References in this report
to “we,” “us” or the “Company” refer to Senior Connect Acquisition Corp. I. References to our “management”
or our “management team” refer to our officers and directors, and references to the “Sponsor” refer to Health
Connect Acquisitions Holdings LLC, a Delaware limited liability company. References to our “initial stockholders” refer to
the Sponsor.
Item 1. BUSINESS.
Introduction
We are a blank check company
incorporated on August 27, 2020 as a Delaware corporation formed for the purpose of effecting a merger, capital stock exchange, asset
acquisition, stock purchase, reorganization or similar business combination with one or more businesses. We have neither engaged in any
operations nor generated any revenue to date. Based on our business activities, the Company is a “shell company” as defined
under the Exchange Act of 1934 (the “Exchange Act”) because we have no operations and nominal assets consisting almost entirely
of cash.
On December 15, 2020, we
consummated our initial public offering (the “Public Offering”) of 41,400,000 units, including the issuance of 5,400,000 units
as a result of the underwriters’ exercise of their over-allotment option in full. Each unit consists of one share of Class A common
stock and one-half of one redeemable warrant. Each whole warrant entitles the holder thereof to purchase one share of Class A common stock
at a price of $11.50 per share. The units were sold at an offering price of $10.00 per unit, generating gross proceeds, before expenses,
of $414,000,000. Prior to the consummation of the Public Offering, on August 27, 2020, the Sponsor purchased 10,062,500 shares of Class
B common stock (the “Founder Shares”) par value $0.0001 per share in exchange for a capital contribution of $25,000, or $0.002
per share. On November 23, 2020, the Sponsor surrendered 1,437,500 shares of Class B common stock to the Company for cancellation for
no consideration, resulting in the Sponsor holding 8,625,000 Founder Shares. On December 10, 2020, we effected a 1:1.2 stock split of
our Class B common stock, resulting in an aggregate of 10,350,000 Founder Shares outstanding, all of which are held by the Sponsor. The
number of Founder Shares outstanding was determined based on the expectation that the Public Offering would be a maximum of 41,400,000
units and therefore that such Founder Shares would represent, on an as-converted basis, 20% of the outstanding shares of Class A common
stock under the Public Offering.
Simultaneously with the consummation
of the Public Offering, we consummated the private placement of an aggregate of 10,280,000 private placement warrants, each exercisable
to purchase one share of Class A common stock at $11.50 per share, to the Sponsor at a price of $1.00 per warrant, generating gross proceeds,
before expenses, of approximately $10,280,000 (the “Private Placement”). The warrants sold in the Private Placement, or the
private placement warrants, are identical to the warrants included in the units sold in the Public Offering, except that, so long as they
are held by their initial purchasers or their permitted transferees, (i) they will not be redeemable by the Company, (ii) they (including
the shares of Class A common stock issuable upon exercise of these warrants) may not, subject to certain limited exceptions, be transferred,
assigned or sold until 30 days after the Company completes its initial business combination and (iii) they may be exercised by the holders
on a cashless basis.
Upon the closing of the Public
Offering and the Private Placement, $414,000,000 was placed in a trust account with Continental Stock Transfer & Trust Company acting
as trustee (the “Trust Account”). Except for the withdrawal of interest to pay taxes, our amended and restated certificate
of incorporation (the “Charter”) provides that none of the funds held in trust will be released from the Trust Account until
the earlier of (i) the completion of our initial business combination; (ii) the redemption of any of the shares of Class A common stock
sold as part of the units sold in our Public Offering (“public shares”) properly submitted in connection with a stockholder
vote to amend the Charter to modify the substance or timing of our obligation to redeem 100% of the public shares if we do not complete
an initial business combination by December 15, 2023 (as modified by the Extension Amendment described below) or with respect to any other
material provisions relating to stockholders’ rights or pre-initial business combination activity or (iii) the redemption of 100%
of the public shares if we are unable to complete an initial business combination by December 15, 2023 (as modified by the Extension Amendment
described below) . The proceeds held in the Trust Account may only be invested in direct United States government treasury obligations
within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), having
a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company
Act which invest only in direct U.S. government treasury obligations.
After the payment of underwriting
discounts and commissions (excluding the deferred portion of $14,490,000 in underwriting discounts and commissions, which amount will
be payable upon consummation of our initial business combination if consummated) and approximately $1,000,000 in expenses relating to
the Public Offering, approximately $1,000,000 of the net proceeds of the Public Offering and Private Placement was not deposited into
the Trust Account and was retained by us for working capital purposes. The net proceeds deposited into the Trust Account remain on deposit
in the Trust Account earning interest. As of December 31, 2020, there was $414.0 million in investments and cash held in the Trust Account
and approximately $0.9 million of cash held outside the Trust Account available for working capital purposes.
On April 14, 2022, the Company
entered into a promissory note with the Sponsor, pursuant to which the Company may borrow up to an aggregate principal amount of $3,000,000
(the “Post-IPO Promissory Note”). The Post-IPO Promissory Note is non-interest bearing and due on the earlier of December
31, 2022 and the date on which the Company consummates its initial business combination. If we complete a business combination, we would
repay such additional loaned amounts, without interest, upon consummation of the business combination. In the event that a business combination
does not close, we may use a portion of the working capital held outside the trust account to repay such additional loaned amounts but
no proceeds from our trust account would be used for such repayment. Except for the foregoing, the terms of such additional loans (if
any) have not been determined and no written agreements exist with respect to such loans. If we fully draw down on the Post-IPO Promissory
Note and require additional funds for working capital purposes, the Sponsor, an affiliate of the Sponsor, or our officers and directors
may, but are not obligated to, loan us such additional funds as may be required. Borrowings made by the Company during the first quarter
of 2022 were subsequently formalized with the execution of the Post-IPO Promissory Note on April 14, 2022. On March 1, 2023, the Company
and Sponsor amended and restated the Promissory Note (the “A&R Promissory Note”) such that the A&R Promissory Note
will be repaid on the earlier of (i) December 15, 2023 and (ii) the effective date of a merger, share exchange, asset acquisition, share
purchase, reorganization or similar business combination, involving the Company and one or more businesses, without interest. As of March
1, 2023, the Company was provided aggregate advances of $1,692,640 in loan proceeds pursuant to the A&R Promissory Note.
On December 12, 2022, the
Company filed with the Secretary of State of the State of Delaware an amendment (the “Extension Amendment”) to our amended
and restated certificate of incorporation to change the date by which we must consummate a Business Combination from December 15, 2022
(the date that is 24 months from the closing of the Public Offering) to December 15, 2023 (the date that is 36 months from the closing
date of the Public Offering) or such earlier date as determined by the board of directors. Our stockholders approved the Extension Amendment
at a special meeting of stockholders (the “Special Meeting”) on December 9, 2022. In connection with the Special Meeting,
stockholders holding 40,171,206 shares of Class A common stock properly exercised their right to redeem their shares for cash at a redemption
price of approximately $10.10 per share, for an aggregate redemption amount of approximately $405.8 million. Following such redemptions,
approximately $12.4 million was left in trust and 1,228,794 shares of Class A common stock remain outstanding.
Effecting Our Initial Business Combination
General
We are not presently engaged
in, and we will not engage in, any operations for an indefinite period of time. We intend to effectuate our initial business combination
using cash held in the Trust Account, our equity, debt or a combination of these as the consideration to be paid in our initial business
combination. We may seek to complete our initial business combination with a company or business that may be financially unstable or in
its early stages of development or growth, which would subject us to the numerous risks inherent in such companies and businesses.
If our initial business combination
is paid for using equity or debt securities, 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 shares of Class A common stock, we may apply the balance
of the cash released to us from the Trust Account for general corporate purposes, including for maintenance or expansion of operations
of the post-transaction company, the payment of principal or interest due on indebtedness incurred in completing our initial business
combination, to fund the purchase of other companies or for working capital.
Selection of Target Businesses
While we may pursue an initial
business combination with a company in any sector or geography, we intend to focus our search on businesses serving the senior market
or capable of being repositioned to do so. Our Charter prohibits us from effectuating a business combination with another blank check
company or similar company with nominal operations.
In accordance with Nasdaq
listing rules, 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 assets held in the trust account (excluding the deferred underwriting commissions and taxes payable on the
interest earned on the trust account) at the time of signing the agreement to enter into the initial business combination. We refer to
this as the 80% of fair market value test. The fair market value of the target or targets will be determined by our Board based upon one
or more standards generally accepted by the financial community (such as actual and potential sales, earnings, cash flow and/or book value).
Even though our Board will rely on generally accepted standards, our Board will have discretion to select the standards employed. In addition,
the application of the standards generally involves a substantial degree of judgement. Accordingly, investors will be relying on the business
judgment of the board of directors in evaluating the fair market value of the target or targets. The proxy solicitation materials or tender
offer documents used by us in connection with any proposed transaction will provide public stockholders with our analysis of our satisfaction
of the 80% of fair market value test, as well as the basis for our determinations. If our Board 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 that
is a member of the Financial Industry Regulatory Authority (“FINRA”) or an independent valuation or appraisal firm with respect
to satisfaction of such criteria. If our Board is not able to independently determine the fair market value of the target business or
businesses, or if we are considering an initial business combination with an affiliated entity, we will obtain an opinion with respect
to the satisfaction of such criteria from an independent investment bank or an independent valuation or accounting firm. We do not intend
to purchase multiple businesses in unrelated industries in conjunction with our initial business combination. Subject to this stipulation,
our management will have virtually unrestricted flexibility in identifying and selecting one or more prospective businesses, although
we will not be permitted to effectuate our initial business combination with another blank check company or a similar company with nominal
operations.
We anticipate structuring our
initial business combination so that the post-transaction company in which our public shareholders own shares will own or acquire 100%
of the equity interests or assets of the target business or businesses. We may, however, structure our initial business combination such
that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business, in order to meet
certain objectives of the prior owners of the target business, the target management team or shareholders or for other reasons, but we
will only complete such business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities
of the target, or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment
company under the Investment Company Act of 1940, as amended, or the Investment Company Act. Even if the post-transaction company owns
or acquires 50% or more of the voting securities of the target, our shareholders prior to the business combination may collectively own
a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in the business combination
transaction. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the
outstanding capital stock of a target. In this case, we would acquire a 100% controlling interest in the target. However, as a result
of the issuance of a substantial number of new shares, our shareholders immediately prior to our initial business combination could own
less than a majority of our outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests
or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses
that is owned or acquired is what will be valued for purposes of the 80% of fair market value test. If the business combination involves
more than one target business, the 80% of fair market value test will be based on the aggregate value of all of the target businesses
and we will treat the target businesses together as the initial business combination for purposes of a tender offer or for seeking shareholder
approval, as applicable.
To the extent we effect our
initial business combination with a company or companies that may be financially unstable or in early stages of development or growth,
we may be affected by numerous risks inherent in such a situation. 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.
We will craft a priority
list of companies based on the acquisition criteria above. These companies will primarily be sourced through our management team’s
long-standing, extensive network of industry executives, investment firms, consultants, and intermediaries.
In evaluating a prospective
target business, we expect to conduct a due diligence review which may encompass, among other things, meetings with management, document
reviews, primary research, policy research, on-site visits, and a review of financial and other information about the target and its industry.
We will lean heavily upon the decades of our management team’s experience conducting diligence on a broad set of private and publicly
held healthcare companies. We expect this experience to allow our management to quickly focus on the key, material investment drivers
and reach the most insightful experts for the issue(s) at hand.
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.
Permitted Purchases of Our Securities
If we seek stockholder approval
of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to
the tender offer rules, our initial stockholders, directors, officers, advisors or their respective affiliates may purchase shares or
public warrants in privately negotiated transactions or in the open market either prior to or following the completion of our initial
business combination. There is no limit on the number of shares our initial stockholders, directors, officers, advisors or their respective
affiliates may purchase in such transactions, subject to compliance with applicable law and Nasdaq rules. 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 shares or public 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 initial
stockholders, directors, officers, advisors or their respective affiliates purchase shares in privately negotiated transactions from public
stockholders who have already elected to exercise their redemption rights, such selling stockholders would be required to revoke their
prior elections to redeem their shares. We do not currently anticipate that such purchases, if any, would constitute a tender offer subject
to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange
Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers
will comply with such rules.
The purpose of any such purchases
of shares could be to (i) vote such shares in favor of the business combination and thereby increase the likelihood of obtaining stockholder
approval of the business combination or (ii) to satisfy a closing condition in an agreement with a target that requires us to have a minimum
net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would
otherwise not be met. The purpose of any such purchases of public warrants could be to reduce the number of public warrants outstanding
or to vote such warrants on any matters submitted to the warrant holders for approval in connection with our initial business combination.
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 common stock 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 initial stockholders,
officers, directors and/or their respective affiliates anticipate that they may identify the stockholders with whom our initial stockholders,
officers, directors or their respective affiliates may pursue privately negotiated purchases by either the stockholders contacting us
directly or by our receipt of redemption requests submitted by stockholders (in the case of Class A common stock) following our mailing
of proxy materials in connection with our initial business combination. To the extent that our sponsor, officers, directors, advisors
or their respective affiliates enter into a private purchase, they would identify and contact only potential selling stockholders 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 stockholder has already submitted a proxy with respect to our initial business combination but only if such shares
have not already been voted at the stockholder meeting related to our initial business combination. Our sponsor, officers, directors,
advisors or any of their respective affiliates will select which stockholders to purchase shares from based on a negotiated price and
number of shares and any other factors that they may deem relevant and will only purchase shares if such purchases comply with Regulation
M under the Exchange Act and the other federal securities laws. Our sponsor, officers, directors and/or their respective 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 will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchases are subject
to such reporting requirements.
Redemption Rights for Public Stockholders
upon Completion of Our Initial Business Combination
We will provide our public
stockholders with the opportunity to redeem all or a portion of their public 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 our initial business combination, including interest earned on the funds held in the trust account and
not previously released to us to pay our taxes, divided by the number of then outstanding public shares, subject to the limitations and
on the conditions described herein. The amount in the trust account is initially anticipated to be $10.00 per public share. The per share
amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions we
will pay to the underwriters. There will be no redemption rights upon the completion of our initial business combination with respect
to our warrants. Our initial stockholders, officers and directors have entered into a letter agreement with us, pursuant to which they
have agreed to waive their redemption rights with respect to any founder shares they hold and any public shares they may acquire during
or after the Public Offering in connection with the completion of our initial business combination.
Limitations on Redemptions
Our amended and restated
certificate of incorporation provides that in no event will we redeem our public shares in an amount that would cause our net tangible
assets to be less than $5,000,001. In addition, our proposed initial business combination may impose a minimum cash requirement for: (i)
cash consideration to be paid to the target or its owners, (ii) cash for working capital or other general corporate purposes or (iii)
the retention of cash to satisfy other conditions. In the event the aggregate cash consideration we would be required to pay for all shares
of Class A common stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the
terms of the proposed initial business combination exceed the aggregate amount of cash available to us, we will not complete the initial
business combination or redeem any shares in connection with such initial business combination, and all shares of Class A common stock
submitted for redemption will be returned to the holders thereof. We may, however, raise funds through the issuance of equity-linked securities
or through loans, advances or other indebtedness in connection with our initial business combination, including pursuant to forward purchase
agreements or backstop arrangements we may enter into following consummation of the Public Offering, in order to, among other reasons,
satisfy such net tangible assets or minimum cash requirements.
Manner of Conducting Redemptions
We will provide our public
stockholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination
either (i) in connection with a stockholder meeting called to approve the initial business combination or (ii) without a stockholder vote
by means of a tender offer. The decision as to whether we will seek stockholder approval of a proposed initial 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 stockholder approval under applicable law or stock exchange
listing requirements. Asset acquisitions and stock purchases would not typically require stockholder approval while direct mergers with
our company where we do not survive and any transactions where we issue more than 20% of our outstanding common stock or seek to amend
our amended and restated certificate of incorporation would require stockholder approval. So long as we obtain and maintain a listing
for our securities on Nasdaq, we will be required to comply with Nasdaq’s stockholder approval rules.
The requirement that we provide
our public stockholders with the opportunity to redeem their public shares by one of the two methods listed above is contained in provisions
of our amended and restated certificate of incorporation and will apply whether or not we maintain our registration under the Exchange
Act or our listing on Nasdaq. Such provisions may be amended if approved by holders of 65% of our common stock entitled to vote thereon.
If we provide our public
stockholders with the opportunity to redeem their public shares in connection with a stockholder meeting, we will:
| ● | conduct the redemptions in
conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and
not pursuant to the tender offer rules, and |
| ● | file proxy materials with the
SEC. |
If we seek stockholder approval,
we will complete our initial business combination only if a majority of the outstanding shares of common stock voted are voted in favor
of the initial business combination. A quorum for such meeting will consist of the holders present in person or by proxy of shares of
outstanding capital stock of the company representing a majority of the voting power of all outstanding shares of capital stock of the
company entitled to vote at such meeting. Our initial stockholders will count towards this quorum and, pursuant to the letter agreement,
our sponsor, officers and directors have agreed to vote any founder shares they hold and any public shares purchased during or after the
Public Offering (including in open market and privately-negotiated transactions) in favor of our initial business combination. For purposes
of seeking approval of the majority of our outstanding shares of common stock voted, non-votes will have no effect on the approval of
our initial business combination once a quorum is obtained. As a result, we would not need any shares in addition to our initial stockholders’
founder shares to be voted in favor of an initial business combination in order to have our initial business combination approved (assuming
the over-allotment option was not exercised). These quorums and voting thresholds, and the voting agreements of our initial stockholders,
may make it more likely that we will consummate our initial business combination. Each public stockholder may elect to redeem its public
shares irrespective of whether they vote for or against the proposed transaction or whether they were a stockholder on the record date
for the stockholder meeting held to approve the proposed transaction.
If a stockholder vote is
not required and we do not decide to hold a stockholder vote for business or other reasons, we will:
| ● | conduct the redemptions pursuant
to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers, and |
| ● | file tender offer documents
with the SEC prior to completing our initial business combination, which contain substantially the same financial and other information
about the initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates
the solicitation of proxies. |
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 stockholders not tendering more than a specified number of public
shares, which number will be based on the requirement that we may not redeem public shares in an amount that would cause our net tangible
assets to be less than $5,000,001. If public stockholders tender more shares than we have offered to purchase, we will withdraw the tender
offer and not complete the initial business combination.
Upon the public announcement
of our initial business combination, if we elect to conduct redemptions pursuant to the tender offer rules, we or our sponsor will terminate
any plan established in accordance with Rule 10b5-1 to purchase shares of our Class A common stock in the open market, in order to comply
with Rule 14e-5 under the Exchange Act.
We intend to require our
public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street
name,” to, at the holder’s option, either deliver their stock certificates to our transfer agent or deliver their shares to
our transfer agent electronically using The Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) system, prior to the
date set forth in the proxy materials or tender offer documents, as applicable. In the case of proxy materials, this date may be up to
two business days prior to the date on which the vote on the proposal to approve the initial business combination is to be held. In addition,
if we conduct redemptions in connection with a stockholder vote, we intend to require a public stockholder seeking redemption of its public
shares to also submit a written request for redemption to our transfer agent two business days prior to the vote in which the name of
the beneficial owner of such shares is included. The proxy materials or tender offer documents, as applicable, that we will furnish to
holders of our public shares in connection with our initial business combination will indicate whether we are requiring public stockholders
to satisfy such delivery requirements. We believe that this will allow our transfer agent to efficiently process any redemptions without
the need for further communication or action from the redeeming public stockholders, which could delay redemptions and result in additional
administrative cost. If the proposed initial business combination is not approved and we continue to search for a target company, we will
promptly return any certificates or shares delivered by public stockholders who elected to redeem their shares.
Our amended and restated
certificate of incorporation provides that in no event will we redeem our public shares in an amount that would cause our net tangible
assets to be less than $5,000,001. In addition, our proposed initial business combination may impose a minimum cash requirement for: (i)
cash consideration to be paid to the target or its owners, (ii) cash for working capital or other general corporate purposes or (iii)
the retention of cash to satisfy other conditions. In the event the aggregate cash consideration we would be required to pay for all shares
of Class A common stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the
terms of the proposed initial business combination exceed the aggregate amount of cash available to us, we will not complete the initial
business combination or redeem any shares in connection with such initial business combination, and all shares of Class A common stock
submitted for redemption will be returned to the holders thereof. We may, however, raise funds through the issuance of equity-linked securities
or through loans, advances or other indebtedness in connection with our initial business combination, including pursuant to forward purchase
agreements or backstop arrangements we may enter into following consummation of the Public Offering, in order to, among other reasons,
satisfy such net tangible assets or minimum cash requirements.
Limitation on Redemption Upon Completion
of Our Initial Business Combination If We Seek Stockholder Approval
If we seek stockholder approval
of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to
the tender offer rules, our amended and restated certificate of incorporation provides that a public stockholder, together with any affiliate
of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under
Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to Excess Shares, without our prior consent.
We believe this restriction will discourage stockholders 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 stockholder holding more than an aggregate of 15% of the shares sold in the Public Offering could threaten to exercise its redemption
rights if such holder’s shares are not purchased by us, our sponsor or our management at a premium to the then-current market price
or on other undesirable terms. By limiting our stockholders’ ability to redeem no more than 15% of the shares sold in the Public
Offering without our prior consent, we believe we will limit the ability of a small group of stockholders 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 stockholders’ ability to vote all of their shares (including Excess Shares) for or against our initial business
combination.
Delivering Stock Certificates in Connection
with the Exercise of Redemption Rights
As described above, we intend
to require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in
“street name,” to, at the holder’s option, either deliver their stock certificates to our transfer agent or deliver
their shares to our transfer agent electronically using The Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) system,
prior to the date set forth in the proxy materials or tender offer documents, as applicable. In the case of proxy materials, this date
may be up to two business days prior to the date on which the vote on the proposal to approve the initial business combination is to be
held. In addition, if we conduct redemptions in connection with a stockholder vote, we intend to require a public stockholder seeking
redemption of its public shares to also submit a written request for redemption to our transfer agent two business days prior to the vote
in which the name of the beneficial owner of such shares is included. The proxy materials or tender offer documents, as applicable, that
we will furnish to holders of our public shares in connection with our initial business combination will indicate whether we are requiring
public stockholders to satisfy such delivery requirements. Accordingly, a public stockholder would have up to two business days prior
to the vote on the initial business combination if we distribute proxy materials, or from the time we send out our tender offer materials
until the close of the tender offer period, as applicable, to submit or tender its shares if it wishes to seek to exercise its redemption
rights. In the event that a stockholder fails to comply with these or any other procedures disclosed in the proxy or tender offer materials,
as applicable, its shares may not be redeemed. Given the relatively short exercise period, it is advisable for stockholders to use electronic
delivery of their public shares.
There is a nominal cost associated
with the above-referenced process and the act of certificating the shares or delivering them through the DWAC system. The transfer agent
will typically charge the broker submitting or tendering shares 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 submit or 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.
Any request to redeem such
shares, once made, may be withdrawn at any time up to the date set forth in the proxy materials or tender offer documents, as applicable.
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 stockholders 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 initial
business combination is not completed, we may continue to try to complete an initial business combination with a different target until
December 15, 2023.
Conduct of Redemptions Pursuant to Tender
Offer Rules
If we conduct redemptions
pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (the “SEC”), we will, pursuant to our Charter:
(a) conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers; and (b)
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.
Submission of Our Initial Business Combination
to a Stockholder Vote
In the event that we seek
stockholder approval of our initial business combination, we will distribute proxy materials and, in connection therewith, provide our
public stockholders with the redemption rights described above upon completion of the initial business combination.
If we seek shareholder approval,
we will complete our initial business combination only if a majority of the outstanding shares of common stock voted are voted in favor
of the business combination. A quorum for such meeting will consist of the holders present in person or by proxy of shares of outstanding
capital stock of the company representing a majority of the voting power of all outstanding shares of capital stock of the company entitled
to vote at such meeting. Our initial stockholders will count towards this quorum and, pursuant to the letter agreement, our sponsor, officers
and directors have agreed to vote any founder shares they hold and any public shares purchased during or after the Public Offering (including
in open market and privately-negotiated transactions) in favor of our initial business combination. For purposes of seeking approval of
the majority of our outstanding shares of common stock voted, non-votes will have no effect on the approval of our initial business combination
once a quorum is obtained. As a result, we would not need any shares in addition to our initial stockholders’ founder shares to
be voted in favor of an initial business combination in order to have our initial business combination approved (assuming the over-allotment
option was not exercised). These quorum and voting thresholds, and the voting agreements of our initial stockholders, may make it more
likely that we will consummate our initial business combination. Each public stockholder may elect to redeem its public shares irrespective
of whether they vote for or against the proposed transaction or whether they were a stockholder on the record date for the stockholder
meeting held to approve the proposed transaction.
Redemption of Public Shares and Liquidation
If No Initial Business Combination
Our Charter provides that
we will have until December 15, 2023 (or such earlier date as determined by the board of directors) to complete our initial business combination.
If we are unable to complete our initial business combination within such time period, we will: (i) cease all operations except for the
purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares,
at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on
the funds held in the trust account and not previously released to us to pay our taxes (less up to $100,000 of interest to pay dissolution
expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’
rights as stockholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably
possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, liquidate and dissolve,
subject, in each case, to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable
law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail
to complete our initial business combination within the prescribed time period.
Our initial stockholders,
officers and directors have entered into a letter agreement with us, pursuant to which they have waived their rights to liquidating distributions
from the trust account with respect to their founder shares if we fail to complete our initial business combination by December 15, 2023
(or such earlier date as determined by the board of directors). However, if our initial stockholders, officers or directors acquire public
shares in or after the Public Offering, they will be entitled to liquidating distributions from the trust account with respect to such
public shares if we fail to complete our initial business combination within the allotted time period.
The underwriters have agreed
to waive their rights to their deferred underwriting commission held in the trust account in the event we do not complete our initial
business combination and subsequently liquidate and, in such event, such amounts will be included with the funds held in the trust account
that will be available to fund the redemption of our public shares.
Our initial stockholders,
officers and directors have agreed, pursuant to a letter agreement with us, that they will not propose any amendment to our amended and
restated certificate of incorporation to modify the substance or timing of our obligation to allow redemption in connection with our initial
business combination or to redeem 100% of our public shares if we do not complete our initial business combination by December 15, 2023
(or such earlier date as determined by the board of directors) or with respect to any other material provisions relating to stockholders’
rights or pre-initial business combination activity, unless we provide our public stockholders with the opportunity to redeem their Class
A common stock 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 taxes,
divided by the number of then outstanding public shares, subject to the limitations described above under “Limitations on redemptions.”
For example, our board of directors may propose such an amendment if it determines that additional time is necessary to complete our initial
business combination. In such event, we will conduct a proxy solicitation and distribute proxy materials pursuant to Regulation 14A of
the Exchange Act seeking stockholder approval of such proposal, and in connection therewith, provide our public stockholders with the
redemption rights described above upon stockholder approval of such amendment.
Competition
In identifying, evaluating
and selecting a target business for our business combination, we may 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 similar or greater technical, human
and other resources to ours or more local industry knowledge than we do and our financial resources will be relatively limited when contrasted
with those of many of these competitors. While we believe there are numerous target businesses we could potentially acquire with the net
proceeds of the Public Offering and the sale of the private placement warrants, our ability to compete with respect to the acquisition
of certain target businesses that are sizable will be limited by our available financial resources. This inherent competitive limitation
gives others an advantage in pursuing the acquisition of certain target businesses. Furthermore, we are obligated to offer holders of
our public shares the right to redeem their shares for cash at the time of our initial business combination in conjunction with a stockholder
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 are unable to complete our initial business combination, our public stockholders may receive only their pro rata portion of the funds
in the trust account that are available for distribution to public stockholders, and our warrants will expire worthless.
Employees
We currently have four executive
officers: Richard T. Burke, Isaac Applbaum, Ryan Burke and Steven Schwartz. These individuals 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 on whether a target business
has been selected for our initial business combination and the stage of the business combination process we are in. We do not intend to
have any full time employees prior to the completion of our initial business combination.
Available Information
We are required to file Annual
Reports on Form 10-K and Quarterly Reports on Form 10-Q with the SEC on a regular basis, and are required to disclose certain material
events (e.g., changes in corporate control, acquisitions or dispositions of a significant amount of assets other than in the ordinary
course of business and bankruptcy) in a Current Report on Form 8-K. The SEC maintains an Internet website that contains reports, proxy
and information statements and other information regarding issuers that file electronically with the SEC. The SEC’s Internet website
is located at http://www.sec.gov. In addition, the Company will provide copies of these documents without charge upon request from us
in writing at 7114 East Stetson Drive, Suite 400, Scottsdale, AZ 85251or by telephone at (480) 948-9200.
ITEM 1A. RISK FACTORS.
RISK
FACTORS
An investment in our securities
involves a high degree of risk. You should consider carefully all of the risks described below, together with the other information contained
in this Annual Report on Form 10-K and the prospectus associated with our Public Offering, before making a decision to invest in our securities.
If any of the following events occur, our business, financial condition and operating results may be materially adversely affected. In
that event, the trading price of our securities could decline, and you could lose all or part of your investment.
RISKS RELATING TO OUR SEARCH FOR, AND CONSUMMATION
OF OR INABILITY TO
CONSUMMATE, A BUSINESS COMBINATION
Our stockholders may not be afforded an opportunity
to vote on our proposed initial business combination, and even if we hold a vote, holders of our founder shares will participate in such
vote, which means we may complete our initial business combination even though a majority of our public stockholders do not support such
a combination.
We may choose not to hold
a stockholder vote to approve our initial business combination if the business combination would not require stockholder approval under
applicable law or stock exchange listing requirement. Except for as required by applicable law or stock exchange requirement, the decision
as to whether we will seek stockholder approval of a proposed business combination or will allow stockholders 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 stockholder approval. Even if we seek stockholder
approval, the holders of our founder shares will participate in the vote on such approval. Accordingly, we may complete our initial business
combination even if a majority of our public stockholders do not approve of the business combination we complete.
If we seek stockholder approval of our initial
business combination, our initial stockholders and management team have agreed to vote in favor of such initial business combination,
regardless of how our public stockholders vote.
Our initial stockholders
own 89.4% of our outstanding common stock after giving effect to the redemptions in connection with the Special Meeting. Our initial stockholders
and management team also may from time to time purchase Class A common stock prior to our initial business combination. Our amended and
restated certificate of incorporation provides that, if we seek stockholder approval of an initial business combination, such initial
business combination will be approved if we receive the affirmative vote of a majority of the shares voted at such meeting, including
the founder shares. As a result, we would not need any shares in addition to our initial stockholders’ founder to be voted in favor
of an initial business combination in order to have our initial business combination approved (assuming the over-allotment option was
not exercised). Accordingly, if we seek stockholder approval of our initial business combination, the agreement by our initial stockholders
and management team to vote in favor of our initial business combination will increase the likelihood that we will receive the requisite
stockholder approval for such initial business combination.
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 our initial business combination. Since
our board of directors may complete a business combination without seeking stockholder approval, public stockholders may not have the
right or opportunity to vote on the business combination, unless we seek such stockholder vote. Accordingly, your only opportunity to
affect the investment decision regarding our initial 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 stockholders in
which we describe our initial business combination.
The ability of our public stockholders to redeem
their shares for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult
for us to enter into a business combination with a target.
We may seek to enter into
a business combination transaction agreement with minimum cash requirement for (i) cash consideration to be paid to the target or its
owners, (ii) cash for working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions.
If too many public stockholders exercise their redemption rights, we would not be able to meet such closing condition and, as a result,
would not be able to proceed with the business combination. Furthermore, in no event will we redeem our public shares in an amount that
would cause our net tangible assets to be less than $5,000,001. Consequently, if accepting all properly submitted redemption requests
would cause our net tangible assets to be less than $5,000,001 or make us unable to satisfy a minimum cash condition as described above,
we would not proceed with such redemption and the related business combination and may instead search for an alternate business combination.
Prospective targets will be aware of these risks and, thus, may be reluctant to enter into a business combination transaction with us.
The ability of our public stockholders 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 stockholders 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 our initial business combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price,
or requires us to have a minimum amount of cash at closing, we will need to reserve a portion of the cash in the trust account to meet
such requirements, or arrange for third party financing. In addition, if a larger number of shares is submitted for redemption than we
initially expected, we may need to restructure the transaction to reserve a greater portion of the cash in the trust account or arrange
for third party financing. Raising additional third party financing may involve dilutive equity issuances or the incurrence of indebtedness
at higher than desirable levels. Furthermore, this dilution would increase to the extent that the anti-dilution provision of the Class
B common stock results in the issues of shares of Class A common stock on a greater than one-to-one basis upon conversion of the shares
of Class B common stock at the time of our initial business combination. In addition, 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 stockholders 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 above considerations may limit our ability to complete the most desirable business combination
available to us or optimize our capital structure.
The ability of our public stockholders to exercise
redemption rights with respect to a large number of our shares could increase the probability that our initial business combination would
be unsuccessful and that you would have to wait for liquidation in order to redeem your shares.
If our initial business combination
agreement requires us to use a portion of the cash in the trust account to pay the purchase price, or requires us to have a minimum amount
of cash at closing, the probability that our initial business combination would be unsuccessful is increased. If our initial business
combination is unsuccessful, you would not receive your pro rata portion of the trust account until we liquidate the trust account. If
you are in need of immediate liquidity, you could attempt to sell your shares in the open market; however, at such time our shares may
trade at a discount to the pro rata amount per share in the trust account. In either situation, you may suffer a material loss on your
investment or lose the benefit of funds expected in connection with your exercise of redemption rights until we liquidate or you are able
to sell your shares in the open market.
Our search for a business combination, and
any target business with which we ultimately consummate a business combination, may be materially adversely affected by the coronavirus
(COVID-19) outbreak and the status of debt and equity markets.
In March 2020, the World
Health Organization declared COVID-19 a global pandemic. This outbreak of COVID-19 has resulted in, and a significant outbreak of other
infectious diseases could result in, a widespread health crisis that has and may continue to adversely affect the economies and financial
markets worldwide, and the business of any potential target business with which we may consummate a business combination could be materially
and adversely affected. Furthermore, we may be unable to complete a business combination if continued concerns relating to COVID-19 restrict
travel, limit the ability to have meetings with potential investors or the target company’s personnel, vendors and services providers
are unavailable to negotiate and consummate a transaction in a timely manner. The extent to which COVID-19 impacts our search for and
ability to consummate a business combination will depend on future developments, which are highly uncertain and cannot be predicted, including
new information which may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others.
If the disruptions posed by COVID-19 or other matters of global concern continue for an extensive period of time, and result in protectionist
sentiments and legislation in our target markets, our ability to consummate a business combination, or the operations of a target business
with which we ultimately consummate a business combination, may be materially adversely affected. In addition, our ability to consummate
a transaction may be dependent on the ability to raise equity and debt financing which may be impacted by COVID-19 and other events, including
as a result of increased market volatility, decreased market liquidity in third- party financing being unavailable on terms acceptable
to us or at all. Finally, the outbreak of COVID-19 may also have the effect of heightening many of the other risks described in this “Risk
Factors” section, such as those related to the market for our securities and cross-border transactions.
The requirement that we complete our initial
business combination by December 15, 2023 (or such earlier date as determined by the board of directors) 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 stockholders.
Any potential target business
with which we enter into negotiations concerning a business combination will be aware that we must complete our initial business combination
by December 15, 2023 (or such earlier date as determined by the board of directors). Consequently, such target business may obtain leverage
over us in negotiating a business combination, knowing that if we do not complete our initial business combination with that particular
target business, we may be unable to complete our initial business combination with any target business. This risk will increase as we
get closer to the timeframe described above. In addition, we may have limited time to conduct due diligence and may enter into our initial
business combination on terms that we would have rejected upon a more comprehensive investigation.
We may not be able to complete our initial
business combination by December 15, 2023 (or such earlier date as determined by the board of directors), in which case we would cease
all operations except for the purpose of winding up and we would redeem our public shares and liquidate.
We may not be able to find
a suitable target business and complete our initial business combination by December 15, 2023 (or such earlier date as determined by the
board of directors). Our ability to complete our initial business combination may be negatively impacted by general market conditions,
volatility in the capital and debt markets and the other risks described herein. For example, the outbreak of COVID-19 continues to grow
both in the U.S. and globally and, while the extent of the impact of the outbreak on us will depend on future developments, it could limit
our ability to complete our initial business combination, including as a result of increased market volatility, decreased market liquidity
and third-party financing being unavailable on terms acceptable to us or at all. Additionally, the outbreak of COVID-19 may negatively
impact businesses we may seek to acquire. If we have not completed our initial business combination within such time period, we will:
(i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business
days thereafter, redeem the public shares, at a per share price, payable in cash, equal to the aggregate amount then on deposit in the
trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes (less
up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will
completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions,
if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders
and our board of directors, liquidate and dissolve, subject in each case, to our obligations under Delaware law to provide for claims
of creditors and the requirements of other applicable law.
If we seek stockholder approval of our initial
business combination, our initial stockholders, directors, executive officers, advisors and their respective affiliates may elect to purchase
shares or public warrants from public stockholders, which may influence a vote on a proposed business combination and reduce the public
“float” of our Class A common stock.
If we seek stockholder approval
of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to
the tender offer rules, our initial stockholders, directors, executive officers, advisors or their respective affiliates may purchase
shares or public 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. There is no limit on the number of shares our initial stockholders,
directors, officers, advisors or their respective affiliates may purchase in such transactions, subject to compliance with applicable
law and Nasdaq rules. However, other than as expressly stated herein, 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 shares or public warrants in such transactions. Such purchases may include a contractual acknowledgment that
such stockholder, although still the record holder of our shares, is no longer the beneficial owner thereof and therefore agrees not to
exercise its redemption rights.
In the event that our initial
stockholders, directors, executive officers, advisors or their respective affiliates purchase shares in privately negotiated transactions
from public stockholders who have already elected to exercise their redemption rights, such selling stockholders would be required to
revoke their prior elections to redeem their shares. The purpose of any such purchases of shares could be to vote such shares in favor
of the business combination and thereby increase the likelihood of obtaining stockholder approval of the business combination or to satisfy
a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing
of our initial business combination, where it appears that such requirement would otherwise not be met. The purpose of any such purchases
of public warrants could be to reduce the number of public warrants outstanding or to vote such warrants on any matters submitted to the
warrant holders for approval in connection with our initial business combination. Any such purchases of our securities may result in the
completion of our initial business combination that may not otherwise have been possible. We expect 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.
In addition, if such purchases
are made, the public “float” of our Class A common stock or public warrants and the number of beneficial holders of our securities
may be reduced, possibly making it difficult to obtain or maintain the quotation, listing or trading of our securities on a national securities
exchange.
If a stockholder 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 stockholder fails to receive our proxy materials or tender offer documents, as applicable, such stockholder
may not become aware of the opportunity to redeem its shares. In addition, proxy materials or tender offer documents, as applicable, that
we will furnish to holders of our public shares in connection with our initial business combination will describe the various procedures
that must be complied with in order to validly tender or submit public shares for redemption. For example, we intend to require our public
stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,”
to, at the holder’s option, either deliver their stock certificates to our transfer agent, or to deliver their shares to our transfer
agent electronically prior to the date set forth in the proxy materials or tender offer documents, as applicable. In the case of proxy
materials, this date may be up to two business days prior to the date on which the vote on the proposal to approve the initial business
combination is to be held. In addition, if we conduct redemptions in connection with a stockholder vote, we intend to require a public
stockholder seeking redemption of its public shares to also submit a written request for redemption to our transfer agent two business
days prior to the vote in which the name of the beneficial owner of such shares is included.
In the event that a stockholder
fails to comply with these or any other procedures disclosed in the proxy or tender offer materials, as applicable, its shares may not
be redeemed.
You will not be entitled to protections normally
afforded to investors of many other blank check companies.
Since the net proceeds of
the Public Offering and the sale of the private placement warrants are intended to be used to complete an initial business combination
with a target business that has not been selected, we may be deemed to be a “blank check” company under the United States
securities laws. However, because we will have net tangible assets in excess of $5,000,000 upon the completion of the Public Offering
and the sale of the private placement warrants and will file a Current Report on Form 8-K, including an audited balance sheet demonstrating
this fact, we are exempt from rules promulgated by the SEC to protect investors in blank check companies, such as Rule 419. Accordingly,
investors will not be afforded the benefits or protections of those rules. Among other things, this means our units will be immediately
tradable and we will have a longer period of time to complete our initial business combination than do companies subject to Rule 419.
Moreover, if the Public Offering were subject to Rule 419, that rule would prohibit the release of any interest earned on funds held in
the trust account to us unless and until the funds in the trust account were released to us in connection with our completion of an initial
business combination. For a more detailed comparison of our offering to offerings that comply with Rule 419.
If we seek stockholder 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 stockholders
are deemed to hold in excess of 15% of our Class A common stock, you will lose the ability to redeem all such shares in excess of 15%
of our Class A common stock.
If we seek stockholder approval
of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to
the tender offer rules, our amended and restated certificate of incorporation provides that a public stockholder, together with any affiliate
of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under
Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 15% without
our prior consent, which we refer to as the “Excess Shares.” However, we would not be restricting our stockholders’
ability to vote all of their shares (including Excess Shares) for or against our initial business combination. Your inability to redeem
the Excess Shares will reduce your influence over our ability to complete our initial business combination and you could suffer a material
loss on your investment in us if you sell Excess Shares in open market transactions. Additionally, you will not receive redemption distributions
with respect to the Excess Shares if we complete our initial business combination. And as a result, you will continue to hold that number
of shares exceeding 15% and, in order to dispose of such shares, would be required to sell your shares in open market transactions, potentially
at a loss.
Because of our limited resources and the significant
competition for business combination opportunities, it may be more difficult for us to complete our initial business combination. If we
are unable to complete our initial business combination, our public stockholders may receive only their pro rata portion of the funds
in the trust account that are available for distribution to public stockholders, and our warrants will expire worthless.
We expect to encounter 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 similar or greater
technical, human and other resources to ours or more local industry knowledge than we do and our financial resources will be relatively
limited when contrasted with those of many of these competitors. While we believe there are numerous target businesses we could potentially
acquire with the net proceeds of the Public Offering and the sale of the private placement warrants, our ability to compete with respect
to the acquisition of certain target businesses that are sizable will be limited by our available financial resources. This inherent competitive
limitation gives others an advantage in pursuing the acquisition of certain target businesses. Furthermore, we are obligated to offer
holders of our public shares the right to redeem their shares for cash at the time of our initial business combination in conjunction
with a stockholder 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 are unable to complete our initial business combination, our public stockholders may receive only their pro rata portion
of the funds in the trust account that are available for distribution to public stockholders, and our warrants will expire worthless.
If the net proceeds of the Public Offering
not being held in the trust account are insufficient to allow us to operate for at least until December 15, 2023, it could limit the amount
available to fund our search for a target business or businesses and complete our initial business combination, and we will depend on
loans from our sponsor or management team to fund our search and to complete our initial business combination.
Of the net proceeds of the
Public Offering, only $1,000,000 were available to us initially outside the trust account to fund our working capital requirements. We
believe that the funds available to us outside of the trust account will be sufficient to allow us to operate for at least until December
15, 2023; however, we cannot assure you that our estimate is accurate. Of the funds available to us, we could use a portion of the funds
available to us to pay fees to consultants to assist us with our search for a target business. We could also use a portion of the funds
as a down payment or to fund a “no-shop” provision (a provision in letters of intent or merger agreements 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 or merger agreement 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.
On April 14, 2022, the Company
entered into the Post-IPO Promissory Note, pursuant to which the Company may borrow up to an aggregate principal amount of $3,000,000.
The Post-IPO Promissory Note is non-interest bearing and due on the earlier of December 31, 2022 and the date on which the Company consummates
its initial business combination. If we complete a business combination, we would repay such additional loaned amounts, without interest,
upon consummation of the business combination. In the event that a business combination does not close, we may use a portion of the working
capital held outside the trust account to repay such additional loaned amounts but no proceeds from our trust account would be used for
such repayment. Except for the foregoing, the terms of such additional loans (if any) have not been determined and no written agreements
exist with respect to such loans. If we fully draw down on the Post-IPO Promissory Note and require additional funds for working capital
purposes, the Sponsor, an affiliate of the Sponsor, or our officers and directors may, but are not obligated to, loan us such additional
funds as may be required. Borrowings made by the Company during the first quarter of 2022 were subsequently formalized with the execution
of the Post-IPO Promissory Note on April 14, 2022. On March 1, 2023, the Company and Sponsor amended and restated the Promissory Note
such that the A&R Promissory Note will be repaid on the earlier of (i) December 15, 2023 and (ii) the effective date of a merger,
share exchange, asset acquisition, share purchase, reorganization or similar business combination, involving the Company and one or more
businesses, without interest. As of March 1, 2023, the Company was provided aggregate advances of $1,692,640 in loan proceeds pursuant
to the A&R Promissory Note.
In the event that our offering
expenses exceed our estimate of $1,000,000, we may fund such excess with funds not to be held in the trust account. In such case, the
amount of funds we intend to be held outside the trust account would decrease by a corresponding amount. Conversely, in the event that
the offering expenses are less than our estimate of $1,000,000, the amount of funds we intend to be held outside the trust account would
increase by a corresponding amount. The amount held in the trust account will not be impacted as a result of such increase or decrease.
If we are required to seek additional capital, we would need to borrow funds from our sponsor, management team or other third parties
to operate or may be forced to liquidate. Neither our sponsor, members of our management team nor any of their respective affiliates is
under any obligation to advance funds to us in such circumstances. Any such advances would be repaid only from funds held outside the
trust account or from funds released to us upon completion of our initial business combination. Up to $1,500,000 of such loans may be
convertible into warrants of the post-business combination entity at a price of $1.00 per warrant at the option of the lender. The warrants
would be identical to the private placement warrants. Prior to the completion of our initial business combination, we do not expect to
seek loans from parties other than our sponsor or an affiliate of our sponsor 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 are unable to complete
our initial business combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate
the trust account. Consequently, our public stockholders may only receive an estimated $10.00 per share, or possibly less, on our redemption
of our public shares, and our warrants will expire worthless.
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 stockholders may be less than $10.00
per share.
Our placing of funds in the
trust account may not protect those funds from third party claims against us. Although we will seek to have all vendors, service providers
(except for our independent registered public accounting firm), 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 stockholders, 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 consider whether competitive alternatives
are reasonably available to us and will only enter into an agreement with such third party if management believes that such third party’s
engagement would be in the best interests of the company under the circumstances. The underwriters of the Public Offering as well as our
registered independent public accounting firm will not execute agreements with us waiving such claims to the monies held in the trust
account.
Examples of possible instances
where we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular
expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute
a waiver or in cases where management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee
that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts
or agreements with us and will not seek recourse against the trust account for any reason. Upon redemption of our public shares, if we
are unable to complete our initial business combination within the prescribed timeframe, or upon the exercise of a redemption right in
connection with our initial business combination, we will be required to provide for payment of claims of creditors that were not waived
that may be brought against us within the 10 years following redemption. Accordingly, the per share redemption amount received by public
stockholders could be less than the $10.00 per public share initially held in the trust account, due to claims of such creditors. Pursuant
to the letter agreement the form of which is filed as an exhibit to the registration statement of which this prospectus forms a part,
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, or a prospective target business with which we have entered into a written letter of intent, confidentiality or other similar
agreement or business combination agreement, reduce the amount of funds in the trust account to below the lesser of (i) $10.00 per public
share and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account, if
less than $10.00 per public share due to reductions in the value of the trust assets, less taxes payable, provided that such liability
will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies
held in the trust account (whether or not such waiver is enforceable) nor will it apply to any claims under our indemnity of the underwriters
of the Public Offering against certain liabilities, including liabilities under the Securities Act. However, we have not asked our sponsor
to reserve for such indemnification obligations, nor have we independently verified whether our sponsor has sufficient funds to satisfy
its indemnity obligations and we believe that our sponsor’s only assets are securities of our company. Therefore, we cannot assure
you that our sponsor would be able to satisfy those obligations. As a result, if any such claims were successfully made against the trust
account, the funds available for our initial business combination and redemptions could be reduced to less than $10.00 per public share.
In such event, we may not be able to complete our initial business combination, and you would receive such lesser amount per share in
connection with any redemption of your public shares. None of our officers or directors will indemnify us for claims by third parties
including, without limitation, claims by vendors and prospective target businesses.
Our directors may decide not to enforce the
indemnification obligations of our sponsor, resulting in a reduction in the amount of funds in the trust account available for distribution
to our public stockholders.
In the event that the proceeds
in the trust account are reduced below the lesser of (i) $10.00 per share and (ii) the actual amount per public share held in the trust
account as of the date of the liquidation of the trust account if less than $10.00 per public share due to reductions in the value of
the trust assets, in each case less taxes payable, 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
stockholders may be reduced below $10.00 per share.
If, after we distribute the proceeds in the
trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that
is not dismissed, a bankruptcy court may seek to recover such proceeds, and the members of our board of directors may be viewed as having
breached their fiduciary duties to our creditors, thereby exposing the members of our board of directors and us to claims of punitive
damages.
If, after we distribute the
proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed
against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy
laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek
to recover some or all amounts received by our stockholders. In addition, our board of directors may be viewed as having breached its
fiduciary duty to our creditors and/or having acted in bad faith, by paying public stockholders from the trust account prior to addressing
the claims of creditors, thereby exposing itself and us to claims of punitive damages.
If, before distributing the proceeds in the
trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that
is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our stockholders and the per share amount
that would otherwise be received by our stockholders in connection with our liquidation may be reduced.
If, before distributing the
proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed
against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included
in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. To the extent any
bankruptcy claims deplete the trust account, the per share amount that would otherwise be received by our stockholders in connection with
our liquidation may be reduced.
Our warrants are accounted for as liabilities
and the changes in value of our warrants could have a material effect on our financial results.
On April 12, 2021, the Acting
Director of the Division of Corporation Finance and Acting Chief Accountant of the SEC together issued a statement regarding the accounting
and reporting considerations for warrants issued by special purpose acquisition companies entitled “Staff Statement on Accounting
and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (“SPACs”)” (the “SEC
Staff Statement”). Specifically, the SEC Staff Statement focused on certain settlement terms and provisions related to certain tender
offers following a business combination, which terms are deemed to be similar to those contained in the warrant agreement governing our
warrants and those of other SPAC entities. As a result of the SEC Staff Statement, we reevaluated the accounting treatment of our public
warrants and our private placement warrants and determined to reclassify the warrants as derivative liabilities measured at fair value,
with changes in fair value each period reported in earnings.
As a result, now included
on our balance sheets contained elsewhere in this Annual Report are derivative liabilities related to our warrants. Accounting Standards
Codification 815, Derivatives and Hedging (“ASC 815”), provides for the remeasurement of the fair value of such derivatives
at each balance sheet date, with a resulting non-cash gain or loss related to the change in the fair value being recognized in earnings
in the statement of operations in the period of change. As a result of this recurring fair value measurement, our financial statements
and results of operations may fluctuate quarterly, based on factors which are outside of our control. Due to the recurring fair value
measurement, we expect that we will recognize going forward non-cash gains or losses on our warrants each reporting period until exercised
and that the amount of such gains or losses could be material.
We have identified a material weakness in our
internal control over financial reporting related to the accounting for complex financial instruments. If we are unable to develop and
maintain an effective system of internal control over financial reporting going forward, we may not be able to accurately report our financial
results in a timely manner, which may adversely affect investor confidence in us and materially and adversely affect our business and
operating results.
Following the issuance of
the SEC Staff Statement on April 12, 2021, after consultation with our independent registered public accounting firm, our management and
our audit committee concluded that, in light of the SEC Staff Statement, it was appropriate for us to restate our previously issued financial
statements for the affected periods. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial
reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will
not be prevented or detected and corrected on a timely basis. We have determined to classify this circumstance as a material weakness.
Effective internal controls
are necessary for us to provide reliable financial reports and prevent fraud. We have taken certain actions and continue to evaluate steps
to prevent as possible the necessity for restatements going forward. These remediation measures may be time consuming and costly, and
there is no assurance that these initiatives will ultimately have the intended effects. If we identify any new material weaknesses in
the future, any such newly identified material weakness could limit our ability to prevent or detect a misstatement of our accounts or
disclosures that could result in a material misstatement of our annual or interim financial statements. In such case, we may be unable
to maintain compliance with securities law requirements regarding timely filing of periodic reports. In addition to applicable stock exchange
listing requirements, investors may in such event lose confidence in our financial reporting and our stock price may decline as a result.
We cannot assure that the measures we have taken to date, or any measures we may take in the future, will be sufficient to avoid potential
future material weaknesses.
We, and following our initial business combination,
the post-business combination company, may face litigation and other risks as a result of material weaknesses in our internal control
over financial reporting.
The restatement described
in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, the change in accounting for our
warrants, and other matters raised or that may in the future be raised by the SEC, we face potential for litigation or other disputes
which may include, among others, claims under federal and state securities laws, contractual claims or other claims arising from the restatement
and material weaknesses in our internal control over financial reporting and the preparation of our financial statements. As of the date
of this Annual Report on Form 10-K, we have no knowledge of any such litigation or dispute. However, we can provide no assurance that
such litigation or dispute will not arise in the future. Any such litigation or dispute, whether successful or not, could have a material
adverse effect on our business, results of operations and financial condition or our ability to complete a business combination.
If we are deemed to be an investment company
under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted,
which may make it difficult for us to complete our initial business combination.
If we are deemed to be an
investment company under the Investment Company Act, our activities may be restricted, including:
| ● | restrictions on the nature
of our investments; and |
| ● | restrictions on the issuance
of securities, each of which may make it difficult for us to complete our initial business combination. In addition, we may have imposed
upon us burdensome requirements, including: |
| ● | registration as an investment
company with the SEC; |
| ● | adoption of a specific form
of corporate structure; and |
| ● | reporting, record keeping,
voting, proxy and disclosure requirements and other rules and regulations that we are not subject to. |
In order not to be regulated
as an investment company under the Investment Company Act, unless we can qualify for an exclusion, we must ensure that we are engaged
primarily in a business other than investing, reinvesting or trading of securities and that our activities do not include investing, reinvesting,
owning, holding or trading “investment securities” constituting more than 40% of our assets (exclusive of U.S. government
securities and cash items) on an unconsolidated basis. Our business will be to identify and complete a business combination and thereafter
to operate the post-transaction business or assets for the long term. We do not plan to buy businesses or assets with a view to resale
or profit from their resale. We do not plan to buy unrelated businesses or assets or to be a passive investor.
We do not believe that our
anticipated principal activities will subject us to the Investment Company Act. To this end, the proceeds held in the trust account may
only be invested in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company
Act having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment
Company Act which invest only in direct U.S. government treasury obligations. Pursuant to the trust agreement, the trustee is not permitted
to invest in other securities or assets. By restricting the investment of the proceeds to these instruments, and by having a business
plan targeted at acquiring and growing businesses for the long term (rather than on buying and selling businesses in the manner of a merchant
bank or private equity fund), we intend to avoid being deemed an “investment company” within the meaning of the Investment
Company Act. The Public Offering is not intended for persons who are seeking a return on investments in government securities or investment
securities. The trust account is intended as a holding place for funds pending the earliest to occur of either: (i) the completion of
our initial business combination; (ii) the redemption of any public shares properly tendered in connection with a stockholder vote to
amend our amended and restated certificate of incorporation to modify the substance or timing of our obligation to allow redemption in
connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination
within 24 months from the closing of the Public Offering; and (iii) absent an initial business combination within 24 months from the closing
of the Public Offering or with respect to any other material provisions relating to stockholders’ rights or pre-initial business
combination activity, our return of the funds held in the trust account to our public stockholders as part of our redemption of the public
shares. If we do not invest the proceeds as discussed above, we may be deemed to be subject to the Investment Company Act. If we were
deemed to be subject to the Investment Company Act, compliance with these additional regulatory burdens would require additional expenses
for which we have not allotted funds and may hinder our ability to complete a business combination. If we are unable to complete our initial
business combination, our public stockholders may only receive their pro rata portion of the funds in the trust account that are available
for distribution to public stockholders, and our warrants will expire worthless.
If we are deemed to be an investment company
for purposes of the Investment Company Act, we may be forced to abandon our efforts to complete an initial business combination and instead
be required to liquidate the Company. To mitigate the risk of that result, on or prior to the 24-month anniversary of the effective date
of the registration statement relating to our Public Offering, we may instruct Continental Stock Transfer & Trust Company to liquidate
the securities held in the trust account and instead hold all funds in the trust account in cash. As a result, following such change,
we will likely receive minimal, if any, interest, on the funds held in the trust account, which would reduce the dollar amount that our
public shareholders would have otherwise received upon any redemption or liquidation of the Company if the assets in the trust account
had remained in U.S. government securities or money market funds.
On March 30, 2022, the SEC
issued proposed rules (the “SPAC Rule Proposals”), relating, among other things, to circumstances in which SPACs such as us
could potentially be subject to the Investment Company Act and the regulations thereunder. The SPAC Rule Proposals would provide a safe
harbor for such companies from the definition of “investment company” under Section 3(a)(1)(A) of the Investment Company Act,
provided that a SPAC satisfies certain criteria. To comply with the duration limitation of the proposed safe harbor, a SPAC would have
a limited time period to announce and complete a de-SPAC transaction. Specifically, to comply with the safe harbor, the SPAC Rule Proposals
would require a company to file a report on Form 8-K announcing that it has entered into an agreement with a target company for an initial
business combination no later than 18 months after the effective date of the registration statement for its initial public offering. The
company would then be required to complete its initial business combination no later than 24 months after the effective date of the registration
statement for its initial public offering. We understand that the SEC has recently been taking informal positions regarding the Investment
Company Act consistent with the SPAC Rule Proposals.
There is currently uncertainty
concerning the applicability of the Investment Company Act to a SPAC, including a company like ours, that does not complete its initial
business combination within the proposed time frame set forth in the proposed safe harbor rule. As indicated above, we completed our Public
Offering in December 2020 and have operated as a blank check company searching for a target business with which to consummate an initial
business combination since such time. If we were deemed to be an investment company for purposes of the Investment Company Act, we might
be forced to abandon our efforts to complete an initial business combination and instead be required to liquidate the Company. If we are
required to liquidate the Company, our investors would not be able to realize the benefits of owning shares in a successor operating business,
including the potential appreciation in the value of our shares and warrants following such a transaction, and our warrants would expire
worthless.
The funds in the trust account
have, since our Public Offering, been held only in U.S. government treasury obligations with a maturity of 185 days or less or in money
market funds investing solely in U.S. government treasury obligations and meeting certain conditions under Rule 2a-7 under the Investment
Company Act. As of September 30, 2022, amounts held in trust account included approximately $2.2 million of accrued interest. To mitigate
the risk of us being deemed to have been operating as an unregistered investment company under the Investment Company Act, we may, on
or prior to December 15, 2023, instruct Continental Stock Transfer & Trust Company, the trustee with respect to the trust account,
to liquidate the U.S. government treasury obligations or money market funds held in the trust account and thereafter to hold all funds
in the trust account in cash (i.e., in one or more bank accounts) until the earlier of the consummation of a business combination or our
liquidation. Following such liquidation of the assets in our trust account, we will likely receive minimal interest, if any, on the funds
held in the trust account, which would reduce the dollar amount our public shareholders would have otherwise received upon any redemption
or liquidation of the Company if the assets in the trust account had remained in U.S. government securities or money market funds. This
means that the amount available for redemption will not increase in the future.
In addition, even prior to
December 15, 2023, we may be deemed to be an investment company. The longer that the funds in the trust account are held in short-term
U.S. government securities or in money market funds invested exclusively in such securities, even prior to December 15, 2023, there is
a greater risk that we may be considered an unregistered investment company, in which case we may be required to liquidate. Accordingly,
we may determine, in our discretion, to liquidate the securities held in the trust account at any time, even prior to December 15, 2023,
and instead hold all funds in the trust account in cash, which would further reduce the dollar amount our public shareholders would receive
upon any redemption or our liquidation.
Changes in laws or regulations, or a failure
to comply with any laws and regulations, may adversely affect our business, including our ability to negotiate and complete our initial
business combination, and results of operations.
We are subject to laws and
regulations enacted by national, regional and local governments. In particular, we will be required to comply with certain SEC and other
legal requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those
laws and regulations and their interpretation and application may also change from time to time and those changes could have a material
adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable laws or regulations,
as interpreted and applied, could have a material adverse effect on our business, including our ability to negotiate and complete our
initial business combination, and results of operations.
If we have not completed an initial business
combination by December 15, 2023 (or such earlier date as determined by the board of directors), our public stockholders may be forced
to wait beyond such date before redemption from our trust account.
If we have not completed
an initial business combination by December 15, 2023 (or such earlier date as determined by the board of directors), 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 the interest to pay dissolution expenses), will be used to fund the redemption of our public
shares, as further described herein. Any redemption of public stockholders from the trust account will be effected automatically by function
of our amended and restated certificate of incorporation 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 stockholders, as part of any liquidation process, such winding
up, liquidation and distribution must comply with the applicable provisions of the DGCL. In that case, investors may be forced to wait
beyond December 15, 2023 before the redemption proceeds of our trust account become available to them, and they receive the return of
their pro rata portion of the proceeds from our trust account. We have no obligation to return funds to investors prior to the date of
our liquidation unless we complete our initial business combination or amend certain material provisions of our amended and restated certificate
of incorporation prior thereto and only then in cases where investors have sought to redeem their Class A common stock. Only upon our
redemption or any liquidation will public stockholders be entitled to distributions if we do not complete our initial business combination.
Our stockholders may be held liable for claims
by third parties against us to the extent of distributions received by them upon redemption of their shares.
Under the DGCL, stockholders
may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution.
The pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event
we do not complete our initial business combination by December 15, 2023 (or such earlier date as determined by the board of directors)
may be considered a liquidating distribution under Delaware law. If a corporation complies with certain procedures set forth in Section
280 of the DGCL intended to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during
which any third-party claims can be brought against the corporation, a 90-day period during which the corporation may reject any claims
brought, and an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability of stockholders
with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount
distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution. However,
it is our intention to redeem our public shares as soon as reasonably possible following the December 15, 2023 date (or such earlier date
as determined by the board of directors) in the event we do not complete our initial business combination and, therefore, we do not intend
to comply with the foregoing procedures.
Because we will not be complying
with Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that will provide for
our payment of all existing and pending claims or claims that may be potentially brought against us within the 10 years following our
dissolution. However, because we are a blank check company, rather than an operating company, and our operations will be limited to searching
for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment bankers,
etc.) or prospective target businesses. If our plan of distribution complies with Section 281(b) of the DGCL, any liability of stockholders
with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount
distributed to the stockholder, and any liability of the stockholder would likely be barred after the third anniversary of the dissolution.
We cannot assure you that we will properly assess all claims that may be potentially brought against us. As such, our stockholders could
potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of our stockholders
may extend beyond the third anniversary of such date. Furthermore, if the pro rata portion of our trust account distributed to our public
stockholders upon the redemption of our public shares in the event we do not complete our initial business combination by December 15,
2023 (or such earlier date as determined by the board of directors) is not considered a liquidating distribution under Delaware law and
such redemption distribution is deemed to be unlawful (potentially due to the imposition of legal proceedings that a party may bring or
due to other circumstances that are currently unknown), then pursuant to Section 174 of the DGCL, the statute of limitations for claims
of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidating
distribution.
Because we are neither limited to evaluating
a target business in a particular industry sector nor have we selected any specific target businesses with which to pursue our initial
business combination, you will be unable to ascertain the merits or risks of any particular target business’s operations.
Our efforts to identify a
prospective initial business combination target will not be limited to a particular industry, sector or geographic region. While we may
pursue an initial business combination opportunity in any industry or sector, we intend to capitalize on the ability of our management
team to identify, acquire and operate a business or businesses that can benefit from our management team’s established global relationships
and operating experience. Our management team has extensive experience in identifying and executing strategic investments globally and
has done so successfully in a number of sectors. Our amended and restated certificate of incorporation prohibits us from effectuating
a business combination with another blank check company or similar company with nominal operations. Because we have not yet selected any
specific target business with respect to a business combination, there is no basis to evaluate the possible merits or risks of any particular
target business’s operations, results of operations, cash flows, liquidity, financial condition or prospects. To the extent we complete
our initial business combination, we may be affected by numerous risks inherent in the business operations with which we combine. For
example, if we combine with a financially unstable business or an entity lacking an established record of sales or earnings, we may be
affected by the risks inherent in the business and operations of a financially unstable or a development stage entity. Although our officers
and directors will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly
ascertain or assess all of the significant risk factors or that we will have adequate time to complete due diligence. Furthermore, some
of these risks may be outside of our control and leave us with no ability to control or reduce the chances that those risks will adversely
impact a target business. We also cannot assure you that an investment in our units will ultimately prove to be more favorable to investors
than a direct investment, if such opportunity were available, in a business combination target. Accordingly, any stockholders or warrant
holders who choose to remain stockholders or warrant holders following our initial business combination could suffer a reduction in the
value of their securities. Such stockholders or warrant holders are unlikely to have a remedy for such reduction in value unless they
are able to successfully claim that the reduction was due to the breach by our officers or directors of a duty of care or other fiduciary
duty owed to them, or if they are able to successfully bring a private claim under securities laws that the proxy materials or tender
offer documents, as applicable, relating to the business combination contained an actionable material misstatement or material omission.
We may seek business combination opportunities
in industries or sectors that may be outside of our management’s areas of expertise.
We will consider a business
combination outside of our management’s areas of expertise if a business combination candidate is presented to us and we determine
that such candidate offers an attractive business combination opportunity for our company. Although our management will endeavor to evaluate
the risks inherent in any particular business combination candidate, we cannot assure you that we will adequately ascertain or assess
all of the significant risk factors. We also cannot assure you that an investment in our units will not ultimately prove to be less favorable
to investors in the Public Offering than a direct investment, if an opportunity were available, in a business combination candidate. In
the event we elect to pursue a business combination 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 prospectus 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 ascertain or assess adequately all of the relevant risk factors. Accordingly, any stockholders who choose
to remain stockholders following our initial business combination could suffer a reduction in the value of their shares. Such stockholders
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 attributes consistent with our general criteria and guidelines. 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 stockholders 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 stockholder approval of the transaction is required by law, or we decide
to obtain stockholder approval for business or other reasons, it may be more difficult for us to attain stockholder approval of our initial
business combination if the target business does not meet our general criteria and guidelines. If we are unable to complete our initial
business combination, our public stockholders may only receive their pro rata portion of the funds in the trust account that are available
for distribution to public stockholders, and our warrants will expire worthless.
We are not required to obtain an opinion from
an independent investment banking firm or from a valuation or appraisal 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 stockholders from a financial point of view.
Unless we complete our initial
business combination with an affiliated entity or our board of directors cannot independently determine the fair market value of the target
business or businesses (including with the assistance of financial advisors), we are not required to obtain an opinion from an independent
investment banking firm which is a member of FINRA or from a valuation or appraisal firm that the price we are paying is fair to our stockholders
from a financial point of view. If no opinion is obtained, our stockholders 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 materials or tender offer documents, as applicable, related to our initial business combination.
We may issue additional shares of Class A common
stock or shares of preferred stock to complete our initial business combination or under an employee incentive plan after completion of
our initial business combination. We may also issue shares of Class A common stock upon the conversion of the founder shares at a ratio
greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions contained in our amended
and restated certificate of incorporation. Any such issuances would dilute the interest of our stockholders and likely present other risks.
Our amended and restated
certificate of incorporation authorizes the issuance of up to 380,000,000 shares of Class A common stock, par value $0.0001 per share,
20,000,000 shares of Class B common stock, par value $0.0001 per share, and 1,000,000 shares of preferred stock, par value $0.0001 per
share. Immediately after the Public Offering, there were 338,600,000 and 9,650,000 authorized but unissued shares of Class A common stock
and Class B common stock, 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 common stock. The Class B common stock is automatically
convertible into Class A common stock concurrently with or immediately following the consummation of our initial business combination,
initially at a one-for-one ratio but subject to adjustment as set forth herein and in our amended and restated certificate of incorporation.
Immediately after the Public Offering, were be no shares of preferred stock issued and outstanding.
We may issue a substantial
number of additional shares of Class A common stock or shares of preferred stock to complete our initial business combination or under
an employee incentive plan after completion of our initial business combination. We may also issue shares of Class A common stock to redeem
the warrants as described in “Description of Securities - Warrants - Public Stockholders’ Warrants - Redemption of warrants
when the price per share of Class A common stock equals or exceeds $10.00” or upon conversion of the Class B common stock at a ratio
greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions as set forth therein.
However, our amended and restated certificate of incorporation provides, among other things, that prior to 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 as
a class with our public shares (a) on any initial business combination or (b) to approve an amendment to our amended and restated certificate
of incorporation to (x) extend the time we have to consummate a business combination beyond 24 months from the closing of the Public Offering
or (y) amend the foregoing provisions. These provisions of our amended and restated certificate of incorporation, like all provisions
of our amended and restated certificate of incorporation, may be amended with a stockholder vote. The issuance of additional shares of
common stock or shares of preferred stock:
| ● | may significantly dilute the
equity interest of investors in the Public Offering; |
| ● | may subordinate the rights
of holders of Class A common stock if shares of preferred stock are issued with rights senior to those afforded our Class A common stock; |
| ● | could cause a change in control
if a substantial number of shares of Class A common stock is issued, which may affect, among other things, our ability to use our net
operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; and |
| ● | may adversely affect prevailing
market prices for our units, Class A common stock and/or warrants. |
Unlike some other similarly structured special
purpose acquisition companies, our initial stockholders will receive additional shares of Class A common stock if we issue certain shares
to consummate an initial business combination.
The founder shares will automatically
convert into shares of Class A common stock concurrently with or immediately following the consummation of our initial business combination
on a one-for-one basis, subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like, and
subject to further adjustment as provided herein. In the case that additional shares of Class A common stock or equity-linked securities
are issued or deemed issued in connection with our initial business combination, the number of shares of Class A common stock issuable
upon conversion of all founder shares will equal, in the aggregate, on an as-converted basis, 20% of the total number of shares of Class
A common stock outstanding after such conversion (after giving effect to any redemptions of shares of Class A common stock by public stockholders),
including the total number of shares of Class A common stock issued, or deemed issued or issuable upon conversion or exercise of any equity-linked
securities or rights issued or deemed issued, by the company in connection with or in relation to the consummation of the initial business
combination, excluding any shares of Class A common stock or equity-linked securities or rights exercisable for or convertible into shares
of Class A common stock issued, or to be issued, to any seller in the initial business combination and any private placement warrants
issued to our sponsor, officers or directors upon conversion of working capital loans, provided that such conversion of founder shares
will never occur on a less than one-for-one basis. This is different than some other similarly structured special purpose acquisition
companies in which the initial stockholders will only be issued an aggregate of 20% of the total number of shares to be outstanding prior
to our initial business combination.
Resources could be wasted in researching business
combinations that are not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge with another
business. If we are unable to complete our initial business combination, our public stockholders may only receive their pro rata portion
of the funds in the trust account that are available for distribution to public stockholders, and our warrants will expire worthless.
We anticipate that the investigation
of each specific target business and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments
will require substantial management time and attention and substantial costs for accountants, attorneys and others. If we decide not to
complete a specific initial business combination, the costs incurred up to that point for the proposed transaction likely would not be
recoverable. Furthermore, if we reach an agreement relating to a specific target business, we may fail to complete our initial business
combination for any number of reasons including those beyond our control. Any such event will result in a loss to us of the related costs
incurred which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we are unable
to complete our initial business combination, our public stockholders may only receive their pro rata portion of the funds in the trust
account that are available for distribution to public stockholders, and our warrants will expire worthless.
We may engage in a business combination with
one or more target businesses that have relationships with entities that may be affiliated with our sponsor, executive officers, directors
or existing holders 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 existing holders. Our directors also serve as officers and board members for other entities,
including, without limitation, those described under “Management - Conflicts of Interest.” Such entities may compete with
us for business combination opportunities. Our sponsor, officers and directors are not currently aware of any specific opportunities for
us to complete our initial business combination with any entities with which they are affiliated, and there have been no substantive discussions
concerning a business combination with any such entity or entities. Although we will not be specifically focusing on, or targeting, any
transaction with any affiliated entities, we would pursue such a transaction if we determined that such affiliated entity met our criteria
for a business combination as set forth in “Proposed Business - Effecting our initial business combination - Selection of a target
business and structuring of our initial business combination” and such transaction was approved by a majority of our independent
and disinterested directors. Despite our agreement to obtain an opinion from an independent investment banking firm which is a member
of FINRA or a valuation or appraisal firm regarding the fairness to our company from a financial point of view of a business combination
with one or more domestic or international businesses affiliated with our sponsor, executive officers, directors or existing holders,
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 stockholders 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 the Public Offering), a conflict of interest may arise in determining whether a particular business combination
target is appropriate for our initial business combination.
On August 27, 2020 our sponsor
subscribed for an aggregate 10,062,500 founder shares for a total subscription price of $25,000, or approximately $0.002 per share. On
November 23, 2020, our sponsor surrendered 1,437,500 founder shares to us for cancellation for no consideration resulting in our sponsor
holding 8,625,000 founder shares. Such shares are fully paid, and the cash amount of the subscription price therefor was received on September
22, 2020. On December 10, 2020, we effected a 1:1.2 stock split of our Class B common stock, resulting in an aggregate of 10,350,000 founder
shares outstanding, all of which are held by our sponsor. Prior to the initial investment in the company of $25,000 by the sponsor, the
company had no assets, tangible or intangible. The purchase price of the founder shares was determined by dividing the amount of cash
contributed to the company by the number of founder shares issued. The number of founder shares outstanding was determined based on the
expectation that the total size of the Public Offering would be a maximum of 41,400,000 units if the underwriters’ over-allotment
option was exercised in full, and therefore that such founder shares would represent 20% of the outstanding shares after the Public Offering.
The founder shares will be worthless if we do not complete an initial business combination. In addition, our sponsor has committed to
purchase an aggregate of 10,280,000 warrants, each exercisable for one share of Class A common stock at $11.50 per share, for an aggregate
purchase price of $10,280,000, or $1.00 per warrant, that will also be worthless if we do not complete our initial business combination.
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 December 15, 2023 nears, which is the deadline for our completion of
an initial business combination.
We may issue notes or other debt securities,
or otherwise incur substantial debt, to complete a business combination, which may adversely affect our leverage and financial condition
and thus negatively impact the value of our stockholders’ investment in us.
Although we have no commitments
as of the date of this prospectus to issue any notes or other debt securities, or to otherwise incur outstanding debt following the Public
Offering, we may choose to incur substantial debt to complete our initial business combination. We and our officers have agreed that we
will not incur any indebtedness unless we have obtained from the lender a waiver of any right, title, interest or claim of any kind in
or to the monies held in the trust account. As such, no issuance of debt will affect the per share amount available for redemption from
the trust account. Nevertheless, the incurrence of debt could have a variety of negative effects, including:
| ● | default and foreclosure on
our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations; |
| ● | acceleration of our obligations
to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the
maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant; |
| ● | our immediate payment of all
principal and accrued interest, if any, if the debt is payable on demand; |
| ● | our inability to obtain necessary
additional financing if the debt contains covenants restricting our ability to obtain such financing while the debt is outstanding; |
| ● | our inability to pay dividends
on our Class A common stock; |
| ● | 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 common
stock if declared, expenses, capital expenditures, acquisitions and other general corporate purposes; |
| ● | limitations on our flexibility
in planning for and reacting to changes in our business and in the industry in which we operate; |
| ● | increased vulnerability to
adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and |
| ● | limitations on our ability
to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and
other purposes and other disadvantages compared to our competitors who have less debt. |
We may only be able to complete one business
combination with the proceeds of the Public Offering and the sale of the private placement warrants, which will cause us to be solely
dependent on a single business which may have a limited number of products or services. This lack of diversification may negatively impact
our operations and profitability.
The net proceeds from the
Public Offering and the private placement of warrants provided us with $399,510,000 that we may use to complete our initial business combination
and pay related fees and expenses (after taking into account the $14,490,000 of deferred underwriting commissions being held in the trust
account and the estimated offering expenses).
We may effectuate our initial
business combination with a single target business or multiple target businesses simultaneously or within a short period of time. However,
we may not be able to effectuate our initial business combination with more than one target business because of various factors, including
the existence of complex accounting issues and the requirement that we prepare and file pro forma financial statements with the SEC that
present operating results and the financial condition of several target businesses as if they had been operated on a combined basis. By
completing our initial business combination with only a single entity, our lack of diversification may subject us to numerous economic,
competitive and regulatory developments. Further, we would not be able to diversify our operations or benefit from the possible spreading
of risks or offsetting of losses, unlike other entities which may have the resources to complete several business combinations in different
industries or different areas of a single industry. Accordingly, the prospects for our success may be:
| ● | solely dependent upon the performance
of a single business, property or asset, or |
| ● | dependent upon the development
or market acceptance of a single or limited number of products, processes or services. |
This lack of diversification
may subject us to numerous economic, competitive and regulatory risks, any or all of which may have a substantial adverse impact upon
the particular industry in which we may operate subsequent to our initial business combination.
We may attempt to simultaneously complete business
combinations with multiple prospective targets, which may hinder our ability to complete our initial business combination and give rise
to increased costs and risks that could negatively impact our operations and profitability.
If we determine to simultaneously
acquire several businesses that are owned by different sellers, we will need for each of such sellers to agree that our purchase of its
business is contingent on the simultaneous closings of the other business combinations, which may make it more difficult for us, and delay
our ability, to complete our initial business combination. With multiple business combinations, we could also face additional risks, including
additional burdens and costs with respect to possible multiple negotiations and due diligence investigations (if there are multiple sellers)
and the additional risks associated with the subsequent assimilation of the operations and services or products of the acquired companies
in a single operating business. If we are unable to adequately address these risks, it could negatively impact our profitability and results
of operations.
We may attempt to complete our initial business
combination with a private company about which little information is available, which may result in a business combination with a company
that is not as profitable as we suspected, if at all.
In pursuing our business
combination strategy, we may seek to effectuate our initial business combination with a privately held company. Very little public information
generally exists about private companies, and we could be required to make our decision on whether to pursue a potential initial business
combination on the basis of limited information, which may result in a business combination with a company that is not as profitable as
we suspected, if at all.
We do not have a specified maximum redemption
threshold. The absence of such a redemption threshold may make it possible for us to complete our initial business combination with which
a substantial majority of our stockholders or warrant holders do not agree.
Our amended and restated
certificate of incorporation does not provide a specified maximum redemption threshold, except that in no event will we redeem our public
shares in an amount that would cause our net tangible assets to be less than $5,000,001. In addition, our proposed initial business combination
may impose a minimum cash requirement for: (i) cash consideration to be paid to the target or its owners, (ii) cash for working capital
or other general corporate purposes or (iii) the retention of cash to satisfy other conditions. As a result, we may be able to complete
our initial business combination even though a substantial majority of our public stockholders do not agree with the transaction and have
redeemed their shares or, if we seek stockholder 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 any of their respective affiliates. In the event the aggregate cash consideration
we would be required to pay for all shares of Class A common stock 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 in connection with such initial business combination, all shares
of Class A common stock 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, special purpose acquisition companies have, in the recent past, amended various provisions of their charters and other governing
instruments, including their warrant agreements. We cannot assure you that we will not seek to amend our amended and restated certificate
of incorporation or governing instruments in a manner that will make it easier for us to complete our initial business combination that
our stockholders may not support.
In order to effectuate a
business combination, special purpose acquisition companies have, in the recent past, amended various provisions of their charters and
governing instruments, including their warrant agreements. For example, special purpose acquisition companies have amended the definition
of business combination, increased redemption thresholds and extended the time to consummate an initial business combination and, with
respect to their warrants, amended their warrant agreements to require the warrants to be exchanged for cash and/or other securities.
Amending our amended and restated certificate of incorporation requires the approval of holders of 65% of our common stock, and amending
our warrant agreement will require a vote of holders of at least 50% of the public warrants and, solely with respect to any amendment
to the terms of the private placement warrants or any provision of the warrant agreement with respect to the private placement warrants,
50% of the number of the then outstanding private placement warrants. In addition, our amended and restated certificate of incorporation
requires us to provide our public stockholders with the opportunity to redeem their public shares for cash if we propose an amendment
to our amended and restated certificate of incorporation to modify the substance or timing of our obligation to allow redemption in connection
with our initial business combination or to redeem 100% of our public shares if we do not complete an initial business combination by
December 15, 2023 (or such earlier date as determined by the board of directors) or with respect to any other material provisions relating
to stockholders’ rights or pre-initial business combination activity. To the extent any of such amendments would be deemed to fundamentally
change the nature of the securities offered through this registration statement, we would register, or seek an exemption from registration
for, the affected securities. We cannot assure you that we will not seek to amend our charter or governing instruments or extend the time
to consummate an initial business combination in order to effectuate our initial business combination.
The provisions of our amended and restated
certificate of incorporation that relate to our pre-business combination activity (and corresponding provisions of the agreement governing
the release of funds from our trust account) may be amended with the approval of holders of 65% of our common stock, which is a lower
amendment threshold than that of some other special purpose acquisition companies. It may be easier for us, therefore, to amend our amended
and restated certificate of incorporation to facilitate the completion of an initial business combination that some of our stockholders
may not support.
Our amended and restated
certificate of incorporation provides that any of its provisions related to pre-business combination activity (including the requirement
to deposit proceeds of the Public 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 stockholders as described herein) may be amended if approved by
holders of 65% of our common stock entitled to vote thereon and corresponding provisions of the trust agreement governing the release
of funds from our trust account may be amended if approved by holders of 65% of our common stock entitled to vote thereon. In all other
instances, our amended and restated certificate of incorporation may be amended by holders of a majority of our outstanding common stock
entitled to vote thereon, subject to applicable provisions of the DGCL or applicable stock exchange rules. Our initial stockholders, who
collectively beneficially own 89.4% of our outstanding common stock after giving effect to the redemptions in connection with the Special
Meeting, may participate in any vote to amend our amended and restated certificate of incorporation and/or trust agreement and will have
the discretion to vote in any manner they choose. As a result, we may be able to amend the provisions of our amended and restated certificate
of incorporation which govern our pre-business combination behavior more easily than some other special purpose acquisition companies,
and this may increase our ability to complete a business combination with which you do not agree. Our stockholders may pursue remedies
against us for any breach of our amended and restated certificate of incorporation.
Our sponsor, executive officers
and directors have agreed, pursuant to written agreements with us, that they will not propose any amendment to our amended and restated
certificate of incorporation to modify the substance or timing of our obligation to allow redemption in connection with our initial business
combination or to redeem 100% of our public shares if we do not complete our initial business combination by December 15, 2023 (or such
earlier date as determined by the board of directors) or with respect to any other material provisions relating to stockholders’
rights or pre-initial business combination activity, unless we provide our public stockholders with the opportunity to redeem their Class
A common stock 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 taxes,
divided by the number of then outstanding public shares. Our stockholders 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 stockholders would need to pursue a stockholder derivative action, subject
to applicable law.
We may be unable to obtain additional financing
to complete our initial business combination or to fund the operations and growth of a target business, which could compel us to restructure
or abandon a particular business combination.
We have not selected any
specific business combination target but intend to target businesses with enterprise values that are greater than we could acquire with
the net proceeds of the Public Offering and the sale of the private placement warrants. As a result, if the cash portion of the purchase
price exceeds the amount available from the trust account, net of amounts needed to satisfy any redemption by public stockholders, we
may be required to seek additional financing to complete such proposed initial business combination. We cannot assure you that such financing
will be available on acceptable terms, if at all. To the extent that additional financing proves to be unavailable when needed to complete
our initial business combination, we would be compelled to either restructure the transaction or abandon that particular business combination
and seek an alternative target business candidate. Further, we may be required to obtain additional financing in connection with the closing
of our initial business combination for general corporate purposes, including for maintenance or expansion of operations of the post-transaction
businesses, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, or to fund
the purchase of other companies. If we are unable to complete our initial business combination, our public stockholders may only receive
their pro rata portion of the funds in the trust account that are available for distribution to public stockholders, and our warrants
will expire worthless. In addition, even if we do not need additional financing to complete our initial business combination, we may require
such financing to fund the operations or growth of the target business. The failure to secure additional financing could have a material
adverse effect on the continued development or growth of the target business. None of our officers, directors or stockholders is required
to provide any financing to us in connection with or after our initial business combination.
Our initial stockholders control a substantial
interest in us and thus may exert a substantial influence on actions requiring a stockholder vote, potentially in a manner that you do
not support.
Our initial stockholders
own 89.4% of our outstanding common stock after giving effect to the redemptions in connection with the Special Meeting. Accordingly,
they may exert a substantial influence on actions requiring a stockholder vote, potentially in a manner that you do not support, including
amendments to our amended and restated certificate of incorporation. If our initial stockholders purchase any units in the Public Offering
or if our initial stockholders purchase any additional Class A common stock in the aftermarket or in privately negotiated transactions,
this would increase their control. Neither our initial stockholders nor, to our knowledge, any of our officers or directors, have any
current intention to purchase additional securities, other than as disclosed in this prospectus. Factors that would be considered in making
such additional purchases would include consideration of the current trading price of our Class A common stock. 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 terms for three years with only one class of directors being elected in each year. We may not hold an annual meeting of stockholders
to elect new directors prior to the completion of our initial business combination, in which case all of the current directors will continue
in office until at least the completion of the business combination. If there is an annual meeting, as a consequence of our “staggered”
board of directors, only a minority of the board of directors will be considered for election and our initial stockholders, because of
their ownership position, will have considerable influence regarding the outcome. Accordingly, our initial stockholders will continue
to exert control at least until the completion of our initial business combination.
Because we must furnish our stockholders with
target business financial statements, we may lose the ability to complete an otherwise advantageous initial business combination with
some prospective target businesses.
The federal proxy rules require
that the proxy statement with respect to the vote on an initial business combination include historical and pro forma financial statement
disclosure. 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 (“GAAP”), or international financial reporting
standards as issued by the International Accounting Standards Board (“IFRS”), depending on the circumstances and the historical
financial statements may be required to be audited in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (“PCAOB”). These financial statement requirements may limit the pool of potential target businesses we may acquire
because some targets may be unable to provide such financial statements in time for us to disclose such statements in accordance with
federal proxy rules and complete our initial business combination within the prescribed time frame.
Compliance obligations under the Sarbanes-Oxley
Act may make it more difficult for us to effectuate our initial business combination, require substantial financial and management resources,
and increase the time and costs of completing an initial business combination.
Section 404 of the Sarbanes-Oxley
Act requires that we evaluate and report on our system of internal controls beginning with our Annual Report on Form 10-K for the year
ending December 31, 2021. Only in the event we are deemed to be a large accelerated filer or an accelerated filer, and no longer qualify
as an emerging growth company, will we be required to comply with the independent registered public accounting firm attestation requirement
on our internal control over financial reporting. Further, for as long as we remain an emerging growth company, we will not be required
to comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting.
The fact that we are a blank check company makes compliance with the requirements of the Sarbanes-Oxley Act particularly burdensome on
us as compared to other public companies because a target 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 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.
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 initial 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 initial 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.
RISKS RELATING TO THE POST-BUSINESS COMBINATION
COMPANY
Subsequent to our completion of our initial
business combination, we may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have
a significant negative effect on our financial condition, results of operations and the price of our securities, which could cause you
to lose some or all of your investment.
Even if we conduct extensive
due diligence on a target business with which we combine, we cannot assure you that this diligence will identify all material issues that
may be present with a particular target business, that it would be possible to uncover all material issues through a customary amount
of due diligence, or that factors outside of the target business and outside of our control will not later arise. As a result of these
factors, we may be forced to later write-down or write-off assets, restructure our operations, or incur impairment or other charges that
could result in our reporting losses. Even if our due diligence successfully identifies certain risks, unexpected risks may arise and
previously known risks may materialize in a manner not consistent with our preliminary risk analysis. Even though these charges may be
non-cash items and not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to negative
market perceptions about us or our securities. In addition, charges of this nature may cause us to violate net worth or other covenants
to which we may be subject as a result of assuming pre-existing debt held by a target business or by virtue of our obtaining debt financing
to partially finance the initial business combination or thereafter. Accordingly, any stockholders or warrant holders who choose to remain
stockholders or warrant holders following the business combination could suffer a reduction in the value of their securities. Such stockholders
or warrant holders are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction
was due to the breach by our officers or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully
bring a private claim under securities laws that the proxy materials or tender offer documents, as applicable, relating to the business
combination contained an actionable material misstatement or material omission.
The officers and directors of an acquisition
candidate may resign upon completion of our initial business combination. The loss of a business combination target’s key personnel
could negatively impact the operations and profitability of our post-combination business.
The role of an acquisition
candidate’s key personnel upon the completion of our initial business combination cannot be ascertained at this time. Although we
contemplate that certain members of an acquisition candidate’s management team will remain associated with the acquisition candidate
following our initial business combination, it is possible that members of the management of an acquisition candidate will not wish to
remain in place.
Our management may not maintain control of
a target business after our initial business combination. We cannot provide assurance that, upon loss of control of a target business,
new management will possess the skills, qualifications or abilities necessary to profitably operate such business.
We may structure our initial
business combination so that the post-transaction company in which our public stockholders own shares will own less than 100% of the equity
interests or assets of a target business, but we will only complete such business combination if the post-transaction company owns or
acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient
for us not to be required to register as an investment company under the Investment Company Act. We will not consider any transaction
that does not meet such criteria. Even if the post-transaction company owns 50% or more of the voting securities of the target, our stockholders
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 shares of Class A common stock in exchange for all of the outstanding capital stock 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 shares of Class A
common stock, our stockholders immediately prior to such transaction could own less than a majority of our outstanding Class A common
stock subsequent to such transaction. In addition, other minority stockholders may subsequently combine their holdings resulting in a
single person or group obtaining a larger share of the company’s shares than we initially acquired. Accordingly, this may make it
more likely that our management will not maintain control of the target business.
We may have a limited ability to assess the
management of a prospective target business and, as a result, may effect our initial business combination with a target business whose
management may not have the skills, qualifications or abilities to manage a public company.
When evaluating the desirability
of effecting our initial business combination with a prospective target business, our ability to assess the target business’s management
may be limited due to a lack of time, resources or information. Our assessment of the capabilities of the target 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 stockholders or warrant holders who choose
to remain stockholders or warrant holders following the business combination could suffer a reduction in the value of their securities.
Such stockholders or warrant holders are unlikely to have a remedy for such reduction in value unless they are able to successfully claim
that the reduction was due to the breach by our officers or directors of a duty of care or other fiduciary duty owed to them, or if they
are able to successfully bring a private claim under securities laws that the proxy solicitation or tender offer materials, as applicable,
relating to the business combination contained an actionable material misstatement or material omission.
There are risks related to the healthcare industry
to which we may be subject.
Business combinations with
companies with operations in the healthcare industry entail special considerations and risks. If we are successful in completing a business
combination with a target business with operations in the healthcare industry, we will be subject to, and possibly adversely affected
by, the following risks, including but not limited to:
| ● | Competition could reduce profit
margins. |
| ● | Our inability to comply with
governmental regulations affecting the healthcare industry could negatively affect our operations. |
| ● | An inability to license or
enforce intellectual property rights on which our business may depend. |
| ● | The success of our planned
business following consummation of our initial business combination may depend on maintaining a well-secured business and technology
infrastructure. |
|
● |
If we are required to obtain governmental approval of our products, the production of our products could be delayed and we could be required to engage in a lengthy and expensive approval process that may not ultimately be successful. |
| ● | Continuing government and private
efforts to contain healthcare costs, including through the implementation of legal and regulatory changes, may reduce our future revenue
and our profitability following such business combination. |
| ● | Changes in the healthcare related
wellness industry and markets for such products affecting our customers or retailing practices could negatively impact customer relationships
and our results of operations. |
|
● |
The healthcare industry is susceptible to significant liability exposure. If liability claims are brought against us following a business combination, it could materially adversely affect our operations. |
| ● | Dependence of our operations
upon third-party suppliers, manufacturers or contractors whose failure to perform adequately could disrupt our business. |
| ● | The Affordable Care Act, possible
changes to it or its repeal, and how it is implemented could negatively impact our business. |
| ● | A disruption in supply could
adversely impact our business. |
Any of the foregoing could
have an adverse impact on our operations following a business combination. However, our efforts in identifying prospective target businesses
will not be limited to the healthcare industry. Accordingly, if we acquire a target business in another industry, these risks will likely
not affect us and we will be subject to other risks attendant with the specific industry in which we operate or target business which
we acquire, none of which can be presently ascertained.
RISKS RELATING TO ACQUIRING AND OPERATING A
BUSINESS IN FOREIGN COUNTRIES
If we effect our initial business combination
with a company located outside of the United States, we would be subject to a variety of additional risks that may adversely affect us.
If we pursue a target company
with operations or opportunities outside of the United States for our initial business combination, we may face additional burdens in
connection with investigating, agreeing to and completing such initial business combination, and if we effect such initial business combination,
we would be subject to a variety of additional risks that may negatively impact our operations.
If we pursue a target a company
with operations or opportunities outside of the United States for our initial business combination, we would be subject to risks associated
with cross-border business combinations, including in connection with investigating, agreeing to and completing our initial business combination,
conducting due diligence in a foreign jurisdiction, having such transaction approved by any local governments, regulators or agencies
and changes in the purchase price based on fluctuations in foreign exchange rates.
If we effect our initial
business combination with such a company, we would be subject to any special considerations or risks associated with companies operating
in an international setting, including any of the following:
| ● | costs and difficulties inherent
in managing cross-border business operations; |
| ● | rules and regulations regarding
currency redemption; |
| ● | complex corporate withholding
taxes on individuals; |
| ● | laws governing the manner in
which future business combinations may be effected; |
| ● | exchange listing and/or delisting
requirements; |
| ● | tariffs and trade barriers; |
| ● | regulations related to customs
and import/export matters; |
| ● | local or regional economic
policies and market conditions; |
| ● | unexpected changes in regulatory
requirements; |
| ● | challenges in managing and
staffing international operations; |
|
● |
tax issues, such as tax law changes and variations in tax laws as compared to the United States; |
| ● | currency fluctuations and exchange
controls; |
| ● | challenges in collecting accounts
receivable; |
| ● | cultural and language differences; |
| ● | underdeveloped or unpredictable
legal or regulatory systems; |
| ● | protection of intellectual
property; |
| ● | social unrest, crime, strikes,
riots and civil disturbances; |
| ● | regime changes and political
upheaval; |
| ● | terrorist attacks and wars;
and |
|
● |
deterioration of political relations with the United States. |
We may not be able to adequately
address these additional risks. If we were unable to do so, we may be unable to complete such initial business combination, or, if we
complete such initial business combination, our operations might suffer, either of which may adversely impact our business, financial
condition and results of operations.
RISKS RELATING TO OUR MANAGEMENT TEAM
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.
Involvement of members of our management and
companies with which they are affiliated in civil disputes and litigation or governmental investigations unrelated to our business affairs
could materially impact our ability to complete an initial business combination.
Members of our management
team and companies with which they are affiliated have been, and in the future will continue to be, involved in a wide variety of business
affairs, including transactions, such as sales and purchases of businesses, and ongoing operations. As a result of such involvement, members
of our management and companies with which they are affiliated in past have been, and may in the future be, involved in civil disputes
and litigation and governmental investigations relating to their business affairs unrelated to our company. Any claims or investigations
involving members of our management and companies with which they are affiliated may be detrimental to our reputation and could negatively
affect our ability to identify and complete an initial business combination in a material manner and may have an adverse effect on the
price of our securities.
Our ability to successfully effect our initial
business combination and to be successful thereafter will be dependent upon the efforts of our key personnel, some of whom may join us
following our initial business combination. The loss of key personnel could negatively impact the operations and profitability of our
post-combination business.
Our ability to successfully
effect our initial business combination is dependent upon the efforts of our key personnel. The role of our key personnel in the target
business, however, cannot presently be ascertained. Although some of our key personnel may remain with the target business in senior management
or advisory positions following our initial business combination, it is likely that some or all of the management of the target business
will remain in place. While we intend to closely scrutinize any individuals we engage after our initial business combination, we cannot
assure you that our assessment of these individuals will prove to be correct. These individuals may be unfamiliar with the requirements
of operating a company regulated by the SEC, which could cause us to have to expend time and resources helping them become familiar with
such requirements.
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, subject to their fiduciary duties under Delaware law.
Our executive officers and directors will allocate
their time to other businesses thereby causing conflicts of interest in their determination as to how much time to devote to our affairs.
This conflict of interest could have a negative impact on our ability to complete our initial business combination.
Our executive officers and
directors are not required to, and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating
their time between our operations and our search for a business combination and their other businesses. We do not intend to have any full-time
employees prior to the completion of our initial business combination. Each of our executive officers is engaged in several other business
endeavors for which he may be entitled to substantial compensation, and our executive officers and non-independent directors are not obligated
to contribute any specific number of hours per week to our affairs. Our independent directors also serve as officers and board members
for other entities. If our executive officers’ and directors’ other business affairs require them to devote substantial amounts
of time to such affairs in excess of their current commitment levels, it could limit their ability to devote time to our affairs which
may have a negative impact on our ability to complete our initial business combination.
Our officers and directors presently have,
and any of them in the future may have additional, fiduciary or contractual obligations to other entities and, accordingly, may have conflicts
of interest in determining to which entity a particular business opportunity should be presented.
Following the completion
of the Public Offering and until we consummate our initial business combination, we intend to engage in the business of identifying and
combining with one or more businesses. 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. 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. Our amended and restated certificate of incorporation provides that we renounce our
interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely
in his or her capacity as a director or officer of the company and such opportunity is one we are legally and contractually permitted
to undertake and would otherwise be reasonable for us to pursue, and to the extent the director or officer is permitted to refer that
opportunity to us without violating another legal obligation. In addition, our sponsor and our officers and directors may sponsor or form
other special purpose acquisition companies similar to ours or may pursue other business or investment ventures during the period in which
we are seeking an initial business combination. Any such companies, businesses or ventures may present additional conflicts of interest
in pursuing an initial business combination. However, we do not believe that any such potential conflicts would materially affect our
ability to complete our initial business combination.
Our executive officers, directors, security
holders and their respective affiliates may have competitive pecuniary interests that conflict with our interests.
We have not adopted a policy
that expressly prohibits our directors, executive officers, security holders or affiliates from having a direct or indirect pecuniary
or financial interest in any investment to be acquired or disposed of by us or in any transaction to which we are a party or have an interest.
In fact, we may enter into a business combination with a target business that is affiliated with our sponsor, our directors or executive
officers, although we do not intend to do so. Nor do we have a policy that expressly prohibits any such persons from engaging for their
own account in business activities of the types conducted by us. Accordingly, such persons or entities may have a conflict between their
interests and ours.
The personal and financial
interests of our directors and officers may influence their motivation in timely identifying and selecting a target business and completing
a business combination. Consequently, our directors’ and officers’ discretion in identifying and selecting a suitable target
business may result in a conflict of interest when determining whether the terms, conditions and timing of a particular business combination
are appropriate and in our stockholders’ best interest. If this were the case, it would be a breach of their fiduciary duties to
us as a matter of Delaware law and we or our stockholders might have a claim against such individuals for infringing on our stockholders’
rights. However, we might not ultimately be successful in any claim we may make against them for such reason.
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. 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 stockholders 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 stockholders. Furthermore, a stockholder’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.
Certain agreements related to the Public Offering
may be amended without stockholder approval.
Each of the agreements related
to the Public Offering to which we are a party, other than the warrant agreement and the investment management trust agreement, may be
amended without stockholder approval. Such agreements are: the underwriting agreement; the letter agreement among us and our initial stockholders,
officers and directors; the registration rights agreement among us and our initial stockholders; the private placement warrants purchase
agreement between us and our sponsor; and the administrative services agreement among us, our sponsor and an affiliate of our sponsor.
These agreements contain various provisions that our public stockholders might deem to be material. For example, our letter agreement
and the underwriting agreement contain certain lock-up provisions with respect to the founder shares, private placement warrants and other
securities held by our initial stockholders, officers and directors. Amendments to such agreements would require the consent of the applicable
parties thereto and would need to be approved by our board of directors, which may do so for a variety of reasons, including to facilitate
our initial business combination. While we do not expect our board of directors to approve any amendment to any of these agreements prior
to our initial business combination, it may be possible that our board of directors, in exercising its business judgment and subject to
its fiduciary duties, chooses to approve one or more amendments to any such agreement. Any amendment entered into in connection with the
consummation of our initial business combination will be disclosed in our proxy materials or tender offer documents, as applicable, related
to such initial business combination, and any other material amendment to any of our material agreements will be disclosed in a filing
with the SEC. Any such amendments would not require approval from our stockholders, may result in the completion of our initial business
combination that may not otherwise have been possible, and may have an adverse effect on the value of an investment in our securities.
For example, amendments to the lock-up provision discussed above may result in our initial stockholders selling their securities earlier
than they would otherwise be permitted, which may have an adverse effect on the price of our securities.
RISKS RELATING TO OUR SECURITIES
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 stockholders will
be entitled to receive funds from the trust account only upon the earlier to occur of: (i) our completion of an initial business combination,
and then only in connection with those shares of Class A common stock that such stockholder properly elected to redeem, subject to the
limitations described herein, (ii) the redemption of any public shares properly tendered in connection with a stockholder vote to amend
our amended and restated certificate of incorporation to modify the substance or timing of our obligation to allow redemption in connection
with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination by
December 15, 2023 (or such earlier date as determined by the board of directors) or with respect to any other material provisions relating
to stockholders’ rights or pre-initial business combination activity, and (iii) the redemption of our public shares if we are unable
to complete an initial business combination by December 15, 2023 (or such earlier date as determined by the board of directors), subject
to applicable law and as further described herein. In addition, if our plan to redeem our public shares if we are unable to complete an
initial business combination by December 15, 2023 (or such earlier date as determined by the board of directors) is not completed for
any reason, compliance with Delaware law may require that we submit a plan of dissolution to our then-existing stockholders for approval
prior to the distribution of the proceeds held in our trust account. In that case, public stockholders may be forced to wait beyond December
15, 2023 before they receive funds from our trust account. In no other circumstances will a public stockholder have any right or interest
of any kind in the trust account. Holders of warrants will not have any right to the proceeds held in the trust account with respect to
the warrants. Accordingly, to liquidate your investment, you may be forced to sell your public shares or warrants, potentially at a loss.
Nasdaq may delist our securities from trading
on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading
restrictions.
Our units, Class A common
stock and warrants are listed on Nasdaq. We cannot assure you that our securities will continue to be listed on Nasdaq in the future or
prior to our initial business combination. In order to continue listing our securities on Nasdaq prior to our initial business combination,
we must maintain certain financial, distribution and share price levels. Generally, we must maintain a minimum average global market capitalization
and a minimum number of holders of our securities.
Additionally, in connection
with our initial business combination, we will be required to demonstrate compliance with Nasdaq’s initial listing requirements,
which are more rigorous than Nasdaq’s continued listing requirements, in order to continue to maintain the listing of our securities
on Nasdaq. For instance, our share price would generally be required to be at least $4.00 per share and our stockholder’s equity
would generally be required to be at least $5.0 million. We cannot assure you that we will be able to meet those initial listing requirements
at that time.
If Nasdaq delists our securities
from trading on its exchange and we are not able to list our securities on another national securities exchange, we expect our securities
could be quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including:
| ● | a limited availability of market
quotations for our securities; |
| ● | reduced liquidity for our securities; |
| ● | a determination that our Class
A common stock is a “penny stock” which will require brokers trading in our Class A common stock to adhere to more stringent
rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities; |
| ● | a limited amount of news and
analyst coverage; and |
| ● | a decreased ability to issue
additional securities or obtain additional financing in the future. |
The National Securities Markets
Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which
are referred to as “covered securities.” Because our units, Class A common stock and warrants are listed on Nasdaq, our units,
Class A common stock and warrants will qualify as covered securities under the statute. Although the states are preempted from regulating
the sale of our securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and,
if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case.
While we are not aware of a state having used these powers to prohibit or restrict the sale of securities issued by blank check companies,
other than the State of Idaho, certain state securities regulators view blank check companies unfavorably and might use these powers,
or threaten to use these powers, to hinder the sale of securities of blank check companies in their states. Further, if we were no longer
listed on Nasdaq, our securities would not qualify as covered securities under the statute and we would be subject to regulation in each
state in which we offer our securities.
On January 9, 2023, the Company
received a notice from Nasdaq indicating that the Company was deficient in meeting the requirements of Listing Rule 5620(a), which requires
the Company to hold an annual meeting of shareholders no later than one year after the end of the Company’s 2021 fiscal year-end.
In accordance with Nasdaq Listing Rule 5810(c)(2)(G), the Company submitted a plan to regain compliance by holding an annual meeting by
June 2023. While the plan is pending approval by Nasdaq, the Company’s securities will continue to trade on Nasdaq.
The determination of the offering price of
our units, the size of the Public Offering and terms of the units is more arbitrary than the pricing of securities and size of an offering
of an operating company in a particular industry. You may have less assurance, therefore, that the offering price of our units properly
reflects the value of such units than you would have in a typical offering of an operating company.
Prior to the Public Offering
there was been 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 the Public Offering, management held customary organizational meetings with
the representative of the underwriters, both prior to our inception and thereafter, with respect to the state of capital markets, generally,
and the amount the underwriters believed they reasonably could raise on our behalf. Factors considered in determining the size of the
Public Offering, prices and terms of the units, including the Class A common stock and warrants underlying the units, include:
|
● |
the history and prospects of companies whose principal business is the acquisition of other companies; |
|
● |
prior offerings of those companies; |
|
● |
our prospects for acquiring an operating business at attractive values; |
|
● |
a review of debt to equity ratios in leveraged transactions; |
|
● |
an assessment of our management and their experience in identifying operating companies; |
|
● |
general conditions of the securities markets at the time of the Public Offering; and |
|
● |
other factors as were deemed relevant. |
Although these factors were
considered, the determination of our offering size, price and terms of the units 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.
Provisions in our amended and restated certificate
of incorporation and Delaware law may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future
for our shares of Class A common stock and could entrench management.
Our amended and restated
certificate of incorporation contains provisions that may discourage unsolicited takeover proposals that stockholders 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 preferred stock, 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.
We are also subject to anti-takeover
provisions under Delaware law, which could delay or prevent a change of control. Together these provisions may make the removal of management
more difficult and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our
securities.
Our initial business combination and our structure
thereafter may not be tax-efficient to our stockholders and warrant holders. As a result of our business combination, our tax obligations
may be more complex, burdensome and uncertain.
Although we will attempt
to structure our initial business combination in a tax-efficient manner, 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. For example,
in connection with our initial business combination and subject to any requisite stockholder approval, we may structure our business combination
in a manner that requires stockholders and/or warrant holders to recognize gain or income for tax purposes, effect a business combination
with a target company in another jurisdiction, or reincorporate in a different jurisdiction (including, but not limited to, the jurisdiction
in which the target company or business is located). We do not intend to make any cash distributions to stockholders or warrant holders
to pay taxes in connection with our business combination or thereafter. Accordingly, a stockholder or a warrant holder may need to satisfy
any liability resulting from our initial business combination with cash from its own funds or by selling all or a portion of the shares
received. In addition, stockholders and warrant holders may also be subject to additional income, withholding or other taxes with respect
to their ownership of us after our initial business combination.
In addition, we may effect
a business combination with a target company that has business operations outside of the United States, and possibly, business operations
in multiple jurisdictions. If we effect such a business combination, we could be subject to significant income, withholding and other
tax obligations in a number of jurisdictions with respect to income, operations and subsidiaries related to those jurisdictions. Due to
the complexity of tax obligations and filings in other jurisdictions, we may have a heightened risk related to audits or examinations
by U.S. federal, state, local and non-U.S. taxing authorities. This additional complexity and risk could have an adverse effect on our
after-tax profitability and financial condition.
We may amend the terms of the warrants in a
manner that may be adverse to holders of public warrants with the approval by the holders of at least 50% of the then outstanding public
warrants. As a result, the exercise price of your warrants could be increased, the exercise period could be shortened and the number of
shares of Class A common stock purchasable upon exercise of a warrant could be decreased, all without your approval.
Our warrants are 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 to correct any defective provision or 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 this prospectus, (ii) adjusting the provisions relating to cash dividends
on shares of common stock as contemplated by and in accordance with the warrant agreement or (iii) adding or changing any provisions with
respect to matters or questions arising under the warrant agreement as the parties to the warrant agreement may deem necessary or desirable
and that the parties deem to not adversely affect the rights of the registered holders of the warrants, provided that the approval by
the holders of at least 50% of the then outstanding public warrants is required to make any change that adversely affects the interests
of the registered holders of the public warrants. Accordingly, we may amend the terms of the public warrants in a manner adverse to a
holder if holders of at least 50% of the then outstanding public warrants approve of such amendment. Although our ability to amend the
terms of the public warrants with the consent of at least 50% of the then outstanding public warrants is unlimited, examples of such amendments
could be amendments to, among other things, increase the exercise price of the warrants, convert the warrants into cash or stock (at a
ratio different than initially provided), shorten the exercise period or decrease the number of shares of Class A common stock 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. 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.
A provision of our warrant agreement may make
it more difficult for us to complete an initial business combination.
If (i) we issue additional
common stock 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 common stock, (ii) the aggregate gross proceeds from such issuances represent more than
60% of the total equity proceeds, and interest thereon, available for the funding of our initial business combination on the date of the
completion of our initial business combination (net of redemptions), and (iii) the Market Value is below $9.20 per share, then the exercise
price of the warrants will be adjusted to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $10.00
and $18.00 per share redemption trigger prices will be adjusted (to the nearest cent) to be equal to 100% and 180% of the higher of the
Market Value and the Newly Issued Price, respectively. This may make it more difficult for us to complete an initial business combination
with a target business.
We may redeem your unexpired warrants prior
to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless.
We have the ability to redeem
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 common stock 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 Stockholders’ 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 or its permitted transferees.
In addition, we have the
ability to redeem the outstanding public warrants at any time after they become exercisable and prior to their expiration, at a price
of $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that the closing price of our
Class A common stock equals or exceeds $10.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or
the exercise price of a warrant as described under the heading “Description of Securities - Warrants - Public Stockholders’
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, including that holders will be able to
exercise their warrants prior to redemption for a number of shares of Class A common stock determined based on the redemption date and
the fair market value of our Class A common stock. The value received upon exercise of the warrants (i) may be less than the value the
holders would have received if they had exercised their warrants at a later time where the underlying share price is higher and (ii) may
not compensate the holders for the value of the warrants, including because the number of shares of Class A common stock received is capped
at 0.361 shares of Class A common stock per warrant (subject to adjustment) irrespective of the remaining life of the warrants.
Our warrants may have an adverse effect on
the market price of our shares of Class A common stock and make it more difficult to effectuate our initial business combination.
We issued warrants to purchase
20,700,000 shares of Class A common stock as part of the units offered by the Public Offering and, simultaneously with the closing of
the Public Offering, we issued in a private placement an aggregate of 10,280,000 warrants, each exercisable to purchase one share of Class
A common stock at $11.50 per share. In addition, if our sponsor or an affiliate of our sponsor or certain of our officers and directors
makes any working capital loans, such lender may convert those loans into up to an additional 1,500,000 private placement warrants, at
the price of $1.00 per warrant. To the extent we issue common stock to effectuate our initial business combination, the potential for
the issuance of a substantial number of additional shares of Class A common stock 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
shares of Class A common stock and reduce the value of the Class A common stock issued to complete our initial business combination. Therefore,
our warrants may make it more difficult to effectuate our initial business combination or increase the cost of acquiring the target business.
Because each unit contains one-half of one
warrant and only a whole warrant may be exercised, the units may be worth less than units of other special purpose acquisition companies.
Each unit contains one-half
of one 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 shares of Class A common stock to be issued to the warrant holder.
This is different from other offerings similar to ours whose units include one common share and one 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 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 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 it included a warrant to purchase one whole share.
The grant of registration rights to our initial
stockholders and holders of our private placement warrants may make it more difficult to complete our initial business combination, and
the future exercise of such rights may adversely affect the market price of our shares of Class A common stock.
Pursuant to an agreement
entered into concurrently with the issuance and sale of the securities in the Public Offering, our initial stockholders, the holders of
our private placement warrants, the holders of warrants that may be issued upon conversion of working capital loans and their permitted
transferees can demand that we register the shares of Class A common stock into which founder shares are convertible, the private placement
warrants and the Class A common stock issuable upon exercise of the private placement warrants or the Class A common stock issuable upon
conversion of warrants that may be issued upon conversion of working capital loans and any other securities of the company acquired by
them prior to the consummation of our initial business combination. We will bear the cost of registering these securities. The registration
and availability of such a significant number of securities for trading in the public market may have an adverse effect on the market
price of our Class A common stock. In addition, the existence of the registration rights may make our initial business combination more
costly or difficult to conclude. This is because the stockholders of the target business may increase the equity stake they seek in the
combined entity or ask for more cash consideration to offset the negative impact on the market price of our Class A common stock that
is expected when the shares of common stock owned by our initial stockholders, holders of our private placement warrants or holders of
our working capital loans or their respective permitted transferees are registered.
You will not be permitted to exercise your
warrants unless we register and qualify the underlying Class A common stock or certain exemptions are available.
If the issuance of the Class
A common stock upon exercise of the warrants is not registered, qualified or exempt from registration or qualification under the Securities
Act and applicable state securities laws, holders of warrants will not be entitled to exercise such warrants and such warrants 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 common stock included in the units.
We are not registering the
Class A common stock 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 15 business days, after
the closing of our initial business combination, we will use our best efforts to file with the SEC a registration statement covering the
registration under the Securities Act of the Class A common stock issuable upon exercise of the warrants and thereafter will use our best
efforts to cause the same to become effective within 60 business days following our initial business combination and to maintain a current
prospectus relating to the Class A common stock issuable upon exercise of the warrants until the expiration of the warrants in accordance
with the provisions of the warrant agreement. We cannot assure you that we will be able to do so if, for example, any facts or events
arise which represent a fundamental change in the information set forth in the registration statement or prospectus, the financial statements
contained or incorporated by reference therein are not current or correct or the SEC issues a stop order.
If the shares of Class A
common stock issuable upon exercise of the warrants are not registered under the Securities Act, under the terms of the warrant agreement,
holders of warrants who seek to exercise their warrants will not be permitted to do so for cash and, instead, will be required to do so
on a cashless basis in accordance with Section 3(a)(9) of the Securities Act or another exemption.
In no event will warrants
be exercisable for cash or on a cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise their
warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the
exercising holder, or an exemption from registration or qualification is available.
If our shares of Class A
common stock are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition
of “covered securities” under Section 18(b)(1) of the Securities Act, we may, at our option, not permit holders of warrants
who seek to exercise their warrants to do so for cash and, instead, require them to do so on a cashless basis in accordance with Section
3(a)(9) of the Securities Act; in the event we so elect, we will not be required to file or maintain in effect a registration statement
or register or qualify the shares underlying the warrants under applicable state securities laws, and in the event we do not so elect,
we will use our best efforts to register or qualify the shares underlying the warrants under applicable state securities laws to the extent
an exemption is not available.
In no event will we be required
to net cash settle any warrant, or issue securities (other than upon a cashless exercise as described above) 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 the Securities
Act or applicable state securities laws.
You may only be able to exercise your public
warrants on a “cashless basis” under certain circumstances, and if you do so, you will receive fewer shares of Class A common
stock from such exercise than if you were to exercise such warrants for cash.
The warrant agreement provides
that in the following circumstances holders of warrants who seek to exercise their warrants will not be permitted to do for cash and will,
instead, be required to do so on a cashless basis in accordance with Section 3(a)(9) of the Securities Act: (i) if the shares of Class
A common stock issuable upon exercise of the warrants are not registered under the Securities Act in accordance with the terms of the
warrant agreement; and (ii) if we have so elected and the shares of Class A common stock is at the time of any exercise of a warrant not
listed on a national securities exchange such that they satisfy the definition of “covered securities” under Section 18(b)(1)
of the Securities Act. If you exercise your public warrants on a cashless basis under the circumstances described in clauses (i) and (ii)
in the preceding sentence, you would pay the warrant exercise price by surrendering the warrants for that number of shares of Class A
common stock equal to the quotient obtained by dividing (x) the product of the number of shares of Class A common stock underlying the
warrants, multiplied by the excess of the “fair market value” of our shares of Class A common stock (as defined in the next
sentence) over the exercise price of the warrants by (y) the fair market value. The “fair market value” is the average reported
closing price of the shares of Class A common stock 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.
As a result, you would receive fewer shares of Class A common stock from such exercise than if you were to exercise such warrants for
cash.
A new 1% U.S. federal excise tax could be imposed
on us in connection with redemptions by us of our shares or our liquidation.
On August 16, 2022, President
Biden signed into law the Inflation Reduction Act of 2022 (the “IR Act”), which, among other things, imposes a new 1% U.S.
federal excise tax on certain repurchases of stock by “covered corporations” (which include publicly traded domestic (i.e.,
U.S.) corporations) beginning in 2023, with certain exceptions (the “Excise Tax”). The Excise Tax is imposed on the repurchasing
corporation itself, not its stockholders from which the stock is repurchased. Because we are a Delaware corporation and our securities
are trading on Nasdaq, we are a “covered corporation” for this purpose. The amount of the Excise Tax is generally 1% of the
fair market value of the shares repurchased at the time of the repurchase. However, for purposes of calculating the Excise Tax, repurchasing
corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases
during the same taxable year. In addition, certain exceptions apply to the Excise Tax. The U.S. Department of the Treasury has authority
to provide regulations and other guidance to carry out, and prevent the abuse or avoidance of the Excise Tax; however, no guidance has
been issued to date. It is uncertain whether, and/or to what extent, the Excise Tax could apply to any repurchase by us of our common
stock or in the event of our liquidation, in each instance after December 31, 2022, including any redemptions in connection with an initial
business combination or in the event we do not consummate an initial business combination by December 15, 2023 (or such earlier date as
determined by the board of directors).
Whether and to what extent
we would be subject to the Excise Tax on a redemption of our shares of Class A common stock or other stock issued by us would depend on
a number of factors, including (i) whether the redemption is treated as a repurchase of stock for purposes of the Excise Tax, (ii) the
fair market value of the redemption treated as a repurchase of stock in connection with our initial business combination, an extension
or otherwise, (iii) the structure of the initial business combination, (iv) the nature and amount of any “PIPE” or other equity
issuances in connection with the initial business combination (or otherwise issued not in connection with the initial business combination
but issued within the same taxable year of a redemption treated as a repurchase of stock) and (v) the content of regulations and other
guidance from the U.S. Department of the Treasury. As noted above, the Excise Tax would be payable by us, and not by the redeeming holder.
The imposition of the Excise Tax could cause a reduction in the cash available on hand to complete an initial business combination or
for effecting redemptions and may affect our ability to complete an initial business combination. In addition, the Excise Tax could cause
a reduction in the per share amount payable to our public stockholders in the event we liquidate the trust account due to a failure to
complete an initial business combination within the requisite timeframe.
GENERAL RISK FACTORS
We are a blank check 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 blank check company
incorporated under the laws of the State of Delaware with no operating results, and we will not commence operations until obtaining funding
through the Public Offering. 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. We have no plans, arrangements or understandings with any prospective
target business concerning a business combination and may be unable to complete our initial business combination. If we fail to complete
our initial business combination, we will never generate any operating revenues.
Past performance by our management team and
their respective affiliates may not be indicative of future performance of an investment in us or in the future performance of any business
that we may acquire.
Information regarding performance
by, or businesses associated with, our management team or businesses associated with them is presented for informational purposes only.
Past performance by our management team or the other companies referred to in this prospectus is not a guarantee either (i) of success
with respect to any business combination we may consummate or (ii) that we will be able to locate a suitable candidate for our initial
business combination. You should not rely on the historical record of the performance of our management team’s or businesses associated
with them as indicative of our future performance of an investment in us or the returns we will, or is likely to, generate going forward.
An investment in us is not an investment in any of the companies associated with our management team.
Cyber incidents or attacks directed at us could
result in information theft, data corruption, operational disruption and/or financial loss.
We depend on digital technologies,
including information systems, infrastructure and cloud applications and services, including those of third parties with which we may
deal. Sophisticated and deliberate attacks on, or security breaches in, our systems or infrastructure, or the systems or infrastructure
of third parties or the cloud, could lead to corruption or misappropriation of our assets, proprietary information and sensitive or confidential
data. As an early stage company without significant investments in data security protection, we may not be sufficiently protected against
such occurrences. We may not have sufficient resources to adequately protect against, or to investigate and remediate any vulnerability
to, cyber incidents. It is possible that any of these occurrences, or a combination of them, could have adverse consequences on our business
and lead to financial loss.
We 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 internal controls 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 stockholder approval of any golden parachute payments
not previously approved. As a result, our stockholders may not have access to certain information they may deem important. We could be
an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier, including if the market
value of our Class A common stock held by non-affiliates equals or exceeds $700 million as of any June 30 before that time, in which case
we would no longer be an emerging growth company as of the following December 31. We cannot predict whether investors will find our securities
less attractive because we will rely on these exemptions. If some investors find our securities less attractive as a result of our reliance
on these exemptions, the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading
market for our securities and the trading prices of our securities may be more volatile.
Further, Section 102(b)(1)
of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until
private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class
of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS
Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging
growth companies but any such an election to opt out is irrevocable. We have elected not to opt out of such extended transition period
which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an
emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may
make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging growth
company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting
standards used.
Additionally, we are a “smaller
reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced
disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller
reporting company until the last day of the fiscal year in which (1) the market value of our common stock held by non-affiliates equals
or exceeds $250 million as of the prior June 30th, or (2) our annual revenues exceeded $100 million during such completed fiscal
year and the market value of our common stock held by non-affiliates equals or exceeds $700 million as of the prior June 30th.
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.
Provisions in our amended and restated certificate
of incorporation and Delaware law may have the effect of discouraging lawsuits against our directors and officers.
Our amended and restated
certificate of incorporation requires, unless we consent in writing to the selection of an alternative forum, that (i) any derivative
action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer
or other employee to us or our stockholders, (iii) any action asserting a claim against us, our directors, officers or employees arising
pursuant to any provision of the DGCL or our amended and restated certificate of incorporation or bylaws, or (iv) any action asserting
a claim against us, our directors, officers or employees governed by the internal affairs doctrine may be brought only in the Court of
Chancery in the State of Delaware, except any claim (A) as to which the Court of Chancery of the State of Delaware determines that there
is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the
personal jurisdiction of the Court of Chancery within ten days following such determination), (B) which is vested in the exclusive jurisdiction
of a court or forum other than the Court of Chancery, or (C) for which the Court of Chancery does not have subject matter jurisdiction.
If an action is brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process
on such stockholder’s counsel. Although we believe this provision benefits us by providing increased consistency in the application
of Delaware law in the types of lawsuits to which it applies, a court may determine that this provision is unenforceable, and to the extent
it is enforceable, the provision may have the effect of discouraging lawsuits against our directors and officers, although our stockholders
will not be deemed to have waived our compliance with federal securities laws and the rules and regulations thereunder.
Notwithstanding the foregoing,
our amended and restated certificate of incorporation provides that the exclusive forum provision will not apply to suits brought to enforce
a duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. Section 27
of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange
Act or the rules and regulations thereunder. Additionally, unless we consent in writing to the selection of an alternative forum, the
federal courts shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities
Act against us or any of our directors, officers, other employees or agents. Any person or entity purchasing or otherwise acquiring any
interest in our securities shall be deemed to have notice of and consented to these provisions. Although we believe this provision benefits
us by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies, the provision limit
our stockholders’ ability to obtain a favorable judicial forum for disputed with us and may have the effect of discouraging lawsuits
against our directors and officers.
Additionally, unless we consent
in writing to the selection of an alternative forum, the federal courts shall be the exclusive forum for the resolution of any complaint
asserting a cause of action arising under the Securities Act against us or any of our directors, officers, other employees or agents.
Section 22 of the Securities Act, however, created concurrent jurisdiction for federal and state courts over all suits brought to enforce
any duty or liability created by the Securities Act or the rules and regulations thereunder. Accordingly, there is uncertainty as to whether
a court would enforce such provisions, and the enforceability of similar choice of forum provisions in other companies’ charter
documents has been challenged in legal proceedings. While the Delaware courts have determined that such exclusive forum provisions are
facially valid, a stockholder may nevertheless seek to bring a claim in a venue other than those designated in the exclusive forum provisions,
and there can be no assurance that such provisions will be enforced by a court in those other jurisdictions. Any person or entity purchasing
or otherwise acquiring any interest in our securities shall be deemed to have notice of an consented to these provisions; however, we
note that investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder.
Although we believe this
provision benefits us by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies,
the provision may limit our stockholders’ ability to obtain a favorable judicial forum for disputed with us and may have the effect
of discouraging lawsuits against our directors and officers.
The financial statements may not reflect the
Company’s financial condition and cash flow as a result of Russia’s military action against Ukraine.
In February 2022, the Russian
Federation and Belarus commenced a military action with the country of Ukraine. As a result of this action, various nations, including
the United States, have instituted economic sanctions against the Russian Federation and Belarus. Further, the impact of this action and
related sanctions on the world economy are not determinable as of the date of these financial statements. The specific impact on the Company’s
financial condition, results of operations, and cash flows is also not determinable as of the date of these financial statements.