General
We
are an early stage blank check company recently formed as a Delaware corporation for the purpose of effecting a merger, share
exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses, which
we refer to throughout this Report as our initial business combination. True Wind Capital, a technology-focused private investment
firm, is our advisory platform. Our Chief Executive Officer, Mr. Adam H. Clammer, and our Chairman, Mr. James H. Greene,
Jr., are the founding partners of True Wind Capital. We expect to capitalize on the ability of our management team and the broader
True Wind Capital platform to identify, acquire, and operate a business in the technology and technology-enabled services
sectors that may provide opportunities for attractive long-term risk-adjusted returns, though we reserve the right to
pursue an acquisition opportunity in any business or industry.
True
Wind Capital
True
Wind Capital is a San Francisco-based private equity firm managing $1.4 billion as of September 2020 that is focused
on investing in leading technology companies with a broad mandate including software, financial technology, industrial technology,
healthcare IT, internet, semiconductors, and IT services. True Wind Capital is a value-added partner, providing support and
expertise that is rooted in its teams’ 75+ years of collective investing experience. True Wind Capital currently has a team
of 15 full-time investment professionals with deep technology investing expertise.
We
have utilized True Wind Capital’s platform to provide access to its team, deal prospects, and network, along with any necessary
resources to aid in the identification, diligence, and operational support of a target for the initial business combination.
True Wind Capital was instrumental
in launching Nebula Acquisition Corporation (“Nebula”), a special purpose acquisition company that completed its initial
public offering in January 2018 in which it sold 27,500,000 units, each consisting of one share of Nebula common stock and one-third of
one warrant to purchase one share of Nebula common stock for an offering price of $10.00 per unit, generating aggregate proceeds
of $275,000,000. True Wind Capital sourced several acquisition targets for Nebula, which completed a business combination in June
2020 with Open Lending, a provider of lending enablement and risk analytics solutions to financial institutions. In addition to
the proceeds from the initial public offering, Nebula contributed another $200 million in proceeds from a private placement
completed at the time of the initial business combination. Open Lending’s common shares trade on Nasdaq under the symbol
“LPRO.” The closing price of LPRO on December 31, 2020 was $34.96 per share. Including the warrants underlying the
units, the return to investors who purchased units in Nebula’s initial public offering was 3.7x multiple of invested capital
and an IRR of 55% through December 31, 2020. The performance of LPRO may not be indicative of our management team’s ability
to successfully find a target business and to consummate an initial business combination.
Business
Strategy
Our
business strategy is to utilize True Wind Capital’s existing investment identification and evaluation platform to identify
and complete our initial business combination with a company that our management believes, with proper utilization of our network
and experience, has a compelling potential for value creation through our involvement. The True Wind Capital team leverages their
vast investment experience, deep network and technology industry expertise to identify and generate attractive acquisition opportunities
among technology companies with overall transaction values between $750 million and $2.5 billion. To the extent the
purchase price for any acquisition to be paid in cash exceeds the net proceeds available to us, we may issue debt or equity to
consummate the acquisition. Such additional financing may come in the form of bank financings or preferred equity, common equity
or debt offerings or a combination of the foregoing. We believe True Wind’s experience and track record, along with its
disciplined direct sourcing and thematic research approach, are particularly differentiated, and will enable us to successfully
identify and execute an initial business combination. We leverage True Wind Capital’s extensive network of relationships,
ranging from senior executives at public and private companies to financial advisory firms around the globe, to assist in the
identification of a target for the initial business combination. True Wind Capital intends to dedicate its time and resources
to conduct diligence in an effort to complete an initial business combination.
True
Wind Capital and our management team has experience in:
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Operating companies,
setting and changing strategies, and identifying, mentoring and recruiting exceptional talent;
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Developing and growing
companies, both organically and through strategic transactions and acquisitions, and expanding the product range and geographic
footprint of a number of target businesses;
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Investing in leading
private and public technology companies to accelerate their growth and maturation;
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Sourcing, structuring,
acquiring, and selling businesses;
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Accessing the capital
markets, including financing businesses and helping companies transition to public ownership; and
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Fostering relationships
with sellers, capital providers and target management teams.
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Market
Opportunity
We
are pursuing opportunities with private, high-growth, and high-quality technology companies with an overall transaction value
between $750 million and $2.5 billion. Given our management team’s extensive and diverse technology investing
experience, we are seeking opportunities in software, hardware, and tech-enabled services businesses across a range of different
sectors and end-markets. Furthermore, we are open to combining with businesses that are owned by founders and minority investors,
private equity firms, and family-owned businesses. Private technology companies are at the forefront of innovation and have
been driving disruption in legacy industries at an unprecedented pace, creating brand new markets and business models in the process.
We believe that as these companies continue to scale, their addressable markets continue to expand, and they reach financial maturity,
they will make fundamentally attractive long-term investments that will drive shareholder value creation. We believe that
our mandate provides us with a broad pool of potential opportunities to complete an initial business combination with.
There
has been a significant increase in the amount of capital available and deployed in private markets in recent years, not only from
traditional venture capital firms but also other types of investors including hedge funds, mutual funds, and sovereign wealth
funds. This has not only driven private technology company valuations higher but has resulted in them staying private longer as
these companies now have greater access to growth capital and liquidity that the traditional IPO process has typically provided.
We estimate that there are over 400+ private technology companies globally with a valuation, as of the last round of financing,
in excess of $1 billion, which is more than double the number from four years prior. However, we believe that there are significant
benefits to companies from being publicly traded at a certain stage of their development. These include increased brand awareness
and development, the ability to create acquisition currency to pursue inorganic growth, and increased access to capital markets.
We
believe that combining with a blank check company, especially one with a management team with extensive technology investing experience,
will inherently be an attractive mechanism to go public. Given the current volatility experienced in both the stock market and
debt capital markets as a result of the COVID-19 pandemic, it has become increasingly difficult for high-quality businesses
that want to go public to do so on favorable terms. First, a traditional IPO process is inherently an inefficient mechanism for
price discovery as pricing and terms of an offering remain unknown until the day of pricing of the offering, resulting in uncertainty
of proceeds and valuation. Second, the traditional IPO book-build process can result in allocation decisions that leave companies
with sub-optimal or short-term focused investors that further drive volatility and hinder management’s ability
to drive long-term shareholder value creation. Furthermore, the nature of the IPO process, including sizeable regulatory
requirements and document drafting, selection of underwriters, and investor roadshows and engagements, serves as an expensive
distraction to management from the day-to-day operations of their business, especially in the current COVID-19 environment.
We believe blank check companies provide a transparent and efficient mechanism to go public due to their ability to finalize terms
of a transaction with a target prior to public disclosure and provide companies with a stable base of long-term focused investors
that have conducted significant due diligence. Our previous involvement with Nebula and its combination with Open Lending (NASDAQ:
LPRO), and our management team’s collective 50+ years of technology investing experience, provides us with significant
differentiation in looking for combination opportunities compared to other technology-focused blank check companies.
Investment
Criteria
We
seek to identify companies that have compelling growth potential and a combination of the following characteristics. We use these
criteria and guidelines in evaluating acquisition opportunities, but we may decide to enter our initial business combination with
a target business that does not meet these criteria and guidelines. We intend to acquire companies or assets that we believe have
the following attributes:
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Large and growing
market. We focus on investments in industry segments that we believe demonstrate attractive long-term growth prospects
and reasonable overall size or potential;
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Attractive, inherently
profitable business with high operating leverage. We seek to invest in companies that we believe possess not only established
business models and sustainable competitive advantages, but also inherently profitable unit economics;
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Strong management
teams. We spend significant time assessing a company’s leadership and personnel and evaluating what we can do to
augment and/or upgrade the team over time if needed;
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Opportunity for
operational improvements. We seek to identify businesses that we believe are stable but at an inflection point and would
benefit from our ability to drive improvements in the company’s processes, go-to-market strategy, product or service
offering, sales and marketing efforts, geographical presence and/or leadership team;
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Differentiated
products or services. We evaluate metrics such as recurring revenues, product life cycle, cohort consistency, pricing
per product or customer, cross-sell success and churn rates to focus on businesses whose products or services are differentiated
or where we see an opportunity to create value by implementing best practices;
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Compelling growth
prospects. We view growth as an important driver of value and seek companies whose growth potential can generate meaningful
upside;
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Minimal technology
risk. We seek to invest in companies that have established market-tested product or service offerings; and
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Appropriate valuations.
We seek to be a disciplined and valuation-centric investor that invests on terms that we believe provide significant
upside potential with limited downside risk.
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These
criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination
may be based, to the extent relevant, on these general guidelines as well as on other considerations, factors and criteria that
our management may deem relevant. In the event that we decide to enter into our initial business combination with a target business
that does not meet the above criteria and guidelines, we will disclose that the target business does not meet the above criteria
in our stockholder communications related to our initial business combination, which, as discussed in this Report, would be in
the form of tender offer documents or proxy solicitation materials that we would file with the SEC.
Our
Management Team
Our
management team is led by our Chief Executive Officer, Mr. Clammer, and our Chairman, Mr. Greene, who are also the founding
partners of True Wind Capital, who have worked together for over twenty years and who, collectively, have more than 50 years of
private equity investing experience. We believe that they constitute one of the longest standing and most successful partnerships
in technology private equity investing. Prior to founding True Wind Capital, Mr. Clammer and Mr. Greene were founding
partners of the Kohlberg Kravis Roberts & Co. (“KKR”) Global Technology Group in 2004. At KKR, Mr. Clammer
and Mr. Greene played a major role in over 30 platform investments with total transaction values in excess of $75 billion
and more than $15 billion of invested equity, and were involved in investments across geographies, through a variety of different
structures and amidst diverse economic cycles. These investments included some of the largest and most complex private equity
deals in the technology industry. Success at this level requires the highest degree of diligence, financial and market analyses,
process management, structuring abilities, operational knowhow and investment acumen.
As
pioneers in the technology private equity industry, Mr. Clammer and Mr. Greene were required to build the KKR platform
organically. This included: (i) building an exceptional investment team; (ii) creating and fostering relationships with industry
leaders and bankers; (iii) formulating and executing new investment theses; (iv) developing and refining due diligence processes
appropriate for highly technical businesses and markets; and (v) building networks of operating executives and knowledgeable
advisors to rely on for investment input and portfolio management support. More recently, and without the benefit of the KKR brand,
Mr. Clammer and Mr. Greene launched True Wind Capital, creating another exceptional team and raising a $558 million
first time fund. Since the final close in January 2017, True Wind Capital has completed investments in six technology platforms
and numerous add-on acquisitions across a range of structures and types including leveraged buyouts, management buyouts,
growth equity, PIPEs, public-take-privates, and carve-outs.
Our
management team is supported by True Wind Capital’s team of investment professionals who each have meaningful technology-related private
equity and growth equity investing experience and possess extensive experience in corporate finance, mergers and acquisitions,
equity and debt capital markets, strategic consulting, and operations. We believe that True Wind Capital’s operating expertise,
transaction experience, and relationships provide us with a substantial number of attractive potential business combination targets.
The
past performance of our management team or of True Wind Capital is not a guarantee either (i) of success with respect to any business
combination we may consummate or (ii) that we will be able to identify a suitable candidate for our initial business combination.
You should not rely on the historical record of our management’s performance as indicative of our future performance.
Our
Acquisition Process
True
Wind Capital believes that conducting comprehensive due diligence on prospective investments is particularly important within
the technology industry. We have utilized and will continue to utilize the diligence, rigor, and expertise of True Wind Capital’s
platform to evaluate potential targets’ strengths, weaknesses, and opportunities to identify the relative risk and return
profile of any potential target for our initial business combination. Given our management team’s extensive tenure investing
in technology companies, we are familiar with the prospective target’s end-market, competitive landscape and business model.
In
evaluating a prospective initial business combination, we have conducted and will continue to conduct a thorough diligence review
that encompasses, among other things, meetings with incumbent management and employees, document reviews, inspection of facilities,
financial analyses and technology reviews, as well as a review of other information that will be made available to us.
We
are not prohibited from pursuing an initial business combination with a company that is affiliated with True Wind Capital, our
sponsor, our officers, or our directors, subject to certain approvals and consents. In the event we seek to complete our initial
business combination with a company that is affiliated with True Wind Capital, our sponsor, officers or directors, we, or a committee
of independent directors, will obtain an opinion from an independent investment banking firm which is a member of FINRA or an
independent accounting firm that our initial business combination is fair to us from a financial point of view. Currently, we
are not aware of an affiliate of True Wind Capital that would make a suitable target for our initial business combination.
Members
of our management team may directly or indirectly own our securities, and accordingly, they may have a conflict of interest in
determining whether a particular target business is an appropriate business with which to effectuate our initial business combination.
Further, each of our officers and directors may have a conflict of interest with respect to evaluating a particular business combination
if the retention or resignation of any such officers and directors was included by a target business as a condition to any agreement
with respect to our initial business combination.
Each
of our officers and directors presently has, and many of them in the future may have additional, fiduciary, contractual or other
obligations or duties to one or more other entities pursuant to which such officer or director is or will be required to present
a business combination opportunity to such entities, including Nebula Caravel Acquisition Corp. Our amended and restated certificate
of incorporation provides that we renounce our interest in any corporate opportunity offered to any director or officer unless
(i) such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company,
(ii) such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us
to pursue and (iii) the director or officer is permitted to refer the opportunity to us without violating another legal obligation.
Accordingly, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for one
or more entities to which he or she has fiduciary, contractual or other obligations or duties, including Nebula Caravel Acquisition
Corp., he or she will honor these obligations and duties to present such business combination opportunity to such entities first,
and only present it to us if such entities reject the opportunity and he or she determines to present the opportunity to us. We
do not believe, however, that the fiduciary, contractual or other obligations or duties of our officers or directors will materially
affect our ability to complete our initial business combination, aside from Nebula Caravel Acquisition Corp.
We
have entered into forward purchase agreements with the forward purchasers that provide for the aggregate purchase of at least
$100,000,000 of Class A common stock at $10.00 per share, in a private placement that will close concurrently with the closing
of our initial business combination. The forward purchasers’ commitments under the forward purchase agreements are subject
to certain conditions as described herein. The obligations under the forward purchase agreements will not depend on whether any
shares of Class A common stock are redeemed by our public stockholders. The forward purchasers will not receive any shares
of Class B common stock or warrants as part of the forward purchase agreements; these shares will be identical to the shares of
Class A common stock included in the units being sold in our initial public offering, except that the forward purchase shares
will be subject to certain transfer restrictions and have certain registration rights, as described herein.
Our
sponsor, officers, directors and True Wind Capital may participate in the formation of, or become an officer or director of, any
other blank check company prior to completion of our initial business combination. As a result, our sponsor, officers, directors
and True Wind Capital could have conflicts of interest in determining whether to present business combination opportunities to
us or to any other blank check company with which they may become involved. Although we have no formal policy in place for vetting
potential conflicts of interest, our board of directors will review any potential conflicts of interest on a case-by-case basis.
Initial
Business Combination
Nasdaq
rules require that we must complete one or more business combinations having an aggregate fair market value of at least 80% of
the value of the assets held in the trust account (net of amounts disbursed to management for working capital purposes and excluding
the deferred underwriting commissions and taxes payable on the interest earned on the trust account) at the time of our signing
a definitive agreement in connection with our initial business combination. If our board of directors is not able to independently
determine the fair market value of the target business or businesses, we will obtain an opinion from an independent investment
banking firm that is a member of FINRA or from an independent accounting firm, with respect to the satisfaction of such criteria.
We do not currently intend to purchase multiple businesses in unrelated industries in conjunction with our initial business combination,
although there is no assurance that will be the case. Additionally, pursuant to Nasdaq rules, any initial business combination
must be approved by a majority of our independent directors.
We
anticipate structuring our initial business combination either (i) in such a way so that the post-transaction company in
which our public stockholders own shares will own or acquire 100% of the equity interests or assets of the target business or
businesses, or (ii) in such a way so that the post-transaction company owns or acquires less than 100% of such interests
or assets of the target business in order to meet certain objectives of the target management team or stockholders, or for other
reasons. However, we will only complete an initial 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. Even if the post-transaction company
owns or acquires 50% or more of the voting securities of the target, our stockholders prior to the initial business combination
may collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the target
and us in the initial business combination. For example, we could pursue a transaction in which we issue a substantial number
of new shares in exchange for all of the outstanding capital stock of a target. In this case, we would acquire a 100% controlling
interest in the target. However, as a result of the issuance of a substantial number of new shares, our stockholders 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 taken into
account for purposes of Nasdaq’s 80% fair market value test. If the initial business combination involves more than one
target business, the 80% fair market value test will be based on the aggregate value of all of the transactions and we will treat
the target businesses together as the initial business combination for purposes of a tender offer or for seeking stockholder approval,
as applicable.
Our
amended and restated certificate of incorporation requires the affirmative vote of a majority of our board of directors, which
must include a majority of our independent directors to approve our initial business combination (or such other vote as the applicable
law or stock exchange rules then in effect may require).
We
do not believe we will need to raise additional funds in order to meet the expenditures required for operating our business. However,
if our estimates of the costs of identifying a target business, undertaking in-depth due diligence and negotiating an initial
business combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our
business prior to our initial business combination. Moreover, we may need to obtain additional financing either to complete our
initial business combination or because we become obligated to redeem a significant number of our public shares upon completion
of our initial business combination, in which case we may issue additional securities or incur debt in connection with such business
combination. In addition, we target businesses with enterprise values that are greater than we could acquire with the net proceeds
of our initial public offering and the sale of the private placement warrants, and, 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 redemptions by public stockholders,
we may be required to seek additional financing to complete such proposed initial business combination. We may also obtain financing
prior to the closing of our initial business combination to fund our working capital needs and transaction costs in connection
with our search for and completion of our initial business combination. There is no limitation on our ability to raise funds through
the issuance of equity or 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. Subject
to compliance with applicable securities laws, we would only complete such financing simultaneously with the completion of our
business combination. 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. In addition, following our initial business combination,
if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.
We
have filed a registration statement on Form 8-A with the SEC to voluntarily register our securities under Section 12 of the
Exchange Act. As a result, we are subject to the rules and regulations promulgated under the Exchange Act. We have no current
intention of filing a Form 15 to suspend our reporting or other obligations under the Exchange Act prior or subsequent to
the consummation of our initial business combination.
Corporate
Information
We
are an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As
such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other
public companies that are not “emerging growth companies” including, but not limited to, not being required to comply
with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding
executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory
vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. If some investors
find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of
our securities may be more volatile.
In
addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended
transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards.
In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards
would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period.
We
will remain an emerging growth company until the earlier of: (1) the last day of the fiscal year (a) following September
15, 2025, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be
a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700 million
as of the end of the prior fiscal year’s second fiscal quarter; and (2) the date on which we have issued more than $1.00 billion
in non-convertible debt during the prior three-year period. References herein to “emerging growth company”
shall have the meaning associated with it in the JOBS Act.
Our
executive offices are located at Four Embarcadero Center, Suite 2100, San Francisco, CA 94111, and our telephone number is (415)
780-9975. We maintain a corporate website at www.truewindcapital.com/nebula-caravelacqcorp. Our website and the information
contained on, or that can be accessed through, the website is not deemed to be incorporated by reference in, and is not considered
part of, this Report. You should not rely on any such information in making your decision whether to invest in our securities.
Sourcing
of Potential Business Combination Targets
We
anticipate that target business candidates will continue to be brought to our attention from various unaffiliated sources, including
investment bankers and investment professionals. Target businesses will continue to be brought to our attention by such unaffiliated
sources as a result of being solicited by us by calls or mailings. These sources will also continue to introduce us to target
businesses in which they think we may be interested on an unsolicited basis, since many of these sources will have read our public
filings and know what types of businesses we are targeting. Our officers and directors, as well as our sponsor and their affiliates,
will continue to bring to our attention target business candidates that they become aware of through their business contacts as
a result of formal or informal inquiries or discussions they may have, as well as attending trade shows or conventions. In addition,
we may receive a number of proprietary deal flow opportunities that would not otherwise necessarily be available to us as a result
of the business relationships of our officers and directors and our sponsor and their respective industry and business contacts
as well as their affiliates. We have engaged the services of professional firms or other individuals that specialize in business
acquisitions, and we may engage other firms or other individuals in the future, in which event we are paying or may pay a finder’s
fee, consulting fee, advisory fee or other compensation to be determined in an arm’s length negotiation based on the terms
of the transaction, only to the extent our management determines that the use of a finder may bring opportunities to us that may
not otherwise be available to us or if finders approach us on an unsolicited basis with a potential transaction that our management
determines is in our best interest to pursue. Payment of finder’s fees is customarily tied to completion of a transaction,
in which case any such fee will be paid out of the funds held in the trust account. In no event, however, will our sponsor or
any of our existing officers or directors, or any entity with which our sponsor or officers are affiliated, be paid any finder’s
fee, reimbursement, consulting fee, monies in respect of any payment of a loan or other compensation by the company prior to,
or in connection with any services rendered for any services they render in order to effectuate, the completion of our initial
business combination (regardless of the type of transaction that it is). Although none of our sponsor, executive officers or directors,
or any of their respective affiliates, are allowed to receive any compensation, finder’s fees or consulting fees from a
prospective business combination target in connection with a contemplated initial business combination, we do not have a policy
that prohibits our sponsor, executive officers or directors, or any of their respective affiliates, from negotiating for the reimbursement
of out-of-pocket expenses by a target business. Some of our officers and directors may enter into employment or consulting
agreements with the post-transaction company following our initial business combination. The presence or absence of any such
fees or arrangements are not used as a criterion in our selection process of an initial business combination candidate.
We
are not prohibited from pursuing an initial business combination with a company that is affiliated with True Wind Capital, our
sponsor, our officers, or our directors, subject to certain approvals and consents. In the event we seek to complete our initial
business combination with a company that is affiliated with True Wind Capital, our sponsor, officers or directors, we, or a committee
of independent directors, will obtain an opinion from an independent investment banking firm which is a member of FINRA or an
independent accounting firm that our initial business combination is fair to us from a financial point of view. Currently, we
are not aware of an affiliate of True Wind Capital that would make a suitable target for our initial business combination.
If
any of our officers or directors becomes aware of a business combination opportunity that is suitable for one or more entities
to which he or she has fiduciary, contractual or other obligations or duties, including Nebula Caravel Acquisition Corp., he or
she will honor these obligations and duties to present such business combination opportunity to such entities first, and only
present it to us if such entities reject the opportunity and he or she determines to present the opportunity to us (including
as described above).
Status
as a Public Company
We
believe our structure makes us an attractive business combination partner to target businesses. As an existing public company,
we offer target businesses an alternative to the traditional initial public offering through a merger, capital stock exchange,
asset acquisition, stock purchase, reorganization or similar business combination. In this situation, the owners of the target
business would exchange their shares of stock in the target business for shares of our stock or for a combination of shares of
our stock and cash, allowing us to tailor the consideration to the specific needs of the sellers. Although there are various costs
and obligations associated with being a public company, we believe target businesses will find this method a more certain and
cost effective method to becoming a public company than the typical initial public offering. In a typical initial public offering,
there are additional expenses incurred in marketing, road show and public reporting efforts that may not be present to the same
extent in connection with a business combination with us.
Furthermore,
once a proposed business combination is completed, the target business will have effectively become public, whereas an initial
public offering is always subject to the underwriters’ ability to complete the offering, as well as general market conditions,
which could delay or prevent the offering from occurring. Once public, we believe the target business would then have greater
access to capital and an additional means of providing management incentives consistent with stockholders’ interests. It
can offer further benefits by augmenting a company’s profile among potential new customers and vendors and aid in attracting
talented employees.
We
will remain an emerging growth company until the earlier of: (1) the last day of the fiscal year (a) following September
15, 2025, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be
a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700 million
as of the end of the prior fiscal year’s second fiscal quarter; and (2) the date on which we have issued more than $1.00 billion
in non-convertible debt during the prior three-year period.
Financial
Position
With
funds available in the trust account for a business combination initially in the amount of $579,000,000 assuming no redemptions
and after payment of $21,000,000 of deferred underwriting fees and at least $100,000,000 in proceeds from the sale of the forward
purchase shares, we offer a target business a variety of options such as creating a liquidity event for its owners, providing
capital for the potential growth and expansion of its operations or strengthening its balance sheet by reducing its debt ratio.
Because we are able to complete our initial business combination using our cash, debt or equity securities, or a combination of
the foregoing, we have the flexibility to use the most efficient combination that will allow us to tailor the consideration to
be paid to the target business to fit its needs and desires. However, we have not taken any steps to secure third-party financing
and there can be no assurance it will be available to us.
Significant
Activities Since Inception
On
September 15, 2020, the Company consummated its IPO of 60,000,000 units (the “Units”), including 7,500,000 Units issued
pursuant to the partial exercise by the underwriters of their over-allotment option (the “Over-Allotment Units”; collectively
with the Initial Units, the “Units”). Each Unit consists of one share of Class A common stock, $0.0001 par value per
share (“Class A common stock”), and one-third of one warrant (“Public Warrant”), each whole warrant entitling
the holder to purchase one share of Class A common stock at $11.50 per share. The Units were sold at an offering price of $10.00
per Unit, generating gross proceeds of $600,000,000. As a result of the underwriters’ partial exercise of the over-allotment
option, the Company’s sponsor, TWC Tech Holdings II, LLC (the “Sponsor”), forfeited 93,750 shares of Class B
common stock. Simultaneously with the consummation of the IPO and the sale of the Units, the Company consummated the private placement
(“Private Placement”) of an aggregate of 9,666,667 warrants (“Placement Warrants”) at a price of $1.50
per Placement Warrant, generating total proceeds of $14,500,000.
A
total of $600,000,000 of the net proceeds from our initial public offering (including the partial over-allotment) and the private
placement of warrants to our sponsor were deposited in a trust account established for the benefit of the Company’s public
stockholders.
Our
units began trading on September 11, 2020 on The Nasdaq Capital Market under the symbol “TWCTU.” Commencing on November
2, 2020, the securities comprising the units began separate trading. The units, common stock, and warrants are trading on The
Nasdaq Capital Market under the symbols “TWCTU,” “TWCT” and “TWCTW,” respectively.
Effecting
our Initial Business Combination
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 from the proceeds of our initial public offering and the sale of the private placement
warrants and the sale of the forward placement shares, if any, our capital stock, 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 redemption of our public
shares, we may apply the balance of the cash released to us from the trust account for general corporate purposes, including for
maintenance or expansion of operations of post-transaction businesses, the payment of principal or interest due on indebtedness
incurred in completing our initial business combination, to fund the purchase of other companies or for working capital.
We
may seek to raise additional funds in connection with the completion of our initial business combination through a private offering
of equity securities or debt securities or loans, and we may effectuate our initial business combination using the proceeds of
such offerings or loans rather than using the amounts held in the trust account.
In
the case of an initial business combination funded with assets other than the trust account assets, our tender offer documents
or proxy materials disclosing the business combination would disclose the terms of the financing and, only if required by applicable
law, we would seek stockholder approval of such financing. There are no prohibitions on our ability to raise funds privately or
through loans in connection with our initial business combination.
Selection
of a Target Business and Structuring of our Initial Business Combination
Nasdaq
rules require that we must complete one or more business combinations having an aggregate fair market value of at least 80% of
the value of the assets held in the trust account (net of amounts disbursed to management for working capital purposes and excluding
the deferred underwriting commissions and taxes payable on the interest earned on the trust account) at the time of our signing
a definitive agreement in connection with our initial business combination. The fair market value of our initial business combination
will be determined by our board of directors based upon one or more standards generally accepted by the financial community, such
as discounted cash flow valuation, a valuation based on trading multiples of comparable public businesses or a valuation based
on the financial metrics of M&A transactions of comparable businesses. 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 FINRA or from an independent accounting firm, with respect to the satisfaction of such criteria. We do not
currently intend to purchase multiple businesses in unrelated industries in conjunction with our initial business combination,
although there is no assurance that will be the case. Subject to this requirement, our management has virtually unrestricted flexibility
in identifying and selecting one or more prospective target businesses, although we are not permitted to effectuate our initial
business combination with another blank check company or a similar company with nominal operations.
In
any case, we will only complete an initial business combination in which we own or acquire 50% or more of the outstanding voting
securities of the target or otherwise acquire a controlling interest in the target sufficient for it not to be required to register
as an investment company under the Investment Company Act. If we own or acquire less than 100% of the equity interests or assets
of a target business or businesses, the portion of such business or businesses that are owned or acquired by the post-transaction company
is what will be taken into account for purposes of Nasdaq’s 80% fair market value test.
To
the extent we effect our initial business combination with a company or business that may be financially unstable or in its early
stages of development or growth, we may be affected by numerous risks inherent in such company or business. Although our management
will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain
or assess all significant risk factors.
In
evaluating a prospective target business, we have conducted and will continue to conduct a thorough due diligence review which
encompasses, among other things, meetings with incumbent management and employees, document reviews, inspection of facilities,
as well as a review of financial, operational, legal and other information which will be made available to us.
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.
Lack
of Business Diversification
For
an indefinite period of time after the completion of our initial business combination, the prospects for our success may depend
entirely on the future performance of a single business.
Unlike
other entities that have the resources to complete business combinations with multiple entities in one or several industries,
it is probable that we will not have the resources to diversify our operations and mitigate the risks of being in a single line
of business. By completing our initial business combination with only a single entity, our lack of diversification may:
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subject us to negative
economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact on the particular
industry in which we operate after our initial business combination; and
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cause us to depend
on the marketing and sale of a single product or limited number of products or services.
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Limited
Ability to Evaluate the Target’s Management Team
Although
we intend to closely scrutinize the management of a prospective target business when evaluating the desirability of effecting
our initial business combination with that business, our assessment of the target business’s management may not prove to
be correct. In addition, the future management may not have the necessary skills, qualifications or abilities to manage a public
company. Furthermore, the future role of members of our management team, if any, in the target business cannot presently be stated
with any certainty. While it is possible that one or more of our directors will remain associated in some capacity with us following
our initial business combination, it is highly unlikely that any of them will devote their full efforts to our affairs subsequent
to our initial business combination. Moreover, we cannot assure you that members of our management team will have significant
experience or knowledge relating to the operations of the particular target business.
We
cannot assure you that any of our key personnel will remain in senior management or advisory positions with the combined company.
The determination as to whether any of our key personnel will remain with the combined company will be made at the time of our
initial business combination.
Following
our initial business combination, we may seek to recruit additional managers to supplement the incumbent management of the target
business. We cannot assure you that we will have the ability to recruit additional managers, or that additional managers will
have the requisite skills, knowledge or experience necessary to enhance the incumbent management.
Stockholders
May Not Have the Ability to Approve our Initial Business Combination
We
may conduct redemptions without a stockholder vote pursuant to the tender offer rules of the SEC. However, we will seek stockholder
approval if it is required by applicable law or stock exchange rule, or we may decide to seek stockholder approval for business
or other reasons. Presented in the table below is a graphic explanation of the types of initial business combinations we may consider
and whether stockholder approval is currently required under Delaware law for each such transaction.
Type of Transaction
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Whether
Stockholder
Approval is
Required
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Purchase of assets
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No
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Purchase of stock of target not involving a merger with the company
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No
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Merger of target into a subsidiary of the company
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No
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Merger of the company with a target
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Yes
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Under
Nasdaq’s listing rules, stockholder approval would be required for our initial business combination if, for example:
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we issue shares
of Class A common stock that will be equal to or in excess of 20% of the number of shares of our Class A common
stock then outstanding;
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any of our directors,
officers or substantial stockholders (as defined by Nasdaq rules) has a 5% or greater interest (or such persons collectively
have a 10% or greater interest), directly or indirectly, in the target business or assets to be acquired or otherwise and
the present or potential issuance of common stock could result in an increase in outstanding common shares or voting power
of 5% or more; or
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the issuance or
potential issuance of common stock will result in our undergoing a change of control.
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The
decision as to whether we will seek stockholder approval of a proposed business combination in those instances in which stockholder
approval is not required by law will be made by us, solely in our discretion, and will be based on business and legal reasons,
which include a variety of factors, including, but not limited to:
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the timing of the
transaction, including in the event we determine stockholder approval would require additional time and there is either not
enough time to seek stockholder approval or doing so would place the company at a disadvantage in the transaction or result
in other additional burdens on the company;
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the expected cost
of holding a stockholder vote;
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the risk that the
stockholders would fail to approve the proposed business combination;
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other time and budget
constraints of the company; and
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additional legal
complexities of a proposed business combination that would be time-consuming and burdensome to present to stockholders.
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Permitted
Purchases of Our Securities
In
the event 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 sponsor, directors, officers, advisors or any of their
respective affiliates may purchase public shares or public warrants or a combination thereof 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 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. In the event our initial
stockholders, directors, officers, advisors or any of their respective affiliates determine to make any such purchases at the
time of a stockholder vote relating to our initial business combination, such purchases could have the effect of influencing the
vote necessary to approve such transaction. None of the funds in the trust account will be used to purchase public shares 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. Such a purchase may include a contractual acknowledgement 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. We have adopted
an insider trading policy which requires insiders to (1) refrain from purchasing securities when they are in possession of any
material non-public information and (2) to clear all trades with our compliance personnel or legal counsel prior to execution.
We cannot currently determine whether our insiders will make such purchases pursuant to a Rule 10b5-1 plan, as it will be
dependent upon several factors, including but not limited to, the timing and size of such purchases. Depending on such circumstances,
our insiders may either make such purchases pursuant to a Rule 10b5-1 plan or determine that such a plan is not necessary.
In
the event that our sponsor, directors, officers, advisors or any of their respective affiliates purchase public shares in privately
negotiated transactions from public stockholders who have already elected to exercise their redemption rights or submitted a proxy
to vote against our initial business combination, such selling stockholders would be required to revoke their prior elections
to redeem their shares and any proxy to vote against our initial business combination. We do not currently anticipate that such
purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction
subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases
that the purchases are subject to such rules, the purchasers will comply with such rules.
The
purpose of such purchases could be to vote such shares in favor of the business combination and thereby increase the likelihood
of obtaining stockholder approval of our initial business combination or to satisfy a closing condition in an agreement with a
target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination,
where it appears that such requirement would otherwise not be met. This may result in the completion of our initial business combination
that may not otherwise have been possible.
In
addition, if such purchases are made, the public “float” of our common stock may be reduced and the number of beneficial
holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading
of our securities on a national securities exchange.
Our
sponsor, officers, directors, advisors and/or any of their respective affiliates may identify the stockholders with whom our sponsor,
officers, directors, advisors or any of 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 following our mailing of proxy materials
in connection with our initial business combination. To the extent that our sponsor, officers, directors, advisors or any of 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. Such persons would select the stockholders from whom to acquire shares based on the number of shares available, the
negotiated price per share and such other factors as any such person may deem relevant at the time of purchase. The price per
share paid in any such transaction may be different than the amount per share a public stockholder would receive if it elected
to redeem its shares in connection with our initial business combination. Our sponsor, officers, directors, advisors or any of
their respective affiliates will purchase shares only if such purchases comply with Regulation M under the Exchange Act and the
other federal securities laws.
Any
purchases by our sponsor, officers, directors and/or any of their respective affiliates who are affiliated purchasers under Rule
10b-18 under the Exchange Act will only be made to the extent such purchases are made in compliance with Rule 10b-18, which
is a safe harbor from liability for manipulation under Section 9(a)(2) and Rule 10b-5 of the Exchange Act. Rule 10b-18 has
certain technical requirements that must be complied with in order for the safe harbor to be available to the purchaser. Our sponsor,
officers, directors and/or any of their respective affiliates will be restricted from making purchases of common stock if such
purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act.
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 as of two
business days prior to the consummation of our initial business combination, including interest (net of permitted withdrawals),
divided by the number of then outstanding public shares, subject to the limitations described herein. The amount in the trust account
as of December 31, 2020 was approximately $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. The redemption
right will include the requirement that any beneficial owner on whose behalf a redemption right is being exercised must identify
itself in order to validly redeem its shares. Each public stockholder may elect to redeem its public shares without voting, and
if they do vote, irrespective of whether they vote for or against the proposed transaction. There will be no redemption rights
upon the completion of our initial business combination with respect to our warrants. Our sponsor, 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 and any public shares held by them in connection with the completion of our initial business combination.
Manner
of Conducting Redemptions
We
will provide our public stockholders with the opportunity to redeem all or a portion of their shares of Class A common stock
upon the completion of our initial business combination either: (1) in connection with a stockholder meeting called to approve
the business combination; or (2) by means of a tender offer. The decision as to whether we will seek stockholder approval of a
proposed business combination or conduct a tender offer will be made by us, solely in our discretion, and will be based on a variety
of factors such as the timing of the transaction and whether the terms of the transaction would require us to seek stockholder
approval under applicable law or stock exchange listing requirement. Under Nasdaq rules, 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. If we structure a business combination transaction with a target company in a manner that
requires stockholder approval, we will not have discretion as to whether to seek a stockholder vote to approve the proposed business
combination. We currently intend to conduct redemptions pursuant to a stockholder vote unless stockholder approval is not required
by applicable law or stock exchange listing requirement and we choose to conduct redemptions pursuant to the tender offer rules
of the SEC for business or other reasons. So long as we obtain and maintain a listing for our securities on Nasdaq, we are required
to comply with such rules.
If
a stockholder vote is not required and we do not decide to hold a stockholder vote for business or other reasons, we will, pursuant
to our amended and restated certificate of incorporation:
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conduct the redemptions
pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers; and
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file tender offer
documents with the SEC prior to completing our initial business combination which contain substantially the same financial
and other information about the initial business combination and the redemption rights as is required under Regulation 14A
of the Exchange Act, which regulates the solicitation of proxies.
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Upon
the public announcement of our initial business combination, we and 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 if we elect to redeem our public
shares through a tender offer, to comply with Rule 14e-5 under the Exchange Act.
In
the event we conduct redemptions pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business
days, in accordance with Rule 14e-1(a) under the Exchange Act, and we will not be permitted to complete our initial business combination
until the expiration of the tender offer period. In addition, the tender offer will be conditioned on public 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, after payment of the deferred underwriting commissions, to
be less than $5,000,001 (so that we do not then become subject to the SEC’s “penny stock” rules) or any greater
net tangible asset or cash requirement which may be contained in the agreement relating to our initial business combination. If
public stockholders tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete such
initial business combination.
If,
however, stockholder approval of the transaction is required by applicable law or stock exchange listing requirement, or we decide
to obtain stockholder approval for business or other reasons, we will, pursuant to our amended and restated certificate of incorporation:
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conduct the redemptions
in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation
of proxies, and not pursuant to the tender offer rules; and
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file proxy materials
with the SEC.
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We
expect that a final proxy statement would be mailed to public stockholders at least 10 days prior to the stockholder vote. However,
we expect that a draft proxy statement would be made available to such stockholders well in advance of such time, providing additional
notice of redemption if we conduct redemptions in conjunction with a proxy solicitation. Although we are not required to do so,
we currently intend to comply with the substantive and procedural requirements of Regulation 14A in connection with any stockholder
vote even if we are not able to maintain our Nasdaq listing or Exchange Act registration.
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 stockholder approval, unless otherwise required by applicable law, regulation or stock exchange rules, 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, officers and directors will count towards this quorum and have agreed
to vote any founder shares and any public shares held by them in favor of our initial business combination. These quorum and voting
thresholds and agreements, may make it more likely that we will consummate our initial business combination. Each public stockholder
may elect to redeem its public shares without voting, and if they do vote, irrespective of whether they vote for or against the
proposed transaction. In addition, our sponsor, 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 and any public shares held by them
in connection with the completion of a business combination.
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, after payment of the deferred underwriting commissions, to be less than $5,000,001 (so that
we do not then become subject to the SEC’s “penny stock” rules). Redemptions of our public shares may also be
subject to a higher net tangible asset test or cash requirement pursuant to an agreement relating to our initial business combination.
For example, the proposed business combination may require: (1) cash consideration to be paid to the target or its owners; (2)
cash to be transferred to the target for working capital or other general corporate purposes; or (3) the retention of cash to
satisfy other conditions in accordance with the terms of the proposed business combination. In the event the aggregate cash consideration
we would be required to pay for all 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, and all shares of Class A common
stock submitted for redemption will be returned to the holders thereof.
Limitation
on Redemption Upon Completion of our Initial Business Combination if we Seek Stockholder Approval
Notwithstanding
the foregoing, 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 an aggregate of 15% or more of the shares sold in our initial public offering, without our prior
consent, which we refer to as the “Excess Shares.” 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 affiliates to purchase their shares at a significant premium to
the then-current market price or on other undesirable terms. Absent this provision, a public stockholder holding more than
an aggregate of 15% of the shares sold in our initial public offering could threaten to exercise its redemption rights if such
holder’s shares are not purchased by us or our affiliates 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 our initial public
offering, 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.
Tendering
Stock Certificates in Connection with a Tender Offer or Redemption Rights
We
may require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their
shares in “street name,” to either tender their certificates to our transfer agent prior to the date set forth in
the tender offer documents or proxy materials mailed to such holders, or up to two business days prior to the vote on the proposal
to approve the business combination in the event we distribute proxy materials or to deliver their shares to the transfer agent
electronically using The Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, rather than simply voting
against the initial business combination at the holder’s option. The tender offer or proxy materials, 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, which will include the requirement that any beneficial owner
on whose behalf a redemption right is being exercised must identify itself in order to validly redeem its shares. Accordingly,
a public stockholder would have from the time we send out our tender offer materials until the close of the tender offer period,
or up to two business days prior to the vote on the business combination if we distribute proxy materials, as applicable, to tender
its shares if it wishes to seek to exercise its redemption rights. Pursuant to the tender offer rules, the tender offer period
will be not less than 20 business days and, in the case of a stockholder vote, a final proxy statement would be mailed to public
stockholders at least 10 days prior to the stockholder vote. However, we expect that a draft proxy statement would be made available
to such stockholders well in advance of such time, providing additional notice of redemption if we conduct redemptions in conjunction
with a proxy solicitation. 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 tendering process and the act of certificating the shares or delivering
them through The Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System. The transfer agent will typically
charge the tendering broker $80.00 and it would be up to the broker whether or not to pass this cost on to the redeeming holder.
However, this fee would be incurred regardless of whether or not we require holders seeking to exercise redemption rights to tender
their shares. The need to deliver shares is a requirement of exercising redemption rights regardless of the timing of when such
delivery must be effectuated.
The
foregoing is different from the procedures used by many blank check companies. In order to perfect redemption rights in connection
with their business combinations, many blank check companies would distribute proxy materials for the stockholders’ vote
on an initial business combination, and a holder could simply vote against a proposed business combination and check a box on
the proxy card indicating such holder was seeking to exercise his or her redemption rights. After the business combination was
approved, the company would contact such stockholder to arrange for him or her to deliver his or her certificate to verify ownership.
As a result, the stockholder then had an “option window” after the completion of the business combination during which
he or she could monitor the price of the company’s stock in the market. If the price rose above the redemption price, he
or she could sell his or her shares in the open market before actually delivering his or her shares to the company for cancellation.
As a result, the redemption rights, to which stockholders were aware they needed to commit before the stockholder meeting, would
become “option” rights surviving past the completion of the business combination until the redeeming holder delivered
its certificate. The requirement for physical or electronic delivery prior to the meeting ensures that a redeeming holder’s
election to redeem is irrevocable once the business combination is approved.
Any
request to redeem such shares, once made, may be withdrawn at any time up to the date set forth in the tender offer materials
or the date of the stockholder meeting set forth in our proxy materials, 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 business combination is not completed, we may continue to try to complete a business combination with a different
target until the end of the completion window.
Redemption
of Public Shares and Liquidation if no Initial Business Combination
Our
amended and restated certificate of incorporation provides that we will have only the time of the completion window to complete
our initial business combination. If we are unable to complete our initial business combination within such period, we will: (1)
cease all operations except for the purpose of winding up; (2) 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 (net of permitted withdrawals and 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), subject to applicable law;
and (3) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders
and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for
claims of creditors and the requirements of other applicable law. There are 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 completion
window.
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 any founder shares held by them if we fail to
complete our initial business combination within the completion window. However, if our sponsor or any of our officers and directors
acquires public shares, it 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 completion window.
Our
sponsor, officers and directors have agreed, pursuant to a written 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 provide for the
redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we
do not complete our initial business combination within the completion window, unless we provide our public stockholders with
the opportunity to redeem their shares of 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 (net of permitted withdrawals),
divided by the number of then outstanding public shares. However, we may not redeem our public shares in an amount that would
cause our net tangible assets, after payment of the deferred underwriting commissions, to be less than $5,000,001 (so that we
do not then become subject to the SEC’s “penny stock” rules).
We
expect that all costs and expenses associated with implementing our plan of dissolution, as well as payments to any creditors,
will be funded from amounts held outside the trust account, although we cannot assure you that there will be sufficient funds
for such purpose. However, if those funds are not sufficient to cover the costs and expenses associated with implementing our
plan of dissolution, to the extent that there is any interest accrued in the trust account not required to pay taxes, we may request
the trustee to release to us an additional amount of up to $100,000 of such accrued interest to pay those costs and expenses.
If
we were to expend all of the net proceeds of our initial public offering and the sale of the private placement warrants, other
than the proceeds deposited in the trust account, and without taking into account interest, if any, earned on the trust account
and any tax payments or expenses for the dissolution of the trust, the per share redemption amount received by stockholders upon
our dissolution would be $10.00. The proceeds deposited in the trust account could, however, become subject to the claims of our
creditors which would have higher priority than the claims of our public stockholders. We cannot assure you that the actual per
share redemption amount received by stockholders will not be substantially less than $10.00. Under Section 281(b) of the DGCL,
our plan of dissolution must provide for all claims against us to be paid in full or make provision for payments to be made in
full, as applicable, if there are sufficient assets. These claims must be paid or provided for before we make any distribution
of our remaining assets to our stockholders. While we intend to pay such amounts, if any, we cannot assure you that we will have
funds sufficient to pay or provide for all creditors’ claims.
Although
we have sought and will continue to seek to have all vendors, service providers (other than our independent registered public
accounting firm), prospective target businesses or other entities with which we do business execute agreements with us waiving
any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public stockholders,
there is no guarantee that they will execute such agreements or even if they execute such agreements that they would be prevented
from bringing claims against the trust account including but not limited to fraudulent inducement, breach of fiduciary responsibility
or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain an advantage
with respect to a claim against our assets, including the funds held in the trust account. If any third party refuses to execute
an agreement waiving such claims to the monies held in the trust account, our management will perform an analysis of the alternatives
available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes
that such third party’s engagement would be significantly more beneficial to us than any alternative. Examples of possible
instances where we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant
whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that
would agree to execute a waiver or in cases where we are unable to find a service provider willing to execute a waiver. In addition,
there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising
out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason.
In order to protect the amounts held in the trust account, our sponsor has agreed that it will be liable to us if and to the extent
any claims by a third party (other than our independent registered public accounting firm) for services rendered or products sold
to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amount
of funds in the trust account to below (1) $10.00 per public share or (2) 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 share due to reductions in the value of
the trust assets, in each case net of permitted withdrawals, except as to any claims by a third party that executed a waiver of
any and all rights to the monies held in the trust account (whether any such waiver is enforceable) and except as to any claims
under our indemnity of the underwriters of our initial public offering against certain liabilities, including liabilities under
the Securities Act. We have not independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations
and believe that our sponsor’s only assets are securities of our company and, therefore, our sponsor may not be able to
satisfy those obligations. We have not asked our sponsor to reserve for such obligations. 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 in the trust account 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 will indemnify us for
claims by third parties including, without limitation, claims by vendors and prospective target businesses. None of our other
officers will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target
businesses.
In
the event that the proceeds in the trust account are reduced below: (1) $10.00 per public share; or (2) 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 share due
to reductions in the value of the trust assets, in each case net of permitted withdrawals, and our sponsor asserts that it is
unable to satisfy its indemnification obligations or that it has no indemnification obligations related to a particular claim,
our independent directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations.
While we currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce
its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment may
choose not to do so in certain instances. For example, the cost of such legal action may be deemed by the independent directors
to be too high relative to the amount recoverable or the independent directors may determine that a favorable outcome is not likely.
Accordingly, we cannot assure you that due to claims of creditors the actual value of the per share redemption price will not
be substantially less than $10.00 per share.
We
seek to reduce the possibility that our sponsor has to indemnify the trust account due to claims of creditors by endeavoring to
have all vendors, service providers (other than our independent registered public accounting firm), prospective target businesses
or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind
in or to monies held in the trust account. Our sponsor are not liable as to any claims under our indemnity of the underwriters
of our initial public offering against certain liabilities, including liabilities under the Securities Act. In the event that
we liquidate and it is subsequently determined that the reserve for claims and liabilities is insufficient, stockholders who received
funds from our trust account could be liable for claims made by creditors.
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 within the completion window may be considered
a liquidating distribution under Delaware law. Delaware law provides that if the 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.
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 within the completion window, is not considered a liquidating distribution
under Delaware law and such redemption distribution is deemed to be unlawful, 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. If we are unable to complete our initial business combination within the completion
window, we will: (1) cease all operations except for the purpose of winding up; (2) 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 (net of permitted withdrawals and 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),
subject to applicable law; and (3) as promptly as reasonably possible following such redemption, subject to the approval of our
remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware
law to provide for claims of creditors and the requirements of other applicable law. Accordingly, it is our intention to redeem
our public shares as soon as reasonably possible following our 24th month and, therefore, we do not intend to
comply with those procedures. 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 well beyond the third anniversary of such date.
Because
we are 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 subsequent ten years. However, because we are a blank check company, rather than an operating company, and our operations
are 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 and independent registered public accounting firm) or prospective target businesses. As described
above, pursuant to the obligation contained in our underwriting agreement, we have sought and will continue to seek to have all
vendors, service providers (other than our independent registered public accounting firm), prospective target businesses or other
entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to
any monies held in the trust account.
As
a result of this obligation, the claims that could be made against us are significantly limited and the likelihood that any claim
that would result in any liability extending to the trust account is remote.
Further,
our sponsor may be liable only to the extent necessary to ensure that the amounts in the trust account are not reduced below:
(1) $10.00 per public share; or (2) 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 share due to reductions in value of the trust assets, in each case net of permitted
withdrawals and will not be liable as to any claims under our indemnity of the underwriters of our initial public offering against
certain liabilities, including liabilities under the Securities Act.
If
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, we cannot assure you we will be able to return $10.00 per share to our public stockholders. Additionally, if 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. Furthermore, our board may be viewed as having breached its fiduciary duty to our creditors and/or
may have acted in bad faith, and thereby exposing itself and our company to claims of punitive damages, by paying public stockholders
from the trust account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against
us for these reasons. Please see “Risk Factors — 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.”
Our
public stockholders will be entitled to receive funds from the trust account only in the event of the redemption of our public
shares if we do not complete our initial business combination within the completion window or if they redeem their respective
shares for cash upon the completion of the initial business combination. In no other circumstances will a stockholder have any
right or interest of any kind to or in the trust account. In the event we seek stockholder approval in connection with our initial
business combination, a stockholder’s voting in connection with our initial business combination alone will not result in
a stockholder’s redeeming its shares to us for an applicable pro rata share of the trust account. Such stockholder must
have also exercised its redemption rights described above.
Amended
and Restated Certificate of Incorporation
Our
amended and restated certificate of incorporation contains certain requirements and restrictions relating to our initial public
offering that applies to us until the consummation of our initial business combination. If we seek to amend any provisions of
our amended and restated certificate of incorporation to modify the substance or timing of our obligation to provide for the redemption
of our public shares in complete our initial business combination within the completion window or with respect to any other material
provisions relating to the rights of holders of our Class A Common Stock or pre-initial business combination business
activity, we will provide public stockholders with the opportunity to redeem their public shares in connection with any such vote.
Our initial stockholders, officers and directors have agreed to waive any redemption rights with respect to any founder shares
and any public shares held by them in connection with the completion of our initial business combination. Specifically, our amended
and restated certificate of incorporation provides, among other things, that:
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prior to the consummation
of our initial business combination, we shall either: (1) seek stockholder approval of our initial business combination at
a meeting called for such purpose at which stockholders may seek to redeem their shares, regardless of whether they vote for
or against, or abstain from voting on, the proposed business combination, into their pro rata share of the aggregate amount
on deposit in the trust account as of two business days prior to the consummation of our initial business combination, including
interest (net of permitted withdrawals); or (2) provide our public stockholders with the opportunity to tender their shares
to us by means of a tender offer (and thereby avoid the need for a stockholder vote) for an amount equal to their pro rata
share of the aggregate amount on deposit in the trust account as of two business days prior to the consummation of our initial
business combination, including interest (net of permitted withdrawals), in each case subject to the limitations described
herein;
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we will consummate
our initial business combination only if we have net tangible assets of at least $5,000,001 upon such consummation and, solely
if we seek stockholder approval, a majority of the outstanding shares of common stock voted are voted in favor of the business
combination at a duly held stockholders meeting;
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if our initial business
combination is not consummated within the completion window, then our existence will terminate and we will distribute all
amounts in the trust account; and
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prior to our initial
business combination, we may not issue additional shares of capital stock that would entitle the holders thereof to (1) receive
funds from the trust account or (2) vote on any initial business combination.
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These
provisions cannot be amended without the approval of holders of 65% of our common stock. In the event we seek stockholder approval
in connection with our initial business combination, our amended and restated certificate of incorporation provides that, unless
otherwise required by applicable law or stock exchange rules, we may consummate our initial business combination only if approved
by a majority of the shares of common stock voted by our stockholders at a duly held stockholders meeting.
Competition
In
identifying, evaluating and selecting a target business for our initial business combination, we have encountered and may continue
to encounter intense competition from other entities having a business objective similar to ours, including other blank check
companies, private equity groups and leveraged buyout funds, public companies and operating businesses seeking strategic acquisitions.
Many of these entities are well established and have extensive experience identifying and effecting business combinations directly
or through affiliates. Moreover, many of these competitors possess greater financial, technical, human and other resources than
us. Our ability to acquire larger target businesses is limited by our available financial resources. This inherent limitation
gives others an advantage in pursuing the acquisition of a target business. Furthermore, our obligation to pay cash in connection
with our public stockholders who exercise their redemption rights may reduce the resources available to us for our initial business
combination and our outstanding warrants, and the future dilution they potentially represent, may not be viewed favorably by certain
target businesses. Either of these factors may place us at a competitive disadvantage in successfully negotiating an initial business
combination.
Sponsor
Indemnity
Our
sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (other than our independent registered
public accounting firm) for services rendered or products sold to us, or a prospective target business with which we have discussed
entering into a transaction agreement, reduce the amount of funds in the trust account to below: (1) $10.00 per public share;
or (2) 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 share due to reductions in the value of the trust assets, in each case, net of permitted withdrawals, except
as to any claims by a third party that executed a waiver of any and all rights to the monies held in the trust account (whether
any such waiver is enforceable) and except as to any claims under our indemnity of the underwriters of our initial public offering
against certain liabilities, including liabilities under the Securities Act. We have not independently verified whether our sponsor
has sufficient funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are securities of our
company and, therefore, our sponsor may not be able to satisfy those obligations. We have not asked our sponsor to reserve for
such obligations. Therefore, we cannot assure you that our sponsor would be able to satisfy those obligations. We believe the
likelihood of our sponsor having to indemnify the trust account is limited because we will endeavor to have all vendors and prospective
target businesses as well as other entities execute agreements with us waiving any right, title, interest or claim of any kind
in or to monies held in the trust account.
Employees
We
currently have two officers and do not intend to have any full-time employees prior to the completion of our initial business
combination. Members of our management team are not obligated to devote any specific number of hours to our matters but they devote
as much of their time as they deem necessary to our affairs and intend to continue doing so until we have completed our initial
business combination. The amount of time that any such person devotes in any time period to our company may vary based on whether
a target business has been selected for our initial business combination and the current stage of the business combination process.
Periodic
Reporting and Financial Information
Our
units, Class A common stock and warrants are registered under the Exchange Act and we have reporting obligations, including
the requirement that we file annual, quarterly and current reports with the SEC. In accordance with the requirements of the Exchange
Act, this Report contains financial statements audited and reported on by our independent registered public accounting firm.
We
will provide stockholders with audited financial statements of the prospective target business as part of the tender offer materials
or proxy solicitation materials sent to stockholders to assist them in assessing the target business. These financial statements
may be required to be prepared in accordance with, or be reconciled to, GAAP or IFRS, depending on the circumstances and the historical
financial statements may be required to be audited in accordance with the PCAOB. These financial statement requirements may limit
the pool of potential target businesses we may acquire because some targets may be unable to provide such financial statements
in time for us to disclose such financial statements in accordance with federal proxy rules and complete our initial business
combination within the completion window. We cannot assure you that any particular target business identified by us as a potential
business combination candidate will have financial statements prepared in accordance with GAAP or that the potential target business
will be able to prepare its financial statements in accordance with the requirements outlined above. To the extent that these
requirements cannot be met, we may not be able to acquire the proposed target business. While this may limit the pool of potential
business combination candidates, we do not believe that this limitation will be material.
We
are required to evaluate our internal control procedures for the fiscal year ending December 31, 2021 as required by the
Sarbanes-Oxley Act. Only in the event we are deemed to be a large accelerated filer or an accelerated filer and no longer
an emerging growth company will we be required to have our internal control procedures audited. A target business may not be in
compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of their internal controls. The development of
the internal controls of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs
necessary to complete any such acquisition.
We
are an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As
such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other
public companies that are not “emerging growth companies” including, but not limited to, not being required to comply
with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding
executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory
vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. If some investors
find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of
our securities may be more volatile.
In
addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended
transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards.
In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards
would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period.
We
will remain an emerging growth company until the earlier of: (1) the last day of the fiscal year (a) following September 15, 2025,
(b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated
filer, which means the market value of our common stock that is held by non-affiliates exceeds $700 million as of the
end of the prior fiscal year’s second fiscal quarter; and (2) the date on which we have issued more than $1.00 billion
in non-convertible debt during the prior three-year period. References herein to “emerging growth company”
shall have the meaning associated with it in the JOBS Act.