References in this report to “we,”
“us” or the “Company” refer to RCF Acquisition Corp. References to our “management” or our “management
team” refer to our officers and directors, and references to the “Sponsor” refer to RCF VII Sponsor LLC, a Delaware
limited liability company. References to our “initial shareholders” refer to the holders of our Class B ordinary shares (the
“Founder Shares”).
ITEM 1A. RISK FACTORS.
An investment in our securities involves a
high degree of risk. You should consider carefully all of the risks described below, together with the other information contained in
this Annual Report on Form 10-K, the prospectus associated with our Public Offering and the Registration Statement, before making a decision
to invest in our securities. If any of the following events occur, our business, financial condition and operating results may be materially
adversely affected. In that event, the trading price of our securities could decline, and you could lose all or part of your investment.
Risks Relating to our Search for, and Consummation
of or Inability to Consummate, a Business Combination
We are a blank check company with no operating
history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.
We are a blank check company incorporated under
the laws of the Cayman Islands with no operating results. Because we lack an operating history, you have no basis upon which to evaluate
our ability to achieve our business objective of completing our initial business combination. We have no plans, arrangements or understandings
with any prospective target business concerning a business combination and may be unable to complete our initial business combination.
If we fail to complete our initial business combination, we will never generate any operating revenues.
Our public shareholders may not be afforded
an opportunity to vote on our proposed initial business combination, and even if we hold a vote, holders of our Founder Shares will participate
in such vote, which means we may complete our initial business combination even though a majority of our public shareholders do not support
such a combination.
We may choose not to hold a shareholder vote to
approve our initial business combination unless the business combination would require shareholder approval under applicable law or stock
exchange listing requirements. In such case, the decision as to whether we will seek shareholder approval of a proposed business combination
or will allow shareholders to sell their shares to us in a tender offer will be made by us, solely in our discretion, and will be based
on a variety of factors, such as the timing of the transaction and whether the terms of the transaction would otherwise require us to
seek shareholder approval. Even if we seek shareholder approval, the holders of our Founder Shares will participate in the vote on such
approval. Accordingly, we may complete our initial business combination even if holders of a majority of our ordinary shares do not approve
of the business combination we complete.
Your only opportunity to effect your investment
decision regarding a potential business combination may be limited to the exercise of your right to redeem your shares from us for cash.
At the time of your investment in us, you will
not be provided with an opportunity to evaluate the specific merits or risks of our initial business combination. Since our board of directors
may complete a business combination without seeking shareholder approval, public shareholders may not have the right or opportunity to
vote on the business combination, unless we seek such shareholder vote. Accordingly, your only opportunity to effect your investment decision
regarding our initial business combination may be limited to exercising your redemption rights within the period of time (which will be
at least 20 business days) set forth in our tender offer documents mailed to our public shareholders in which we describe our initial
business combination.
If we seek shareholder approval of our initial
business combination, our initial shareholders and management team have agreed to vote in favor of such initial business combination,
regardless of how our public shareholders vote.
Our initial shareholders owned 20% of our issued
and outstanding ordinary shares immediately following the completion of the Public Offering. Our initial shareholders and management team
also may from time to time purchase Class A ordinary shares prior to our initial business combination. Our amended and restated memorandum
and articles of association provides that, if we seek shareholder approval of an initial business combination, such initial business combination
will be approved if we receive an ordinary resolution under Cayman Islands law, which requires the affirmative vote of a majority of the
shareholders who attend and vote at a general meeting of the Company, including the Founder Shares. As a result, in addition to our initial
shareholders’ Founder Shares, we would need 8,625,000 or 37.5% of the 23,000,000 public shares sold in the Public Offering to be
voted in favor of an initial business combination in order to have our initial business combination approved (assuming all outstanding
shares are voted). Accordingly, if we seek shareholder approval of our initial business combination, the agreement by our initial shareholders
and management team to vote in favor of our initial business combination will increase the likelihood that we will receive an ordinary
resolution, being the requisite shareholder approval for such initial business combination.
The ability of our public shareholders to redeem
their shares for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult
for us to enter into a business combination with a target.
We may seek to enter into a business combination
transaction agreement with a minimum cash requirement for (i) cash consideration to be paid to the target or its owners, (ii) cash for
working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions. If too many public shareholders
exercise their redemption rights, we would not be able to meet such closing condition and, as a result, would not be able to proceed with
the business combination. Furthermore, in no event will we redeem our public shares in an amount that would cause our net tangible assets
to be less than $5,000,001. Consequently, if accepting all properly submitted redemption requests would cause our net tangible assets
to be less than $5,000,001 or such greater amount necessary to satisfy a condition as described above, we would not proceed with such
redemption and the related business combination and may instead search for an alternate business combination. Prospective targets will
be aware of these risks and, thus, may be reluctant to enter into a business combination transaction with us.
The ability of our public shareholders to exercise
redemption rights with respect to a large number of our shares may not allow us to complete the most desirable business combination or
optimize our capital structure.
At the time we enter into an agreement for our
initial business combination, we will not know how many shareholders may exercise their redemption rights, and therefore will need to
structure the transaction based on our expectations as to the number of shares that will be submitted for redemption. If our initial business
combination agreement requires us to use a portion of the cash in the Trust Account to pay the purchase price, or requires us to have
a minimum amount of cash at closing, we will need to reserve a portion of the cash in the Trust Account to meet such requirements, or
arrange for third party financing. In addition, if a larger number of shares are submitted for redemption than we initially expected,
we may need to restructure the transaction to reserve a greater portion of the cash in the Trust Account or arrange for third party financing.
Raising additional third party financing may involve dilutive equity issuances or the incurrence of indebtedness at higher than desirable
levels. Furthermore, this dilution would increase to the extent that the anti-dilution provision of the Class B ordinary shares results
in the issuance of Class A ordinary shares on a greater than one-to-one basis upon conversion of the Class B ordinary shares at the time
of our initial business combination. In addition, the amount of the deferred underwriting commissions payable to the underwriters will
not be adjusted for any shares that are redeemed in connection with an initial business combination. The per share amount we will distribute
to shareholders who properly exercise their redemption rights will not be reduced by the deferred underwriting commission and after such
redemptions, the amount held in trust will continue to reflect our obligation to pay the entire deferred underwriting commissions. The
above considerations may limit our ability to complete the most desirable business combination available to us or optimize our capital
structure.
The ability of our public shareholders to exercise
redemption rights with respect to a large number of our shares could increase the probability that our initial business combination would
be unsuccessful and that you would have to wait for liquidation in order to redeem your shares.
If our initial business combination agreement
requires us to use a portion of the cash in the Trust Account to pay the purchase price, or requires us to have a minimum amount of cash
at closing, the probability that our initial business combination would be unsuccessful is increased. If our initial business combination
is unsuccessful, you would not receive your pro rata portion of the Trust Account until we liquidate the Trust Account. If you are in
need of immediate liquidity, you could attempt to sell your shares in the open market; however, at such time our shares may trade at a
discount to the pro rata amount per share in the Trust Account. In either situation, you may suffer a material loss on your investment
or lose the benefit of funds expected in connection with your exercise of redemption rights until we liquidate or you are able to sell
your shares in the open market.
Our search for a business combination, and
any target business with which we ultimately consummate a business combination, may be materially adversely affected by the recent coronavirus
(COVID-19) outbreak and the status of debt and equity markets, as well as protectionist legislation in our target markets.
A significant outbreak of COVID-19 has resulted
in a widespread health crisis that could continue to, and other events (such as terrorist attacks, natural disasters or a significant
outbreak of other infectious diseases) could:
| ● | adversely affect the economies and financial markets worldwide,
leading to changes in interest rates, reduced liquidity and a continued slowdown in global economic conditions; |
| ● | provoke turbulence in financial markets, which could make
it difficult or impossible to raise additional capital to consummate a deal including debt or equity on terms acceptable to us or at
all; |
| ● | disrupt our operations and those of our potential partners,
including those helping us diligence or search for targets, due to illness or efforts to mitigate the pandemic, including but not limited
to government-mandated shutdowns, other social distancing measures, travel restrictions, office closures and measures impacting on working
practices, such as the imposition of remote working arrangements, and quarantine requirements and isolation measures under local laws; |
| ● | negatively impact the health of members of our team; |
| ● | adversely affect our ability to conduct redemptions; and |
| ● | materially and adversely affect the business of any potential
target business with which we consummate a business combination. |
Furthermore, we may be unable to complete a business
combination at all if concerns relating to COVID-19 continue to restrict travel, limit the ability to have meetings with potential investors
or make it impossible or impractical to negotiate and consummate a transaction with the target company’s personnel, vendors and
services providers in a timely manner, if at all. The extent to which COVID-19 impacts our search for a business combination will depend
on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the
severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others. The global spread of COVID-19 could materially
and adversely affect our operations and financial condition due to the disruptions to commerce, reduced economic activity and other unforeseen
consequences of a pandemic that are beyond our control. While vaccines for COVID-19 are being, and have been, developed, there is no guarantee
that any such vaccine will be effective, work as expected or be made available or will be accepted on a significant scale and in a timely
manner. If the disruptions posed by COVID-19 or other matters of global concern continue for an extensive period of time, our ability
to consummate a business combination, or the operations of a target business with which we ultimately consummate a business combination,
may be materially adversely affected.
Finally, the outbreak of COVID-19 or other events
(such as terrorist attacks, natural disasters or a significant outbreak of other infectious diseases) may also have the effect of heightening
many of the other risks described in this “Risk Factors” section, such as those related to the market for our securities.
The requirement that we complete our initial
business combination within 18 months after the Public Offering may give potential target businesses leverage over us in negotiating a
business combination and may limit the time we have in which to conduct due diligence on potential business combination targets, in particular
as we approach our dissolution deadline, which could undermine our ability to complete our initial business combination on terms that
would produce value for our shareholders.
Any potential target business with which we enter
into negotiations concerning a business combination will be aware that we must complete our initial business combination within 18 months
of the Public Offering. Consequently, such target business may obtain leverage over us in negotiating a business combination, knowing
that if we do not complete our initial business combination with that particular target business, we may be unable to complete our initial
business combination with any target business. This risk will increase as we get closer to the timeframe described above. In addition,
we may have limited time to conduct due diligence and may enter into our initial business combination on terms that we would have rejected
upon a more comprehensive investigation.
We may not be able to complete our initial
business combination within 18 months after the Public Offering, in which case we would cease all operations except for the purpose of
winding up and we would redeem our public shares and liquidate.
We may not be able to find a suitable target business
and complete our initial business combination within 18 months after the Public Offering. Our ability to complete our initial business
combination may be negatively impacted by general market conditions, volatility in the capital and debt markets and the other risks described
herein, including, without limitation, as a result of terrorist attacks, natural disasters or a significant outbreak of other infection
diseases. For example, the outbreak of COVID-19 continues to grow both in the U.S. and globally and, while the extent of the impact of
the outbreak on us will depend on future developments, it could limit our ability to complete our initial business combination, including
as a result of increased market volatility, decreased market liquidity and third-party financing being unavailable on terms acceptable
to us or at all. Furthermore, we may be unable to complete a business combination if continued concerns relating to COVID-19 restrict
travel, limit the ability to have meetings with potential investors or the target company’s personnel, vendors and services providers
are unavailable to negotiate and consummate a transaction in a timely manner. Additionally, the outbreak of COVID-19 and other events
(such as terrorist attacks, natural disasters or a significant outbreak of other infection diseases) may negatively impact businesses
we may seek to acquire. If we have not completed our initial business combination within such time period, we will: (i) cease all operations
except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the
public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest
earned on the funds held in the Trust Account (less taxes payable 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 shareholders’ rights as shareholders
(including the right to receive further liquidation distributions, if any) and (iii) as promptly as reasonably possible following such
redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in each
case to our obligations under Cayman Islands law to provide for claims of creditors and in all cases subject to the other requirements
of applicable law.
In such case, our public shareholders may only
receive $10.20 per share, and our warrants will expire worthless. In certain circumstances, our public shareholders may receive less than
$10.20 per share on the redemption of their shares.
If we seek shareholder approval of our initial
business combination, our Sponsor, initial shareholders, directors, officers, advisors and their affiliates may elect to purchase shares
or public warrants from public shareholders, which may influence a vote on a proposed business combination and reduce the public “float”
of our Class A ordinary shares.
If we seek shareholder approval of our initial
business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer
rules, our Sponsor, directors, officers, advisors or their affiliates may purchase shares or public warrants in privately negotiated transactions
or in the open market either prior to or following the completion of our initial business combination, although they are under no obligation
to do so. There is no limit on the number of shares our initial shareholders, directors, officers, advisors or their affiliates may purchase
in such transactions, subject to compliance with applicable law and NYSE rules. However, they have no current commitments, plans or intentions
to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds in the Trust
Account will be used to purchase shares or public warrants in such transactions. Such purchases may include a contractual acknowledgment
that such shareholder, although still the record holder of our shares, is no longer the beneficial owner thereof and therefore agrees
not to exercise its redemption rights.
In the event that our Sponsor, directors, officers,
advisors or their affiliates purchase shares in privately negotiated transactions from public shareholders who have already elected to
exercise their redemption rights, such selling shareholders would be required to revoke their prior elections to redeem their shares.
The purpose of any such purchases of shares could be to vote such shares in favor of the business combination and thereby increase the
likelihood of obtaining shareholder approval of the business combination or to satisfy a closing condition in an agreement with a target
that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it
appears that such requirement would otherwise not be met. The purpose of any such purchases of public warrants could be to reduce the
number of public warrants outstanding or to vote such warrants on any matters submitted to the warrant holders for approval in connection
with our initial business combination. We expect that any such purchases of our securities may result in the completion of our initial
business combination that may not otherwise have been possible. Any such purchases will be reported pursuant to Section 13 and Section
16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements.
In addition, if such purchases are made, the public
“float” of our Class A ordinary shares or public warrants and the number of beneficial holders of our securities may be reduced,
possibly making it difficult to obtain or maintain the quotation, listing or trading of our securities on a national securities exchange.
If a shareholder fails to receive notice of
our offer to redeem our public shares in connection with our initial business combination, or fails to comply with the procedures for
submitting or tendering its shares, such shares may not be redeemed.
We will comply with the proxy rules or tender
offer rules, as applicable, when conducting redemptions in connection with our initial business combination. Despite our compliance with
these rules, if a shareholder fails to receive our proxy materials or tender offer documents, as applicable, such shareholder may not
become aware of the opportunity to redeem its shares. In addition, proxy materials or tender offer documents, as applicable, that we will
furnish to holders of our public shares in connection with our initial business combination will describe the various procedures that
must be complied with in order to validly tender or submit public shares for redemption. For example, we intend to require our public
shareholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,”
to, at the holder’s option, either deliver their share certificates to our transfer agent, or to deliver their shares to our transfer
agent electronically prior to the date set forth in the proxy materials or tender offer documents, as applicable. In the case of proxy
materials, this date may be up to two business days prior to the scheduled vote on the proposal to approve the initial business combination.
In addition, if we conduct redemptions in connection with a shareholder vote, we intend to require a public shareholder seeking redemption
of its public shares to also submit a written request for redemption to our transfer agent two business days prior to the scheduled vote
in which the name of the beneficial owner of such shares is included. In the event that a shareholder fails to comply with these or any
other procedures disclosed in the proxy or tender offer materials, as applicable, its shares may not be redeemed.
You will not be entitled to protections normally
afforded to investors of many other blank check companies.
Since the net proceeds of the Public Offering
and the sale of the Private Placement Warrants are intended to be used to complete an initial business combination with a target business,
we may be deemed to be a “blank check” company under the United States securities laws. However, because we have net tangible
assets in excess of $5,000,000 and have filed a Current Report on Form 8-K, including an audited balance sheet demonstrating this fact,
we are exempt from rules promulgated by the SEC to protect investors in blank check companies, such as Rule 419. Accordingly, investors
will not be afforded the benefits or protections of those rules. Among other things, this means that we will have a longer period of time
to complete our initial business combination than do companies subject to Rule 419. Moreover, if the Public Offering had been subject
to Rule 419, that rule would have prohibited the release of any interest earned on funds held in the Trust Account to us unless and until
the funds in the Trust Account were released to us in connection with our completion of an initial business combination.
If we seek shareholder approval of our initial
business combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a “group” of shareholders
are deemed to hold in excess of 15% of our Class A ordinary shares, you will lose the ability to redeem all such shares in excess of 15%
of our Class A ordinary shares.
If we seek shareholder approval of our initial
business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer
rules, our amended and restated memorandum and articles of association provide that a public shareholder, together with any affiliate
of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under
Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 15% of the
shares sold in the Public Offering, which we refer to as the “Excess Shares.” However, we would not be restricting our shareholders’
ability to vote all of their shares (including Excess Shares) for or against our initial business combination. Your inability to redeem
the Excess Shares will reduce your influence over our ability to complete our initial business combination and you could suffer a material
loss on your investment in us if you sell Excess Shares in open market transactions. Additionally, you will not receive redemption distributions
with respect to the Excess Shares if we complete our initial business combination. And as a result, you will continue to hold that number
of shares exceeding 15% and, in order to dispose of such shares, would be required to sell your shares in open market transactions, potentially
at a loss.
Because of our limited resources and the significant
competition for business combination opportunities, it may be more difficult for us to complete our initial business combination. If have
not completed our initial business combination, our public shareholders may receive only their pro rata portion of the funds in the Trust
Account that are available for distribution to public shareholders, and our warrants will expire worthless.
We expect to encounter competition from other
entities having a business objective similar to ours, including private investors (which may be individuals or investment partnerships),
other blank check companies and other entities, domestic and international, competing for the types of businesses we intend to acquire.
Many of these individuals and entities are well-established and have extensive experience in identifying and effecting, directly or indirectly,
acquisitions of companies operating in or providing services to various industries. Many of these competitors possess similar or greater
technical, human and other resources to ours or more local industry knowledge than we do and our financial resources will be relatively
limited when contrasted with those of many of these competitors. Additionally, the number of blank check companies looking for business
combination targets has increased compared to recent years and many of these blank check companies are sponsored by entities or persons
that have significant experience with completing business combinations. While we believe there are numerous target businesses we could
potentially acquire with the net proceeds of the Public Offering and the sale of the Private Placement Warrants, our ability to compete
with respect to the acquisition of certain target businesses that are sizable will be limited by our available financial resources. This
inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses. Furthermore, we are
obligated to offer holders of our public shares the right to redeem their shares for cash at the time of our initial business combination
in conjunction with a shareholder vote or via a tender offer. Target companies will be aware that this may reduce the resources available
to us for our initial business combination. Any of these obligations may place us at a competitive disadvantage in successfully negotiating
a business combination. If we have not completed our initial business combination, our public shareholders may receive only their pro
rata portion of the funds in the Trust Account that are available for distribution to public shareholders, and our warrants will expire
worthless. In certain circumstances, our public shareholders may receive less than $10.20 per share on the redemption of their shares.
As the number of special purpose acquisition
companies evaluating targets increases, attractive targets may become scarcer and there may be more competition for attractive targets.
This could increase the cost of our initial business combination and could even result in our inability to find a target or to consummate
an initial business combination.
In recent years, the number of special purpose
acquisition companies that have been formed has increased substantially. Many potential targets for special purpose acquisition companies
have already entered into an initial business combination, and there are still many special purpose acquisition companies seeking targets
for their initial business combination, as well as many such companies currently in registration. As a result, at times, fewer attractive
targets may be available, and it may require more time, more effort and more resources to identify a suitable target and to consummate
an initial business combination.
In addition, because there are more special purpose
acquisition companies seeking to enter into an initial business combination with available targets, the competition for available targets
with attractive fundamentals or business models may increase, which could cause target companies to demand improved financial terms. Attractive
deals could also become scarcer for other reasons, such as economic or industry sector downturns, geopolitical tensions, or increases
in the cost of additional capital needed to close business combinations or operate targets post-business combination.
This could increase the cost of, delay or otherwise
complicate or frustrate our ability to find and consummate an initial business combination, and may result in our inability to consummate
an initial business combination on terms favorable to our investors altogether.
If the net proceeds of the Public Offering
and the sale of the Private Placement Warrants not being held in the Trust Account are insufficient to allow us to operate at least until
May 15, 2023, it could limit the amount available to fund our search for a target business or businesses and complete our initial business
combination, and we will depend on loans from our Sponsor or management team to fund our search and to complete our initial business combination.
Of the net proceeds of the Public Offering and the Private Placement,
only approximately $1,900,000 was made available to us initially outside Trust Account to fund our working capital requirements. We cannot
assure you that the funds available to us outside of the Trust Account, which includes the Sponsor Convertible Note (as defined below),
will be sufficient to allow us to operate at least until May 15, 2023.Of the funds available to us, we could use a portion of the funds
available to us to pay fees to consultants to assist us with our search for a target business. We could also use a portion of the funds
as a down payment or to fund a “no-shop” provision (a provision in letters of intent or merger agreements designed to keep
target businesses from “shopping” around for transactions with other companies or investors on terms more favorable to such
target businesses) with respect to a particular proposed business combination, although we do not have any current intention to do so.
If we entered into a letter of intent or merger agreement where we paid for the right to receive exclusivity from a target business and
were subsequently required to forfeit such funds (whether as a result of our breach or otherwise), we might not have sufficient funds
to continue searching for, or conduct due diligence with respect to, a target business.
If we are required to seek additional capital,
we would need to borrow funds from our Sponsor, management team or other third parties to operate or may be forced to liquidate. Neither
our Sponsor, members of our management team nor any of their affiliates is under any obligation to advance funds to us in such circumstances.
Any such advances would be repaid only from funds held outside the Trust Account or from funds released to us upon completion of our initial
business combination. Up to $1,500,000 of such loans may be convertible into Private Placement Warrants of the post-business combination
entity at a price of $1.00 per warrant at the option of the lender. Such warrants would be identical to the Private Placement Warrants.
Prior to the completion of our initial business combination, we do not expect to seek loans from parties other than our Sponsor or an
affiliate of our Sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all
rights to seek access to funds in our Trust Account. If we have not completed our initial business combination because we do not have
sufficient funds available to us, we will be forced to cease operations and liquidate the Trust Account. Consequently, as of December
31, 2022 our public shareholders may only receive an estimated $10.35 per share, or possibly less, on our redemption of our public shares,
and our warrants will expire worthless.
Changes in the market for directors’
and officers’ liability insurance could make it more difficult and more expensive for us to negotiate and complete an initial business
combination.
In recent months, the market for directors’
and officers’ liability insurance for special purpose acquisition companies has changed in ways adverse to us and our management
team. Fewer insurance companies are offering quotes for directors and officers liability coverage, the premiums charged for such policies
have generally increased and the terms of such policies have generally become less favorable. These trends may continue into the future.
The increased cost and decreased availability
of directors’ and officers’ liability insurance could make it more difficult and more expensive for us to negotiate an initial
business combination. In order to obtain directors’ and officers’ liability insurance or modify its coverage as a result of
becoming a public company, the post-business combination entity might need to incur greater expense, accept less favorable terms or both.
However, any failure to obtain adequate directors’ and officers’ liability insurance could have an adverse impact on the post-business
combination’s ability to attract and retain qualified officers and directors.
In addition, even after we were to complete an
initial business combination, our directors and officers could still be subject to potential liability from claims arising from conduct
alleged to have occurred prior to the initial business combination. As a result, in order to protect our directors and officers, the post-business
combination entity may need to purchase additional insurance with respect to any such claims (“run-off insurance”). The need
for run-off insurance would be an added expense for the post-business combination entity, and could interfere with or frustrate our ability
to consummate an initial business combination on terms favorable to our investors.
If third parties bring claims against us, the
proceeds held in the Trust Account could be reduced and the per-share redemption amount received by shareholders may be less than $10.20
per share.
Our placing of funds in the Trust Account may
not protect those funds from third party claims against us. Although we will seek to have all vendors, service providers, prospective
target businesses and other entities with which we do business execute agreements with us waiving any right, title, interest or claim
of any kind in or to any monies held in the Trust Account for the benefit of our public shareholders, such parties may not execute such
agreements, or even if they execute such agreements they may not be prevented from bringing claims against the Trust Account, including,
but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the
enforceability of the waiver, in each case in order to gain advantage with respect to a claim against our assets, including the funds
held in the Trust Account. If any third party refuses to execute an agreement waiving such claims to the monies held in the Trust Account,
our management will consider whether competitive alternatives are reasonably available to us and will only enter into an agreement with
such third party if management believes that such third party’s engagement would be in the best interests of the Company under the
circumstances. The underwriters of the Public Offering will not execute agreements with us waiving such claims to the monies held in the
Trust Account.
Examples of possible instances where we may engage
a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular expertise or skills
are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases
where management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities
will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements
with us and will not seek recourse against the Trust Account for any reason. Upon redemption of our public shares, if we have not completed
our initial business combination within the prescribed timeframe, or upon the exercise of a redemption right in connection with our initial
business combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought against
us within the 10 years following redemption. Accordingly, the per-share redemption amount received by public shareholders could be less
than the $10.20 per public share initially held in the Trust Account, due to claims of such creditors. Pursuant to the letter agreement
the form of which is filed as an exhibit to this Form 10-K, our Sponsor has agreed that it will be liable to us if and to the extent any
claims by a third party for services rendered or products sold to us, or a prospective target business with which we have entered into
a written letter of intent, confidentiality or other similar agreement or business combination agreement, reduce the amount of funds in
the Trust Account to below the lesser of (i) $10.20 per public share and (ii) the actual amount per public share held in the Trust Account
as of the date of the liquidation of the Trust Account, if less than $10.20 per share due to reductions in the value of the trust assets,
less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed
a waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable) nor will it apply to
any claims under our indemnity of the underwriters of the Public Offering against certain liabilities, including liabilities under the
Securities Act. However, we have not asked our Sponsor to reserve for such indemnification obligations, nor have we independently verified
whether our Sponsor has sufficient funds to satisfy its indemnity obligations and we believe that our Sponsor’s only assets are
securities of our Company. Therefore, we cannot assure you that our Sponsor would be able to satisfy those obligations.
As a result, if any such claims were successfully
made against the Trust Account, the funds available for our initial business combination and redemptions could be reduced to less than
$10.20 per public share. In such event, we may not be able to complete our initial business combination, and you would receive such lesser
amount per share in connection with any redemption of your public shares. None of our officers or directors will indemnify us for claims
by third parties including, without limitation, claims by vendors and prospective target businesses.
Our directors may decide not to enforce the
indemnification obligations of our Sponsor, resulting in a reduction in the amount of funds in the Trust Account available for distribution
to our public shareholders.
In the event that the proceeds in the Trust Account
are reduced below the lesser of (i) $10.20 per share and (ii) the actual amount per public share held in the Trust Account as of the date
of the liquidation of the Trust Account if less than $10.20 per share due to reductions in the value of the trust assets, in each case
less taxes payable, and our Sponsor asserts that it is unable to satisfy his obligations or that it has no indemnification obligations
related to a particular claim, our independent directors would determine whether to take legal action against our Sponsor to enforce its
indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against our
Sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment
and subject to their fiduciary duties may choose not to do so in any particular instance if, for example, the cost of such legal action
is deemed by the independent directors to be too high relative to the amount recoverable or if the independent directors determine that
a favorable outcome is not likely. If our independent directors choose not to enforce these indemnification obligations, the amount of
funds in the Trust Account available for distribution to our public shareholders may be reduced below $10.20 per share.
Our financial condition raises substantial
doubt about our ability to continue as a “going concern.”
As of December 31, 2022, we had cash of $41,276
and a working capital deficit of $331,676. We have incurred and expect to continue to incur significant costs in pursuit of our
acquisition plans. We cannot assure you that our plans to consummate an initial business combination will be successful. These factors,
among others, raise substantial doubt about our ability to continue as a going concern. The financial statements contained elsewhere in
this report do not include any adjustments that might result from our inability to continue as a going concern.
The securities in which we invest the proceeds
held in the trust account could bear a negative rate of interest, which could reduce the interest income available for payment of taxes
or reduce the value of the assets held in trust such that the per share redemption amount received by shareholders may be less than $10.20
per share.
The net proceeds the Public Offering and Private
Placement are held in the trust account. The proceeds held in the trust account may only be invested in direct U.S. government treasury
obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment
Company Act which invest only in direct U.S. government treasury obligations. While short-term U.S. treasury obligations currently yield
a positive rate of interest, they have briefly yielded negative interest rates in recent years. Central banks in Europe and Japan pursued
interest rates below zero in recent years, and the Open Market Committee of the Federal Reserve has not ruled out the possibility that
it may in the future adopt similar policies in the United States. In the event of very low or negative yields, the amount of interest
income (which interest shall be net of taxes payable and up to $100,000 of interest to pay dissolution expenses) would be reduced. In
the event that we are unable to complete our initial business combination, our public shareholders are entitled to receive their pro-rata
share of the proceeds held in the trust account, plus any interest income. If the balance of the trust account is reduced below
$204,000,000 as a result of negative interest rates, the amount of funds in the trust account available for distribution to our public
shareholders may be reduced below $10.20 per share.
If, after we distribute the proceeds in the
Trust Account to our public shareholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition
is filed against us that is not dismissed, a bankruptcy or insolvency court may seek to recover such proceeds, and the members of our
board of directors may be viewed as having breached their fiduciary duties to our creditors, thereby exposing the members of our board
of directors and us to claims of punitive damages.
If, after we distribute the proceeds in the Trust
Account to our public shareholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is
filed against us that is not dismissed, any distributions received by shareholders could be viewed under applicable debtor/creditor and/or
bankruptcy or insolvency laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a
bankruptcy or insolvency court could seek to recover some or all amounts received by our shareholders. In addition, our board of directors
may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith, thereby exposing itself and us
to claims of punitive damages, by paying public shareholders from the Trust Account prior to addressing the claims of creditors.
If, before distributing the proceeds in the
Trust Account to our public shareholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition
is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our shareholders
and the per-share amount that would otherwise be received by our shareholders in connection with our liquidation may be reduced.
If, before distributing the proceeds in the Trust
Account to our public shareholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is
filed against us that is not dismissed, the proceeds held in Trust Account could be subject to applicable bankruptcy or insolvency law,
and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our shareholders.
To the extent any bankruptcy claims deplete the Trust Account, the per-share amount that would otherwise be received by our shareholders
in connection with our liquidation may be reduced.
If we are deemed to be an investment company
under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted,
which may make it difficult for us to complete our initial business combination.
If we are deemed to be an investment company under
the Investment Company Act, our activities may be restricted, including:
| ● | restrictions on the nature of our investments; and |
| ● | restrictions on the issuance of securities, |
each of which may make it difficult for us to
complete our business combination. In addition, we may have imposed upon us burdensome requirements, including:
| ● | registration as an investment company; |
| ● | adoption of a specific form of corporate structure; and |
| ● | reporting, record keeping, voting, proxy and disclosure requirements
and other rules and regulations. |
In order not to be regulated as an investment
company under the Investment Company Act, unless we can qualify for an exclusion, we must ensure that we are engaged primarily in a business
other than investing, reinvesting or trading of securities and that our activities do not include investing, reinvesting, owning, holding
or trading “investment securities” constituting more than 40% of our assets (exclusive of U.S. government securities and cash
items) on an unconsolidated basis. Our business is to identify and complete a business combination and thereafter to operate the post-transaction
business or assets for the long term. We do not plan to buy businesses or assets with a view to resale or profit from their resale. We
do not plan to buy unrelated businesses or assets or to be a passive investor.
We do not believe that our principal activities
subject us to the Investment Company Act. To this end, the proceeds held in the Trust Account may only be invested in United States “government
securities” within the meaning of Section 2 (a)(16) of the Investment Company Act having a maturity of 185 days or less or in money
market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S.
government treasury obligations. Pursuant to the trust agreement, the trustee is not permitted to invest in other securities or assets.
By restricting the investment of the proceeds to these instruments, and by having a business plan targeted at acquiring and growing businesses
for the long term (rather than on buying and selling businesses in the manner of a merchant bank or private equity fund), we intend to
avoid being deemed an “investment company” within the meaning of the Investment Company Act. The Trust Account is intended
as a holding place for funds pending the earliest to occur of either: (i) the completion of our initial business combination; (ii) the
redemption of any public shares properly submitted in connection with a shareholder vote to amend our amended and restated memorandum
and articles of association (A) that would modify the substance or timing of our obligation to allow redemption in connection with our
initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 18 months
of the Public Offering or (B) with respect to any other material provisions relating to shareholders’ rights or pre-initial business
combination activity; or (iii) absent an initial business combination within 18 months of the Public Offering, our return of the funds
held in the Trust Account to our public shareholders as part of our redemption of the public shares. If we do not invest the proceeds
as discussed above, we may be deemed to be subject to the Investment Company Act. If we were deemed to be subject to the Investment Company
Act, compliance with these additional regulatory burdens would require additional expenses for which we have not allotted funds and may
hinder our ability to complete a business combination. If we have not completed our initial business combination, our public shareholders
may only receive their pro rata portion of the funds in the Trust Account that are available for distribution to public shareholders,
and our warrants will expire worthless.
If we are deemed to
be an investment company for purposes of the Investment Company Act, we may be forced to abandon our efforts to complete an initial business
combination and instead be required to liquidate the Company. To mitigate the risk of that result, on or prior to the 18-month anniversary
of the effective date of the registration statement relating to our IPO, we may instruct Continental Stock Transfer & Trust Company
to liquidate the securities held in the trust account and instead hold all funds in the trust account in cash. As a result, following
such change, we will likely receive minimal, if any, interest, on the funds held in the trust account, which would reduce the dollar amount
that our public shareholders would have otherwise received upon any redemption or liquidation of the Company if the assets in the trust
account had remained in U.S. government securities or money market funds.
On March 30, 2022, the
SEC issued proposed rules (the “SPAC Rule Proposals”), relating, among other things, to circumstances in which SPACs such
as us could potentially be subject to the Investment Company Act and the regulations thereunder. The SPAC Rule Proposals would provide
a safe harbor for such companies from the definition of “investment company” under Section 3(a)(1)(A) of the Investment Company
Act, provided that a SPAC satisfies certain criteria. To comply with the duration limitation of the proposed safe harbor, a SPAC would
have a limited time period to announce and complete a de-SPAC transaction. Specifically, to comply with the safe harbor, the SPAC Rule
Proposals would require a company to file a report on Form 8-K announcing that it has entered into an agreement with a target company
for an initial business combination no later than 18 months after the effective date of the registration statement for its initial public
offering. The company would then be required to complete its initial business combination no later than 18 months after the effective
date of the registration statement for its initial public offering. We understand that the SEC has recently been taking informal positions
regarding the Investment Company Act consistent with the SPAC Rule Proposals.
There is currently uncertainty
concerning the applicability of the Investment Company Act to a SPAC, including a company like ours, that does not complete its initial
business combination within the proposed time frame set forth in the proposed safe harbor rule. As indicated above, we completed our IPO
in November 2021 and have operated as a blank check company searching for a target business with which to consummate an initial business
combination since such time (or approximately 14 months after the effective date of our IPO, as of the date of this Annual Report). If
we were deemed to be an investment company for purposes of the Investment Company Act, we might be forced to abandon our efforts to complete
an initial business combination and instead be required to liquidate the Company. If we are required to liquidate the Company, our investors
would not be able to realize the benefits of owning shares in a successor operating business, including the potential appreciation in
the value of our shares and warrants following such a transaction, and our warrants would expire worthless.
The funds in the trust
account have, since our IPO, been held only in U.S. government treasury obligations with a maturity of 185 days or less or in money market
funds investing solely in U.S. government treasury obligations and meeting certain conditions under Rule 2a-7 under the Investment Company
Act. As of December 31, 2022, amounts held in trust account included approximately $3,441,214 of accrued interest. To mitigate the risk
of us being deemed to have been operating as an unregistered investment company under the Investment Company Act, we may, on or prior
to the 18-month anniversary of the effective date of the registration statement relating to our IPO, or May 9, 2023, instruct Continental
Stock Transfer & Trust Company, the trustee with respect to the trust account, to liquidate the U.S. government treasury obligations
or money market funds held in the trust account and thereafter to hold all funds in the trust account in cash (i.e., in one or more bank
accounts) until the earlier of the consummation of a business combination or our liquidation. Following such liquidation of the assets
in our trust account, we will likely receive minimal interest, if any, on the funds held in the trust account, which would reduce the
dollar amount our public shareholders would have otherwise received upon any redemption or liquidation of the Company if the assets in
the trust account had remained in U.S. government securities or money market funds. This means that the amount available for redemption
will not increase in the future.
In addition, even prior
to the 18-month anniversary of the effective date of the registration statement relating to our IPO, we may be deemed to be an investment
company. The longer that the funds in the trust account are held in short-term U.S. government securities or in money market funds invested
exclusively in such securities, even prior to the 18-month anniversary, there is a greater risk that we may be considered an unregistered
investment company, in which case we may be required to liquidate. Accordingly, we may determine, in our discretion, to liquidate the
securities held in the trust account at any time, even prior to the 18-month anniversary, and instead hold all funds in the trust account
in cash, which would further reduce the dollar amount our public shareholders would receive upon any redemption or our liquidation.
Changes in laws or regulations, or a failure
to comply with any laws and regulations, may adversely affect our business, including our ability to negotiate and complete our initial
business combination, and results of operations.
We are subject to laws and regulations enacted
by national, regional and local governments. In particular, we are required to comply with certain SEC and other legal requirements. Compliance
with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations and their
interpretation and application may also change from time to time and those changes could have a material adverse effect on our business,
investments and results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied,
could have a material adverse effect on our business, including our ability to negotiate and complete our initial business combination,
and results of operations.
If we are unable to consummate our initial
business combination within 18 months of the Public Offering, our public shareholders may be forced to wait beyond such to 18 months before
redemption from our Trust Account.
If we are unable to consummate our initial business
combination within 18 months of the Public Offering, the proceeds then on deposit in the Trust Account, including interest earned on the
funds held in the Trust Account (less taxes payable and up to $100,000 of interest to pay dissolution expenses), will be used to fund
the redemption of our public shares, as further described herein. Any redemption of public shareholders from the Trust Account will be
effected automatically by function of our amended and restated memorandum and articles of association prior to any voluntary winding up.
If we are required to wind-up, liquidate the Trust Account and distribute such amount therein, pro rata, to our public shareholders, as
part of any liquidation process, such winding up, liquidation and distribution must comply with the applicable provisions of the Companies
Act. In that case, investors may be forced to wait beyond 18 months of the Public Offering before the redemption proceeds of our Trust
Account become available to them, and they receive the return of their pro rata portion of the proceeds from our Trust Account. We have
no obligation to return funds to investors prior to the date of our redemption or liquidation unless we consummate our initial business
combination prior thereto and only then in cases where investors have sought to redeem their Class A ordinary shares. Only upon our redemption
or any liquidation will public shareholders be entitled to distributions if we are unable to complete our initial business combination.
Our shareholders may be held liable for claims
by third parties against us to the extent of distributions received by them upon redemption of their shares.
If we are forced to enter into an insolvent liquidation,
any distributions received by shareholders could be viewed as an unlawful payment if it was proved that immediately following the date
on which the distribution was made, we were unable to pay our debts as they fall due in the ordinary course of business. As a result,
a liquidator could seek to recover some or all amounts received by our shareholders. Furthermore, our directors may be viewed as having
breached their fiduciary duties to us or our creditors and/or may have acted in bad faith, thereby exposing themselves and our Company
to claims, by paying public shareholders from the Trust Account prior to addressing the claims of creditors. We cannot assure you that
claims will not be brought against us for these reasons. We and our directors and officers who knowingly and willfully authorized or permitted
any distribution to be paid out of our share premium account while we were unable to pay our debts as they fall due in the ordinary course
of business would be guilty of an offence and may be liable to a fine of approximately $18,293 and to imprisonment for five years in the
Cayman Islands.
We may not hold an annual meeting of shareholders
until after the consummation of our initial business combination, which could delay the opportunity for our shareholders to appoint directors.
In accordance with NYSE corporate governance requirements,
we are not required to hold an annual general meeting until no later than one year after our first fiscal year end following our listing
on NYSE. There is no requirement under the Companies Act for us to hold annual or general meetings to appoint directors. Until we hold
an annual meeting of shareholders, public shareholders may not be afforded the opportunity to appoint directors and to discuss company
affairs with management. Our board of directors is divided into three classes with only one class of directors being appointed in each
year and each class (except for those directors appointed prior to our first annual meeting of shareholders) serving a three-year term.
Because we are neither limited to evaluating
a target business in a particular industry sector nor have we selected any target businesses with which to pursue our initial business
combination, you will be unable to ascertain the merits or risks of any particular target business’s operations.
Our efforts to identify a prospective initial
business combination target will not be limited to a particular industry, sector or geographic region. While we may pursue an initial
business combination opportunity in any industry or sector, we intend to focus on a target in an industry where we believe our management
team’s expertise and experience will provide us with a competitive advantage. Our amended and restated memorandum and articles of
association prohibit us from effectuating a business combination solely with another blank check company or similar company with nominal
operations. To the extent we complete our initial business combination, we may be affected by numerous risks inherent in the business
operations with which we combine. For example, if we combine with a financially unstable business or an entity lacking an established
record of sales or earnings, we may be affected by the risks inherent in the business and operations of a financially unstable or a development
stage entity. Although our officers and directors will endeavor to evaluate the risks inherent in a particular target business, we cannot
assure you that we will properly ascertain or assess all of the significant risk factors or that we will have adequate time to complete
due diligence. Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce the chances
that those risks will adversely impact a target business. We also cannot assure you that an investment in our Units will ultimately prove
to be more favorable to investors than a direct investment, if such opportunity were available, in a business combination target. Accordingly,
any shareholders who choose to remain shareholders following the business combination could suffer a reduction in the value of their securities.
Such shareholders are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction
was due to the breach by our officers or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully
bring a private claim under securities laws that the proxy solicitation or tender offer materials, as applicable, relating to the business
combination contained an actionable material misstatement or material omission.
Although we have identified general criteria
and guidelines that we believe are important in evaluating prospective target businesses, we may enter into our initial business combination
with a target that does not meet such criteria and guidelines, and as a result, the target business with which we enter into our initial
business combination may not have attributes entirely consistent with our general criteria and guidelines.
Although we have identified general criteria and
guidelines for evaluating prospective target businesses, it is possible that a target business with which we enter into our initial business
combination will not have all of these positive attributes. If we complete our initial business combination with a target that does not
meet some or all of these guidelines, such combination may not be as successful as a combination with a business that does meet all of
our general criteria and guidelines. In addition, if we announce a prospective business combination with a target that does not meet our
general criteria and guidelines, a greater number of shareholders may exercise their redemption rights, which may make it difficult for
us to meet any closing condition with a target business that requires us to have a minimum net worth or a certain amount of cash. In addition,
if shareholder approval of the transaction is required by law, or we decide to obtain shareholder approval for business or other reasons,
it may be more difficult for us to attain shareholder approval of our initial business combination if the target business does not meet
our general criteria and guidelines. If we have not completed our initial business combination, our public shareholders may only receive
their pro rata portion of the funds in the Trust Account that are available for distribution to public shareholders, and our warrants
will expire worthless. In certain circumstances, our public shareholders may receive less than $10.20 per share on the redemption of their
shares.
We may seek business combination opportunities
with an entity lacking an established record of revenue, cash flow or earnings, which could subject us to volatile revenues, cash flows
or earnings or difficulty in retaining key personnel.
To the extent we complete our initial business
combination with an entity lacking an established record of revenues or earnings, we may be affected by numerous risks inherent in the
operations of the business with which we combine. These risks include volatile revenues or earnings and difficulties in obtaining and
retaining key personnel. Although our officers and directors will endeavor to evaluate the risks inherent in a particular target business,
we may not be able to properly ascertain or assess all of the significant risk factors and we may not have adequate time to complete due
diligence. Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce the chances
that those risks will adversely impact a target business.
We are not required to obtain an opinion from
an independent investment banking firm or from a valuation or appraisal firm, and consequently, you may have no assurance from an independent
source that the price we are paying for the business is fair to our shareholders from a financial point of view.
Unless we complete our initial business combination
with an affiliated entity or our board of directors cannot independently determine the fair market value of the target business or businesses
(including with the assistance of financial advisors), we are not required to obtain an opinion from an independent investment banking
firm which is a member of FINRA or from a valuation or appraisal firm that the price we are paying is fair to our shareholders from a
financial point of view. If no opinion is obtained, our shareholders will be relying on the judgment of our board of directors, who will
determine fair market value based on standards generally accepted by the financial community. Such standards used will be disclosed in
our proxy materials or tender offer documents, as applicable, related to our initial business combination.
Our letter agreement with our Sponsor, officers
and directors may be amended without shareholder approval.
Our letter agreement with our Sponsor, officers
and directors contains provisions relating to transfer restrictions of our Founder Shares and Private Placement Warrants, indemnification
of the Trust Account, waiver of redemption rights and participation in liquidating distributions from the Trust Account. The letter agreement
may be amended without shareholder approval. While we do not expect our board to approve any amendment to the letter agreement prior to
our initial business combination, it may be possible that our board, in exercising its business judgment and subject to its fiduciary
duties, chooses to approve one or more amendments to the letter agreement. Any such amendments to the letter agreement would not require
approval from our shareholders and may have an adverse effect on the value of an investment in our securities.
Our initial shareholders control a substantial
interest in us and thus may exert a substantial influence on actions requiring a shareholder vote, potentially in a manner that you do
not support.
Our initial shareholders own 20% of our issued
and outstanding ordinary shares. Accordingly, they may exert a substantial influence on actions requiring a shareholder vote, potentially
in a manner that you do not support, including amendments to our amended and restated memorandum and articles of association. In addition,
prior to the closing of our initial business combination, only holders of the Class B ordinary shares will have the right to vote to continue
the Company in a jurisdiction outside the Cayman Islands. This provision of our amended and restated memorandum and articles of association
may only be amended by a special resolution passed by not less than 90% of our ordinary shares which are represented in person or by proxy
and are voted at our general meeting. As a result, you will not have any influence over our continuation in a jurisdiction outside the
Cayman Islands prior to our initial business combination.
If our initial shareholders purchase any additional
Class A ordinary shares in the aftermarket or in privately negotiated transactions, this would increase their control. Neither our initial
shareholders nor, to our knowledge, any of our officers or directors, have any current intention to purchase additional securities, other
than as disclosed in this report. Factors that would be considered in making such additional purchases would include consideration of
the current trading price of our Class A ordinary shares. In addition, our board of directors is and will be divided into three classes,
each of which will generally serve for a term for three years with only one class of directors being appointed in each year. We may not
hold an annual or extraordinary general meeting to appoint new directors prior to the completion of our initial business combination,
in which case all of the current directors will continue in office until at least the completion of the business combination. If there
is an annual general meeting, as a consequence of our “staggered” board of directors, only a minority of the board of directors
will be considered for appointment and our initial shareholders, because of their ownership position, will have considerable influence
regarding the outcome. Accordingly, our initial shareholders will continue to exert control at least until the completion of our initial
business combination.
A provision of our warrant agreement may make
it more difficult for us to consummate an initial business combination.
If (i) we issue additional ordinary shares or
equity-linked securities for capital raising purposes in connection with the closing of our initial business combination at an issue price
or effective issue price of less than $9.20 per Class A ordinary share (with such issue price or effective issue price to be determined
in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without
taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly
Issued Price”), (ii) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and
interest thereon, available for the funding of our initial business combination, and (iii) the volume weighted average trading price of
the Class A ordinary shares during the 20 trading day period starting on the trading day prior to the day on which the Company consummates
a business combination (such price, the “Market Value”) is below $9.20 per share, then the exercise price of the warrants
will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00
per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the
Newly Issued Price. This may make it more difficult for us to consummate an initial business combination with a target business.
Because we must furnish our shareholders with
target business financial statements, we may lose the ability to complete an otherwise advantageous initial business combination with
some prospective target businesses.
The federal proxy rules require that the proxy
statement with respect to the vote on an initial business combination include historical and pro forma financial statement disclosure.
We will include the same financial statement disclosure in connection with our tender offer documents, whether or not they are required
under the tender offer rules. These financial statements may be required to be prepared in accordance with, or be reconciled to, accounting
principles generally accepted in the United States of America (“GAAP”), or international financial reporting standards as
issued by the International Accounting Standards Board (“IFRS”) depending on the circumstances and the historical financial
statements may be required to be audited in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(“PCAOB”). These financial statement requirements may limit the pool of potential target businesses we may acquire because
some targets may be unable to provide such financial statements in time for us to disclose such statements in accordance with federal
proxy rules and complete our initial business combination within the prescribed time frame.
Compliance obligations under the Sarbanes-Oxley
Act may make it more difficult for us to effectuate our initial business combination, require substantial financial and management resources,
and increase the time and costs of completing an initial business combination.
Section 404 of the Sarbanes-Oxley Act requires
that we evaluate and report on our system of internal controls beginning with this Annual Report on Form 10-K for the year ending December
31, 2022. Only in the event we are deemed to be a large accelerated filer or an accelerated filer, and no longer qualify as an emerging
growth company, will we be required to comply with the independent registered public accounting firm attestation requirement on our internal
control over financial reporting. Further, for as long as we remain an emerging growth company, we will not be required to comply with
the independent registered public accounting firm attestation requirement on our internal control over financial reporting. The fact that
we are a blank check company makes compliance with the requirements of the Sarbanes-Oxley Act particularly burdensome on us as compared
to other public companies because a target business with which we seek to complete our initial business combination may not be in compliance
with the provisions of the Sarbanes-Oxley Act regarding adequacy of its internal controls. The development of the internal control of
any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such business
combination.
Financial incentives may cause the underwriters
to have potential conflicts of interest in rendering any additional services to us after the Public Offering, including, for example,
in connection with the sourcing and consummation of an initial business combination.
We may engage any of the underwriters or one of
their respective affiliates to provide additional services to us after the Public Offering, including, for example, identifying potential
targets, providing financial advisory services, acting as a placement agent in a private offering or arranging debt financing. We may
pay any of the underwriters or their respective affiliates fair and reasonable fees or other compensation that would be determined at
that time in an arm’s-length negotiation; provided that no agreement will be entered into with the underwriters or their affiliates
and no fees or other compensation for such services will be paid to the underwriters or their respective affiliates prior to the date
that is 60 days from the date of this report, unless such payment would not be deemed underwriters’ compensation in connection with
the Public Offering. The underwriters are also entitled to receive deferred commissions that are conditioned on the completion of an initial
business combination. The fact that the underwriters or their affiliates’ financial interests are tied to the consummation of a
business combination transaction may give rise to potential conflicts of interest in providing any such additional services to us, including
potential conflicts of interest in connection with the sourcing and consummation of an initial business combination.
We may reincorporate in another jurisdiction
in connection with our initial business combination and such reincorporation may result in taxes imposed on shareholders.
We may, in connection with our initial business
combination and subject to requisite shareholder approval by special resolution under the Companies Act, reincorporate in the jurisdiction
in which the target company or business is located or in another jurisdiction. The transaction may require a shareholder to recognize
taxable income in the jurisdiction in which the shareholder is a tax resident or in which its members are resident if it is a tax transparent
entity. We do not intend to make any cash distributions to shareholders to pay such taxes. Shareholders may be subject to withholding
taxes or other taxes with respect to their ownership of us after the reincorporation.
We may reincorporate in another jurisdiction
in connection with our initial business combination, and the laws of such jurisdiction may govern some or all of our future material agreements
and we may not be able to enforce our legal rights.
In connection with our initial business combination,
we may relocate the home jurisdiction of our business from the Cayman Islands to another jurisdiction. If we determine to do this, the
laws of such jurisdiction may govern some or all of our future material agreements. The system of laws and the enforcement of existing
laws in such jurisdiction may not be as certain in implementation and interpretation as in the United States. The inability to enforce
or obtain a remedy under any of our future agreements could result in a significant loss of business, business opportunities or capital.
Our initial business combination and our structure
thereafter may not be tax-efficient to our shareholders and warrant holders. As a result of our business combination, our tax obligations
may be more complex, burdensome and uncertain.
Although we will attempt to structure our initial
business combination in a tax-efficient manner, tax structuring considerations are complex, the relevant facts and law are uncertain and
may change, and we may prioritize commercial and other considerations over tax considerations. For example, in connection with our initial
business combination and subject to any requisite shareholder approval, we may structure our business combination in a manner that requires
shareholders and/or warrant holders to recognize gain or income for tax purposes, effect a business combination with a target company
in another jurisdiction, or reincorporate in a different jurisdiction (including, but not limited to, the jurisdiction in which the target
company or business is located). We do not intend to make any cash distributions to shareholders or warrant holders to pay taxes in connection
with our business combination or thereafter. Accordingly, a shareholder or a warrant holder may need to satisfy any liability resulting
from our initial business combination with cash from its own funds or by selling all or a portion of the shares or warrants received.
In addition, shareholders and warrant holders may also be subject to additional income, withholding or other taxes with respect to their
ownership of us after our initial business combination.
In addition, we may effect a business combination
with a target company that has business operations outside of the United States, and possibly, business operations in multiple jurisdictions.
If we effect such a business combination, we could be subject to significant income, withholding and other tax obligations in a number
of jurisdictions with respect to income, operations and subsidiaries related to those jurisdictions. Due to the complexity of tax obligations
and filings in other jurisdictions, we may have a heightened risk related to audits or examinations by U.S. federal, state, local and
non-U.S. taxing authorities. This additional complexity and risk could have an adverse effect on our after-tax profitability and financial
condition.
Any negative developments involving our Sponsor,
management, directors and companies with which they are currently or have been affiliated, including civil disputes, litigation, government
or other investigations or other actual or alleged misconduct, unrelated to our business affairs could materially impact our ability to
consummate an initial business combination.
Our Sponsor, members of our management team, our
directors, and companies with which they are affiliated have been, and in the future will continue to be, involved in a wide variety of
business and other activities. As a result of such involvement, our Sponsor, members of our management, our directors and companies with
which they are affiliated may become involved in or subject to civil disputes, litigation, governmental or other investigations, actual
or alleged misconduct or other negative developments relating to their affairs unrelated to our company. Negative developments, including
any negative publicity related thereto, may be detrimental to our reputation, may negatively affect our ability to identify and complete
an initial business combination in a material manner, and may have an adverse effect on the price of our securities.
Past performance by members of our management
team or their respective affiliates may not be indicative of future performance of an investment in us.
Information regarding performance is presented
for informational purposes only. Any past experience or performance of members of our management team and their respective affiliates
is not a guarantee of either (i) our ability to successfully identify and execute a transaction or (ii) success with respect to any business
combination that we may consummate. You should not rely on the historical record of our management team or their respective affiliates
as indicative of the future performance of an investment in us or the returns we will, or are likely to, generate going forward. Our management
has no experience in operating special purpose acquisition companies.
Risks Relating to the Post-Business Combination
Company
Subsequent to our completion of our initial
business combination, we may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have
a significant negative effect on our financial condition, results of operations and our share price, which could cause you to lose some
or all of your investment.
Even if we conduct due diligence on a target business
with which we combine, we cannot assure you that this diligence will identify all material issues that may be present within a particular
target business, that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors
outside of the target business and outside of our control will not later arise. As a result of these factors, we may be forced to later
write-down or write-off assets, restructure our operations, or incur impairment or other charges that could result in our reporting losses.
Even if our due diligence successfully identifies certain risks, unexpected risks may arise and previously known risks may materialize
in a manner not consistent with our preliminary risk analysis. Even though these charges may be non-cash items and not have an immediate
impact on our liquidity, the fact that we report charges of this nature could contribute to negative market perceptions about us or our
securities. In addition, charges of this nature may cause us to violate net worth or other covenants to which we may be subject as a result
of assuming pre-existing debt held by a target business or by virtue of our obtaining debt financing to partially finance the initial
business combination or thereafter. Accordingly, any shareholders who choose to remain shareholders following the business combination
could suffer a reduction in the value of their securities. Such shareholders are unlikely to have a remedy for such reduction in value
unless they are able to successfully claim that the reduction was due to the breach by our officers or directors of a duty of care or
other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that the proxy solicitation
or tender offer materials, as applicable, relating to the business combination contained an actionable material misstatement or material
omission.
Resources could be wasted in researching business
combinations that are not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge with another
business. If we have not completed our initial business combination, our public shareholders may only receive their pro rata portion of
the funds in the Trust Account that are available for distribution to public shareholders, and our warrants will expire worthless.
We anticipate that the investigation of each specific
target business and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require
substantial management time and attention and substantial costs for accountants, attorneys, consultants and others. If we decide not to
complete a specific initial business combination, the costs incurred up to that point for the proposed transaction likely would not be
recoverable. Furthermore, if we reach an agreement relating to a specific target business, we may fail to complete our initial business
combination for any number of reasons including those beyond our control. Any such event will result in a loss to us of the related costs
incurred which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we have
not completed our initial business combination, our public shareholders may only receive their pro rata portion of the funds in the Trust
Account that are available for distribution to public shareholders, and our warrants will expire worthless.
We are dependent upon our officers and directors
and their loss could adversely affect our ability to operate.
Our operations are dependent upon a relatively
small group of individuals and, in particular, our officers and directors and the members of our advisory board. We believe that our success
depends on the continued service of our officers, directors and the members of our advisory board, at least until we have completed our
initial business combination. In addition, our officers and directors are not required to commit any specified amount of time to our affairs
and, accordingly, will have conflicts of interest in allocating their time among various business activities, including identifying potential
business combinations and monitoring the related due diligence. We do not have key-man insurance on the
life of any of our directors or officers. The unexpected loss of the services of one or more of our directors or officers could have
a detrimental effect on us.
Our ability to successfully effect our initial
business combination and to be successful thereafter will be dependent upon the efforts of our key personnel, some of whom may join us
following our initial business combination. The loss of key personnel could negatively impact the operations and profitability of our
post-combination business.
Our ability to successfully effect our initial
business combination is dependent upon the efforts of our key personnel. The role of our key personnel in the target business, however,
cannot presently be ascertained. Although some of our key personnel may remain with the target business in senior management or advisory
positions following our initial business combination, it is likely that some or all of the management of the target business will remain
in place. While we intend to closely scrutinize any individuals we engage after our initial business combination, we cannot assure you
that our assessment of these individuals will prove to be correct. These individuals may be unfamiliar with the requirements of operating
a company regulated by the SEC, which could cause us to have to expend time and resources helping them become familiar with such requirements.
In addition, the officers and directors of an
acquisition candidate may resign upon completion of our initial business combination. The departure of a business combination target’s
key personnel could negatively impact the operations and profitability of our post-combination business. The role of an acquisition candidate’s
key personnel upon the completion of our initial business combination cannot be ascertained at this time. Although we contemplate that
certain members of an acquisition candidate’s management team will remain associated with the acquisition candidate following our
initial business combination, it is possible that members of the management of an acquisition candidate will not wish to remain in place.
The loss of key personnel could negatively impact the operations and profitability of our post-combination business.
After our initial business combination, it
is possible that a majority of our directors and officers will live outside the United States and all of our assets will be located outside
the United States; therefore investors may not be able to enforce federal securities laws or their other legal rights.
It is possible that after our initial business
combination, a majority of our directors and officers will reside outside of the United States and all of our assets will be located outside
of the United States. As a result, it may be difficult, or in some cases not possible, for investors in the United States to enforce their
legal rights, to effect service of process upon all of our directors or officers or to enforce judgments of United States courts predicated
upon civil liabilities and criminal penalties on our directors and officers under United States laws.
Our key personnel may negotiate employment
or consulting agreements with a target business in connection with a particular business combination, and a particular business combination
may be conditioned on the retention or resignation of such key personnel. These agreements may provide for them to receive compensation
following our initial business combination and as a result, may cause them to have conflicts of interest in determining whether a particular
business combination is the most advantageous.
Our key personnel may be able to remain with our
Company after the completion of our initial business combination only if they are able to negotiate employment or consulting agreements
in connection with the business combination. Such negotiations would take place simultaneously with the negotiation of the business combination
and could provide for such individuals to receive compensation in the form of cash payments and/or our securities for services they would
render to us after the completion of the business combination. Such negotiations also could make such key personnel’s retention
or resignation a condition to any such agreement. The personal and financial interests of such individuals may influence their motivation
in identifying and selecting a target business, subject to their fiduciary duties under Cayman Islands law.
We may have a limited ability to assess the
management of a prospective target business and, as a result, may effect our initial business combination with a target business whose
management may not have the skills, qualifications or abilities to manage a public company.
When evaluating the desirability of effecting
our initial business combination with a prospective target business, our ability to assess the target business’s management may
be limited due to a lack of time, resources or information. Our assessment of the capabilities of the target business’s management,
therefore, may prove to be incorrect and such management may lack the skills, qualifications or abilities we suspected. Should the target
business’s management not possess the skills, qualifications or abilities necessary to manage a public company, the operations and
profitability of the post-combination business may be negatively impacted. Accordingly, any shareholders who choose to remain shareholders
following the business combination could suffer a reduction in the value of their shares. Such shareholders are unlikely to have a remedy
for such reduction in value unless they are able to successfully claim that the reduction was due to the breach by our officers or directors
of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws
that the proxy solicitation or tender offer materials, as applicable, relating to the business combination contained an actionable material
misstatement or material omission.
The officers and directors of an acquisition
candidate may resign upon completion of our initial business combination. The loss of a business combination target’s key personnel
could negatively impact the operations and profitability of our post-combination business.
The role of an acquisition candidate’s key
personnel upon the completion of our initial business combination cannot be ascertained at this time. Although we contemplate that certain
members of an acquisition candidate’s management team will remain associated with the acquisition candidate following our initial
business combination, it is possible that members of the management of an acquisition candidate will not wish to remain in place.
Our management may not be able to maintain
control of a target business after our initial business combination. We cannot provide assurance that, upon loss of control of a target
business, new management will possess the skills, qualifications or abilities necessary to profitably operate such business.
We may structure our initial business combination
so that the post-transaction company in which our public shareholders own shares will own less than 100% of the equity interests or assets
of a target business, but we will only complete such business combination if the post-transaction company owns or acquires 50% or more
of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for us not to
be required to register as an investment company under the Investment Company Act. We will not consider any transaction that does not
meet such criteria. Even if the post-transaction company owns 50% or more of the voting securities of the target, our shareholders prior
to the business combination may collectively own a minority interest in the post business combination company, depending on valuations
ascribed to the target and us in the business combination. For example, we could pursue a transaction in which we issue a substantial
number of new Class A ordinary shares in exchange for all of the outstanding share capital, shares or other equity interests of a target.
In this case, we would acquire a 100% interest in the target. However, as a result of the issuance of a substantial number of new Class
A ordinary shares, our shareholders immediately prior to such transaction could own less than a majority of our issued and outstanding
Class A ordinary shares subsequent to such transaction. In addition, other minority shareholders may subsequently combine their holdings
resulting in a single person or group obtaining a larger portion of the Company’s shares than we initially acquired. Accordingly,
this may make it more likely that our management will not be able to maintain control of the target business.
We may issue notes or other debt securities,
or otherwise incur substantial debt, to complete a business combination, which may adversely affect our leverage and financial condition
and thus negatively impact the value of our shareholders’ investment in us.
With the exception of the Sponsor Convertible
Note, we have no commitments as of the date of this report to issue any notes or other debt securities, or to otherwise incur outstanding
debt following the Public Offering, we may choose to incur substantial debt to complete our initial business combination. We and our officers
have agreed that we will not incur any indebtedness unless we have obtained from the lender a waiver of any right, title, interest or
claim of any kind in or to the monies held in the Trust Account. As such, no issuance of debt will affect the per share amount available
for redemption from the Trust Account. Nevertheless, the incurrence of debt could have a variety of negative effects, including:
| ● | default and foreclosure on our assets if our operating revenues
after an initial business combination are insufficient to repay our debt obligations; |
| ● | acceleration of our obligations to repay the indebtedness
even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial
ratios or reserves without a waiver or renegotiation of that covenant; |
| ● | our immediate payment of all principal and accrued interest,
if any, if the debt security is payable on demand; |
| ● | our inability to obtain necessary additional financing if
the debt security contains covenants restricting our ability to obtain such financing while the debt security is outstanding; |
| ● | our inability to pay dividends on our Class A ordinary shares; |
| ● | using a substantial portion of our cash flow to pay principal
and interest on our debt, which will reduce the funds available for dividends on our Class A ordinary shares if declared, expenses, capital
expenditures, acquisitions and other general corporate purposes; |
| ● | limitations on our flexibility in planning for and reacting
to changes in our business and in the industry in which we operate; |
| ● | increased vulnerability to adverse changes in general economic,
industry and competitive conditions and adverse changes in government regulation; and |
| ● | limitations on our ability to borrow additional amounts for
expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages
compared to our competitors who have less debt. |
We may only be able to complete one business
combination with the proceeds of the Public Offering and the sale of the Private Placement Warrants, which will cause us to be solely
dependent on a single business which may have a limited number of products or services. This lack of diversification may negatively impact
our operations and profitability.
The net proceeds from the Public Offering and
the Private Placement will provide us with $226,550,000 that we may use to complete our initial business combination (after taking into
account the $8,050,000 of deferred underwriting commissions being held in the Trust Account).
We may effectuate our initial business combination
with a single target business or multiple target businesses simultaneously or within a short period of time. However, we may not be able
to effectuate our initial business combination with more than one target business because of various factors, including the existence
of complex accounting issues and the requirement that we prepare and file pro forma financial statements with the SEC that present operating
results and the financial condition of several target businesses as if they had been operated on a combined basis. By completing our initial
business combination with only a single entity, our lack of diversification may subject us to numerous economic, competitive and regulatory
developments. Further, we would not be able to diversify our operations or benefit from the possible spreading of risks or offsetting
of losses, unlike other entities which may have the resources to complete several business combinations in different industries or different
areas of a single industry. Accordingly, the prospects for our success may be:
| ● | solely dependent upon the performance of a single business,
property or asset, or |
| ● | dependent upon the development or market acceptance of a
single or limited number of products, processes or services. |
This lack of diversification may subject us to
numerous economic, competitive and regulatory risks, any or all of which may have a substantial adverse impact upon the particular industry
in which we may operate subsequent to our initial business combination.
We may attempt to simultaneously complete business
combinations with multiple prospective targets, which may hinder our ability to complete our initial business combination and give rise
to increased costs and risks that could negatively impact our operations and profitability.
If we determine to simultaneously acquire several
businesses that are owned by different sellers, we will need for each of such sellers to agree that our purchase of its business is contingent
on the simultaneous closings of the other business combinations, which may make it more difficult for us, and delay our ability, to complete
our initial business combination. With multiple business combinations, we could also face additional risks, including additional burdens
and costs with respect to possible multiple negotiations and due diligence investigations (if there are multiple sellers) and the additional
risks associated with the subsequent assimilation of the operations and services or products of the acquired companies in a single operating
business. If we are unable to adequately address these risks, it could negatively impact our profitability and results of operations.
We may attempt to complete our initial business
combination with a private company about which little information is available, which may result in a business combination with a company
that is not as profitable as we suspected, if at all.
In pursuing our business combination strategy,
we may seek to effectuate our initial business combination with a privately held company. Very little public information generally exists
about private companies, and we could be required to make our decision on whether to pursue a potential initial business combination on
the basis of limited information, which may result in a business combination with a company that is not as profitable as we suspected,
if at all.
We do not have a specified maximum redemption
threshold. The absence of such a redemption threshold may make it possible for us to complete our initial business combination with which
a substantial majority of our shareholders do not agree.
Our amended and restated memorandum and articles
of association provide that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less
than $5,000,001. In addition, our proposed initial business combination may impose a minimum cash requirement for (i) cash consideration
to be paid to the target or its owners, (ii) cash for working capital or other general corporate purposes or (iii) the retention of cash
to satisfy other conditions. As a result, we may be able to complete our initial business combination even though a substantial majority
of our public shareholders do not agree with the transaction and have redeemed their shares or, if we seek shareholder approval of our
initial business combination and do not conduct redemptions in connection with our initial business combination pursuant to the tender
offer rules, have entered into privately negotiated agreements to sell their shares to our Sponsor, officers, directors, advisors or any
of their affiliates. In the event the aggregate cash consideration we would be required to pay for all Class A ordinary shares that are
validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination
exceed the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares, all Class A ordinary
shares submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business combination.
In order to effectuate an initial business
combination, special purpose acquisition companies have, in the recent past, amended various provisions of their charters and other governing
instruments, including their warrant agreements. We cannot assure you that we will not seek to amend our amended and restated memorandum
and articles of association or governing instruments in a manner that will make it easier for us to complete our initial business combination
and that our shareholders may not support.
In order to effectuate a business combination,
special purpose acquisition companies have, in the recent past, amended various provisions of their charters and governing instruments,
including their warrant agreements. For example, special purpose acquisition companies have amended the definition of business combination,
increased redemption thresholds and extended the time to consummate an initial business combination and, with respect to their warrants,
amended their warrant agreements to require the warrants to be exchanged for cash and/or other securities. Amending our amended and restated
memorandum and articles of association will require a special resolution under Cayman Islands law, which requires the affirmative vote
of a majority of at least two-thirds of the shareholders who attend and vote at a general meeting of the Company, and amending our warrant
agreement will require a vote of holders of at least 50% of the public warrants and, solely with respect to any amendment to the terms
of the Private Placement Warrants or any provision of the warrant agreement with respect to the Private Placement Warrants, 50% of the
then outstanding Private Placement Warrants. In addition, our amended and restated memorandum and articles of association require us to
provide our public shareholders with the opportunity to redeem their public shares for cash if we propose an amendment to our amended
and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to allow redemption
in connection with our initial business combination or to redeem 100% of our public shares if we do not complete an initial business combination
within 18 months of the Public Offering or (B) with respect to any other material provisions relating to shareholders’ rights or
pre-initial business combination activity. We cannot assure you that we will not seek to amend our charter or governing instruments or
extend the time to consummate an initial business combination in order to effectuate our initial business combination.
The provisions of our amended and restated
memorandum and articles of association that relate to our pre-business combination activity (and corresponding provisions of the agreement
governing the release of funds from our Trust Account) may be amended with the approval of holders of not less than two-thirds of our
ordinary shares who attend and vote at a general meeting of the Company (or 65% of our ordinary shares with respect to amendments to the
trust agreement governing the release of funds from our Trust Account), which is a lower amendment threshold than that of some other special
purpose acquisition companies. It may be easier for us, therefore, to amend our amended and restated memorandum and articles of association
to facilitate the completion of an initial business combination that some of our shareholders may not support.
Our amended and restated memorandum and articles
of association provide that any of its provisions related to pre-business combination activity (including the requirement to deposit proceeds
of the Public Offering and the Private Placement into the Trust Account and not release such amounts except in specified circumstances,
and to provide redemption rights to public shareholders as described herein) may be amended if approved by special resolution under Cayman
Islands law, which requires the affirmative vote of a majority of at least two-thirds of the shareholders who attend and vote at a general
meeting of the Company, and corresponding provisions of the trust agreement governing the release of funds from our Trust Account may
be amended if approved by holders of 65% of our ordinary shares. Our initial shareholders, who collectively beneficially own 20% of our
ordinary shares following the Public Offering, will participate in any vote to amend our amended and restated memorandum and articles
of association and/or trust agreement and will have the discretion to vote in any manner they choose. As a result, we may be able to amend
the provisions of our amended and restated memorandum and articles of association which govern our pre-business combination behavior more
easily than some other special purpose acquisition companies, and this may increase our ability to complete a business combination with
which you do not agree. Our shareholders may pursue remedies against us for any breach of our amended and restated memorandum and articles
of association.
Our Sponsor, officers and directors have agreed,
pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated memorandum and articles
of association(A) that would modify the substance or timing of our obligation to allow redemption in connection with our initial business
combination or to redeem 100% of our public shares if we do not complete our initial business combination within 18 months of the Public
Offering or (B) with respect to any other material provisions relating to shareholders’ rights or pre-initial business combination
activity, unless we provide our public shareholders with the opportunity to redeem their Class A ordinary shares upon approval of any
such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest
earned on the funds held in the Trust Account and not previously released to us to pay our taxes, divided by the number of then outstanding
public shares. Our shareholders are not parties to, or third-party beneficiaries of, these agreements and, as a result, will not have
the ability to pursue remedies against our Sponsor, officers or directors for any breach of these agreements. As a result, in the event
of a breach, our shareholders would need to pursue a shareholder derivative action, subject to applicable law.
We may be unable to obtain additional financing
to complete our initial business combination or to fund the operations and growth of a target business, which could compel us to restructure
or abandon a particular business combination.
We have not selected any specific business combination
target but intend to target businesses with enterprise values that are greater than we could acquire with the net proceeds of the Public
Offering and the sale of the Private Placement Warrants. As a result, if the cash portion of the purchase price exceeds the amount available
from the Trust Account, net of amounts needed to satisfy any redemption by public shareholders, we may be required to seek additional
financing to complete such proposed initial business combination. We cannot assure you that such financing will be available on acceptable
terms, if at all. To the extent that additional financing proves to be unavailable when needed to complete our initial business combination,
we would be compelled to either restructure the transaction or abandon that particular business combination and seek an alternative target
business candidate. Further, we may be required to obtain additional financing in connection with the closing of our initial business
combination for general corporate purposes, including for maintenance or expansion of operations of the post-transaction businesses, the
payment of principal or interest due on indebtedness incurred in completing our initial business combination, or to fund the purchase
of other companies. If we have not completed our initial business combination, our public shareholders may only receive their pro rata
portion of the funds in the Trust Account that are available for distribution to public shareholders, and our warrants will expire worthless.
In addition, even if we do not need additional financing to complete our initial business combination, we may require such financing to
fund the operations or growth of the target business. The failure to secure additional financing could have a material adverse effect
on the continued development or growth of the target business. None of our officers, directors or shareholders is required to provide
any financing to us in connection with or after our initial business combination. If we are unable to complete our initial business combination,
our public shareholders may only receive approximately $10.20 per share on the liquidation of our trust account, and our warrants will
expire worthless. Furthermore, as described in the risk factor entitled “If third parties bring claims against us, the proceeds
held in the trust account could be reduced and the per-share redemption amount received by shareholders may be less than $10.20 per share,”
under certain circumstances our public shareholders may receive less than $10.20 per share upon the liquidation of the trust account.
Risks Relating to Acquiring and Operating a
Business in Foreign Countries
If we effect our initial business combination
with a company located outside of the United States, we would be subject to a variety of additional risks that may adversely affect us.
If we pursue a target company with operations
or opportunities outside of the United States for our initial business combination, we may face additional burdens in connection with
investigating, agreeing to and completing such initial business combination, and if we effect such initial business combination, we would
be subject to a variety of additional risks that may negatively impact our operations.
If we pursue a target company with operations
or opportunities outside of the United States for our initial business combination, we would be subject to risks associated with cross-border
business combinations, including in connection with investigating, agreeing to and completing our initial business combination, conducting
due diligence in a foreign jurisdiction, having such transaction approved by any local governments, regulators or agencies and changes
in the purchase price based on fluctuations in foreign exchange rates.
If we effect our initial business combination
with such a company, we would be subject to any special considerations or risks associated with companies operating in an international
setting, including any of the following:
| ● | costs and difficulties inherent in managing cross-border
business operations and complying with different commercial and legal requirements of overseas markets; |
| ● | rules and regulations regarding currency redemption; |
| ● | complex corporate withholding taxes on individuals; |
| ● | laws governing the manner in which future business combinations
may be effected; |
| ● | exchange listing and/or delisting requirements; |
| ● | tariffs and trade barriers; |
| ● | regulations related to customs and import/export matters; |
| ● | local or regional economic policies and market conditions; |
| ● | unexpected changes in regulatory requirements; |
| ● | challenges in managing and staffing international operations; |
| ● | longer payment cycles and challenges in collecting accounts
receivable; |
| ● | tax issues, such as tax law changes and variations in tax
laws as compared to the United States; |
| ● | currency fluctuations and exchange controls; |
| ● | challenges in collecting accounts receivable; |
| ● | cultural and language differences; |
| ● | underdeveloped or unpredictable legal or regulatory systems; |
| ● | protection of intellectual property; |
| ● | social unrest, crime, strikes, riots and civil disturbances; |
| ● | regime changes and political upheaval; |
| ● | terrorist attacks, natural disasters and wars; and |
| ● | deterioration of political relations with the United States. |
We may not be able to adequately address these
additional risks. If we were unable to do so, we may be unable to complete such initial business combination, or, if we complete such
initial business combination, our operations might suffer, either of which may adversely impact our business, financial condition and
results of operations.
After our initial business combination, substantially
all of our assets may be located in a foreign country and substantially all of our revenue will be derived from our operations in such
country. Accordingly, our results of operations and prospects will be subject, to a significant extent, to the economic, political and
legal policies, developments and conditions in the country in which we operate.
The economic, political and social conditions,
as well as government policies, of the country in which our operations are located could affect our business. Economic growth could be
uneven, both geographically and among various sectors of the economy and such growth may not be sustained in the future. If in the future
such country’s economy experiences a downturn or grows at a slower rate than expected, there may be less demand for spending in
certain industries. A decrease in demand for spending in certain industries could materially and adversely affect our ability to find
an attractive target business with which to consummate our initial business combination and if we effect our initial business combination,
the ability of that target business to become profitable.
Exchange rate fluctuations and currency policies
may cause a target business’s ability to succeed in the international markets to be diminished.
In the event we acquire a non-U.S. target, all
revenues and income would likely be received in a foreign currency, and the dollar equivalent of our net assets and distributions, if
any, could be adversely affected by reductions in the value of the local currency. The value of the currencies in our target regions fluctuate
and are affected by, among other things, changes in political and economic conditions. Any change in the relative value of such currency
against our reporting currency may affect the attractiveness of any target business or, following consummation of our initial business
combination, our financial condition and results of operations. Additionally, if a currency appreciates in value against the dollar prior
to the consummation of our initial business combination, the cost of a target business as measured in dollars will increase, which may
make it less likely that we are able to consummate such transaction.
Risks Relating to our Management Team
None of our Sponsor, officers or directors
has any experience with a blank check company or special purpose acquisition company in the past.
None of our Sponsor, officers or directors has
had experience with a blank check company or special purpose acquisition company in the past. Accordingly, you may not have sufficient
information with which to evaluate their ability to identify and consummate a business combination using the proceeds of Public Offering.
Our management’s lack of experience in operating a special purpose acquisition corporation could adversely affect our ability to
consummate a business combination and could result in our not completing a business combination in the prescribed time frame.
We may not have sufficient funds to satisfy
indemnification claims of our directors and officers.
We have agreed to indemnify our officers and directors
to the fullest extent permitted by law. However, our officers and directors have agreed to waive any right, title, interest or claim of
any kind in or to any monies in the Trust Account and to not seek recourse against the Trust Account for any reason whatsoever. Accordingly,
any indemnification provided will be able to be satisfied by us only if (i) we have sufficient funds outside of the Trust Account or (ii)
we consummate an initial business combination. Our obligation to indemnify our officers and directors may discourage shareholders from
bringing a lawsuit against our officers or directors for breach of their fiduciary duty. These provisions also may have the effect of
reducing the likelihood of derivative litigation against our officers and directors, even though such an action, if successful, might
otherwise benefit us and our shareholders. Furthermore, a shareholder’s investment may be adversely affected to the extent we pay
the costs of settlement and damage awards against our officers and directors pursuant to these indemnification provisions.
Past performance by our management team and
their affiliates, including investments and transactions in which they have participated and businesses with which they have been associated,
may not be indicative of future performance of an investment in the Company.
Information regarding our management team and
their affiliates, including investments and transactions in which they have participated and businesses with which they have been associated,
is presented for informational purposes only. Any past experience and performance by our management team and their affiliates and the
businesses with which they have been associated, is not a guarantee that we will be able to successfully identify a suitable candidate
for our initial business combination, that we will be able to provide positive returns to our shareholders, or of any results with respect
to any initial business combination we may consummate. You should not rely on the historical experiences of our management team and their
affiliates, including investments and transactions in which they have participated and businesses with which they have been associated,
as indicative of the future performance of an investment in us or as indicative of every prior investment by each of the members of our
management team or their affiliates. The market price of our securities may be influenced by numerous factors, many of which are beyond
our control, and our shareholders may experience losses on their investment in our securities.
We may seek business combination opportunities
in industries or sectors that may be outside of our management’s areas of expertise.
We will consider a business combination outside
of our management’s areas of expertise if a business combination candidate is presented to us and we determine that such candidate
offers an attractive business combination opportunity for our Company. Although our management will endeavor to evaluate the risks inherent
in any particular business combination candidate, we cannot assure you that we will adequately ascertain or assess all of the significant
risk factors. We also cannot assure you that an investment in our Units will not ultimately prove to be less favorable to investors in
the Public Offering than a direct investment, if an opportunity were available, in a business combination candidate. In the event we elect
to pursue a business combination outside of the areas of our management’s expertise, our management’s expertise may not be
directly applicable to its evaluation or operation, and the information contained in this Form 10-K regarding the areas of our management’s
expertise would not be relevant to an understanding of the business that we elect to acquire. As a result, our management may not be able
to ascertain or assess adequately all of the relevant risk factors. Accordingly, any shareholders who choose to remain shareholders following
our initial business combination could suffer a reduction in the value of their shares. Such shareholders are unlikely to have a remedy
for such reduction in value.
Our officers and directors will allocate their
time to other businesses thereby causing conflicts of interest in their determination as to how much time to devote to our affairs. This
conflict of interest could have a negative impact on our ability to complete our initial business combination.
Our officers and directors are not required to,
and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our operations
and our search for a business combination and their other businesses. We do not intend to have any full-time employees prior to the completion
of our initial business combination. Each of our officers is engaged in other business endeavors for which he may be entitled to substantial
compensation, and our officers are not obligated to contribute any specific number of hours per week to our affairs. Our independent directors
also serve as officers and board members for other entities. If our officers’ and directors’ other business affairs require
them to devote substantial amounts of time to such affairs in excess of their current commitment levels, it could limit their ability
to devote time to our affairs which may have a negative impact on our ability to complete our initial business combination.
Our officers and directors presently have,
and any of them in the future may have additional, fiduciary or contractual obligations to other entities and, accordingly, may have conflicts
of interest in determining to which entity a particular business opportunity should be presented.
Until we consummate our initial business combination,
we intend to engage in the business of identifying and combining with one or more businesses. Each of our officers and directors presently
has, and any of them in the future may have, additional fiduciary or contractual obligations to other entities pursuant to which such
officer or director is or will be required to present a business combination opportunity to such entities. Accordingly, they may have
conflicts of interest in determining to which entity a particular business opportunity should be presented. These conflicts may not be
resolved in our favor and a potential target business may be presented to another entity prior to its presentation to us, subject to their
fiduciary duties under Cayman Islands law. Our amended and restated memorandum and articles of association provide that, to the fullest
extent permitted by applicable law: (i) no individual serving as a director or an officer shall have any duty, except and to the extent
expressly assumed by contract, to refrain from engaging directly or indirectly in the same or similar business activities or lines of
business as us; and (ii) we renounce any interest or expectancy in, or in being offered an opportunity to participate in, any potential
transaction or matter which may be a corporate opportunity for any director or officer, on the one hand, and us, on the other.
In addition, our Sponsor and our officers and
directors may sponsor or form other special purpose acquisition companies similar to ours or may pursue other business or investment ventures
during the period in which we are seeking an initial business combination. Any such companies, businesses or investments may present additional
conflicts of interest in pursuing an initial business combination. However, we do not believe that any such potential conflicts would
materially affect our ability to complete our initial business combination.
Our officers, directors, security holders and
their respective affiliates may have competitive pecuniary interests that conflict with our interests.
We have not adopted a policy that expressly prohibits
our directors, officers, security holders or affiliates from having a direct or indirect pecuniary or financial interest in any investment
to be acquired or disposed of by us or in any transaction to which we are a party or have an interest. In fact, we may enter into a business
combination with a target business that is affiliated with our Sponsor, our directors or officers, although we do not intend to do so.
Nor do we have a policy that expressly prohibits any such persons from engaging for their own account in business activities of the types
conducted by us. Accordingly, such persons or entities may have a conflict between their interests and ours.
The personal and financial interests of our directors
and officers may influence their motivation in timely identifying and selecting a target business and completing a business combination.
Consequently, our directors’ and officers’ discretion in identifying and selecting a suitable target business may result in
a conflict of interest when determining whether the terms, conditions and timing of a particular business combination are appropriate
and in our shareholders’ best interest. If this were the case, it could be a breach of their fiduciary duties to us as a matter
of Cayman Islands law and we or our shareholders might have a claim against such individuals for infringing on our shareholders’
rights. However, we might not ultimately be successful in any claim we may make against them for such reason.
We may engage in a business combination with
one or more target businesses that have relationships with entities that may be affiliated with our Sponsor, officers, directors or existing
holders which may raise potential conflicts of interest.
In light of the involvement of our Sponsor, officers
and directors with other entities, we may decide to acquire one or more businesses affiliated with our Sponsor, officers, directors or
existing holders. Our directors also serve as officers and board members for other entities. Such entities may compete with us for business
combination opportunities. Our Sponsor, officers and directors are not currently aware of any specific opportunities for us to complete
our initial business combination with any entities with which they are affiliated, and there have been no substantive discussions concerning
a business combination with any such entity or entities. Although we will not be specifically focusing on, or targeting, any transaction
with any affiliated entities, we would pursue such a transaction if we determined that such affiliated entity met our criteria for a business
combination and such transaction was approved by a majority of our independent and disinterested directors. Despite our agreement to obtain
an opinion from an independent investment banking firm which is a member of FINRA or a valuation or appraisal firm regarding the fairness
to our Company from a financial point of view of a business combination with one or more domestic or international businesses affiliated
with our Sponsor, officers, directors or existing holders, potential conflicts of interest still may exist and, as a result, the terms
of the business combination may not be as advantageous to our public shareholders as they would be absent any conflicts of interest.
Since our Sponsor, officers and directors will
lose their entire investment in us if our initial business combination is not completed (other than with respect to public shares they
may acquire after the Public Offering), a conflict of interest may arise in determining whether a particular business combination target
is appropriate for our initial business combination. Additionally, since our initial shareholders only paid approximately $0.004 per Founder
Share, our officers and directors could potentially make a substantial profit even if we acquire a target business that subsequently declines
in value.
On June 9, 2021, our Sponsor paid an aggregate
of $25,000 for certain expenses on our behalf in exchange for issuance of 5,750,000 Founder Shares, or approximately $0.004 per share.
Prior to the closing of the Offering, our Sponsor transferred an aggregate of 402,500 Founder Shares to members of our board of directors,
advisory board, management team and/or their estate planning vehicles for the same per-share consideration that it originally paid for
such shares, resulting in our Sponsor holding 5,347,500 Founder Shares. Prior to the initial investment in the Company of $25,000 by the
Sponsor, the Company had no assets, tangible or intangible. The purchase price of the Founder Shares was determined by dividing the amount
of cash contributed to the Company by the number of Founder Shares issued. The number of Founder Shares outstanding was determined based
on the expectation that the total size of the Public Offering would be a maximum of 23,000,000 Units if the underwriters’ over-allotment
option is exercised in full, and therefore that such Founder Shares would represent 20% of the outstanding shares after the Public Offering.
The Founder Shares will be worthless if we do
not complete an initial business combination. In addition, our initial shareholders have purchased an aggregate of 11,700,000 warrants
for an aggregate purchase price of $11,700,000, or $1.00 per warrant. The Private Placement Warrants will also be worthless if we do not
complete our initial business combination. The personal and financial interests of our officers and directors may influence their motivation
in identifying and selecting a target business combination, completing an initial business combination and influencing the operation of
the business following the initial business combination. This risk may become more acute as the 18-month anniversary of the Public Offering
nears, which is the deadline for our completion of an initial business combination.
Additionally, since our initial shareholders only
paid approximately $0.004 per Founder Share, our officers and directors could potentially make a substantial profit even if we acquire
a target business that subsequently declines in value and is unprofitable for public investors. Thus, such parties may have more of an
economic incentive for us to enter into an initial business combination with a riskier, weaker-performing entity or an entity lacking
an established record of revenues or earnings, than would be the case if such parties had paid the full offering price for their Founder
Shares.
If our management following our initial business
combination is unfamiliar with United States securities laws, they may have to expend time and resources becoming familiar with such laws,
which could lead to various regulatory issues.
Following our initial business combination, our
management may resign from their positions as officers or directors of the Company and the management of the target business at the time
of the business combination will remain in place. Management of the target business may not be familiar with United States securities
laws. If new management is unfamiliar with United States securities laws, they may have to expend time and resources becoming familiar
with such laws. This could be expensive and time-consuming and could lead to various regulatory issues which may adversely affect our
operations.
Risks Relating to our Securities
You will not have any rights or interests in
funds from the Trust Account, except under certain limited circumstances. Therefore, to liquidate your investment, you may be forced to
sell your public shares or warrants, potentially at a loss.
Our public shareholders will be entitled to receive
funds from the Trust Account only upon the earliest to occur of: (i) our completion of an initial business combination, and then only
in connection with those Class A ordinary shares that such shareholder properly elected to redeem, subject to the limitations and the
conditions described herein, (ii) the redemption of any public shares properly submitted in connection with a shareholder vote to amend
our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to allow
redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial
business combination within 18 months of the Public Offering or (B) with respect to any other material provisions relating to shareholders’
rights or pre-initial business combination activity, and (iii) the redemption of our public shares if we have not completed an initial
business combination within 18 months of the Public Offering, subject to applicable law and as further described herein. In no other circumstances
will a public shareholder have any right or interest of any kind in the Trust Account. Holders of warrants will not have any right to
the proceeds held in the Trust Account with respect to the warrants. Accordingly, to liquidate your investment, you may be forced to sell
your public shares or warrants, potentially at a loss.
NYSE may delist our securities from trading
on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading
restrictions.
Our Units, Class A ordinary shares and warrants
are listed on NYSE. We cannot assure you that our securities will continue to be listed on NYSE in the future or prior to our initial
business combination. In order to continue listing our securities on NYSE prior to our initial business combination, we must maintain
certain financial, distribution and share price levels. Generally, we must maintain a minimum amount in shareholders’ equity (generally
$2,500,000) and a minimum number of holders of our securities (generally 300 public holders). Additionally, in connection with our initial
business combination, we will be required to demonstrate compliance with NYSE’s initial listing requirements, which are more rigorous
than NYSE’s continued listing requirements, in order to continue to maintain the listing of our securities on NYSE. For instance,
our share price would generally be required to be at least $4.00 per share and our shareholders’ equity would generally be required
to be at least $5.0 million. We cannot assure you that we will be able to meet those initial listing requirements at that time.
If NYSE delists our securities from trading on
its exchange and we are not able to list our securities on another national securities exchange, we expect our securities could be quoted
on an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including:
| ● | a limited availability of market quotations for our securities; |
| ● | reduced liquidity for our securities; |
| ● | a determination that our Class A ordinary shares are a “penny
stock” which will require brokers trading in our Class A ordinary shares to adhere to more stringent rules and possibly result
in a reduced level of trading activity in the secondary trading market for our securities; |
| ● | a limited amount of news and analyst coverage; and |
| ● | a decreased ability to issue additional securities or obtain
additional financing in the future. |
The National Securities Markets Improvement Act
of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred
to as “covered securities.” Our Units, Class A ordinary shares and warrants are listed on NYSE, and, as a result, qualify
as covered securities under the statute. Although the states are preempted from regulating the sale of our securities, the federal statute
does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then
the states can regulate or bar the sale of covered securities in a particular case. While we are not aware of a state having used these
powers to prohibit or restrict the sale of securities issued by blank check companies, other than the State of Idaho, certain state securities
regulators view blank check companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities
of blank check companies in their states. Further, if we were no longer listed on NYSE, our securities would not qualify as covered securities
under the statute and we would be subject to regulation in each state in which we offer our securities.
You may only be able to exercise your public
warrants on a “cashless basis” under certain circumstances, and if you do so, you will receive fewer Class A ordinary shares
from such exercise than if you were to exercise such warrants for cash.
The warrant agreement provides that in the following
circumstances holders of warrants who seek to exercise their warrants will not be permitted to do so for cash and will, instead, be required
to do so on a cashless basis in accordance with Section 3(a)(9) of the Securities Act: (i) if the Class A ordinary shares issuable upon
exercise of the warrants are not registered under the Securities Act in accordance with the terms of the warrant agreement; (ii) if we
have so elected and the Class A ordinary shares are at the time of any exercise of a warrant not listed on a national securities exchange
such that they satisfy the definition of “covered securities” under Section 18(b)(1) of the Securities Act; and (iii) if we
have so elected and we call the public warrants for redemption. If you exercise your public warrants on a cashless basis, you would pay
the warrant exercise price by surrendering the warrants for that number of Class A ordinary shares equal to the quotient obtained by dividing
(x) the product of the number of Class A ordinary shares underlying the warrants, multiplied by the excess of the “fair market value”
of our Class A ordinary shares (as defined in the next sentence) over the exercise price of the warrants by (y) the fair market value.
The “fair market value” is the average reported closing price of the Class A ordinary shares for the 10 trading days ending
on the third trading day prior to the date on which the notice of exercise is received by the warrant agent or on which the notice of
redemption is sent to the holders of warrants, as applicable. As a result, you would receive fewer Class A ordinary shares from such exercise
than if you were to exercise such warrants for cash. The grant of registration rights to our initial shareholders and holders of our Private
Placement Warrants may make it more difficult to complete our initial business combination, and the future exercise of such rights may
adversely affect the market price of our Class A ordinary shares.
The grant of registration rights to our initial
shareholders and holders of our Private Placement Warrants may make it more difficult to complete our initial business combination, and
the future exercise of such rights may adversely affect the market price of our Class A ordinary shares
Pursuant to an agreement entered into concurrently
with the issuance and sale of the securities in the Public Offering, our initial shareholders and their permitted transferees can demand
that we register the Class A ordinary shares into which Founder Shares are convertible, holders of our Private Placement Warrants and
their permitted transferees can demand that we register the Private Placement Warrants and the Class A ordinary shares issuable upon exercise
of the Private Placement Warrants, and holders of warrants that may be issued upon conversion of working capital loans may demand that
we register the Class A ordinary shares issuable upon exercise of such warrants. We will bear the cost of registering these securities.
The registration and availability of such a significant number of securities for trading in the public market may have an adverse effect
on the market price of our Class A ordinary shares. In addition, the existence of the registration rights may make our initial business
combination more costly or difficult to conclude. This is because the shareholders of the target business may increase the equity stake
they seek in the combined entity or ask for more cash consideration to offset the negative impact on the market price of our Class A ordinary
shares that is expected when the ordinary shares owned by our initial shareholders, holders of our Private Placement Warrants or holders
of our working capital loans or their respective permitted transferees are registered.
We may issue additional Class A ordinary shares
or preferred shares to complete our initial business combination or under an employee incentive plan after completion of our initial business
combination. We may also issue Class A ordinary shares upon the conversion of the Founder Shares at a ratio greater than one-to-one at
the time of our initial business combination as a result of the anti-dilution provisions contained therein. Any such issuances would dilute
the interest of our shareholders and likely present other risks.
Our amended and restated memorandum and articles
of association authorize the issuance of up to 200,000,000 Class A ordinary shares, par value $0.0001 per share, 20,000,000 Class B ordinary
shares, par value $0.0001 per share, and 1,000,000 preferred shares, par value $0.0001 per share. There are 177,000,000 and 14,250,000
authorized but unissued Class A ordinary shares and Class B ordinary shares, respectively, available for issuance, which amount does not
take into account shares reserved for issuance upon exercise of outstanding warrants or shares issuable upon conversion of the Class B
ordinary shares. The Class B ordinary shares are automatically convertible into Class A ordinary shares concurrently with or immediately
following the consummation of our initial business combination, initially at a one-for-one ratio but subject to adjustment as set forth
herein and in our amended and restated memorandum and articles of association, including in certain circumstances in which we issue Class
A ordinary shares or equity-linked securities related to our initial business combination. Immediately after the Public Offering, there
will be no preferred shares issued and outstanding.
We may issue a substantial number of additional
Class A ordinary shares or preferred shares to complete our initial business combination or under an employee incentive plan after completion
of our initial business combination. We may also issue Class A ordinary shares upon conversion of the Class B ordinary shares at a ratio
greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions as set forth therein.
However, our amended and restated memorandum and articles of association provide, among other things, that prior to our initial business
combination, we may not issue additional shares that would entitle the holders thereof to (i) receive funds from the Trust Account or
(ii) vote on any initial business combination. These provisions of our amended and restated memorandum and articles of association, like
all provisions of our amended and restated memorandum and articles of association, may be amended with a shareholder vote. The issuance
of additional ordinary or preferred shares:
| ● | may significantly dilute the equity interest of investors
in the Public Offering; |
| ● | may subordinate the rights of holders of Class A ordinary
shares if preferred shares are issued with rights senior to those afforded our Class A ordinary shares; |
| ● | could cause a change in control if a substantial number of
Class A ordinary shares are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if
any, and could result in the resignation or removal of our present officers and directors; and |
| ● | may adversely affect prevailing market prices for our Units,
Class A ordinary shares and/or warrants. |
Unlike some other similarly structured special
purpose acquisition companies, our initial shareholders will receive additional Class A ordinary shares if we issue certain shares to
consummate an initial business combination.
The Founder Shares will automatically convert
into Class A ordinary shares concurrently with or immediately following the consummation of our initial business combination on a one-for-one
basis, subject to adjustment for share splits, share capitalizations, reorganizations, recapitalizations and the like, and subject to
further adjustment as provided herein. In the case that additional Class A ordinary shares or equity-linked securities are issued or deemed
issued in connection with our initial business combination, the number of Class A ordinary shares issuable upon conversion of all Founder
Shares will equal, in the aggregate, on an as-converted basis, 20% of sum of (i) the total number of Class A ordinary shares outstanding
after such conversion (after giving effect to any redemptions of Class A ordinary shares by public shareholders), plus (ii) the total
number of Class A ordinary shares issued, or deemed issued or issuable upon conversion or exercise of any equity-linked securities or
rights issued or deemed issued, by the Company in connection with or in relation to the consummation of the initial business combination,
excluding any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued,
or to be issued, to any seller in the initial business combination and any Private Placement Warrants issued to our Sponsor, officers
or directors upon conversion of Working Capital Loans; provided that such conversion of Founder Shares will never occur on a less than
one-for-one basis.
We may amend the terms of the warrants in a
manner that may be adverse to holders of public warrants with the approval by the holders of at least 50% of the then outstanding public
warrants. As a result, the exercise price of your warrants could be increased, the exercise period could be shortened and the number of
Class A ordinary shares purchasable upon exercise of a warrant could be decreased, all without your approval.
Our warrants were issued in registered form under
a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. The warrant agreement provides that
the terms of the warrants may be amended without the consent of any holder for the purpose of (i) curing any ambiguity or to correct any
defective provision or mistake, including to conform the provisions of the warrant agreement to the description of the terms of the warrants
and the warrant agreement, (ii) adjusting the provisions relating to cash dividends on ordinary shares as contemplated by and in accordance
with the warrant agreement or (iii) adding or changing any provisions with respect to matters or questions arising under the warrant agreement
as the parties to the warrant agreement may deem necessary or desirable and that the parties deem to not adversely affect the rights of
the registered holders of the warrants, provided that the approval by the holders of at least 50% of the then-outstanding public warrants
is required to make any change that adversely affects the interests of the registered holders of public warrants. Accordingly, we may
amend the terms of the public warrants in a manner adverse to a holder of public warrants if holders of at least 50% of the then outstanding
public warrants approve of such amendment. Although our ability to amend the terms of the public warrants with the consent of at least
50% of the then outstanding public warrants is unlimited, examples of such amendments could be amendments to, among other things, increase
the exercise price of the warrants, convert the warrants into cash or shares, shorten the exercise period or decrease the number of Class
A ordinary shares purchasable upon exercise of a warrant.
Our warrant agreement designates the courts
of the State of New York or the United States District Court for the Southern District of New York as the sole and exclusive forum for
certain types of actions and proceedings that may be initiated by holders of our warrants, which could limit the ability of warrant holders
to obtain a favorable judicial forum for disputes with our Company.
Our warrant agreement provides that, subject to
applicable law, (i) any action, proceeding or claim against us arising out of or relating in any way to the warrant agreement, including
under the Securities Act, will be brought and enforced in the courts of the State of New York or the United States District Court for
the Southern District of New York, and (ii) that we irrevocably submit to such jurisdiction, which jurisdiction shall be the exclusive
forum for any such action, proceeding or claim. We will waive any objection to such exclusive jurisdiction and that such courts represent
an inconvenient forum.
Notwithstanding the foregoing, these provisions
of the warrant agreement will not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim
for which the federal district courts of the United States of America are the sole and exclusive forum. Any person or entity purchasing
or otherwise acquiring any interest in any of our warrants shall be deemed to have notice of and to have consented to the forum provisions
in our warrant agreement. If any action, the subject matter of which is within the scope the forum provisions of the warrant agreement,
is filed in a court other than a court of the State of New York or the United States District Court for the Southern District of New York
(a “foreign action”) in the name of any holder of our warrants, such holder shall be deemed to have consented to: (x) the
personal jurisdiction of the state and federal courts located in the State of New York in connection with any action brought in any such
court to enforce the forum provisions (an “enforcement action”), and (y) having service of process made upon such warrant
holder in any such enforcement action by service upon such warrant holder’s counsel in the foreign action as agent for such warrant
holder.
This choice-of-forum provision may limit a warrant
holder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with our Company, which may discourage
such lawsuits. Alternatively, if a court were to find this provision of our warrant agreement inapplicable or unenforceable with respect
to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters
in other jurisdictions, which could materially and adversely affect our business, financial condition and results of operations and result
in a diversion of the time and resources of our management and board of directors.
Our amended and restated memorandum and articles
of association provide that the courts of the Cayman Islands will be the exclusive forums for certain disputes between us and our shareholders,
which could limit our shareholders’ ability to obtain a favorable judicial forum for complaints against us or our directors, officers
or employees.
Our amended and restated memorandum and articles
of association provide that unless we consent in writing to the selection of an alternative forum, the courts of the Cayman Islands shall
have exclusive jurisdiction over any claim or dispute arising out of or in connection with our amended and restated memorandum and articles
of association or otherwise related in any way to each shareholder’s shareholding in us, including but not limited to (i) any derivative
action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of any fiduciary or other duty owed by any of
our current or former director, officer or other employee to us or our shareholders, (iii) any action asserting a claim arising pursuant
to any provision of the Companies Act or our amended and restated memorandum and articles of association, or (iv) any action asserting
a claim against us governed by the internal affairs doctrine (as such concept is recognized under the laws of the United States of America)
and that each shareholder irrevocably submits to the exclusive jurisdiction of the courts of the Cayman Islands over all such claims or
disputes. The forum selection provision in our amended and restated memorandum and articles of association will not apply to actions or
suits brought to enforce any liability or duty created by the Securities Act, Exchange Act or any claim for which the federal district
courts of the United States of America are, as a matter of the laws of the United States of America, the sole and exclusive forum for
determination of such a claim.
Our amended and restated memorandum and articles
of association also provide that, without prejudice to any other rights or remedies that we may have, each of our shareholders acknowledges
that damages alone would not be an adequate remedy for any breach of the selection of the courts of the Cayman Islands as exclusive forum
and that accordingly we shall be entitled, without proof of special damages, to the remedies of injunction, specific performance or other
equitable relief for any threatened or actual breach of the selection of the courts of the Cayman Islands as exclusive forum.
This choice of forum provision may increase a
shareholder’s cost and limit the shareholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes
with us or our directors, officers or other employees, which may discourage lawsuits against us and our directors, officers and other
employees. Any person or entity purchasing or otherwise acquiring any of our shares or other securities, whether by transfer, sale, operation
of law or otherwise, shall be deemed to have notice of and have irrevocably agreed and consented to these provisions. There is uncertainty
as to whether a court would enforce such provisions, and the enforceability of similar choice of forum provisions in other companies’
charter documents has been challenged in legal proceedings. It is possible that a court could find this type of provisions to be inapplicable
or unenforceable, and if a court were to find this provision in our amended and restated memorandum and articles of association to be
inapplicable or unenforceable in an action, we may incur additional costs associated with resolving the dispute in other jurisdictions,
which could have adverse effect on our business and financial performance.
We may redeem your unexpired warrants prior
to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless.
We have the ability to redeem outstanding warrants
at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the closing price
of our Class A ordinary shares equals or exceeds $18.00 per share (adjustments to the number of shares issuable upon exercise or the exercise
price of a warrant) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to the date on which
we send notice of such redemption to the warrants holders and provided certain other conditions are met. If and when the warrants become
redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale
under all applicable state securities laws. As a result, we may redeem the warrants as set forth above even if the holders are otherwise
unable to exercise the warrants. Redemption of the outstanding warrants could force you to (i) exercise your warrants and pay the exercise
price therefor at a time when it may be disadvantageous for you to do so, (ii) sell your warrants at the then-current market price when
you might otherwise wish to hold your warrants or (iii) accept the nominal redemption price which, at the time the outstanding warrants
are called for redemption, is likely to be substantially less than the market value of your warrants.
In addition, we have the ability to redeem the
outstanding public warrants at any time after they become exercisable and prior to their expiration, at a price of $0.10 per warrant upon
a minimum of 30 days’ prior written notice of redemption provided that the closing price of our Class A ordinary shares equals or
exceeds $10.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant)
for any 20 trading days within a 30-trading day period ending on the third trading day prior to proper notice of such redemption and provided
that certain other conditions are met, including that holders will be able to exercise their warrants prior to redemption for a number
of Class A ordinary shares determined based on the redemption date and the fair market value of our Class A ordinary shares. The value
received upon exercise of the warrants (1) may be less than the value the holders would have received if they had exercised their warrants
at a later time where the underlying share price is higher and (2) may not compensate the holders for the value of the warrants, including
because the number of ordinary shares received is capped at 0.361 Class A ordinary shares per warrant (subject to adjustment) irrespective
of the remaining life of the warrants.
None of the Private Placement Warrants will be
redeemable by us so long as they are held by the Sponsor or its permitted transferees.
Our warrants may have an adverse effect on
the market price of our Class A ordinary shares and make it more difficult to effectuate our initial business combination.
We issued warrants to purchase 11,500,000 of our
Class A ordinary shares as part of the Units sold in the Public Offering and, simultaneously with the Public Offering, we issued in a
Private Placement an aggregate of 11,700,000 Private Placement Warrants, each exercisable to purchase one Class A ordinary share at $11.50
per share. In addition, if the Sponsor makes any Working Capital Loans, it may convert those loans into up to an additional 1,500,000
Private Placement Warrants, at the price of $1.00 per warrant. To the extent we issue ordinary shares to effectuate a business transaction,
the potential for the issuance of a substantial number of additional Class A ordinary shares upon exercise of these warrants could make
us a less attractive acquisition vehicle to a target business. Such warrants, when exercised, will increase the number of issued and outstanding
Class A ordinary shares and reduce the value of the Class A ordinary shares issued to complete the business transaction. Therefore, our
warrants may make it more difficult to effectuate a business transaction or increase the cost of acquiring the target business.
The Private Placement Warrants are identical to
the warrants included in the Units sold in the Public Offering, except that, so long as they are held by their initial purchasers or their
permitted transferees, (i) they will not be redeemable by the Company, (ii) they (including the Class A ordinary shares issuable upon
exercise of these warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold until 30 days after the Company
completes its initial business combination, (iii) they may be exercised by the holders on a cashless basis and (iv) they will be entitled
to registration rights.
Our warrants are expected to be accounted for
as a warrant liability and will be recorded at fair value upon issuance with changes in fair value each period reported in earnings, which
may have an adverse effect on the market price of our Class A ordinary shares or may make it more difficult for us to consummate an initial
business combination.
We issued an aggregate of 20,500,000 warrants
in connection with the Public Offering. We expect to account for these warrants as a warrant liability and will record at fair value upon
issuance any changes in fair value each period reported in earnings as determined by us based upon a valuation report obtained from its
independent third party valuation firm. The impact of changes in fair value on earnings may have an adverse effect on the market price
of our Class A ordinary shares. In addition, potential targets may prefer combining with a special purpose acquisition company that does
not have warrants that are accounted for as a warrant liability, which may make it more difficult for us to consummate an initial business
combination with a target business.
Because each unit contains one-half of one
warrant and only a whole warrant may be exercised, the Units may be worth less than Units of other special purpose acquisition companies.
Each unit contains one-half of one warrant Pursuant
to the warrant agreement, no fractional warrants were issued upon separation of the Units, and only whole Units can trade. If, upon exercise
of the warrants, a holder would be entitled to receive a fractional interest in a share, we will, upon exercise, round down to the nearest
whole number the number of Class A ordinary shares to be issued to the warrant holder. This is different from other offerings similar
to ours whose Units include one ordinary share and one warrant to purchase one whole share. We have established the components of the
Units in this way in order to reduce the dilutive effect of the warrants upon completion of a business combination since the warrants
will be exercisable in the aggregate for one-half of the number of shares compared to Units that each contain a whole warrant to purchase
one share, thus making us, we believe, a more attractive merger partner for target businesses. Nevertheless, this unit structure may cause
our Units to be worth less than if it included a warrant to purchase one whole share.
The Private Placement Warrants are identical to
the warrants included in the Units sold in the Public Offering, except that, so long as they are held by their initial purchasers or their
permitted transferees, (i) they will not be redeemable by the Company, (ii) they (including the Class A ordinary shares issuable upon
exercise of these warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold until 30 days after the Company
completes its initial business combination, (iii) they may be exercised by the holders on a cashless basis and (iv) they will be entitled
to registration rights.
General Risk Factors
We are an emerging growth company and a smaller
reporting company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements
available to emerging growth companies or smaller reporting companies, this could make our securities less attractive to investors and
may make it more difficult to compare our performance with other public companies.
We are an “emerging growth company”
within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from various reporting
requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, not
being required to comply with the auditor internal controls attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced
disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements
of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously
approved. As a result, our shareholders may not have access to certain information they may deem important. We could be an emerging growth
company for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our
Class A ordinary shares held by non-affiliates exceeds $700 million as of any June 30 before that time, in which case we would no longer
be an emerging growth company as of the following December 31. We cannot predict whether investors will find our securities less attractive
because we will rely on these exemptions. If some investors find our securities less attractive as a result of our reliance on these exemptions,
the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities
and the trading prices of our securities may be more volatile.
Further, Section 102(b)(1) of the JOBS Act exempts
emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that
is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered
under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company
can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but
any such an election to opt out is irrevocable. We have elected not to opt out of such extended transition period which means that when
a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company,
can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our
financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has
opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards
used.
Additionally, we are a “smaller reporting
company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure
obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting
company until the last day of the fiscal year in which (1) the market value of our ordinary shares held by non-affiliates exceeds $250
million as of the prior June 30, or (2) our annual revenues exceeded $100 million during such completed fiscal year and the market value
of our ordinary shares held by non-affiliates exceeds $700 million as of the prior June 30th. To the extent we take advantage of such
reduced disclosure obligations, it may also make comparison of our financial statements with other public companies difficult or impossible.
Provisions in our amended and restated memorandum
and articles of association may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future
for our Class A ordinary shares and could entrench management.
Our amended and restated memorandum and articles
of association contain provisions that may discourage unsolicited takeover proposals that shareholders may consider to be in their best
interests. These provisions include a staggered board of directors and the ability of the board of directors to designate the terms of
and issue new series of preferred shares, which may make the removal of management more difficult and may discourage transactions that
otherwise could involve payment of a premium over prevailing market prices for our securities.
Because we are incorporated under the laws
of the Cayman Islands, you may face difficulties in protecting your interests, and your ability to protect your rights through the U.S.
Federal courts may be limited.
We are an exempted company incorporated under
the laws of the Cayman Islands. As a result, it may be difficult for investors to effect service of process within the United States upon
our directors or officers, or enforce judgments obtained in the United States courts against our directors or officers.
Our corporate affairs will be governed by our
amended and restated memorandum and articles of association, the Companies Act (as the same may be supplemented or amended from time to
time) and the common law of the Cayman Islands. We will also be subject to the federal securities laws of the United States. The rights
of shareholders to take action against the directors, actions by minority shareholders and the fiduciary responsibilities of our directors
to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands
is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from English common law, the decisions
of whose courts are of persuasive authority, but are not binding on a court in the Cayman Islands. The rights of our shareholders and
the fiduciary responsibilities of our directors under Cayman Islands law are different from what they would be under statutes or judicial
precedent in some jurisdictions in the United States. In particular, the Cayman Islands has a different body of securities laws as compared
to the United States, and certain states, such as Delaware, may have more fully developed and judicially interpreted bodies of corporate
law. In addition, Cayman Islands companies may not have standing to initiate a shareholders derivative action in a Federal court of the
United States.
We have been advised by Maples and Calder (Cayman)
LLP, Cayman Islands legal counsel that the courts of the Cayman Islands are unlikely (i) to recognize or enforce against us judgments
of courts of the United States predicated upon the civil liability provisions of the federal securities laws of the United States or any
state; and (ii) in original actions brought in the Cayman Islands, to impose liabilities against us predicated upon the civil liability
provisions of the federal securities laws of the United States or any state, so far as the liabilities imposed by those provisions are
penal in nature. In those circumstances, although there is no statutory enforcement in the Cayman Islands of judgments obtained in the
United States, the courts of the Cayman Islands will recognize and enforce a foreign money judgment of a foreign court of competent jurisdiction
without retrial on the merits based on the principle that a judgment of a competent foreign court imposes upon the judgment debtor an
obligation to pay the sum for which judgment has been given provided certain conditions are met. For a foreign judgment to be enforced
in the Cayman Islands, such judgment must be final and conclusive and for a liquidated sum, and must not be in respect of taxes or a fine
or penalty, inconsistent with a Cayman Islands judgment in respect of the same matter, impeachable on the grounds of fraud or obtained
in a manner, or be of a kind the enforcement of which is, contrary to natural justice or the public policy of the Cayman Islands (awards
of punitive or multiple damages may well be held to be contrary to public policy). A Cayman Islands Court may stay enforcement proceedings
if concurrent proceedings are being brought elsewhere.
As a result of all of the above, public shareholders
may have more difficulty in protecting their interests in the face of actions taken by management, members of the board of directors or
controlling shareholders than they would as public shareholders of a United States company.
Cyber incidents or attacks directed at us could
result in information theft, data corruption, operational disruption and/or financial loss.
We depend on digital technologies, including information
systems, infrastructure and cloud applications and services, including those of third parties with which we may deal. Sophisticated and
deliberate attacks on, or security breaches in, our systems or infrastructure, or the systems or infrastructure of third parties or the
cloud, could lead to corruption or misappropriation of our assets, proprietary information and sensitive or confidential data. As an early
stage company without significant investments in data security protection, we may not be sufficiently protected against such occurrences.
We may not have sufficient resources to adequately protect against, or to investigate and remediate any vulnerability to, cyber incidents.
It is possible that any of these occurrences, or a combination of them, could have adverse consequences on our business and lead to financial
loss.
We are subject to changing law and regulations
regarding regulatory matters, corporate governance and public disclosure that have increased both our costs and the risk of non-compliance.
We are subject to rules and regulations by various
governing bodies, including, for example, the Securities and Exchange Commission, which are charged with the protection of investors and
the oversight of companies whose securities are publicly traded, and to new and evolving regulatory measures under applicable law. Our
efforts to comply with new and changing laws and regulations have resulted in and are likely to continue to result in, increased general
and administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance activities.
Moreover, because these laws, regulations and
standards are subject to varying interpretations, their application in practice may evolve over time as new guidance becomes available.
This evolution may result in continuing uncertainty regarding compliance matters and additional costs necessitated by ongoing revisions
to our disclosure and governance practices. If we fail to address and comply with these regulations and any subsequent changes, we may
be subject to penalty and our business may be harmed.
We may be exposed to liabilities under the
Foreign Corrupt Practices Act, and any determination that we violated the Foreign Corrupt Practices Act could have a material adverse
effect on our business.
We are subject to the Foreign Corrupt Practices
Act, or FCPA, and other laws that prohibit improper payments or offers of payments to foreign governments and their officials and political
parties by U.S. persons and issuers as defined by the statute for the purpose of obtaining or retaining business. We may have operations,
enter into agreements with third parties and make sales in countries that may experience corruption. It will be our policy to implement
safeguards to discourage the unauthorized payments or offers of payments by one of the employees, consultants, or sales agents of our
Company by our employees; however, these parties are not always subject to our control. Also, our existing safeguards and any future
improvements may prove to be less than effective, and the employees, consultants, or sales agents of our Company may engage in conduct
for which we might be held responsible. Violations of the FCPA may result in severe criminal or civil sanctions, and we may be subject
to other liabilities, which could negatively affect our business, operating results and financial condition. In addition, the government
may seek to hold our Company liable for successor liability FCPA violations committed by companies in which we invest or that we acquire.
We may not be able to complete an initial business
combination since such initial business combination may be subject to regulatory review and approval requirements, including pursuant
to foreign investment regulations and review by governmental entities such as the Committee on Foreign Investment in the United States
(“CFIUS”), or may be ultimately prohibited.
Our initial business combination may be subject
to regulatory review and approval requirements by governmental entities, or ultimately prohibited. For example, CFIUS has authority to
review certain direct or indirect foreign investments in U.S. businesses. Among other things, CFIUS is empowered to require mandatory
filings related to certain foreign investments, to charge filing fees related to such filings, and to self-initiate national security
reviews of foreign direct and indirect investments in U.S. businesses if the parties to that investment choose not to file voluntarily.
If CFIUS determines that an investment threatens national security, CFIUS has the power to impose restrictions on the investment or recommend
that the President prohibit it or order divestment. Whether CFIUS has jurisdiction to review an acquisition or investment transaction
depends on, among other factors, the nature and structure of the transaction, the nationality of the parties, the level of beneficial
ownership interest and the nature of any information or governance rights involved.
Our Sponsor, is controlled by a non-U.S. person.
Specifically, our Sponsor is controlled by Resource Capital Fund VII L.P. (“RCF VII LP”), which is the sole managing member
of our Sponsor. Resource Capital Associates VII L.P. is the General Partner of RCF VII LP, and RCFM GP L.L.C. is the General Partner of
Resource Capital Associates VII L.P. James McClements is the managing member of RCFM GP L.L.C. and therefore ultimately has voting and
dispositive power over the securities held directly by our Sponsor. Mr. McClements is an Australian citizen.
For so long as the Sponsor retains a material
ownership interest in us, we may be deemed a “foreign person” under the regulations relating to CFIUS. As such, an initial
business combination with a U.S. business or foreign business with U.S. operations that we may wish to pursue may be subject to CFIUS
review. If a particular proposed initial business combination with a U.S. business falls within CFIUS’s jurisdiction, we may determine
that we are required to make a mandatory filing or that we will submit to CFIUS review on a voluntary basis, or to proceed with the transaction
without submitting to CFIUS and risk CFIUS intervention, before or after closing the transaction. In such circumstances, CFIUS may decide
to delay or recommend that the President of the United States block our proposed initial business combination, require conditions with
respect to such initial business combination or recommend that the President of the United States order us to divest all or a portion
of the U.S. target business of our initial business combination that we acquired without first obtaining CFIUS approval, which may limit
the attractiveness of, or delay or prevent us from pursuing, certain target companies that we believe would otherwise be beneficial to
us and our shareholders. In addition, certain types of U.S. businesses may be subject to rules or regulations that limit or impose requirements
with respect to foreign ownership.
If CFIUS determines it has jurisdiction, CFIUS
may decide to recommend a block or delay our initial business combination, or require conditions with respect to it, which may delay or
prevent us from consummating a potential transaction.
The process of government review, whether by CFIUS
or otherwise, could be lengthy. Because we have only a limited time to complete our initial business combination, our failure to obtain
any required approvals within the requisite time period may require us to liquidate. If we are unable to consummate our initial business
combination within the applicable time period required, including as a result of extended regulatory review, we will, as promptly as reasonably
possible but not more than ten business days thereafter, redeem the public shares for a pro rata portion of the funds held in the trust
account and as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our
board of directors, liquidate and dissolve, subject in each case to our obligations under Cayman Islands law to provide for claims of
creditors and the requirements of other applicable law. In such event, our shareholders will miss the opportunity to benefit from an investment
in a target company and the potential appreciation in value of such investment. Additionally, our warrants will become worthless.”