As of December 6, 2021, there were 7,065,105
ordinary shares, no par value, of the registrant issued and outstanding.
This Amendment No. 1 (“Amendment
No. 1”) to the Transition Report on Form 10-KT/A amends the Transition Report on Form 10-KT of the Company as of and for the period
ended December 31, 2020, as filed with the Securities and Exchange Commission (“SEC”) on June 9, 2021 (the “Original
Filing”).
The Company has re-evaluated
the Company’s application of ASC 480-10-S99-3A to its accounting classification of the redeemable ordinary shares, no par value
(the “Public Shares”), issued as part of the units sold in the Company’s initial public offering (the “IPO”)
on February 24, 2020. Historically, a portion of the Public Shares was classified as permanent equity to maintain shareholders’
equity greater than $5 million on the basis that the Company will not redeem its Public Shares in an amount that would cause its net
tangible assets to be less than $5,000,001, as described in the Company’s Amended and Restated Memorandum and Articles of Association
(the “Charter”). Pursuant to such re-evaluation, the Company’s management has determined that the Public Shares include
certain provisions that require classification of all of the Public Shares as temporary equity regardless of the net tangible assets
redemption limitation contained in the Charter.
Therefore, on November
23, 2021, the Company’s management and the audit committee of the Company’s board of directors concluded that (i) the Company’s
audited financial statements as of December 31, 2020 in the Original Filing, (ii) the Company’s unaudited financial statements
as of March 31, 2021 contained in the Company’s Quarterly Report on Form 10-Q filed with the SEC on June 11, 2021, (iii) the Company’s
unaudited financial statements as of June 30, 2021 contained in the Company’s Quarterly Report on Form 10-Q filed with the SEC
on August 16, 2021, and (iv) the Company’s unaudited financial statements as of September 30, 2021 contained in the Company’s
Quarterly Report on Form 10-Q filed with the SEC on November 15, 2021 (collectively, the “Affected Periods”), should be restated
to report all Public Shares as temporary equity and should no longer be relied upon. As such, the Company will restate its financial
statements for the Affected Periods in this Amendment No. 1 and a Quarterly Report on Form 10-Q/A to be filed with the SEC (“Form
10-Q/A”). On November 24, 2021, the Company filed 8-K with SEC on non-reliance on previously
issued financial statements or a related audit report
or completed interim review.
The restatement does not
have an impact on its cash position and cash held in the trust account established in connection with the IPO (the “Trust Account”).
The Company’s management
has concluded that a material weakness remains in the Company’s internal control over financial reporting and that the Company’s
disclosure controls and procedures were not effective. The Company’s remediation plan with respect to such material weakness will
be described in more detail in the Form 10-Q/A.
We are filing this Amendment
No. 1 to amend and restate the Original Filing with modification as necessary to reflect the restatements. The following items have been
amended to reflect the restatements:
PART
I
Item
1. Business
Overview
We
are a blank check company incorporated as a British Virgin Islands business company and formed for the purpose of effecting a merger,
capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses,
which we refer to throughout this report as our initial business combination. Although we are not limited to a particular industry or
geographic region for purposes of consummating an initial business combination, we intend to focus on businesses primarily operating
in the financial services industry or businesses providing technological services to the financial industry, commonly known as fintech,
in North America and Asia-Pacific.
We
believe the financial services industry has experienced a significant amount of change over the last several years as new companies providing
technology, software, and digital platforms have entered the market. According to an article titled “Global Fintech Investment
Hits Record $111.8B in 2018” published by KPMG in February 2019, there was over $31 billion invested in fintech companies
in 2017 alone. Fintech companies exist across many industries within financial services, including banking technology, payment and financial
transaction processing, capital markets, wealth management, insurance, and financial management systems. We believe that fintech companies
have proven to be successful with multiple business models and strategic objectives. The objective of fintech companies can range from
improving the efficiency of traditional financial services companies, to introducing new products and creating new markets, to those
focused on disrupting traditional financial services companies with competitive products. Fintech is impacting the financial services
sector broadly in the following aspect:
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Fintech
companies tend to snatch away the revenues of traditional financial institutions and force them to be more competitive and vibrant;
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Technology
disrupts the logic of traditional financial institutions and empowers them to adjust their strategic direction;
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Electronic
channel services occupy the entrance, driving traditional financial institutions to achieve full channel integration and coordination;
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Innovations
in fintech companies have sprung up, inspiring traditional financial institutions to innovate their business models;
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Business
innovation drives management innovation, forcing traditional financial institutions to reform their organizational model and IT architecture.
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We
intend to capitalize on the ability of our management team and the broad network our management team and members of the board of directors
have built up over their respective professional career to identify, acquire, and operate a business in the proposed business of our
initial business combination that may provide opportunities for attractive long-term risk-adjusted returns, though we reserve
the right to pursue an acquisition opportunity in any business or industry.
Change
in Fiscal Year-End
On
June 4, 2021, our board of directors approved the change in our fiscal year end from June 30 to December 31. As required, the Company
is filing this transition report on Form 10-K covering the transition period from July 1, 2020 to December 31, 2020.
Recent
Development
On
November 9, 2020, we entered into that certain Amended and Restated Business Combination Agreement (the “Ufin Agreement”),
with Ufin Holdings Limited, a Cayman Islands exempted company (“Ufin”), Ufin Tek Limited, a British Virgin Islands business
company (“Ufin Pubco”), Ufin Mergerco Limited, a British Virgin Islands business company and a wholly-owned subsidiary of
Pubco (“Ufin Merger Sub”), Xiaoma (Sherman) Lu, an individual, in the capacity as the Purchaser Representative thereunder,
Yingkui Liu, in the capacity as the Seller Representative thereunder, and Ufin Investment Limited, a British Virgin Islands business
company and the sole holder of Ufin’s outstanding capital shares (the “Ufin Seller”, together with our company, Ufin,
Ufin Pubco, Ufin Merger Sub, Sherman Xiaoma Lu, Yingkui Liu and Ufin Seller, the “Ufin Parties”) for a proposed business
combination.
On
February 15, 2021, the Ufin Parties entered into a letter agreement pursuant to which they mutually terminated the Ufin Agreement. In
accordance such letter agreement, upon execution and delivery of the letter agreement all of the rights and obligations of the Ufin Parties
under the Ufin Agreement ceased (except for certain obligations related to publicity, confidentiality, fees and expenses, trust fund
waiver, termination and general provisions) without any liability on the part of any party or any of their respective representatives.
On
February 16, 2021, we entered into a Business Combination Agreement (the “Business Combination Agreement”) with Navy Sail
International Limited, a British Virgin Islands company (“Navy Sail”), as Purchaser Representative, JHD Technologies Limited,
a Cayman Islands company (“Pubco”), Yellow River MergerCo Limited, a British Virgin Islands company and a wholly-owned subsidiary
of Pubco (“Merger Sub”), JHD Holdings (Cayman) Limited, a Cayman Islands company (“JHD”), Yellow River (Cayman)
Limited, a Cayman Islands company (the “Primary Seller”), and each of the holders of JHD’s capital shares that become
parties to the Business Combination Agreement after the date hereof by executing and delivering to the Purchaser, Pubco and JHD a joinder
agreement (each individually, a “Seller”, and collectively with the Primary Seller, the “Sellers”), and our sponsor,
solely with respect to Sections 10.3 and Articles XII and XIII thereof, as applicable.
Pursuant
to the Business Combination Agreement, subject to the terms and conditions set forth therein, at the closing of the transactions contemplated
by the Business Combination Agreement (the “Closing”), (a) Merger Sub will merge with and into us, with our company continuing
as the surviving entity (the “Merger”), as a result of which, (1) our company shall become a wholly-owned subsidiary of Pubco
and (ii) each issued and outstanding security of our company immediately prior to the Effective Time (as defined in the Business Combination
Agreement) shall no longer be outstanding and shall automatically be cancelled, in exchange for the right of the holder thereof to receive
a substantially equivalent security of Pubco, and (b) Pubco will acquire all of the issued and outstanding capital shares of JHD from
the Sellers in exchange for ordinary shares of Pubco (the “Share Exchange” and together with the Merger and the other transactions
contemplated by the Business Combination Agreement, the “Transactions”).
The
total consideration to be paid by Pubco to the Sellers for their shares of JHD, shall be an aggregate number of Pubco ordinary shares
with an aggregate value equal to (i) One Billion U.S. Dollars ($1,000,000,000), plus (ii) the aggregate amount cash of JHD and its direct
and indirect subsidiaries as of the Closing date, minus (iii) the aggregate indebtedness of JHD and its direct and indirect subsidiaries,
and minus (iv) the amount of any unpaid transaction expenses of JHD in excess of $10,000,000 in aggregate, with each Pubco ordinary share
valued at the amount equal to the price at which each East Stone ordinary share is redeemed or converted pursuant to the redemption of
shares.
The
issuances of Pubco ordinary shares in connection with the Share Exchange will be exempt from registration under the Securities Act in
reliance upon Section 4(a)(2) thereof because securities of Pubco will issued to a limited number of Sellers without involving a public
offering. Such issuances will also be exempted from registration in reliance upon Regulation S of the Securities Act with regard to certain
Sellers receiving Pubco ordinary shares who are qualified as non-U.S. persons thereunder.
The
Business Combination Agreement and related agreements are further described in the Form 8-K filed by our company on February 18, 2021.
Effective May 24, 2021, the Company has extended
the date by which the Company has to consummate a business combination from May 24, 2021 to August 24, 2021 (the “Extension”).
The Extension is the first of up to two three-month extensions permitted under the Company’s governing documents and provides the
Company with additional time to complete its proposed business combination with JHD. In accordance with the Business Combination Agreement,
JHD agreed to loan to the Company a sum of $1,380,000 on the Sponsor’s behalf in order to support the Extension. Such loan is non-interest
bearing and will be payable upon the consummation of the proposed business combination.
On November 24,
2021, the Company held a special meeting of shareholders and approved to amend the Company’s Amended and Restated Memorandum and
Articles of Association to extend the date by which the Company has to consummate an initial business combination from November 24, 2021
to February 24, 2022. In connection with the approval of the extension, shareholders elected to redeem an aggregate of 10,534,895 ordinary
shares, of which the Company paid cash from the trust account in the aggregate amount of approximately $108.1 million (approximately
$10.26 per share) to redeeming shareholders.
The Transactions are expected
to be completed by the first quarter of 2022, subject to, among other things, the approval of the transaction by the Company’s
shareholders, satisfaction of the conditions stated in the definitive business combination agreement and other customary closing conditions,
including that the U.S. Securities and Exchange Commission completes its review of the proxy statement/prospectus relating to the Transactions,
the receipt of certain regulatory approvals, and the approval by The Nasdaq Stock Market to list the securities of the combined company.
Other
than as specifically discussed, this report does not assume the closing of the Transactions.
Business
Strategy
Our
business strategy is to utilize our management team’s past to identify and complete our initial business combination with a company
that our management believes, with proper utilization of our network and experience, has compelling potential for value creation.
We
believe our management team and members of our board have experience in:
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Operating
companies, setting and changing strategies, and identifying, mentoring and recruiting exceptional talent;
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Developing
and growing companies, both organically and through strategic transactions and acquisitions, and expanding the product range and geographic
footprint of a number of target businesses;
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Investing
in leading private and public technology companies to accelerate their growth and maturation; and
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Accessing
the capital markets, including financing businesses and helping companies transition to public ownership.
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Market
Opportunity
Although
we are not limited to a particular industry or geographic region for purposes of consummating an initial business combination, we intend
to focus on businesses within the fintech business with an overall transaction value between $300 million and $1.0 billion.
Broadly, fintech can refer to any innovation in how people transact business, from money transfers, check deposit over smartphone, bypassing
a bank for credit application, loaning money for small business instantly, or investing into money market fund without in-person assistance.
According to “2018 US Fintech Market Report” by S&P Global, capital has been pouring into the fintech industry where
payments, insurance technology, investment and capital technology, digital lending, banking technology and financial media are taking
the center stage. As indicated in the article titled Global Fintech Investment Hits Record $111.8B in 2018 by KPMG, global fintech investment
in 2018 reached $111.8 billion with investment in Asia taking the lead up to $22.7 billion. The chart below presents an evolved
ecosystem of financial services.
Source:
Capgemini Financial Services Analysis, 2019
Investment
in core and infrastructure technology for the financial services sector is needed to keep pace with innovation. According to the CB Report,
the capital markets ecosystem suffers from a current over-reliance on legacy technologies, which are on average 38 years old. In
contrast, the “information explosion” is causing increasing challenges with the management of data and information, as shown
in the charts below.
Source:
Global Intech Report Q3 2019 by CB Insight
Source:
IDC “Data Age 2025 Study” (sponsored by Seagate)
The
rapid evolution of the capital markets technology landscape has translated into significant investment in companies focused on back-office applications
and functions, as indicated by the number of capital investments made in the front office, middle office and back office within the same
time frame in the chart below.
Source:
Global Intech Report Q3 2019 by CB Insight
Online
Lending. Online lending based on big data analytics has grown where traditional bank lending fails to cover
or under covers. Around 2 billion people worldwide are unbanked, ignored or technically not accessible by traditional banks or mainstream
financial services companies, per Accenture analysis of World Bank and UN figures in its May 2017 report titled Fintech — Did Someone
Cancel the Revolution. Those who are ignored or out of reach by traditional financial services are being served by advanced online lending
technologies.
Big
Data, Cloud Computing and Credit Analytics. Big data powered by cloud computing provides financial lenders
the power to enhance credit rating and credit risk control. Bid data opens up a frontier to financial institutions to service those unbanked
and/or underbanked customers.
Mobile
Phone Payment. Mobile phone payment has been deployed quickly where cash payment can be eliminated creating
fast and efficient transactions. However, smart phone payment is regulated differently in different countries by their respective financial
authorities causing deployment of the technology unevenly worldwide.
Smart
Contract. Smart contract utilizes computer programs, often in block chain, to automatically execute contracts
between two or more parties in a variety of business in financial services, commercial transactions, B to B services, or B to C services,
in lending, loan repayment, mortgaging, reducing costs in the conventional flow of documents and enhancing accuracy and security of the
flow of documents.
Insurtech. Insurtech
is short for “insurance technology.” It represents the emergence of new technologies that are transforming the insurance
industry by reducing costs for consumers and insurance companies, improving efficiency, and enhancing customer satisfaction. Insurtech
is seen to be a disruptor to the property and casualty homogenous insurance segment. Mass computing ability, scenario-based setting
and growth are key strengths of Insurtech companies. Insurtech incorporates AI and online-to-offline (O2O) integration by tapping
into casualty P&C homogeneous-like auto insurance and health insurance segments.
Insurtech
has been applied in areas such as AI-powered anti-fraud solutions for the P&C insurance industry. Insurtech provides a
digitized platform allowing customers to acquire all of their P&C in one place, suitable to small businesses. This digitalized market
place is designed to improve insurance agency processes and efficiency.
According
to KPMG’s March 2019 report titled “Insurtech 10: Trends for 2019,” insurtech trends in the arears of digital risk
reduction, digitizing customers, behaviorial science, AI and machine learning, vehicle-focused coverage (as opposed to driver-focused insurance),
and big data.
As
reported by Insurance Journal in May 2019, more than $1 billion was invested in 85 insurtech deals in the first quarter of 2019.
According
to a March 2019 report titled Regulation and Supervision of Fintech by KPMG, fintech is moving from “under the regulatory”
and is attracting growing responses and supervisory scrutiny, and according to the CB Report, the regulatory landscape is more complex
than ever, giving rise to new business opportunities. The chart below presents the number of mentions of financial service regulation
terms in the media from the beginning of 2012 to the first half of 2019.
Acquisition
Criteria
We
seek to identify companies that have compelling market presence and a combination of the following characteristics. We use these criteria
and guidelines in evaluating acquisition opportunities, including JHD, but we may decide to enter our initial business combination
with a target business that does not meet these criteria and guidelines. We intend to acquire companies or assets that we believe have
the following attributes:
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Strong
and noticeable presence in its market. We intend to focus on investment in an industry segment that has a noticeable presence in its
market;
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First
mover in its niche market. When pursuing our business combination, we look for targets that are early leaders in their niche market and
which set trends in their products and/or services;
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Differentiated
products or services. A company with differentiated products or services offers investors a long term investment opportunity and we certainly
spend time and resources to assess our business combination in this regard;
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Seasoned
management team. We intend to spend significant time assessing a company’s leadership and personnel and evaluating what we can
do to augment and/or upgrade the team over time if needed;
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Widely-applicable technology
& scalable model offering appealing growth potential. Our management believes that technology-driven solutions that are widely
applicable and scalable have a unique window of opportunity to create advantages that will grow with the industry;
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Stable
and reputable customer base. We seek target businesses that have a stable and reputable customer base, with systematic advantages which
are generally able to employ risk management measures to endure economic downturns, industry consolidation, changing business preferences
and other unfavorable business environments that may negatively impact their customers, suppliers and competitors.
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These
criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be
based, to the extent relevant, on these general guidelines as well as other considerations, factors and criteria that our management
may deem relevant.
Status
as a Public Company
We
believe our structure makes us an attractive business combination partner to target businesses. As an existing public company, we offer
a target business an alternative to the traditional initial public offering through a merger or other business combination. In this situation,
the owners of the target business would exchange their shares of stock in the target business for shares of our stock or for a combination
of shares of our stock and cash, allowing us to tailor the consideration to the specific needs of the sellers. Although there are various
costs and obligations associated with being a public company, we believe target businesses will find this method a more certain and cost
effective method to becoming a public company than the typical initial public offering. In a typical initial public offering, there are
additional expenses incurred in marketing, road show and public reporting efforts that may not be present to the same extent in connection
with a business combination with us.
Furthermore,
once a proposed business combination is completed, the target business will have effectively become public, whereas an initial public
offering is always subject to the underwriters’ ability to complete the offering, as well as general market conditions, which could
delay or prevent the offering from occurring or could have negative valuation consequences. Once public, we believe the target business
would then have greater access to capital and an additional means of providing management incentives consistent with shareholders’
interests. It can offer further benefits by augmenting a company’s profile among potential new customers and vendors and aid in
attracting talented employees.
We
are an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As such,
we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies
that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation
requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic
reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation
and shareholder approval of any golden parachute payments not previously approved. If some investors find our securities less attractive
as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile.
In
addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended
transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other
words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise
apply to private companies. We intend to take advantage of the benefits of this extended transition period.
We
will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following February 24, 2025, (b)
in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer,
which means the market value of our ordinary shares that is held by non-affiliates exceeds $700 million on the last day of
the second fiscal quarter of any given fiscal year, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt
securities during the prior three-year period.
Financial
Position
With
a trust account in the amount of $138,833,973 as of December 31, 2020, we can offer a target business a variety of options to facilitate
a business combination and fund future expansion and growth of its business. This amount is after payments of $402,500 to the underwriters
in our initial public offering for deferred underwriting commissions and $3,795,000 to I-Bankers, the representative of the underwriters, for
certain business combination-related advisory fees. Because we are able to consummate a business combination using the cash proceeds
from our initial public offering, our share capital, debt or a combination of the foregoing, we have the flexibility to use an efficient
structure allowing us to tailor the consideration to be paid to the target business to address the needs of the parties. However, if
a business combination requires us to use substantially all of our cash to pay for the purchase price, we may need to arrange third party
financing to help fund our business combination. Accordingly, our flexibility in structuring a business combination may be subject to
these constraints.
Effecting
Our Initial Business Combination
We
are not presently engaged in, and we will not engage in, any operations for an indefinite period of time. We intend to complete our initial
business combination using cash from the proceeds of our initial public offering and the private placement of the private placement units,
our capital stock, debt or a combination of these as the consideration to be paid in our initial business combination. We may seek to
complete our initial business combination with a company or business that may be financially unstable or in its early stages of development
or growth, which would subject us to the numerous risks inherent in such companies and businesses, although we will not be permitted
to effectuate our initial business combination with another blank check company or a similar company with nominal operations.
If
our initial business combination is paid for using equity or debt securities, or not all of the funds released from the trust account
are used for payment of the consideration in connection with our business combination or used for redemptions of our ordinary shares,
we may apply the balance of the cash released to us from the trust account for general corporate purposes, including for maintenance
or expansion of operations of the post-transaction company, the payment of principal or interest due on indebtedness incurred in
completing our initial business combination, to fund the purchase of other assets, companies or for working capital.
We
may seek to raise additional funds through a private offering of debt or equity securities in connection with the completion of our initial
business combination (which may include a specified future issuance), and we may complete our initial business combination using the
proceeds of such offering rather than using the amounts held in the trust account. Subject to compliance with applicable securities laws,
we would expect to complete such financing only simultaneously with the completion of our business combination. In the case of an initial
business combination funded with assets other than the trust account assets, our tender offer documents or proxy materials disclosing
the business combination would disclose the terms of the financing and, only if required by law, we would seek shareholder approval of
such financing. There are no prohibitions on our ability to raise funds privately, including pursuant to any specified future issuance,
or through loans in connection with our initial business combination.
The
time required to select and evaluate a target business and to structure and complete our initial business combination, and the costs
associated with this process, are not currently ascertainable with any degree of certainty. Any costs incurred with respect to the identification
and evaluation of a prospective target business with which our business combination is not ultimately completed will result in our incurring
losses and will reduce the funds we can use to complete another business combination.
Sources
of Target Businesses
We
expect to receive a number of proprietary transaction opportunities to originate as a result of the business relationships, direct outreach,
and deal sourcing activities from the network built up by our management team and by the members of our Board. We also anticipate that
target business candidates will be brought to our attention from various unaffiliated sources, including investment banking firms, consultants,
accounting firms, private equity groups, large business enterprises, and other market participants. These sources may also introduce
us to target businesses in which they think we may be interested on an unsolicited basis, since many of these sources will have read
this report and know what types of businesses we are targeting. Some of our officers and directors may enter into employment or consulting
agreements with the post-transaction company following our initial business combination. The presence or absence of any such fees
or arrangements will not be used as a criterion in our selection process of an acquisition candidate. In no event will our sponsor or
any of our existing officers or directors, or any entity with which they are affiliated, be paid any finder’s fee, consulting fee
or other compensation prior to, or for any services they render in order to effectuate, the completion of our initial business combination
(regardless of the type of transaction that it is).
We
are not prohibited from pursuing an initial business combination with a business combination target that is affiliated with our sponsor,
officers or directors. In the event we seek to complete our initial business combination with a business combination target that is affiliated
with our sponsor, officers or directors, we, or a committee of independent directors, would obtain an opinion from an independent investment
banking firm which is a member of FINRA or an independent accounting firm that such an initial business combination is fair to our company
from a financial point of view. We are not required to obtain such an opinion in any other context. If any of our officers or directors
becomes aware of a business combination opportunity that falls within the line of business of any entity to which he or she has pre-existing fiduciary
or contractual obligations, he or she may be required to present such business combination opportunity to such entity prior to presenting
such business combination opportunity to us.
Lack
of Business Diversification
For
an indefinite period of time after the completion of our initial business combination, the prospects for our success may depend entirely
on the future performance of a single business. Unlike other entities that have the resources to complete business combinations with
multiple entities in one or several industries, it is probable that we will not have the resources to diversify our operations and mitigate
the risks of being in a single line of business. In addition, we intend to focus our search for an initial business combination in a
single industry. By completing our business combination with only a single entity, our lack of diversification may:
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subject
us to negative economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact on the particular
industry in which we operate after our initial business combination, and
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cause
us to depend on the marketing and sale of a single product or limited number of products or services.
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Limited
Ability to Evaluate the Target’s Management Team
Although
we intend to closely scrutinize the management of a prospective target business when evaluating the desirability of effecting our business
combination with that business, our assessment of the target business’ management may not prove to be correct. In addition, the
future management may not have the necessary skills, qualifications or abilities to manage a public company. Furthermore, the future
role of members of our management team or of our board, if any, in the target business cannot presently be stated with any certainty.
While it is possible that one or more of our directors will remain associated in some capacity with us following our business combination,
it is presently unknown if any of them will devote their full efforts to our affairs subsequent to our business combination. Moreover,
we cannot assure you that members of our management team will have significant experience or knowledge relating to the operations of
the particular target business. The determination as to whether any members of our board of directors will remain with the combined company
will be made at the time of our initial business combination.
Following
a business combination, to the extent that we deem it necessary, we may seek to recruit additional managers to supplement the incumbent
management team of the target business. We cannot assure you that we will have the ability to recruit additional managers, or that additional
managers will have the requisite skills, knowledge or experience necessary to enhance the incumbent management.
Selection
of a Target Business and Structuring of a Business Combination
Subject
to the requirement that, so long as our securities are listed on Nasdaq, our initial business combination must be with one or more target
businesses or assets having an aggregate fair market value of at least 80% of the value of the trust account (less any deferred underwriting
commissions, certain advisory fees to I-Bankers and taxes payable on interest earned and less any interest earned thereon that is
released to us for taxes) at the time of the agreement to enter into such initial business combination, our management have virtually
unrestricted flexibility in identifying and selecting one or more prospective target businesses, although we are not permitted to effectuate
our initial business combination with another blank check company or a similar company with nominal operations. In any case, we will
only consummate an initial business combination in which we become the majority shareholder of the target (or control the target
through contractual arrangements in limited circumstances for regulatory compliance purposes as discussed below) or are otherwise not
required to register as an investment company under the Investment Company Act. To the extent we effect our initial business combination
with a company or business that may be financially unstable or in its early stages of development or growth, we may be affected by numerous
risks inherent in such company or business. Although our management endeavor to evaluate the risks inherent in a particular target business,
we may not properly ascertain or assess all significant risk factors.
In evaluating a prospective target
business, we have conducted and will continue to conduct an extensive due diligence review which encompasses, among other things, meetings
with incumbent management and inspection of facilities, as well as review of financial and other information which is made available to
us. This due diligence review are conducted by our management and by unaffiliated third parties we engage.
The
time and costs required to select and evaluate a target business and to structure and complete the business combination cannot presently
be ascertained with any degree of certainty. Any costs incurred with respect to the identification and evaluation of a prospective target
business with which a business combination is not ultimately completed will result in a loss to us and reduce the amount of capital available
to otherwise complete a business combination.
Fair
Market Value of Target Business or Businesses
So
long as our securities are listed on Nasdaq, the target business or businesses or assets with which we effect our initial business combination
must have a collective fair market value equal to at least 80% of the value of the trust account (less any deferred underwriting commissions,
certain advisory fees to I-Bankers and taxes payable on interest earned and less any interest earned thereon that is released to
us for taxes) at the time of the agreement to enter into such initial business combination. So long as our securities are listed
on Nasdaq, if we acquire less than 100% of one or more target businesses in our initial business combination, the aggregate fair market
value of the portion or portions we acquire must equal at least 80% of the value of the trust account (less any deferred underwriting
commissions, certain advisory fees to I-Bankers and taxes payable on interest earned and less any interest earned thereon that is
released to us for taxes) at the time of the agreement to enter into such initial business combination. However, we will always acquire
at least a controlling interest in a target business. The fair market value of a portion of a target business or assets will likely be
calculated by multiplying the fair market value of the entire business by the percentage of the target we acquire. We may seek to consummate
our initial business combination with an initial target business or businesses with a collective fair market value in excess of the balance
in the trust account. In order to consummate such an initial business combination, we may issue a significant amount of debt, equity
or other securities to the sellers of such business and/or seek to raise additional funds through a private offering of debt, equity
or other securities (although our memorandum and articles of association provides that we may not issue securities that can vote with
ordinary shareholders on matters related to our pre-initial business combination activity). If we issue securities in order to consummate
such an initial business combination, our shareholders could end up owning a minority of the combined company’s voting securities
as there is no requirement that our shareholders own a certain percentage of our company (or, depending on the structure of the initial
business combination, an ultimate parent company that may be formed) after our business combination.
We
anticipate structuring our initial business combination to acquire 100% of the equity interest or assets of the target business or businesses.
We may, however, structure our initial business combination to acquire less than 100% of such interests or assets of the target business,
but we will only consummate such business combination if we will become the majority shareholder of the target (or control the target
through contractual arrangements in limited circumstances for regulatory compliance purposes) or are otherwise not required to register
as an “investment company” under the Investment Company Act. Even though we will own a majority interest in 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 transaction. For example, we could pursue a transaction in which
we issue a substantial number of new shares in exchange for all of the outstanding capital stock of a target. In this case, we would
acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our shareholders
immediately prior to our initial business combination could own less than a majority of our outstanding shares subsequent to our initial
business combination.
The
fair market value of a target business or businesses or assets will be determined by our board of directors based upon standards generally
accepted by the financial community, such as actual and potential gross margins, the values of comparable businesses, earnings and cash
flow, book value and, where appropriate, upon the advice of appraisers or other professional consultants. If our board of directors is
not able to independently determine that the target business or assets has a sufficient fair market value to meet the threshold criterion,
we will obtain an opinion from an unaffiliated, independent investment banking firm or an independent accounting firm with respect to
the satisfaction of such criterion. Notwithstanding the foregoing, unless we consummate a business combination with an affiliated entity,
we are not required to obtain an opinion from an independent investment banking firm or an independent accounting firm that the price
we are paying is fair to our shareholders.
Shareholders
May Not Have the Ability to Approve Our Initial Business Combination
Although
we may seek shareholder approval before we effect our initial business combination, we may not do so for business or legal reasons (so
long as such transaction does not require shareholder approval under the Companies Act or the rules of Nasdaq). Presented in the table
below is a graphic explanation of the types of initial business combinations we may consider and whether we expect shareholder approval
would be required under the Companies Act for each such transaction.
Type
of Transaction
|
|
Whether
Shareholder
Approval is
Required
|
Purchase of assets
|
|
No
|
Purchase of stock of target
not involving a merger with the company
|
|
No
|
Merger of target with a
subsidiary of the company
|
|
No
|
Merger of the company with
a target
|
|
Yes
|
Entering into contractual
agreements with a target to obtain control
|
|
No
|
Additionally,
under Nasdaq’s listing rules, shareholder approval would be required for our initial business combination if, for example:
|
●
|
we
issue ordinary shares that will be equal to or in excess of 20% of the number of ordinary shares then outstanding (other than in a public
offering);
|
|
●
|
any
of our directors, officers or substantial shareholders (as defined by Nasdaq rules) has a 5% or greater interest (or such persons collectively
have a 10% or greater interest), directly or indirectly, in the target business or assets to be acquired or otherwise and the present
or potential issuance of ordinary shares could result in an increase in outstanding ordinary shares or voting power of 5% or more; or
|
|
●
|
the
issuance or potential issuance of ordinary shares will result in our undergoing a change of control.
|
We
also may be required to obtain shareholder approval if we wish to take certain actions in connection with our initial business combination
such as adopting an incentive stock plan or amending our charter. So long as we maintain a listing of our securities on Nasdaq, we are
required to comply with such rules.
Ability
to Extend Time to Complete Business Combination
On November 24, 2021we
held a special meeting of shareholders and approved to amend our Amended and Restated Memorandum and Articles of Association to extend
the date by which we have to consummate an initial business combination from November 24, 2021 to February 24, 2022.
Redemption
Rights for Public Shareholders upon Consummation of Our Initial Business Combination
We will provide our public shareholders with the opportunity to redeem
all or a portion their shares upon the consummation of our initial business combination at a per-share price, payable in cash, equal
to the aggregate amount then on deposit in the trust account, including interest (net of taxes payable), divided by the number of then
outstanding public shares, subject to the limitations described herein. As of December 31, 2020, the amount in the trust account is approximately
$10.06per share (subject to increase of up to an additional approximately $0.20 per share in the event that our sponsor elects to extend
such date to consummate a business combination, as described in more detail in this report). As of May 24, 2021, the amount in the trust
account following our first Extension is approximately $10.16 per share reflecting one of the three-month extension cash deposit into
trust account. The per-share amount we will distribute to investors who properly redeem their shares will not be reduced by certain
advisory fees we will pay to I-Bankers. Our initial shareholders have agreed to waive their right to receive liquidating distributions
if we fail to consummate our initial business combination within the requisite time period. However, if our initial shareholders or any
of our officers, directors or affiliates acquires public shares in or after our initial public offering, they will be entitled to receive
liquidating distributions with respect to such public shares if we fail to consummate our initial business combination within the required
time period.
Manner
of Conducting Redemptions
We
will provide our public shareholders with the opportunity to redeem all or a portion of their public shares upon the completion of our
initial business combination either (i) in connection with a shareholder meeting called to approve the business combination or (ii) by
means of a tender offer.
We
intend to hold a shareholder vote in connection with our business combination. In such case, we will:
|
●
|
conduct
the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation
of proxies, and not pursuant to the tender offer rules, and
|
|
●
|
file
proxy materials with the SEC.
|
In
the event that we seek shareholder approval of our initial business combination, we will distribute proxy materials and, in connection
therewith, provide our public shareholders with the redemption rights described above upon consummation of the initial business combination.
If
we seek shareholder approval, we will consummate our initial business combination only if a majority of the outstanding ordinary shares
voted are voted in favor of the business combination. In such case, our initial shareholders have agreed to vote their founder shares,
private shares and any public shares purchased during or after the offering in favor of our initial business combination and our officers
and directors have also agreed to vote any public shares purchased during or after the offering in favor of our initial business
combination. As a result, we would need only 4,307,376 of the 13,800,000 public shares, or approximately 31.2%, sold in our initial public
offering to be voted in favor of a transaction in order to have our initial business combination approved. Each public shareholder may
elect to redeem their public shares irrespective of whether they vote for or against the proposed transaction. In addition, our initial
shareholders have agreed to waive their redemption rights with respect to their founder shares, private shares and public shares in connection
with the consummation of our initial business combination.
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 prior to or
upon the consummation of our initial business combination after payment of the deferred underwriting commission. Furthermore, the redemption
threshold may be further limited by the terms and conditions of our initial business combination. If too many public shareholders exercise
their redemption rights so that we cannot satisfy the net tangible asset requirement or any net worth or cash requirements, we would
not proceed with the redemption of our public shares and the related business combination, and instead may search for an alternate business
combination.
Notwithstanding
the foregoing, if we do not decide to hold a shareholder vote in conjunction with their initial business combination for business or
other legal reasons (so long as shareholder approval is not required by the Companies Act or the rules of Nasdaq), we will conduct redemptions
pursuant to the tender offer rules of the SEC and our memorandum and articles of association. In such case, we will:
|
●
|
offer
to redeem our public shares pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers,
and
|
|
●
|
file
tender offer documents with the SEC prior to consummating our initial business combination which will contain substantially the same
financial and other information about the initial business combination and the redemption rights as is required under Regulation 14A
of the Exchange Act, which regulates the solicitation of proxies, and we will not be permitted to consummate our initial business combination
until the expiration of the tender offer period.
|
In
the event we conduct redemptions pursuant to the tender offer rules, our offer to redeem shall remain open for at least 20 business days,
in accordance with Rule 14e-1(a) under the Exchange Act.
In
connection with the successful consummation of our business combination, we may redeem pursuant to a tender offer up to that number of
ordinary shares that would permit us to maintain net tangible assets of at least $5,000,001 prior to or upon the consummation of our
initial business combination after payment of the deferred underwriting commission. However, the redemption threshold may be further
limited by the terms and conditions of our proposed initial business combination. For example, the proposed business combination may
require: (i) cash consideration to be paid to the target or members of its management team, (ii) cash to be transferred to the target
for working capital or other general corporate purposes or (iii) the allocation of cash to satisfy other conditions in accordance with
the terms of the proposed business combination. In the event the aggregate cash consideration we would be required to pay for all shares
that are validly tendered 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 consummate the business combination, we will not purchase any shares
pursuant to the tender offer and all shares will be returned to the holders thereof following the expiration of the tender offer. Additionally,
since we are required to maintain net tangible assets of at least $5,000,001 prior to or upon the consummation of our initial business
combination after payment of the deferred underwriting commission (which may be substantially higher depending on the terms of our potential
business combination), the chance that the holders of our ordinary shares electing to redeem in connection with a redemption conducted
pursuant to the proxy rules will cause us to fall below such minimum requirement is increased.
When
we conduct a tender offer to redeem our public shares upon consummation of our initial business combination, in order to comply with
the tender offer rules, the offer will be made to all of our shareholders, not just our public shareholders. Our initial shareholders
have agreed to waive their redemption rights with respect to their founder shares, private shares and public shares in connection with
any such tender offer.
Limitation
on Redemption Rights upon Consummation of Our Initial Business Combination If We Seek Shareholder Approval
If
we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our business combination
pursuant to the tender offer rules, our memorandum and articles of association provides that a public shareholder, individually or 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 our initial public offering. We believe this restriction will discourage shareholders from accumulating
large blocks of shares, and subsequent attempts by such holders to use their ability to exercise their redemption rights as a means to
force us or our management to purchase their shares at a significant premium to the then-current market price or on other undesirable
terms. Absent this provision, a public shareholder holding more than an aggregate of 15% of the shares sold in our initial public offering
could threaten to exercise its redemption rights if such holder’s shares are not purchased by us or our management at a premium
to the then-current market price or on other undesirable terms. By limiting our shareholders’ ability to redeem no more than
15% of the shares sold in our initial public offering, we believe we will limit the ability of a small group of shareholders to unreasonably
attempt to block our ability to consummate our initial business combination, particularly in connection with our initial business combination
with a target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. However, we would not
be restricting our shareholders’ ability to vote all of their shares (including all shares held by those shareholders that hold
more than 15% of the shares sold in our initial public offering) for or against our initial business combination. We will resolve any
disputes relating to whether a public shareholder is acting in concert or as a “group” either by requiring certifications
under the penalty of perjury to such effect by public shareholders or via adjudication in court.
Permitted
Purchases of Our Securities by Our Affiliates
If
we seek shareholder approval of our business combination and we do not conduct redemptions in connection with our business combination
pursuant to the tender offer rules, our sponsor, directors, officers or their affiliates may purchase shares in privately negotiated
transactions or in the open market either prior to or following the consummation of our initial business combination. Such a purchase
would include a contractual acknowledgement 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 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. Although very unlikely, our
initial shareholders, officers, directors and their affiliates could purchase sufficient shares so that the initial business combination
may be approved without the majority vote of public shares held by non-affiliates. It is intended that purchases will comply with Rule
10b-18 under the Exchange Act, which provides a safe harbor for purchases made under certain conditions, including with respect
to timing, pricing and volume of purchases.
The
purpose of such purchases would be to (1) increase the likelihood of obtaining shareholder approval of the business combination or (2)
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 the business combination, where it appears that such requirement would otherwise not be met. This may result in the
consummation of an initial business combination that may not otherwise have been possible.
As
a consequence of any such purchases, the public “float” of our ordinary shares may be reduced and the number of beneficial
holders of our securities may be reduced, which may make it difficult to maintain the listing or trading of our securities on a national
securities exchange following consummation of a business combination.
Tendering
Share Certificates in Connection With a Tender Offer or Redemption Rights
We
will require our public shareholders seeking to exercise their redemption rights, whether they are record holders or hold their shares
in “street name,” to either tender their certificates to our transfer agent prior to the expiration date set forth in the
tender offer documents mailed to such holders, or in the event we distribute proxy materials, up to two business days prior to the vote
on the proposal to approve the business combination, or to deliver their shares to the transfer agent electronically using The Depository
Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, at the holder’s option. Accordingly, a public shareholder
would have from the time we send out our tender offer materials until the close of the tender offer period, or up to two days prior to
the vote on the business combination if we distribute proxy materials, as applicable, to tender its shares if it wishes to seek to exercise
its redemption rights. Given the relatively short exercise period, it is advisable for shareholders to use electronic delivery of their
public shares.
There
is a nominal cost associated with the above-referenced tendering process and the act of certificating the shares or delivering them
through the DWAC System. The transfer agent will typically charge the tendering broker $45.00 and it would be up to the broker whether
or not to pass this cost on to the redeeming holder. However, this fee would be incurred regardless of whether or not we require holders
seeking to exercise redemption rights to tender their shares. The need to deliver shares is a requirement of exercising redemption rights
regardless of the timing of when such delivery must be effectuated.
The
foregoing is different from the procedures used by many blank check companies. In order to perfect redemption rights in connection with
their business combinations, many blank check companies would distribute proxy materials for the shareholders’ vote on our initial
business combination, and a holder could simply vote against a proposed business combination and check a box on the proxy card indicating
such holder was seeking to exercise his redemption rights. After the business combination was approved, the company would contact such
shareholder to arrange for him to deliver his certificate to verify ownership. As a result, the shareholder then had an “option
window” after the consummation of the business combination during which he could monitor the price of the company’s shares
in the market. If the price rose above the redemption price, he could sell his shares in the open market before actually delivering his
shares to the company for cancellation. As a result, the redemption rights, to which shareholders were aware they needed to commit before
the shareholder meeting, would become “option” rights surviving past the consummation of the business combination until the
redeeming holder delivered its certificate. The requirement for physical or electronic delivery at or prior to the meeting ensures that
a redeeming holder’s election to redeem is irrevocable once the business combination is approved.
Any
request to redeem such shares, once made, may be withdrawn at any time up to the date set forth in the tender offer materials or the
date of the shareholder meeting set forth in our proxy materials, as applicable. Furthermore, if a holder of a public share delivered
its certificate in connection with an election of redemption rights and subsequently decides prior to the applicable date not to elect
to exercise such rights, such holder may simply request that the transfer agent return the certificate (physically or electronically).
It is anticipated that the funds to be distributed to holders of our public shares electing to redeem their shares will be distributed
promptly after the completion of our initial business combination.
If
the initial business combination is not approved or completed for any reason, then our public shareholders who elected to exercise their
redemption rights would not be entitled to redeem their shares for the applicable pro rata share of the trust account. In such case,
we will promptly return any certificates delivered by public holders who elected to redeem their shares.
If our initial proposed
business combination is not consummated, we may continue to try to consummate our initial business combination with a different target
by February 24, 2022.
Redemption
of Public Shares and Liquidation If No Initial Business Combination
Our sponsor, officers
and directors have agreed that we must complete our initial business combination by February 24, 2022. We may not be able to find a suitable
target business and consummate our initial business combination by such dates. If we are unable to consummate our initial business combination
by February 24, 2022, we will, as promptly as reasonably possible but not more than five business days thereafter, distribute the aggregate
amount then on deposit in the trust account (net of taxes payable, and less up to $50,000 of interest to pay liquidation expenses), pro
rata to our public shareholders by way of redemption and cease all operations except for the purposes of winding up of our affairs. This
redemption of public shareholders from the trust account shall be effected as required by function of our memorandum and articles of
association and prior to any voluntary winding up, although at all times subject to the Companies Act.
Following
the redemption of public shares, we intend to enter “voluntary liquidation” which is the statutory process for formally
closing and dissolving a company under the laws of the British Virgin Islands. Given that we intend to enter voluntary liquidation following
the redemption of public shareholders from the trust account, we do not expect that the voluntary liquidation process will cause any
delay to the payment of redemption proceeds from our trust account. In connection with such a voluntary liquidation, the liquidator would
give notice to creditors inviting them to submit their claims for payment, by notifying known creditors (if any) who have not submitted
claims and by placing a public advertisement in at least one newspaper published in the British Virgin Islands and in at least one newspaper
circulating in the location where the company has its principal place of business, and taking any other steps he considers appropriate
to identify the company’s creditors, after which our remaining assets would be distributed. As soon as the affairs of the company
are fully wound-up, the liquidator must complete his statement of account and file notice with the Registrar that the liquidation is
complete. We would be dissolved once the Registrar issues a Certificate of Dissolution.
Our
initial shareholders have agreed to waive their redemption rights with respect to their founder shares and private units if we fail to
consummate our initial business combination within the applicable period from the closing of our initial public offering.
However, if our initial
shareholders, or any of our officers, directors or affiliates acquire public shares in or after our initial public offering, they will
be entitled to redemption rights with respect to such public shares if we fail to consummate our initial business combination within
the required time period. There will be no redemption rights or liquidating distributions with respect to our rights and warrants, which
will expire worthless in the event we do not consummate our initial business combination by February 24, 2022. We will pay the costs
of our liquidation from our remaining assets outside of the trust account or interest earned on the funds held in the trust account.
However, the liquidator may determine that he or she requires additional time to evaluate creditors’ claims (particularly if there
is uncertainty over the validity or extent of the claims of any creditors). Also, a creditor or shareholder may file a petition with
the BVI court which, if successful, may result in our liquidation being subject to the supervision of that court. Such events might delay
distribution of some or all of our remaining assets.
Additionally,
in any liquidation proceedings of the company under British Virgin Islands law, the funds held in our trust account may be included in
our estate and subject to the claims of third parties with priority over the claims of our shareholders. To the extent any such claims
deplete the trust account we may not be able to return to our public shareholders the liquidation amounts payable to them.
If we were to expend all of the net proceeds of our initial public
offering, other than the proceeds deposited in the trust account, and without taking into account interest, if any, earned on the trust
account, the per-share redemption amount received by shareholders upon our dissolution would be approximately $10.06 (based on the
trust account balance as of December 31, 2020). As of May 24, 2021, the amount in the trust account following our first Extension is approximately
$10.16 per share. The proceeds deposited in the trust account could, however, become subject to the claims of our creditors, which would
have higher priority than the claims of our public shareholders. The actual per-share redemption amount received by shareholders
may be less than $10.00, plus interest (net of taxes payable, and less up to $50,000 of interest to pay liquidation expenses).
Although
we have sought and will continue to seek to have all vendors, service providers (other than our independent auditor), prospective target
businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any
kind in or to any monies held in the trust account for the benefit of our public shareholders, there is no guarantee that they will execute
such agreements or even if they execute such agreements that they would be prevented from bringing claims against the trust account including
but not limited to fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the
enforceability of the waiver, in each case in order to gain an advantage with respect to a claim against our assets, including the funds
held in the trust account. If any third party refuses to execute an agreement waiving such claims to the monies held in the trust account,
our management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party
that has not executed a waiver if management believes that such third party’s engagement would be significantly more beneficial
to us than any alternative. Examples of possible instances where we may engage a third party that refuses to execute a waiver include
the engagement of a third party consultant whose particular expertise or skills are believed by management to be significantly superior
to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider
willing to execute a waiver. WithumSmith+Brown, PC, our independent registered public accounting firm, will not execute agreements with
us waiving such claims to the monies held in the trust account. In addition, there is no guarantee that such entities will agree to waive
any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will
not seek recourse against the trust account for any reason. In order to protect the amounts held in the trust account, our sponsor and
our officers agreed that they will be liable to us, if and to the extent any claims by a vendor for services rendered or products sold
to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amounts in the
trust account to below $10.00 per share, except as to any claims by a third party who executed a waiver of any and all rights to seek
access to the trust account and except as to any claims under our indemnity of the underwriters of our initial public offering against
certain liabilities, including liabilities under the Securities Act. In the event that an executed waiver is deemed to be unenforceable
against a third party, our sponsor will not be responsible to the extent of any liability for such third party claims. However, our sponsor
may not be able to satisfy those obligations. Other than as described above, none of our other officers or directors will indemnify us
for claims by third parties including, without limitation, claims by vendors and prospective target businesses. We have not independently
verified whether our sponsor has sufficient funds to satisfy his indemnity obligations and believe that our sponsor’s only assets
are securities of our company. We believe the likelihood of our sponsor having to indemnify the trust account is limited because we will
endeavor to have all vendors and prospective target businesses as well as other entities execute agreements with us waiving any right,
title, interest or claim of any kind in or to monies held in the trust account.
In
the event that the proceeds in the trust account are reduced below $10.00 per share and our sponsor asserts that it is unable to satisfy
any applicable obligations or that it has no indemnification obligations related to a particular claim, our independent directors would
determine whether to take legal action against our sponsor to enforce its indemnification obligations. While we currently expect that
our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification obligations to us,
it is possible that our independent directors in exercising their business judgment may choose not to do so in any particular instance.
Accordingly, due to claims of creditors, the actual value of the per-share redemption price may be less than $10.00 per share.
We
seek to reduce the possibility that our sponsor has to indemnify the trust account due to claims of creditors by endeavoring to have
all vendors, service providers (other than our independent auditor), prospective target businesses or other entities with which we do
business execute agreements with us waiving any right, title, interest or claim of any kind in or to monies held in the trust account.
Our sponsor will also not be liable as to any claims under our indemnity of the underwriters of our initial public offering against certain
liabilities, including liabilities under the Securities Act. As of December 31, 2020, we had access to up to approximately $23,486 not
placed in the trust account (approximately $389,361 as of June 30, 2020) with which to pay any such potential claims (including costs
and expenses incurred in connection with our liquidation, currently estimated to be more than approximately $50,000). In the event that
we liquidate and it is subsequently determined that the reserve for claims and liabilities is insufficient, shareholders who received
funds from our trust account could be liable for claims made by creditors.
If
we are deemed insolvent for the purposes of the Insolvency Act (i.e. (i) we fail to comply with the requirements of a statutory demand
that has not been set aside under section 157 of the Insolvency Act; (ii) execution or other process issued on a judgment, decree or
order of a British Virgin Islands Court in favor of a creditor of the company is returned wholly or partly unsatisfied; or (iii) either
the value of the company’s liabilities exceeds its assets, or the company is unable to pay its debts as they fall due), then there
are very limited circumstances where prior payments made to shareholders or other parties may be deemed to be a “voidable transaction”
for the purposes of the Insolvency Act. A voidable transaction would include, for these purposes, payments made as “unfair preferences”
or “transactions at an undervalue”. A liquidator appointed over an insolvent company who considers that a particular transaction
or payment is a voidable transaction under the Insolvency Act could apply to the British Virgin Islands Courts for an order setting aside
that payment or transaction in whole or in part.
Additionally,
if we enter insolvent liquidation under the Insolvency Act, the funds held in our trust account will likely be included in our estate
and subject to the claims of third parties with priority over the claims of our shareholders. To the extent any insolvency claims deplete
the trust account you may not be able to return to our public shareholders the liquidation amounts due them.
Our public shareholders
will be entitled to receive funds from the trust account only (i) in the event of a redemption of the public shares prior to any winding
up in the event we do not consummate our initial business combination by February 24, 2022, (ii) if they redeem their shares in connection
with an initial business combination that we consummate or (iii) if they redeem their shares in connection with a shareholder vote to
amend our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to
redeem 100% of our public shares if we do not complete our initial business combination by February 24, 2022 or (B) with respect to any
other provision relating to shareholders’ rights or pre-business combination activity. In no other circumstances shall a shareholder
have any right or interest of any kind to or in the trust account. In the event we seek shareholder approval in connection with our initial
business combination, a shareholder’s voting in connection with the business combination alone will not result in a shareholder’s
redeeming its shares to us for an applicable pro rata share of the trust account. Such shareholder must have also exercised its redemption
rights described above.
Competition
In
identifying, evaluating and selecting a target business for our initial business combination, we have encountered and may continue to
encounter intense competition from other entities having a business objective similar to ours, including other blank check companies,
private equity groups, venture capital funds leveraged buyout funds, and operating businesses seeking strategic acquisitions. Many of
these entities are well established and have significant experience identifying and effecting business combinations directly or through
affiliates. Moreover, many of these competitors possess greater financial, technical, human and other resources than us. Our ability
to acquire larger target businesses is limited by our available financial resources. This inherent limitation gives others an advantage
in pursuing the acquisition of a target business. Furthermore, the requirement that, so long as our securities are listed on Nasdaq,
we acquire a target business or businesses having a fair market value equal to at least 80% of the value of the trust account (less any
deferred underwriting commissions, certain advisory fees to I-Bankers and taxes payable on interest earned and less any interest
earned thereon that is released to us for taxes) at the time of the agreement to enter into the business combination, our obligation
to pay cash in connection with our public shareholders who exercise their redemption rights, and our outstanding rights and warrants
and the potential future dilution they represent, may not be viewed favorably by certain target businesses. Any of these factors may
place us at a competitive disadvantage in successfully negotiating our initial business combination.
Indemnity
Our
sponsor, Xiaoma (Sherman) Lu (our Chief Executive Officer) and Chunyi (Charlie) Hao (our Chairman and Chief Financial Officer) have agreed
that they will be liable to us, if and to the extent any claims by a vendor for services rendered or products sold to us, or a prospective
target business with which we have discussed entering into a transaction agreement, reduce the amounts in the trust account to below
$10.00 per share, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the trust account
and except as to any claims under our indemnity of the underwriters of our initial public offering against certain liabilities, including
liabilities under the Securities Act. In the event that an executed waiver is deemed to be unenforceable against a third party, our sponsor
will not be responsible to the extent of any liability for such third party claims. We have not independently verified whether our sponsor,
Mr. Lu or Mr. Hao, have sufficient funds to satisfy its indemnity obligations and believe that their only assets are securities
of our company. We believe the likelihood of our sponsor, Mr. Lu and Mr. Hao having to indemnify the trust account is limited
because we will endeavor to have all vendors and prospective target businesses as well as other entities execute agreements with us waiving
any right, title, interest or claim of any kind in or to monies held in the trust account.
Employees
We
currently have two officers. These individuals are not obligated to devote any specific number of hours to our matters but they devote
as much of their time as they deem necessary and intend to continue doing so to our affairs until we have completed our initial business
combination. The amount of time they devote in any time period will vary based on whether a target business has been selected for our
initial business combination and the stage of the business combination process we are in. We do not intend to have any full time employees
prior to the consummation of our initial business combination.
Periodic
Reporting and Financial Information
We
have registered our units, ordinary shares, rights and warrants under the Exchange Act and have reporting obligations, including the
requirement that we file annual, quarterly and current reports with the SEC. In accordance with the requirements of the Exchange Act,
this report contains financial statements audited and reported on by our independent registered public accountants.
We
will provide shareholders with audited financial statements of the prospective target business as part of the tender offer materials
or proxy solicitation materials sent to shareholders to assist them in assessing the target business. These financial statements must
be prepared in accordance with, or be reconciled to, GAAP, or IFRS and the historical financial statements must be audited in accordance
with the standards of PCAOB. These financial statement requirements may limit the pool of potential target businesses we may acquire
because some targets may be unable to provide such statements in time for us to disclose such statements in accordance with federal proxy
rules and consummate our initial business combination within our 15-month (or up to 21-month, as applicable) time frame.
We
are required to have our internal control procedures evaluated for the fiscal year ended December 31, 2020 as required by the Sarbanes-Oxley Act.
Only in the event we are deemed to be a large accelerated filer or an accelerated filer will we be required to have our internal control
procedures audited. A target company may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of
their internal controls. The development of the internal controls of any such entity to achieve compliance with the Sarbanes-Oxley Act
may increase the time and costs necessary to complete any such acquisition.
We
are an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As such,
we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies
that are not “emerging growth companies” including, but not limited to, not being required to comply with the independent
registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations
regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory
vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. If some investors find
our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities
may be more volatile.
In
addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended
transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other
words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise
apply to private companies. We intend to take advantage of the benefits of this extended transition period.
We
will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following February 24, 2025, (b)
in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer,
which means the market value of our ordinary shares that are held by non-affiliates exceeds $700 million on the last day of
the second fiscal quarter of any given fiscal year, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt
securities during the prior three-year period.
Item
1A. Risk Factors
An
investment in our securities involves a high degree of risk. You should consider carefully all of the following risks and all the other
information contained in this report, including the financial statements. If any of the following risks occur, our business, financial
condition or results of operations may be materially and adversely affected. In that event, the trading price of our securities could
decline, and you could lose all or part of your investment. The risk factors described below are not necessarily exhaustive and you are
encouraged to perform your own investigation with respect to us and our business.
Risks
Relating to our Search for, Consummation of, or Inability to Consummate,
a Business Combination and Post-Business Combination Risks
Our
public shareholders may not be afforded an opportunity to vote on our proposed business combination, which means we may consummate our
initial business combination even if a majority of our public shareholders do not support such a combination.
If
we do not decide to hold a shareholder vote in conjunction with our initial business combination for business or other legal reasons
(so long as shareholder approval is not required by the Companies Act or the rules of Nasdaq), we will conduct redemptions pursuant to
the tender offer rules of the SEC and our memorandum and articles of association. Nasdaq rules currently allow us to engage in a tender
offer in lieu of a shareholder meeting, provided that we were not seeking to issue more than 20% of our outstanding shares to a target
business as consideration in any business combination. Furthermore, shareholder approval would not be required pursuant to the Companies
Act if our initial business combination were structured as a purchase of assets, a purchase of stock of the target not involving a merger
with us, or a merger of the target into a subsidiary of our company, or if we otherwise entered into contractual arrangements with a
target to obtain control of such company. Accordingly, we may consummate our initial business combination even if holders of a majority
of our public shares do not approve of the business combination.
Our
sponsor controls a substantial interest in us and thus may exert a substantial influence on actions requiring a shareholder vote, potentially
in a manner that you do not support.
As
of the date of this report, our initial shareholders owns approximately 24.2% 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 memorandum and articles of association. If we or our sponsor purchase any additional ordinary shares in the aftermarket
or in privately negotiated transactions, this would increase their control. Neither our sponsor nor, to our knowledge, any of our officers
or directors, has any current intention to purchase additional securities. Factors that would be considered in making such additional
purchases would include consideration of the current trading price of our ordinary shares. In addition, our board of directors is divided
into two classes, each of which generally serve for a term of two years with only one class of directors being elected in each year.
It is unlikely that there will be an annual meeting of shareholders to elect new directors prior to the consummation of our initial business
combination, in which case all of the current directors will continue in office until at least the consummation of the business combination.
If there is an annual meeting, as a consequence of our “staggered” board of directors, only one-half of the board of
directors will be considered for election and our sponsor, because of its ownership position, will have considerable influence regarding
the outcome. Accordingly, our sponsor will continue to exert control at least until the consummation of our initial business combination.
Your
only opportunity to affect the investment decision regarding a potential business combination may be limited to the exercise of your
right to redeem your shares from us for cash.
At
the time of your investment in us, you will not be provided with an opportunity to evaluate the specific merits or risks of one or more
target businesses. Because our board of directors may consummate our initial business combination without seeking shareholder approval,
public shareholders may not have the right or opportunity to vote on the business combination. Accordingly, your only opportunity to
affect the investment decision regarding a potential business combination may be limited to exercising your redemption rights within
the period of time (which will be at least 20 business days) set forth in our tender offer documents mailed to our public shareholders
in which we describe our initial business combination.
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 our initial business combination with a target.
We
may enter into a transaction agreement with a prospective target that requires as a closing condition that we have a minimum net worth
or a certain amount of cash. If too many public shareholders exercise their redemption rights, we may not be able to meet such closing
condition, and as a result, would not be able to proceed with such 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 prior to or upon the consummation of our
initial business combination after payment of the deferred underwriting commission or any greater net tangible asset or cash requirement
which may be contained in the agreement relating to our initial business combination. Our memorandum and articles of association requires
us to provide all of our public shareholders with an opportunity to redeem all of their shares in connection with the consummation of
any initial business combination. Consequently, if accepting all properly submitted redemption requests would cause our net tangible
assets to be less than $5,000,001 prior to or upon the consummation of our initial business combination after payment of the deferred
underwriting commission, or such greater amount necessary to satisfy a closing condition as described above, we would not proceed with
such redemption and the related business combination and may instead search for an alternate business combination. Prospective targets
would be aware of these risks and, thus, may be reluctant to enter into our initial 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 consummate
the most desirable business combination or optimize our capital structure.
In
connection with the successful consummation of our initial business combination, we may redeem up to that number of ordinary shares that
would permit us to maintain net tangible assets of at least $5,000,001 prior to or upon the consummation of our initial business combination
after payment of the deferred underwriting commission. If our initial business combination requires us to use substantially all of our
cash to pay the purchase price, the redemption threshold may be further limited. Alternatively, we may need to arrange third party financing
to help fund our business combination in case a larger percentage of shareholders exercise their redemption rights than we expect. If
the acquisition involves the issuance of our shares as consideration, we may be required to issue a higher percentage of our shares to
the target or its shareholders to make up for the failure to satisfy a minimum cash requirement. Raising additional funds to cover any
shortfall may involve dilutive equity financing or incurring indebtedness at higher than desirable levels. This may limit our ability
to effectuate the most attractive business combination available to us.
The
requirement that we maintain a minimum net worth or retain a certain amount of cash could increase the probability that our business
combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your shares.
If,
pursuant to the terms of our proposed business combination, we are required to maintain a minimum net worth or retain a certain amount
of cash in trust in order to consummate the business combination and regardless of whether we proceed with redemptions under the tender
or proxy rules, the probability that our business combination would be unsuccessful is increased. If our business combination is unsuccessful,
you would not receive your pro rata portion of the trust account until we liquidate. 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 our trust account. In either situation, you may suffer a material loss on your investment or lose the benefit of funds expected in
connection with our redemption until we liquidate or you are able to sell your shares in the open market.
The requirement that we
complete our initial business combination by February 24, 2022 may give potential target businesses leverage over us in negotiating our
initial business combination and may limit the amount of time we have to conduct due diligence on potential business combination targets
as we approach our dissolution deadline, which could undermine our ability to consummate our initial business combination on terms that
would produce value for our shareholders.
Any potential target business
with which we enter into negotiations concerning our initial business combination will be aware that we must consummate our initial business
combination by February 24, 2022. Consequently, such target businesses may obtain leverage over us in negotiating our initial 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 consummate our initial business combination within the required time period, in which case we would cease all operations
except for the purpose of winding up and we would redeem our public shares and liquidate.
Our sponsor, officers
and directors have agreed that we must complete our initial business combination by February 24, 2022. We may not be able to find a suitable
target business and consummate our initial business combination by such dates. 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.
If
we are unable to consummate our initial business combination by such dates, we will, as promptly as reasonably possible but not more
than five business days thereafter, distribute the aggregate amount then on deposit in the trust account (net of taxes payable, and less
up to $50,000 of interest to pay liquidation expenses), pro rata to our public shareholders by way of redemption and cease all operations
except for the purposes of winding up of our affairs, as further described herein. This redemption of public shareholders from the trust
account shall be effected as required by function of our memorandum and articles of association and prior to any voluntary winding up.
If
we seek shareholder approval of our business combination, our sponsor, directors, officers and their affiliates may elect to purchase
shares from shareholders, in which case they may influence a vote in favor of a proposed business combination that you do not support.
If
we seek shareholder approval of our business combination and we do not conduct redemptions in connection with our business combination
pursuant to the tender offer rules, our sponsor, directors, officers or their affiliates may purchase shares in privately negotiated
transactions or in the open market either prior to or following the consummation of our initial business combination. Such a purchase
would include a contractual acknowledgement 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 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 such purchases would be to (1) increase the likelihood of obtaining shareholder approval of the business combination or (2)
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 the business combination, where it appears that such requirement would otherwise not be met. This may result in the consummation
of an initial business combination that may not otherwise have been possible.
Purchases
of ordinary shares in the open market or in privately negotiated transactions by our sponsor, directors, officers or their affiliates
may make it difficult for us to maintain the listing of our ordinary shares on a national securities exchange following the consummation
of an initial business combination.
If
our sponsor, directors, officers or their affiliates purchase ordinary shares in the open market or in privately negotiated transactions,
the public “float” of our ordinary shares and the number of beneficial holders of our securities would both be reduced, possibly
making it difficult to maintain the listing or trading of our securities on a national securities exchange following consummation of
the business combination.
We
will require public shareholders who wish to redeem their ordinary shares in connection with a proposed business combination to comply
with specific requirements for redemption that may make it more difficult for them to exercise their redemption rights prior to the deadline
for exercising their rights.
We
will require our public shareholders seeking to exercise their redemption rights, whether they are record holders or hold their shares
in “street name,” to either tender their certificates to our transfer agent prior to the expiration date set forth in the
tender offer documents mailed to such holders, or in the event we distribute proxy materials, up to two business days prior to the vote
on the proposal to approve the business combination, or to deliver their shares to the transfer agent electronically using The Depository
Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, at the holder’s option. In order to obtain a physical stock
certificate, a shareholder’s broker and/or clearing broker, DTC and our transfer agent will need to act to facilitate this request.
It is our understanding that shareholders should generally allot at least two weeks to obtain physical certificates from the transfer
agent. However, because we do not have any control over this process or over the brokers or DTC, it may take significantly longer than
two weeks to obtain a physical stock certificate. While we have been advised that it takes a short time to deliver shares through the
DWAC System, this may not be the case. Under our memorandum and articles of association, we are required to provide at least 10 days
advance notice of any shareholder meeting, which would be the minimum amount of time a shareholder would have to determine whether to
exercise redemption rights. Accordingly, if it takes longer than we anticipate for shareholders to deliver their shares, shareholders
who wish to redeem may be unable to meet the deadline for exercising their redemption rights and thus may be unable to redeem their shares.
In the event that a shareholder fails to comply with the various procedures that must be complied with in order to validly tender or
redeem public shares, its shares may not be redeemed.
Additionally,
despite our compliance with the proxy rules or tender offer rules, as applicable, shareholders may not become aware of the opportunity
to redeem their shares.
If our
management team pursues a company with operations or opportunities outside of the United States for our initial business combination,
we may face additional burdens in connection with investigating, agreeing to and completing such combination, and if we effect such initial
business combination, we would be subject to a variety of additional risks that may negatively impact our operations.
If
our management team pursues a company with operations or opportunities outside of the United States for our initial business combination,
we would be subject to risks associated with cross-border business combinations, including in connection with investigating, agreeing
to and completing our initial business combination, conducting due diligence in a foreign 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:
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costs
and difficulties inherent in managing cross-border business operations and complying with commercial and legal requirements of overseas
markets;
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rules
and regulations regarding currency redemption;
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complex
corporate withholding taxes on individuals;
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laws
governing the manner in which future business combinations may be effected;
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tariffs
and trade barriers;
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regulations
related to customs and import/export matters;
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currency
fluctuations and exchange controls;
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challenges
in collecting accounts receivable;
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cultural
and language differences;
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employment
regulations;
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crime,
strikes, riots, civil disturbances, terrorist attacks, natural disasters and wars;
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deterioration
of political relations with the United States;
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obligatory
military service by personnel; and
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government
appropriation of assets.
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We
may not be able to adequately address these additional risks. If we were unable to do so, we may be unable to complete such initial business
combination or, if we complete such initial business combination, our operations might suffer, either of which may adversely impact our
business, results of operations and financial condition.
If our
management following our initial business combination is unfamiliar with U.S. securities laws, they may have to expend time and resources
becoming familiar with such laws, which could lead to various regulatory issues.
Following
our initial business combination, any or all of our management could resign from their positions as officers of the Company, and the
management of the target business at the time of the business combination could remain in place. Management of the target business may
not be familiar with U.S. securities laws. If new management is unfamiliar with U.S. securities laws, they may have to expend time and
resources becoming familiar with such laws. This could be expensive and time-consuming and could lead to various regulatory issues
which may adversely affect our operations.
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’ management may be limited due to a lack of time, resources or information. Our assessment of the capabilities
of the target’s management, therefore, may prove to be incorrect and such management may lack the skills, qualifications or abilities
we suspected. Should the target’s management not possess the skills, qualifications or abilities necessary to manage a public company,
the operations and profitability of the post-combination business may be negatively impacted.
We may issue notes or other debt securities,
or otherwise incur substantial debt, to complete our initial business combination, which may adversely affect our financial condition
and thus negatively impact the value of our shareholders’ investment in us.
Although we have no commitments
as of the date of this report to issue any notes or other debt securities, or to otherwise incur outstanding debt, we may choose to incur
substantial debt to complete initial business combination. Furthermore, we may issue a substantial number of additional ordinary or preferred
shares to complete our initial business combination or under an employee incentive plan upon or after consummation of our initial business
combination (although our memorandum and articles of association provides that we may not issue securities that can vote with ordinary
shareholders on matters related to our pre-initial business combination activity). We and our officers and directors have agreed
that we will not incur any indebtedness unless we have obtained from the lender a waiver of any right, title, interest or claim of any
kind in or to any monies held in the trust account. As such, no issuance of debt will affect the per share amount available for redemption
from the trust account. Nevertheless, the incurrence of debt could have a variety of negative effects, including:
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default
and foreclosure on our assets if our operating revenues after our initial business combination are insufficient to repay our debt obligations;
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acceleration
of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants
that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;
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our
immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand;
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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;
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our
inability to pay dividends on our ordinary shares;
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using
a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends
on our ordinary shares if declared, expenses, capital expenditures, acquisitions and other general corporate purposes;
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limitations
on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;
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increased
vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation;
and
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limitations
on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of
our strategy and other purposes and other disadvantages compared to our competitors who have less debt.
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We may only be able to complete one business
combination with the proceeds of our initial public offering, and the sale of the private units, 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.
As of December 31, 2020, $138,833,973
was available for completing our initial business combination (which includes $402,500 for the payment of deferred underwriting commission).
We may effectuate our initial
business combination with a single target business or multiple target businesses simultaneously. 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 consummating our initial business
combination with only a single entity, our lack of diversification may subject us to numerous economic, competitive and regulatory risks.
Further, we would not be able to diversify our operations or benefit from the possible spreading of risks or offsetting of losses, unlike
other entities, which may have the resources to complete several business combinations in different industries or different areas of a
single industry. Accordingly, the prospects for our success may be:
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solely dependent upon the performance of a single business, property or asset, or
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dependent upon the development or market acceptance of a single or limited number of products, processes or services.
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This lack of diversification
may subject us to numerous economic, competitive and regulatory risks, any or all of which may have a substantial adverse impact upon
the particular industry in which we may operate subsequent to our initial business combination.
We may attempt to simultaneously consummate
business combinations with multiple prospective targets, which may hinder our ability to consummate 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 the 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 consummate
our initial business combination with a private company about which little information is available, which may result in our initial business
combination with a company that is not as profitable as we suspected, if at all.
In pursuing our acquisition
strategy, we may seek to effectuate our initial business combination with a privately held company. By definition, very little public
information 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 our initial business combination with a company that is not as profitable
as we suspected, if at all.
Unlike many blank check companies, we do not
have a specified maximum redemption threshold. The absence of such a redemption threshold may make it easier for us to consummate our
initial business combination with which a substantial majority of our shareholders do not agree.
Since we have no specified
percentage threshold for redemption contained in our memorandum and articles of association, our structure is different in this respect
from the structure that has been used by many blank check companies. Historically, blank check companies would not be able to consummate
an initial business combination if the holders of such company’s public shares voted against a proposed business combination and
elected to redeem more than a specified maximum percentage of the shares sold in such company’s initial public offering, which percentage
threshold was typically between 19.99% and 39.99%. As a result, many blank check companies were unable to complete a business combination
because the amount of shares voted by their public shareholders electing redemption exceeded the maximum redemption threshold pursuant
to which such company could proceed with its initial business combination. As a result, we may be able to consummate 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 business
combination pursuant to the tender offer rules, have entered into privately negotiated agreements to sell their shares to us or our sponsor,
officers, directors or their affiliates. However, 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 prior to or upon the consummation of our initial business combination after payment of the deferred
underwriting commission. Furthermore, the redemption threshold may be further limited by the terms and conditions of our initial business
combination. If too many public shareholders exercise their redemption rights so that we cannot satisfy the net tangible asset requirement
or any net worth or cash requirements, we would not proceed with the redemption of our public shares and the related business combination,
and instead may search for an alternate business combination, we would not proceed with the redemption of our public shares and the related
business combination, and instead may search for an alternate business combination.
The provisions of our memorandum and articles
of association relating to the rights and obligations attaching to our ordinary shares, including an amendment to permit us to withdraw
funds from the trust account such that the per share amount investors will receive upon any redemption or liquidation is substantially
reduced or eliminated, may be amended prior to the consummation of our initial business combination with the approval of the holders of
65% (or 50% if for the purposes of approving, or in conjunction with, the consummation of our initial business combination) of our outstanding
ordinary shares attending and voting on such amendment at the relevant meeting, which is a lower amendment threshold than that of many
blank check companies. It may be easier for us, therefore, to amend our memorandum and articles of association to facilitate the consummation
of our initial business combination that a significant number of our shareholders may not support.
Many blank check companies
have a provision in their charter, which prohibits the amendment of certain of its provisions, including those, which relate to a company’s
pre-business combination activity, without approval by a certain percentage of the company’s shareholders. Typically, amendment
of these provisions requires approval by between 90% and 100% of the company’s public shareholders. Our memorandum and articles
of association provides that, prior to the consummation of our initial business combination, its provisions related to pre-business combination
activity and the rights and obligations attaching to the ordinary shares, including to permit us to withdraw funds from the trust account
such that the per share amount investors will receive upon any redemption or liquidation is substantially reduced or eliminated, may
be amended if approved by holders of 65% (or 50% if approved in connection with our initial business combination) of our outstanding
ordinary shares attending and voting on such amendment. Prior to our initial business combination, if we seek to amend any provisions
of our memorandum and articles of association relating to shareholders’ rights or pre-business combination activity, we will
provide dissenting public shareholders with the opportunity to redeem their public shares in connection with any such vote on any proposed
amendments to our memorandum and articles of association. Other provisions of our memorandum and articles of association may be amended
prior to the consummation of our initial business combination if approved by a majority of the votes of shareholders attending and voting
on such amendment or by resolution of the directors. Following the consummation of our initial business combination, the rights and obligations
attaching to our ordinary shares and other provisions of our memorandum and articles of association may be amended if approved by a majority
of the votes of shareholders attending and voting on such amendment or by resolution of the directors. Our initial shareholders, which
beneficially own approximately 24.2% of our ordinary shares as of the date of this report, will participate in any vote to amend our
memorandum and articles of association 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 memorandum and articles of association which govern our pre-business combination and the rights and
obligations attaching to the ordinary shares behavior more easily that many blank check companies, and this may increase our ability
to consummate our initial business combination with which you do not agree. However, we and our directors and officers have agreed not
to propose any amendment to our memorandum and articles of association (A) to modify the substance or timing of our obligation to redeem
100% of our public shares if we do not complete our initial business combination by February 24, 2022 or (B) with respect to any other
provision relating to shareholders’ rights or pre-initial business combination activity, unless we provide our public shareholders
with the opportunity to redeem their public 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 (which interest shall be net of taxes payable), divided
by the number of then outstanding public shares.
We may be unable to obtain additional financing
to complete our initial business combination or to fund the operations and growth of a target business, which could compel us to restructure
or abandon a particular business combination. If we are unable to complete our initial business combination, our public shareholders may
only receive $10.00 per share or potentially less than $10.00 per share on our redemption, and the rights and warrants will expire worthless.
Although we believe that the
net proceeds of our initial public offering and the sale of the private units, including the interest earned on the proceeds held in the
trust account that may be available to us for our initial business combination, will be sufficient to allow us to consummate our initial
business combination, because we have not yet identified any prospective target business, we cannot ascertain the capital requirements
for any particular transaction. If the net proceeds of our initial public offering and the sale of the private units prove to be insufficient,
either because of the size of our initial business combination, the depletion of the available net proceeds in search of a target business,
the obligation to repurchase for cash a significant number of shares from shareholders who elect redemption in connection with our initial
business combination or the terms of negotiated transactions to purchase shares in connection with our initial business combination, we
may be required to seek additional financing or to abandon the proposed business combination. Financing may not be available on acceptable
terms, if at all. To the extent that additional financing proves to be unavailable when needed to consummate our initial business combination,
we would be compelled to either restructure the transaction or abandon that particular initial business combination and seek an alternative
target business candidate. If we are unable to complete our initial business combination, our public shareholders may only receive $10.00
per share or potentially less than $10.00 per share on our redemption, and the rights and warrants will expire worthless. In addition,
even if we do not need additional financing to consummate 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.
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 United States federal
proxy rules require that a proxy statement with respect to a vote on a business combination meeting certain financial significance tests
include historical and/or pro forma financial statement disclosure in periodic reports. We will include the same financial statement disclosure
in connection with our tender offer documents, whether or not they are required under the tender offer rules. These financial statements
must be prepared in accordance with, or be reconciled to, accounting principles generally accepted in the United States of America (“GAAP”),
or International Financial Reporting Standard as issued by the International Accounting Standards Board (“IFRS”), and the
historical financial statements must 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 statements in time for us to disclose such statements in accordance with federal proxy
rules and consummate our initial business combination within our 15-month (or up to 21-month, as applicable) 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 a business combination.
Section 404 of the Sarbanes-Oxley Act
requires an annual assessment of internal control over financial reporting and for certain issuers an attestation of this assessment by
our independent registered public accounting firm. Only in the event we are deemed to be a large accelerated filer or an accelerated filer
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 company with which we seek to complete our 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.
You will not have any rights or interests in
funds from the trust account, except under certain limited circumstances. To liquidate your investment, therefore, you may be forced to
sell your public shares, potentially at a loss.
Our public shareholders
shall be entitled to receive funds from the trust account only (i) in the event of a redemption to public shareholders prior to any winding
up in the event we do not consummate our initial business combination or our liquidation (ii) if they redeem their shares in connection
with an initial business combination that we consummate or (iii) if they redeem their shares in connection with a shareholder vote to
amend our memorandum and articles of association (A) to modify the substance or timing of our obligation to redeem 100% of our public
shares if we do not complete our initial business combination by February 24, 2022 or (B) with respect to any other provision relating
to shareholders’ rights or pre-business combination activity. In no other circumstances will a shareholder have any right
or interest of any kind to the funds in the trust account. Accordingly, to liquidate your investment, you may be forced to sell your
securities, potentially at a loss.
The ability of our public shareholders to exercise
their redemption rights may not allow us to effectuate the most desirable business combination or optimize our capital structure.
If our initial business combination
requires us to use substantially all of our cash to pay the purchase price, because we will not know how many public shareholders may
exercise redemption rights, we may either need to reserve part of the trust account for possible payment upon such redemption, or we may
need to arrange third party financing to help fund our initial business combination. In the event that the acquisition involves the issuance
of our stock as consideration, we may be required to issue a higher percentage of our stock to make up for a shortfall in funds. Raising
additional funds to cover any shortfall may involve dilutive equity financing or incurring indebtedness at higher than desirable levels.
This may limit our ability to effectuate the most attractive business combination available to us.
We may be unable to consummate an initial business
combination if a target business requires that we have a certain amount of cash at closing, in which case public shareholders may have
to remain shareholders of our company and wait until our redemption of the public shares to receive a pro rata share of the trust account
or attempt to sell their shares in the open market.
A potential target may
make it a closing condition to our initial business combination that we have a certain amount of cash in excess of the $5,000,001 of
net tangible assets we are required to have pursuant to our organizational documents available at the time of closing. If the number
of our public shareholders electing to exercise their redemption rights has the effect of reducing the amount of money available to us
to consummate an initial business combination below such minimum amount required by the target business and we are not able to locate
an alternative source of funding, we will not be able to consummate such initial business combination and we may not be able to locate
another suitable target within the applicable time period, if at all. In that case, public shareholders may have to remain shareholders
of our company and wait until February 24, 2022 in order to be able to receive a portion of the trust account, or attempt to sell their
shares in the open market prior to such time, in which case they may receive less than they would have in a liquidation of the trust
account.
We intend to offer each public
shareholder the option to vote in favor of the proposed business combination and still seek redemption of such shareholders’ shares.
In connection with any meeting
held to approve an initial business combination, we will offer each public shareholder (but not our initial shareholders, officers or
directors) the right to have his, her or its ordinary shares redeemed for cash (subject to the limitations described elsewhere in this
report) regardless of whether such shareholder votes for or against such proposed business combination; provided that a shareholder must
in fact vote for or against a proposed business combination in order to have his, her or its ordinary shares redeemed for cash. If a shareholder
fails to vote for or against a proposed business combination, that shareholder would not be able to have his ordinary shares so redeemed.
We will consummate our initial business combination only so long as (after any redemption) we have net tangible assets of at least $5,000,001
prior to or upon such consummation after payment of the deferred underwriting commission and a majority of the outstanding ordinary shares
voted are voted in favor of the business combination. This is different than other similarly structured blank check companies where shareholders
are offered the right to redeem their shares only when they vote against a proposed business combination. This threshold and the ability
to seek redemption while voting in favor of a proposed business combination may make it more likely that we will consummate our initial
business combination.
A public shareholder that fails to vote either
in favor of or against a proposed business combination will not be able to have his shares redeemed for cash.
In order for a public shareholder
to have his shares redeemed for cash in connection with any proposed business combination, that public shareholder must vote either in
favor of or against a proposed business combination. If a public shareholder fails to vote in favor of or against a proposed business
combination, whether that shareholder abstains from the vote or simply does not vote, that shareholder would not be able to have his ordinary
shares so redeemed to cash in connection with such business combination.
Redeeming shareholders may be unable to sell
their securities when they wish to in the event that the proposed business combination is not approved.
We will require public shareholders
who wish to redeem their ordinary shares in connection with any proposed business combination to comply with the delivery requirements
discussed above for redemption. If such proposed business combination is not consummated, we will promptly return such certificates to
the tendering public shareholders. Accordingly, investors who attempted to redeem their shares in such a circumstance will be unable to
sell their securities after the failed acquisition until we have returned their securities to them. The market price for our ordinary
shares may decline during this time and you may not be able to sell your securities when you wish to, even while other shareholders that
did not seek redemption may be able to sell their securities.
Because of our structure, other companies may
have a competitive advantage and we may not be able to consummate an attractive business combination.
We expect to encounter intense
competition from entities other than blank check companies having a business objective similar to ours, including private equity groups,
venture capital funds, leveraged buyout funds and operating businesses competing for acquisitions. Many of these entities are well established
and have extensive experience in identifying and effecting business combinations directly or through affiliates. Many of these competitors
possess greater technical, human and other resources than we do and our financial resources will be relatively limited when contrasted
with those of many of these competitors. Therefore, our ability to compete in acquiring certain sizable target businesses may be limited
by our available financial resources. This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain
target businesses. Furthermore, seeking shareholder approval of our initial business combination may delay the consummation of a transaction.
Any of the foregoing may place us at a competitive disadvantage in successfully negotiating our initial business combination.
You will not be entitled to protections normally
afforded to investors of many other blank check companies.
Since the net proceeds of
our initial public offering are intended to be used to complete our initial business combination with a target business that has not been
identified, we may be deemed to be a “blank check” company under the United States securities laws. However, since we have
net tangible assets in excess of $5,000,000, we are exempt from rules promulgated by the SEC to protect investors in blank check companies,
such as Rule 419. Accordingly, investors are not afforded the benefits or protections of those rules. Among other things, this means that
we may have a longer period of time to complete our initial business combination than do companies subject to Rule 419. Moreover, offerings
subject to Rule 419 would prohibit the release of any interest earned on funds held in the trust account to us unless and until the funds
in the trust account were released to us in connection with our consummation of an initial business combination.
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 targets companies to demand improved
financial terms. Attractive deals could also become scarcer for other reasons, such as economic or industry sector downturns, geopolitical
tensions, or increases in the cost of additional capital needed to close business combinations or operate targets post-business combination.
This could increase the cost of, delay or otherwise complicate or frustrate our ability to find and consummate an initial business combination,
and may result in our inability to consummate an initial business combination on terms favorable to our investors altogether.
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. 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. There can be no assurance that these trends will not continue.
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 the net proceeds of our initial public
offering not being held in the trust account are insufficient to allow us to operate until February 24, 2022, we may be unable to complete
our initial business combination.
The funds available to
us outside of the trust account, plus the interest earned on the funds held in the trust account that may be available to us for
the payment of our tax obligations, may not be sufficient to allow us to operate until February 24, 2022, assuming that our initial business
combination is not consummated during that time. Of the funds available to us, we could use a portion of the funds available to us to
pay fees to consultants to assist us with our search for a target business. We could also use a portion of the funds as a down payment
or to fund a “no-shop” provision (a provision in letters of intent designed to keep target businesses from “shopping”
around for transactions with other companies 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 are unable to fund such down payments or “no
shop” provisions, our ability to close a contemplated transaction could be impaired. Furthermore, if we entered into a letter of
intent where we paid for the right to receive exclusivity from a target business and were subsequently required to forfeit such funds
(whether as a result of our breach or otherwise), we might not have sufficient funds to continue searching for, or conduct due diligence
with respect to, a target business. If we are unable to complete our initial business combination, our public shareholders may only receive
$10.16 per share (based on the balance of our trust account as of May 24, 2021 and excluding $50,000 of interest to pay dissolution expenses)
or potentially less than $10.00 per share on our redemption, and our rights and warrants will expire worthless.
If funds available to us outside of the trust
account are insufficient, 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, to pay our taxes and
to complete our initial business combination. If we are unable to obtain these loans, we may not be able to complete our initial business
combination.
As of December 31, 2020, we had $23,486 held outside the trust account
that is available to us to fund our working capital requirements. 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.
If we are unable to complete our initial business combination because we do not have sufficient funds available to us, we will be forced
to cease operations and liquidate the trust account. In such case, our public shareholders may only receive $10.16 per share (based on
the balance of our trust account as May 24, 2021 and excluding $50,000 of interest to pay dissolution expenses), or less in certain circumstances
and our warrants will expire worthless.
Subsequent to our consummation 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 thorough
due diligence on a target business with which we combine, this diligence may not surface all material issues that may be present inside
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. Although these charges may be non-cash items
and not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to negative market
perceptions about us or our securities. In addition, charges of this nature may cause us to violate net worth or other covenants to which
we may be subject as a result of assuming pre-existing debt held by a target business or by virtue of our obtaining post-combination debt
financing.
If we liquidate, distributions, or part of
them, may be delayed while the liquidator determines the extent of potential creditor claims.
Pursuant to, among other
documents, our memorandum and articles of association, if we do not complete our initial business combination by February 24, 2022 this
will trigger the required redemption of our ordinary shares using the available funds in the trust account pursuant to our memorandum
and articles of association, resulting in our repayment of available funds in the trust account. Following which, we will proceed to
commence a voluntary liquidation and thereby a formal dissolution of the company. In connection with such a voluntary liquidation, the
liquidator would give notice to our creditors inviting them to submit their claims for payment, by notifying known creditors (if any)
who have not submitted claims and by placing a public advertisement in at least one newspaper published in the British Virgin Islands
and in at least one newspaper circulating in the location where the company has its principal place of business, and taking any other
steps he considers appropriate, after which our remaining assets would be distributed.
As soon as our affairs are
fully wound-up, if we were to liquidate, the liquidator must complete his statement of account and will then notify the Registrar of Corporate
Affairs in the British Virgin Islands (the “Registrar”) that the liquidation has been completed. However, the liquidator may
determine that he or she requires additional time to evaluate creditors’ claims (particularly if there is uncertainty over the validity
or extent of the claims of any creditors). Also, a creditor or shareholder may file a petition with the British Virgin Islands Court,
which, if successful, may result in our liquidation being subject to the supervision of that court. Such events might delay distribution
of some or all of our remaining assets.
In any liquidation proceedings
of the company under British Virgin Islands law, the funds held in our trust account may be included in our estate and subject to the
claims of third parties with priority over the claims of our shareholders. To the extent any such claims deplete the trust account we
may not be able to return to our public shareholders the redemption amounts payable to them.
Our directors may decide not
to enforce indemnification obligations against 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 $10.00 per share and our sponsor asserts that it is unable to satisfy its obligations or that it
has no indemnification obligations related to a particular claim, our independent directors would determine on our behalf whether to take
legal action against our sponsor to enforce its indemnification obligations. While we currently expect that our independent directors
would take legal action on our behalf against our sponsor to enforce its indemnification obligations to us, it is possible that our independent
directors in exercising their business judgment may choose not to do so in any particular instance. If our independent directors choose
not to enforce these indemnification obligations on our behalf, the amount of funds in the trust account available for distribution to
our public shareholders may be reduced below $10.00 per share.
We may not have sufficient funds to satisfy
indemnification claims of our directors and executive officers.
We have agreed to indemnify
our officers and directors to the fullest extent permitted by law. However, our officers and directors have agreed to waive any right,
title, interest or claim of any kind in or to any monies in the trust account and to not seek recourse against the trust account for any
reason whatsoever (except to the extent they are entitled to funds from the trust account due to their ownership of public shares). Accordingly,
any indemnification provided will be able to be satisfied by us only if (i) we have sufficient funds outside of the trust account or (ii)
we complete 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.
If we are unable to consummate our initial
business combination by February 24, 2022, our public shareholders may be forced to wait beyond such period before redemption from our
trust account.
If we are unable to consummate
our initial business combination by February 24, 2022, we will, as promptly as reasonably possible but not more than five business days
thereafter, distribute the aggregate amount then on deposit in the trust account (net of taxes payable, and less up to $50,000 of interest
to pay liquidation expenses), pro rata to our public shareholders by way of redemption and cease all operations except for the purposes
of winding up of our affairs by way of a voluntary liquidation, as further described herein. Any redemption of public shareholders from
the trust account shall be effected as required by our memorandum and articles of association prior to our commencing any voluntary liquidation.
If we are required to liquidate prior to distributing the aggregate amount then on deposit in the trust account (net of taxes payable,
and less up to $50,000 of interest to pay liquidation expenses) pro rata to our public shareholders, then 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
February 24, 2022 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. Except as otherwise described herein, we have no obligation to return funds
to investors prior to the date of any redemption required as a result of our failure to consummate our initial business combination within
the period described above or our liquidation, unless we consummate our initial business combination prior thereto and only then in cases
where investors have sought to redeem their ordinary shares. Only upon any such redemption of public shares as we are required to effect
or any liquidation will public shareholders be entitled to distributions if we are unable to complete our initial business combination.
If we are deemed to be insolvent, distributions,
or part of them, may be delayed while the insolvency liquidator determines the extent of potential creditor claims. In these circumstances,
prior payments made by the company may be deemed “voidable transactions.”
If we do not complete
our initial business combination by February 24, 2022, we will be required to redeem our public shares from the trust account pursuant
to our memorandum and articles of association.
However, if at any time we
are deemed insolvent for the purposes of the Insolvency Act (i.e. (i) we fail to comply with the requirements of a statutory demand that
has not been set aside under section 157 of the Insolvency Act; (ii) execution or other process issued on a judgment, decree or order
of a British Virgin Islands Court in favor of a creditor of the company is returned wholly or partly unsatisfied; or (iii) either the
value of the company’s liabilities exceeds its assets, or the company is unable to pay its debts as they fall due), we are required
to immediately enter insolvent liquidation. In these circumstances, a liquidator will be appointed who will give notice to our creditors
inviting them to submit their claims for payment, by notifying known creditors (if any) who have not submitted claims and by placing a
public advertisement in at least one newspaper published in the British Virgin Islands newspaper and in at least one newspaper circulating
in the location where the company has its principal place of business, and taking any other steps he considers appropriate, after which
our assets would be distributed. Following the process of insolvent liquidation, the liquidator will complete its final report and accounts
and will then notify the Registrar. The liquidator may determine that he requires additional time to evaluate creditors’ claims
(particularly if there is uncertainty over the validity or extent of the claims of any creditors). Also, a creditor or shareholder may
file a petition with the British Virgin Islands Court which, if successful, may result in our liquidation being subject to the supervision
of that court. Such events might delay distribution of some or all of our assets to our public shareholders. In such liquidation proceedings,
the funds held in our trust account may be included in our estate and subject to the claims of third parties with priority over the claims
of our shareholders. To the extent any such claims deplete the trust account we cannot assure you we will be able to return to our public
shareholders the amounts otherwise payable to them.
If we are deemed insolvent,
then there are also limited circumstances where prior payments made to shareholders or other parties may be deemed to be a “voidable
transaction” for the purposes of the Insolvency Act. A voidable transaction would be, for these purposes, payments made as “unfair
preferences” or “transactions at an undervalue.” Where a payment was a risk of being a voidable transaction, a liquidator
appointed over an insolvent company could apply to the British Virgin Islands Court for an order, inter alia, for the transaction to be
set aside as a voidable transaction in whole or in part.
Our initial shareholders have
waived their right to participate in any liquidation distribution with respect to the initial shares. We will pay the costs of our liquidation
and distribution of the trust account from our remaining assets outside of the trust account. In addition, our sponsor, Mr. Lu and
Mr. Hao have agreed that they will be liable to us, for all claims of creditors to the extent that we fail to obtain executed waivers
from such entities in order to protect the amounts held in trust, except as to any claims under our indemnity of the underwriters of our
initial public offering against certain liabilities, including liabilities under the Securities Act. However, we cannot assure you that
the liquidator will not determine that he or she requires additional time to evaluate creditors’ claims (particularly if there is
uncertainty over the validity or extent of the claims of any creditors). We also cannot assure you that a creditor or shareholder will
not file a petition with the British Virgin Islands Court which, if successful, may result in our liquidation being subject to the supervision
of that court. Such events might delay distribution of some or all of our assets to our public shareholders.
If deemed to be insolvent, distributions made
to public shareholders, or part of them, from our trust account may be subject to claw back in certain circumstances.
If we do not complete
our initial business combination by February 24, 2022, and instead distribute the aggregate amount then on deposit in the trust account
(net of taxes payable), pro rata to our public shareholders by way of redemption, it will be necessary for our directors to pass a board
resolution approving the redemption of those ordinary shares and the payment of the proceeds to public shareholders. Such board resolutions
are required to confirm that we satisfy the solvency test prescribed by the Companies Act (namely that our assets exceed our liabilities;
and that we are able to pay our debts as they fall due). If, after the redemption proceeds are paid to public shareholders, it transpires
that our financial position at the time was such that it did not satisfy the solvency test, the Companies Act provides a mechanism by
which those proceeds could be recovered from public shareholders. However, the Companies Act also provides for circumstances where such
proceeds could not be subject to claw back, namely where (a) the public shareholders received the proceeds in good faith and without
knowledge of our failure to satisfy the solvency test; (b) a public shareholder altered its position in reliance of the validity of the
payment of the proceeds; or (c) it would be unfair to require repayment of the proceeds in full or at all.
The grant of registration rights to our initial
shareholders 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 ordinary shares.
Pursuant to an agreement entered
into on the date of this report, our initial shareholders, anchor investors, I-Bankers and their permitted transferees can make up
to three demands on or after the consummation of our initial business combination that we register for resale an aggregate of 3,450,000
founder shares, 167,000 insider units and underlying securities, 108,000 anchor units and underlying securities, 75,000 I-Bankers units
and underlying securities, and up to 1,500,000 units, and underlying securities, issuable upon conversion of working capital loans. 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 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 ordinary shares that is expected when the securities owned by our sponsor, holders of our private units or
their respective permitted transferees are registered.
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.
In December 2019, a novel
strain of coronavirus was reported to have surfaced in Wuhan, China, which has and is continuing to spread throughout China and other
parts of the world. On January 30, 2020, the World Health Organization declared the outbreak of the coronavirus disease (COVID-19) a “Public
Health Emergency of International Concern.” On March 11, 2020 the World Health Organization characterized the outbreak as a “pandemic”.
A significant outbreak of COVID-19 and other infectious diseases could result in a widespread health crisis that could adversely affect
the economies and financial markets worldwide, and the business of any potential target business with which we consummate a business combination
could be materially and adversely affected. Furthermore, we may be unable to complete a business combination if continued concerns
relating to COVID-19 restrict travel, limit the ability to have meetings with potential investors or the target company’s personnel,
vendors and services providers are unavailable to negotiate and consummate a transaction in a timely manner. The extent to which COVID-19
impacts our search for a business combination will depend on future developments, which are highly uncertain and cannot be predicted,
including new information which may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact,
among others. If the disruptions posed by COVID-19 or other 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.
Because we are not limited to any particular
business or specific geographic location or any specific target businesses with which to pursue our initial business combination, you
will be unable to ascertain the merits or risks of any particular target business’ operations.
Although we intend to focus
on fintech business in North America and Asia-Pacific, we may pursue acquisition opportunities in any geographic region and in any business
industry or sector. Except for the limitations that, so long as our securities are listed on Nasdaq, a target business have a fair
market value of at least 80% of the value of the trust account (less any deferred underwriting commissions, certain advisory fees to I-Bankers and
taxes payable on interest earned and less any interest earned thereon that is released to us for taxes) and that we are not permitted
to effectuate our initial business combination with another blank check company or similar company with nominal operations, we will have
virtually unrestricted flexibility in identifying and selecting a prospective acquisition candidate. To the extent we consummate 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 may not 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. An investment
in our units may not ultimately prove to be more favorable to investors than a direct investment, if such opportunity were available,
in an acquisition target.
We may seek investment opportunities outside
of our management’s area of expertise and our management may not be able to adequately ascertain or assess all significant risks
associated with the target company.
There is no limitation on
the industry or business sector we may consider when contemplating our initial business combination. We may therefore be presented with
a business combination candidate in an industry unfamiliar to our management team, but we may determine that such candidate offers an
attractive investment opportunity for our company. In the event we elect to pursue an investment outside of our management’s expertise,
our management’s experience may not be directly applicable to the target business or their evaluation of its operations.
Although we 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 specific 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 consummate 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 our initial 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 the rules of Nasdaq, or we decide to obtain shareholder
approval for business or other legal 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 are unable to complete our initial business combination,
our public shareholders may only receive $10.00 per share or potentially less than $10.00 per share on our redemption, and our rights
and warrants will expire worthless.
Management’s flexibility in identifying
and selecting a prospective acquisition candidate, along with our management’s financial interest in consummating our initial business
combination, may lead management to enter into an acquisition agreement that is not in the best interest of our shareholders.
Subject to the requirement
that, so long as our securities are listed on Nasdaq, our initial business combination must be with one or more target businesses or assets
having an aggregate fair market value of at least 80% of the value of the trust account (less any deferred underwriting commissions, certain
advisory fees to I-Bankers and taxes payable on interest earned and less any interest earned thereon that is released to us for taxes)
at the time of the agreement to enter into such initial business combination, we will have virtually unrestricted flexibility in identifying
and selecting a prospective acquisition candidate. Investors will be relying on management’s ability to identify business combinations,
evaluate their merits, conduct or monitor diligence and conduct negotiations. Management’s flexibility in identifying and selecting
a prospective acquisition candidate, along with management’s financial interest in consummating our initial business combination,
may lead management to enter into an acquisition agreement that is not in the best interest of our shareholders.
We may seek investment opportunities with a
financially unstable business or in its early stages of development.
To the extent we effect our
initial business combination with a company or business that may be financially unstable or in its early stages of development or growth,
we may be affected by numerous risks inherent in such company or business. 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 an independent accounting firm, and consequently, an independent source may not confirm that
the price we are paying for the business is fair to our shareholders from a financial point of view.
Unless we consummate our initial
business combination with an affiliated entity, we are not required to obtain an opinion from an independent investment banking firm or
an independent accounting 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. Our board of directors will have significant discretion in choosing the standard
used to establish the fair market value of the target acquisition. Such standards used will be disclosed in our tender offer documents
or proxy solicitation materials, as applicable, related to our initial business combination.
Resources could be wasted in researching acquisitions
that are not consummated, which could materially adversely affect subsequent attempts to locate and acquire or merge with another business.
We anticipate that the investigation
of each specific target business and the negotiation, drafting, and execution of relevant agreements, disclosure documents, and other
instruments will require substantial management time and attention and substantial costs for accountants, attorneys and others. If we
decide not to complete a specific initial business combination, the costs incurred up to that point for the proposed transaction likely
would not be recoverable. Furthermore, if we reach an agreement relating to a specific target business, we may fail to consummate our
initial business combination for any number of reasons including those beyond our control. Any such event will result in a loss to us
of the related costs incurred, which could materially adversely affect subsequent attempts to locate and acquire or merge with another
business. If we are unable to complete our initial business combination, our public shareholders may only receive $10.00 per share or
potentially less than $10.00 per share on our redemption, and our rights and warrants will expire worthless.
We may re-domicile or continue out of
the British Virgin Islands into, another jurisdiction in connection with our initial business combination, and the laws of such jurisdiction
will likely govern all of our 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 or re-domicile or continue out of from the British Virgin
Islands to another jurisdiction. If we determine to do this, the laws of such jurisdiction would likely govern all of our 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. Any such reincorporation and the international nature of our business will likely
subject us to foreign regulation.
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, 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.
Risks Relating to our Sponsor and Management
Team
Our ability to successfully effect our initial
business combination and to be successful thereafter will be largely dependent upon the efforts of our officers, directors and key personnel,
some of whom may join us following our initial business combination. The loss of our officers, directors, or key personnel could negatively
impact the operations and profitability of our business.
Our operations are dependent
upon a relatively small group of individuals and, in particular, our officers and directors. We believe that our success depends on the
continued service of our officers and directors, at least until we have consummated 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 management time among various business activities, including identifying potential business combinations and monitoring
the related due diligence. We do not have an employment agreement with, or key-man insurance on the life of, any of our directors
or officers. The unexpected loss of the services of one or more of our directors or officers could have a detrimental effect on us. Additionally,
we do not intend to have any full time employees prior to the consummation of our initial business combination.
The role of such persons in
the target business, however, cannot presently be ascertained. Although some of such persons 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,
our assessment of these individuals may not prove to be correct. These individuals may be unfamiliar with the requirements of operating
a company regulated by the SEC, which could cause us to have to expend time and resources helping them become familiar with such requirements.
Our key personnel may negotiate employment
or consulting agreements with a target business in connection with a particular business combination. These agreements may provide for
them to receive compensation following our initial business combination and as a result, may cause them to have conflicts of interest
in determining whether a particular business combination is the most advantageous.
Our key personnel may be able
to remain with the company after the consummation 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 consummation of the business combination. The personal and financial interests of such
individuals may influence their motivation in identifying and selecting a target business. However, we believe the ability of such individuals
to remain with us after the consummation of our initial business combination will not be the determining factor in our decision as to
whether or not we will proceed with any potential business combination. There is no certainty, however, that any of our key personnel
will remain with us after the consummation of our initial business combination. Our key personnel may not remain in senior management
or advisory positions with us. The determination as to whether any of our key personnel will remain with us will be made at the time of
our initial business combination.
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’ management
may be limited due to a lack of time, resources or information. Our assessment of the capabilities of the target’s management, therefore,
may prove to be incorrect and such management may lack the skills, qualifications or abilities we suspected. Should the target’s
management not possess the skills, qualifications or abilities necessary to manage a public company, the operations and profitability
of the post-combination business may be negatively impacted.
The officers and directors of an acquisition
candidate may resign upon consummation of our initial business combination. The loss of an acquisition 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 consummation 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 some members of the management team of an acquisition candidate will not
wish to remain in place.
Certain of our officers and directors are now,
and all of them may in the future become, affiliated with entities engaged in business activities similar to those intended to be conducted
by us and, accordingly, may have conflicts of interest in allocating their time and determining to which entity a particular business
opportunity should be presented.
Until we consummate our business
combination, we will continue to engage in the business of identifying and combining with one or more businesses. Our officers and directors
are, or may in the future become, affiliated with entities that are engaged in a similar business.
Our officers also may become
aware of business opportunities, which may be appropriate for presentation to us and the other entities to which they owe certain fiduciary
duties or contractual obligations. 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 or that a potential target business would not be presented
to another entity prior to its presentation to us. Our directors and/or executives are currently managing or will be managing other businesses
similar to the market opportunities we are pursuing business combination.
Furthermore, certain of our
directors and/or executives may enter into blank check companies by serving either directors and/or executives. In order to minimize potential
conflicts of interest which may arise from multiple affiliations, Messrs. Lu and Hao will be required to present all suitable target businesses
to the Company prior to presenting them to such other blank check company, unless such opportunity is expressly offered to Messrs. Hao
and Lu solely in their capacity as officers of such company.
The shares beneficially owned by our officers
and directors may not participate in liquidation distributions and, therefore, our officers and directors may have a conflict of interest
in determining whether a particular target business is appropriate for our initial business combination.
Our officers and directors
have waived their right to redeem their founder shares, private shares, shares underlying private rights or private warrants, or any other
ordinary shares acquired in our initial public offering or thereafter, or to receive distributions with respect to their founder shares,
private shares, or shares underlying private rights or private warrants upon our liquidation if we are unable to consummate our initial
business combination, until all of the claims of any redeeming shareholders and creditors are fully satisfied (and then only from funds
held outside the trust account). Accordingly, these securities will be worthless if we do not consummate our initial business combination.
Any rights and warrants they hold, like those held by the public, will also be worthless if we do not consummate an initial business combination.
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.
We may engage in our initial business combination
with one or more target businesses that have relationships with entities that may be affiliated with our sponsor, officers or directors,
which may raise potential conflicts of interest.
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 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 and directors. Our directors also serve as officers and board members for other entities. Despite our agreement
to obtain an opinion from an independent investment banking firm or an independent account firm regarding the fairness to our shareholders
from a financial point of view of a business combination with one or more domestic or international businesses affiliated with our 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. Our directors have a fiduciary
duty to act in the best interests of our shareholders, whether or not a conflict of interest may exist.
Since our sponsor will lose its entire investment
in us if our initial business combination is not consummated and our officers and directors have significant financial interests in us,
a conflict of interest may arise in determining whether a particular acquisition target is appropriate for our initial business combination.
In October 2018, we issued
an aggregate of 1,437,500 founder shares to our initial shareholders for an aggregate purchase price of $25,000, or approximately $0.017
per share, with 625,000 shares issued to our sponsor, Double Ventures Holdings Limited, of which Mr. Chunyi (Charlie) Hao, our
Chairman and Chief Financial Officer, is the sole director, 625,000 to Navy Sail International Limited, of which Mr. Hao is the sole
director, and 187,500 shares issued to Mr. Hao. In January 2020, we performed a share split whereby each ordinary share was
sub-divided into two shares, resulting in our initial shareholders holding an aggregate of 2,875,000 founder shares. The founder
shares will be worthless if we do not consummate an initial business combination. In February 2020, we effected a 1.2 for 1 share
dividend for each ordinary share outstanding, resulting in our initial shareholders holding an aggregate of 3,450,000 founder shares.
In addition, our sponsor (and/or its designees), together with our anchor investors, have purchased an aggregate of 275,000 private units
in a private placement, each consisting of one ordinary share, one right to receive one-tenth (1/10) of one ordinary share, and one
warrant to purchase one-half (1/2) of one ordinary share, for an aggregate purchase price of $2,750,000 that will also be worthless
if we do not consummate our initial business combination.
We may issue our shares to investors in connection
with our initial business combination at a price that is less than the prevailing market price of our shares at that time.
In connection with our initial
business combination, we may issue shares to investors in private placement transactions (so-called PIPE transactions) at a price of $10.00
per share or which approximates the per-share amounts in our trust account at such time, which is generally approximately $10.00. The
purpose of such issuances will be to enable us to provide sufficient liquidity to the post-business combination entity. The price of the
shares we issue may therefore be less, and potentially significantly less, than the market price for our shares at such time.
Our management team and our shareholders may
not be able to maintain control of a target business after our initial business combination.
We may structure our initial
business combination to acquire less than 100% of the equity interests or assets of a target business, but we will only consummate such
business combination if we will become the majority shareholder of the target (or control the target through contractual arrangements
in limited circumstances for regulatory compliance purposes) or are otherwise not required to register as an investment company under
the Investment Company Act. Even though we may own a majority interest in 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 transaction. For example, we could pursue a transaction in which we issue a substantial number of new shares
in exchange for all of the outstanding capital stock of a target. In this case, we acquire a 100% controlling interest in the target.
However, as a result of the issuance of a substantial number of new shares, our shareholders immediately prior to such transaction could
own less than a majority of our outstanding shares subsequent to such transaction. In addition, other minority shareholders may subsequently
combine their holdings resulting in a single person or group obtaining a larger share of the company’s stock than we initially acquired.
Accordingly, this may make it more likely that we will not be able to maintain our control of the target business.
If we do not hold an annual meeting of shareholders
until after the consummation of our initial business combination, shareholders will not be afforded an opportunity to elect directors
and to discuss company affairs with management until such time.
Unless otherwise required
by law or the rules of Nasdaq, we do not currently intend to call an annual meeting of shareholders until after we consummate our initial
business combination. If our shareholders want us to hold a meeting prior to our consummation of our initial business combination, they
may do so by members holding not less than thirty percent of voting rights in respect of the matter for which the meeting is requested
making a request in writing to the directors in accordance with Section 82(2) of the Companies Act. Under British Virgin Islands law,
we may not increase the required percentage to call a meeting above thirty percent. Until we hold an annual meeting of shareholders, public
shareholders may not be afforded the opportunity to elect directors and to discuss company affairs with management.
Risks Relating to Acquiring and Operating a
Business Outside of the United States
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 negatively impact our
operations.
If we effect our initial business
combination with a company located outside of the United States, we would be subject to any special considerations or risks associated
with companies operating in the target business’ home jurisdiction, including any of the following:
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rules
and regulations or currency redemption or corporate withholding taxes on individuals;
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laws
governing the manner in which future business combinations may be effected;
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exchange
listing and/or delisting requirements;
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tariffs
and trade barriers;
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regulations
related to customs and import/export matters;
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tax
issues, such as tax law changes and variations in tax laws as compared to the United States;
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currency
fluctuations and exchange controls;
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challenges
in collecting accounts receivable;
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cultural
and language differences;
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employment
regulations;
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crime,
strikes, riots, civil disturbances, terrorist attacks and wars; and
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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, our operations might suffer.
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Because of the costs and difficulties inherent
in managing cross-border business operations, our results of operations may be negatively impacted.
Managing a business, operations,
personnel or assets in another country is challenging and costly. Any management that we may have (whether based abroad or in the United
States) may be inexperienced in cross-border business practices and unaware of significant differences in accounting rules, legal
regimes and labor practices. Even with a seasoned and experienced management team, the costs and difficulties inherent in managing cross-border business
operations, personnel and assets can be significant (and much higher than in a purely domestic business) and may negatively impact our
financial and operational performance.
If social unrest, acts of terrorism, regime
changes, changes in laws and regulations, political upheaval, or policy changes or enactments occur in a country in which we may operate
after we effect our initial business combination, it may result in a negative impact on our business.
Political events in another
country may significantly affect our business, assets or operations. Social unrest, acts of terrorism, regime changes, changes in laws
and regulations, political upheaval, and policy changes or enactments could negatively impact our business in a particular country.
Many countries have difficult and unpredictable
legal systems and underdeveloped laws and regulations that are unclear and subject to corruption and inexperience, which may adversely
impact our results of operations and financial condition.
Our ability to seek and enforce
legal protections, including with respect to intellectual property and other property rights, or to defend ourselves with regard to legal
actions taken against us in a given country, may be difficult or impossible, which could adversely impact our operations, assets or financial
condition.
Rules and regulations in many
countries are often ambiguous or open to differing interpretation by responsible individuals and agencies at the municipal, state, regional
and federal levels. The attitudes and actions of such individuals and agencies are often difficult to predict and inconsistent.
Delay with respect to the
enforcement of particular rules and regulations, including those relating to customs, tax, environmental and labor, could cause serious
disruption to operations abroad and negatively impact our results.
If relations between the United States and
foreign governments deteriorate, it could cause potential target businesses or their goods and services to become less attractive.
The relationship between the
United States and foreign governments could be subject to sudden fluctuation and periodic tension. For instance, the United States may
announce its intention to impose quotas on certain imports. Such import quotas may adversely affect political relations between the two
countries and result in retaliatory countermeasures by the foreign government in industries that may affect our ultimate target business.
Changes in political conditions in foreign countries and changes in the state of U.S. relations with such countries are difficult to predict
and could adversely affect our operations or cause potential target businesses or their goods and services to become less attractive.
Because we are not limited to any specific industry, there is no basis for investors in our initial public offering to evaluate the possible
extent of any impact on our ultimate operations if relations are strained between the United States and a foreign country in which we
acquire a target business or move our principal manufacturing or service operations.
If any dividend is declared in the future and
paid in a foreign currency, you may be taxed on a larger amount in U.S. dollars than the U.S. dollar amount that you will actually ultimately
receive.
If you are a U.S. holder of
our ordinary shares, you will be taxed on the U.S. dollar value of your dividends, if any, at the time you receive them, even if you actually
receive a smaller amount of U.S. dollars when the payment is in fact converted into U.S. dollars. Specifically, if a dividend is declared
and paid in a foreign currency, the amount of the dividend distribution that you must include in your income as a U.S. holder will be
the U.S. dollar value of the payments made in the foreign currency, determined at the spot rate of the foreign currency to the U.S. dollar
on the date the dividend distribution is includible in your income, regardless of whether the payment is in fact converted into U.S. dollars.
Thus, if the value of the foreign currency decreases before you actually convert the currency into U.S. dollars, you will be taxed on
a larger amount in U.S. dollars than the U.S. dollar amount that you will actually ultimately receive.
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, certain members of our management team will likely 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 our laws, they may have to expend time and
resources becoming familiar with such laws. This could be expensive and time-consuming and could lead to various regulatory issues,
which may adversely affect our operations.
After our initial business combination, substantially
all of our assets may be located in a foreign country and substantially all of our revenue may be derived from our operations in 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. Such
economic growth has been 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.
Currency policies may cause a target business’
ability to succeed in the international markets to be diminished.
In the event we acquire a
non-U.S. target, all revenues and income would likely be received in a foreign currency, 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.
Because foreign law could govern almost all
of our material agreements, we may not be able to enforce our rights within such jurisdiction or elsewhere, which could result in a significant
loss of business, business opportunities or capital.
Foreign law could govern almost
all of our material agreements. The target business may not be able to enforce any of its material agreements or that remedies will be
available outside of such foreign jurisdiction’s legal system. The system of laws and the enforcement of existing laws and contracts
in such jurisdiction may not be as certain in implementation and interpretation as in the United States. Some foreign jurisdictions may
be inexperienced in enforcing corporate and commercial law, leading to a higher than usual degree of uncertainty as to the outcome of
any litigation. As a result, the inability to enforce or obtain a remedy under any of our future agreements could result in a significant
loss of business and business opportunities.
Many of the economies in Asia are experiencing
substantial inflationary pressures which may prompt the governments to take action to control the growth of the economy and inflation
that could lead to a significant decrease in our profitability following our initial business combination.
While many of the economies
in Asia have experienced rapid growth over the last two decades, they currently are experiencing inflationary pressures. As governments
take steps to address the current inflationary pressures, there may be significant changes in the availability of bank credits, interest
rates, limitations on loans, restrictions on currency conversions and foreign investment. There also may be imposition of price controls.
If prices for the products of our ultimate target business rise at a rate that is insufficient to compensate for the rise in the costs
of supplies, it may have an adverse effect on our profitability. If these or other similar restrictions are imposed by a government to
influence the economy, it may lead to a slowing of economic growth. Because we are not limited to any specific industry, the ultimate
industry that we operate in may be affected more severely by such a slowing of economic growth.
Many industries in Asia are subject to government
regulations that limit or prohibit foreign investments in such industries, which may limit the potential number of acquisition candidates.
Governments in many Asian
countries have imposed regulations that limit foreign investors’ equity ownership or prohibit foreign investments altogether in
companies that operate in certain industries. As a result, the number of potential acquisition candidates available to us may be limited
or our ability to grow and sustain the business, which we ultimately acquire will be limited.
If a country in Asia enacts regulations in
industry segments that forbid or restrict foreign investment, our ability to consummate our initial business combination could be severely
impaired.
Many of the rules and regulations
that companies face concerning foreign ownership are not explicitly communicated. If new laws or regulations forbid or limit foreign investment
in industries in which we want to complete our initial business combination, they could severely impair our candidate pool of potential
target businesses. Additionally, if the relevant central and local authorities find us or the target business with which we ultimately
complete our initial business combination to be in violation of any existing or future laws or regulations, they would have broad discretion
in dealing with such a violation, including, without limitation:
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revoking our business and other licenses;
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requiring that we restructure our ownership or operations; and
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requiring that we discontinue any portion or all of our business.
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Any of the above could have
an adverse effect on our company post-business combination and could materially reduce the value of your investment.
Corporate governance standards in Asia may
not be as strict or developed as in the United States and such weakness may hide issues and operational practices that are detrimental
to a target business.
General corporate governance
standards in some countries are weak in that they do not prevent business practices that cause unfavorable related party transactions,
over-leveraging, improper accounting, family company interconnectivity and poor management. Local laws often do not go far enough to prevent
improper business practices. Therefore, shareholders may not be treated impartially and equally as a result of poor management practices,
asset shifting, conglomerate structures that result in preferential treatment to some parts of the overall company, and cronyism. The
lack of transparency and ambiguity in the regulatory process also may result in inadequate credit evaluation and weakness that may precipitate
or encourage financial crisis. In our evaluation of a business combination we will have to evaluate the corporate governance of a target
and the business environment, and in accordance with United States laws for reporting companies take steps to implement practices that
will cause compliance with all applicable rules and accounting practices. Notwithstanding these intended efforts, there may be endemic
practices and local laws that could add risk to an investment we ultimately make and that result in an adverse effect on our operations
and financial results.
Risks Relating to our Securities
If we are deemed to be an investment company
under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted,
which may make it difficult for us to complete our initial business combination.
If we are deemed to be an
investment company under the Investment Company Act, our activities may be restricted, including:
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restrictions
on the nature of our investments; and
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restrictions
on the issuance of securities;
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each
of which may make it difficult for us to complete our initial business combination.
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In addition, we may have imposed
upon us burdensome requirements, including:
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registration
as an investment company;
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adoption
of a specific form of corporate structure; and
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reporting,
record keeping, voting, proxy and disclosure requirements and other rules and regulations.
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We do not believe that our principal activities subject us to the Investment
Company Act. The proceeds held in the trust account may be invested by the trustee only in United States government treasury bills with
a maturity of 185 days or less or in money market funds investing solely in United States Treasuries and meeting certain conditions under
Rule 2a-7 under the Investment Company Act. Because the investment of the proceeds are restricted to these instruments, we believe we
will meet the requirements for the exemption provided in Rule 3a-1 promulgated under the Investment Company Act. If we were deemed to
be subject to the Investment Company Act, compliance with these additional regulatory burdens would require additional expenses for which
we have not allotted funds and may hinder our ability to complete a business combination. If we are unable to complete our initial business
combination, our public shareholders may receive only approximately $10.16 per share (based on the balance of our trust account as of
May 24, 2021 and excluding $50,000 of interest to pay dissolution expenses), on the liquidation of our trust account and our warrants
will expire worthless.
Nasdaq may delist our securities from trading on its exchange, which
could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.
Our units, ordinary shares,
warrants and rights are listed on Nasdaq. There can be no assurances that our securities will continue to be listed on Nasdaq in the future
or prior to our initial business combination. In order to continue listing our securities on Nasdaq prior to our initial business combination,
we must maintain certain financial, distribution and stock 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 Nasdaq’s initial listing requirements,
which are more rigorous than Nasdaq’s continued listing requirements, in order to continue to maintain the listing of our securities
on Nasdaq. For instance, our share price would generally be required to be at least $4.00 per share, our shareholders’ equity would
generally be required to be at least $5.0 million and we would be required to have a minimum of 300 round lot holders (with at least 50%
of such round lot holders holding securities with a market value of at least $2,500) of our securities. There can be no assurances that
we will be able to meet those initial listing requirements at that time.
If Nasdaq delists our securities
from trading on its exchange and we are not able to list our securities on another national securities exchange, we expect our securities
could be quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including:
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a
limited availability of market quotations for our securities;
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reduced
liquidity for our securities;
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a
determination that our ordinary shares is a “penny stock” which will require brokers trading in our ordinary shares to adhere
to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;
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a
limited amount of news and analyst coverage; and
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a
decreased ability to issue additional securities or obtain additional financing in the future.
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The National Securities Markets
Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which
are referred to as “covered securities.” Since our units, ordinary shares, warrants and rights are listed on Nasdaq, they
are covered securities. Although the states are preempted from regulating the sale of our securities, the federal statute does allow the
states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can
regulate or bar the sale of covered securities in a particular case. While we are not aware of a state having used these powers to prohibit
or restrict the sale of securities issued by blank check companies, other than the State of Idaho, certain state securities regulators
view blank check companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities of
blank check companies in their states. Further, if we were no longer listed on Nasdaq, our securities would not be covered securities
and we would be subject to regulation in each state in which we offer our securities, including in connection with our initial business
combination.
If we seek shareholder approval of our 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 ordinary shares, you will lose the ability to redeem all such shares in excess of 15% of our
ordinary shares.
If we seek shareholder approval
of our initial business combination and we do not conduct redemptions in connection with our business combination pursuant to the tender
offer rules, our memorandum and articles of association provides that a public shareholder, individually or 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 our initial public offering. Your inability to redeem more than an aggregate of 15% of the shares sold in our initial public
offering will reduce your influence over our ability to consummate our initial business combination and you could suffer a material loss
on your investment in us if you sell such excess shares in open market transactions. As a result, you will continue to hold that number
of shares exceeding 15% and, in order to dispose of such shares, you would be required to sell your shares in open market transaction,
potentially at a loss.
Holders of rights and warrants will not participate
in liquidating distributions if we are unable to complete an initial business combination within the required time period.
If we are unable to complete
an initial business combination within the required time period and we liquidate the funds held in the trust account, the rights and warrants
will expire and holders will not receive any of such proceeds with respect to the rights and warrants. In this case, holders of rights
and warrants are treated in the same manner as holders of rights and warrants of blank check companies whose units are comprised of shares,
rights and warrants, as the rights and warrants in those companies do not participate in liquidating distributions. If a business combination
is not approved, the rights and warrants will expire and will be worthless.
If we do not maintain a current and effective
prospectus relating to the ordinary shares issuable upon exercise of the warrants, public holders will only be able to exercise such warrants
on a “cashless basis” which would result in a fewer number of shares being issued to the holder had such holder exercised
the warrants for cash.
If we do not maintain a current
and effective prospectus relating to the ordinary shares issuable upon exercise of the public warrant at the time that holders wish to
exercise such warrants, they will only be able to exercise them on a “cashless basis” provided that an exemption from registration
is available. As a result, the number of ordinary shares that a holder will receive upon exercise of its public warrants will be fewer
than it would have been had such holder exercised its warrant for cash. Further, if an exemption from registration is not available, holders
would not be able to exercise their warrants on a cashless basis and would only be able to exercise their warrants for cash if a current
and effective prospectus relating to the ordinary shares issuable upon exercise of the warrants is available. Under the terms of the warrant
agreement, we have agreed to use our best efforts to meet these conditions and to maintain a current and effective prospectus relating
to the ordinary shares issuable upon exercise of the warrants until the expiration of the warrants. However, we cannot assure you that
we will be able to do so. If we are unable to do so, the potential “upside” of the holder’s investment in our company
may be reduced or the warrants may expire worthless. Notwithstanding the foregoing, the private warrants may be exercisable for unregistered
ordinary shares for cash even if the prospectus relating to the ordinary shares issuable upon exercise of the warrants is not current
and effective.
Our memorandum and articles of association
permit the board of directors by resolution to amend our memorandum and articles of association, including to create additional classes
of securities, including shares with rights, preferences, designations and limitations as they determine which may have an anti-takeover effect.
Our memorandum and articles
of association permits the board of directors by resolution to amend certain provisions of the memorandum and articles of association
including to designate rights, preferences, designations and limitations attaching to the preferred shares as they determine in their
discretion, without shareholder approval with respect the terms or the issuance. If issued, the rights, preferences, designations and
limitations of the preferred shares would be set by the board of directors by amendment to relevant provisions of the memorandum and
articles of association and could operate to the disadvantage of the outstanding ordinary shares the holders of which would not have
any pre-emption rights in respect of such an issue of preferred shares. Such terms could include, among others, preferences as to
dividends and distributions on liquidation, or could be used to prevent possible corporate takeovers. We may issue some or all of such
preferred shares in connection with our initial business combination. Notwithstanding the foregoing, we and our directors and officers
have agreed not propose any amendment to our memorandum and articles of association (A) to modify the substance or timing of our obligation
to redeem 100% of our public shares if we do not complete our initial business combination by February 24, 2022 from the closing of our
initial public offering or (B) with respect to any other provision relating to shareholders’ rights or pre-initial business
combination activity, unless we provide our public shareholders with the opportunity to redeem their public 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 (which interest shall be net of taxes payable), divided by the number of then outstanding public shares.
An investor will only be able to exercise a
warrant if the issuance of ordinary shares upon such exercise has been registered or qualified or is deemed exempt under the securities
laws of the state of residence of the holder of the warrants.
No public warrants will be
exercisable for cash and we will not be obligated to issue ordinary shares unless the ordinary shares issuable upon such exercise has
been registered or qualified or deemed to be exempt under the securities laws of the state of residence of the holder of the warrants.
At the time that the warrants become exercisable, we expect to have our securities listed on a national securities exchange, which would
provide an exemption from registration in every state. However, we cannot assure you of this fact. If the ordinary shares issuable upon
exercise of the warrants are not qualified or exempt from qualification in the jurisdictions in which the holders of the warrants reside,
the warrants may be deprived of any value, the market for the warrants may be limited and they may expire worthless if they cannot be
sold.
Our management’s ability to require holders
of our warrants to exercise such warrants on a cashless basis will cause holders to receive fewer ordinary shares upon their exercise
of the warrants than they would have received had they been able to exercise their warrants for cash.
If we call our public warrants
for redemption after the redemption criteria described elsewhere in this report have been satisfied, our management will have the option
to require any holder that wishes to exercise his warrant (including any warrants held by our initial shareholders or their permitted
transferees) to do so on a “cashless basis.” If our management chooses to require holders to exercise their warrants on a
cashless basis, the number of ordinary shares received by a holder upon exercise will be fewer than it would have been had such holder
exercised his warrant for cash. This will have the effect of reducing the potential “upside” of the holder’s investment
in our company.
We may amend the terms of the warrants in a
way that may be adverse to holders with the approval by the holders of a majority of the then outstanding warrants.
Our warrants are issued in
registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us.
The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or
correct any defective provision. The warrant agreement requires the approval by the holders of a majority of the then outstanding warrants
(including the private warrants) in order to make any change that adversely affects the interests of the registered holders.
We have no obligation to net cash settle the
warrants.
In no event will we have any
obligation to net cash settle the warrants. Furthermore, there are no contractual penalties for failure to deliver securities to the holders
of the warrants upon consummation of our initial business combination or exercise of the warrants. Accordingly, the warrants may expire
worthless.
Our rights and warrants may have an adverse
effect on the market price of our ordinary shares and make it more difficult to effectuate our initial business combination.
We have issued rights to receive
1,380,000 of our ordinary shares and warrants to purchase 6,900,000 of our ordinary shares, as part of the units offered in our initial
public offering, rights to receive 35,000 of our ordinary shares and warrants to purchase 175,000 of our ordinary shares, as part of a
private placement. The warrants are exercisable at a price of $11.50 per full share, subject to adjustment. We have also issued representative’s
warrants exercisable for 690,000 ordinary shares at an initial exercise price of $12.00 per share, subject to adjustment. In addition,
our initial shareholders, officers and directors or their affiliates may, but are not obligated to, make certain loans to us, up to $1,500,000
of which may be converted upon consummation of our initial business combination into additional private units at a price of $10.00 per
unit (which, for example, would result in the holders being issued 150,000 ordinary shares if $1,500,000 of notes were so converted, as
well as 150,000 rights to receive 15,000 ordinary shares and 150,000 warrants to purchase 75,000 shares). To the extent we issue
ordinary shares to effectuate a business transaction, the potential for the issuance of a substantial number of additional ordinary shares
upon exercise of these warrants could make us a less attractive acquisition vehicle to a target business. Any such issuance will increase
the number of issued and outstanding ordinary shares and reduce the value of the ordinary shares issued to complete the business transaction.
Therefore, our rights and warrants may make it more difficult to effectuate a business combination or increase the cost of acquiring the
target business.
Certain of our warrants are accounted for as
liabilities and the changes in value of such warrants could have an effect on our financial results.
On April 12, 2021, the
Acting Director of the Division of Corporation Finance and Acting Chief Accountant of the SEC together issued a statement regarding the
accounting and reporting considerations for warrants issued by special purpose acquisition companies entitled “Staff Statement
on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (“SPACs”)”
(the “SEC Statement”). Specifically, the SEC Statement focused on certain settlement terms and provisions related to certain
tender offers following a business combination, which terms are similar to those contained in the warrant agreement governing our warrants.
As a result of the SEC Statement, we reevaluated the accounting treatment of our 138,000,000 public warrants, 350,000 private warrants,
and 690,000 representative warrants. We determined to classify the private warrants and representative warrants as derivative liabilities
measured at fair value, with changes in fair value each period reported in earnings.
As a result, included on our
balance sheet as of December 31, 2020 contained elsewhere in this Report are derivative liabilities related to embedded features contained
within our private and representative warrants. Accounting Standards Codification 815, Derivatives and Hedging (“ASC 815”),
provides for the remeasurement of the fair value of such derivatives at each balance sheet date, with a resulting non-cash gain or loss
related to the change in the fair value being recognized in earnings in the statement of operations. As a result of the recurring fair
value measurement, our consolidated financial statements and results of operations may fluctuate quarterly, based on factors which are
outside of our control. Due to the recurring fair value measurement, we expect that we will recognize non-cash gains or losses on our
private and representative warrants each reporting period and that the amount of such gains or losses could be material.
A provision of our warrant agreement may make
it more difficult for us to consummate an initial business combination.
Unlike most blank check companies,
if
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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 $9.50 per ordinary share,
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the
aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for
the funding of our initial business combination, and
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the
market value is below $9.50 per share,
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then the exercise price of
the warrants will be adjusted (to the nearest cent) to be equal to 115% of the market price, and the $18.00 per share redemption trigger
price described above will be adjusted (to the nearest cent) to be equal to 180% of the market price. This may make it more difficult
for us to consummate an initial business combination with a target business.
The requirements of being a public company
may strain our resources and divert management’s attention.
As a public company, we are
subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act of 2002 (the “Sarbanes Oxley Act”), the
Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of Nasdaq and other applicable securities rules and
regulations. Compliance with these rules and regulations increase our legal and financial compliance costs, make some activities more
difficult, time-consuming or costly and increase demand on our systems and resources, particularly after we are no longer an “emerging
growth company.” The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures
and internal control over financial reporting. In order to maintain and, if required, improve our disclosure controls and procedures and
internal control over financial reporting to meet this standard, significant resources and management oversight may be required. As a
result, management’s attention may be diverted from other business concerns, which could adversely affect our business and operating
results. We may need to hire more employees in the future or engage outside consultants to comply with these requirements, which will
increase our costs and expenses.
A market for our securities may not develop,
which would adversely affect the liquidity and price of our securities.
The price of our securities
may vary significantly due to one or more potential business combinations and general market or economic conditions. Once listed on Nasdaq,
an active trading market for our securities may never develop or, if developed, it may not be sustained. Additionally, if our securities
become delisted from Nasdaq for any reason, and are quoted on the OTC Bulletin Board, an inter-dealer automated quotation system
for equity securities not listed on a national exchange, the liquidity and price of our securities may be more limited than if we were
listed on Nasdaq or another national exchange. You may be unable to sell your securities unless a market can be established and sustained.
We may issue additional ordinary or preferred
shares to complete our initial business combination or under an employee incentive plan upon or after consummation of our initial business
combination, which would dilute the interest of our shareholders and likely present other risks.
Our memorandum and articles
of association authorize the issuance of an unlimited amount of both ordinary shares of no par value and preferred shares of no par value.
We may issue a substantial number of additional ordinary or preferred shares to complete our initial business combination or under an
employee incentive plan upon or after consummation of our initial business combination (although our memorandum and articles of association
provides that we may not issue securities that can vote with ordinary shareholders on matters related to our pre-initial business
combination activity). The price at which we issue any shares may be lower than the price you paid for the units in our initial public
offering or at a price lower than the trading price of our ordinary shares at the time we commit to such issuance or at the actual issuance
of such shares.
However, our memorandum
and articles of association provides, among other things, that prior to our initial business combination, we may not issue additional
shares of capital stock 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 memorandum and articles of association, like all provisions of our memorandum and articles
of association, may be amended with the approval of our shareholders. However, our executive officers and directors have agreed, pursuant
to a written agreement with us, that they will not propose any amendment to our memorandum and articles of association (A) to modify
the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination
by February 24, 2022 from the closing of our initial public offering or (B) with respect to any other provision relating to shareholders’
rights or pre-initial business combination activity, unless we provide our public shareholders with the opportunity to redeem their
public 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 (which interest shall be net of taxes payable), divided by the number of then outstanding public
shares.
Although no such issuance
of ordinary or preferred shares will affect the per share amount available for redemption from the trust account, the issuance of additional
ordinary or preferred shares:
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may
significantly dilute the equity interest of investors in our initial public offering, who will not have pre-emption rights in respect
of such an issuance;
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may
subordinate the rights of holders of ordinary shares if preferred shares are issued with rights created by amendment of our memorandum
and articles of association by resolution of the directors senior to those afforded our ordinary shares;
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could
cause a change in control if a substantial number of 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
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may
adversely affect prevailing market prices for our units, ordinary shares, rights and/or warrants.
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General Risk Factors
We are a blank check company with no operating
history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.
We are a blank check company
with no operating results. Because we lack an operating history, you have no basis upon which to evaluate our ability to achieve our business
objective of completing our initial business combination with one or more target businesses. We may be unable to complete our initial
business combination. If we fail to complete our initial business combination, we will never generate any operating revenues.
Past performance by our management team may
not be indicative of future performance of an investment in the Company.
Information regarding performance
by, or businesses associated with, our management team and their affiliates is presented for informational purposes only. Past performance
by our management team is not a guarantee either (i) that we will be able to identify a suitable candidate for our initial business
combination or (ii) of success with respect to any business combination we may consummate. You should not rely on the historical record
of the performance of our management team as indicative of our future performance of an investment in the company or the returns the company
will, or is likely to, generate going forward. None of our officers or directors has had experience with any blank check companies in
the past.
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.
Changes in laws or regulations, or a failure
to comply with any laws and regulations, may adversely affect our business, investments 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 also may 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 and results of operations.
The British Virgin Islands,
together with several other non-European Union jurisdictions, have recently introduced legislation aimed at addressing concerns raised
by the Council of the European Union as to offshore structures engaged in certain activities which attract profits without real economic
activity. With effect from January 1, 2019, the Economic Substance (Companies and Limited Partnerships) Act, 2018 (the “ESA”)
came into force in the British Virgin Islands introducing certain economic substance requirements for British Virgin Islands tax resident
companies which are engaged in certain “relevant activities”, which in the case of companies incorporated before January 1,
2019 will apply in respect of financial years commencing June 30, 2019 onwards. However, it is not anticipated that the company itself
will be subject to any such requirements prior to any business combination and thereafter the company may still remain out of scope of
the legislation or else be subject to more limited substance requirements. Although it is presently anticipated that the ESA will have
little material impact on the company or its operations, as the legislation is new and remains subject to further clarification and interpretation
it is not currently possible to ascertain the precise impact of these legislative changes on the company.
We are not subject to the supervision of the
Financial Services Commission of the British Virgin Islands and so our shareholders are not protected by any regulatory inspections in
the British Virgin Islands.
We are not an entity subject
to any regulatory supervision in the British Virgin Islands by the Financial Services Commission. As a result, shareholders are not protected
by any regulatory supervision or inspections by any regulatory agency in the British Virgin Islands and the company is not required to
observe any restrictions in respect of its conduct save as disclosed in this report or its memorandum and articles of association.
You may face difficulties in protecting your
interests, and your ability to protect your rights through the U.S. federal courts may be limited, because we are incorporated under
British Virgin Islands law.
We are a company incorporated
under the laws of the British Virgin Islands. As a result, it may be difficult for investors to enforce judgments obtained in the United
States courts against our directors or officers.
Our corporate affairs are
governed by our memorandum and articles of association, the Companies Act and the common law of the British Virgin Islands. The rights
of shareholders to take action against the directors, actions by minority shareholders and the fiduciary responsibilities of our directors
to us under British Virgin Islands law are governed by the Companies Act and the common law of the British Virgin Islands. The common
law of the British Virgin Islands is derived from English common law, and whilst the decisions of the English courts are of persuasive
authority, they are not binding on a court in the British Virgin Islands. The rights of our shareholders and the fiduciary responsibilities
of our directors under British Virgin Islands law may not be as clearly established as they would be under statutes or judicial precedent
in some jurisdictions in the United States. In particular, the British Virgin Islands has a less developed body of securities laws as
compared to the United States, and some states, such as Delaware, have more fully developed and judicially interpreted bodies of corporate
law. In addition, while statutory provisions do exist in British Virgin Islands law for derivative actions to be brought in certain circumstances,
shareholders in BVI companies may not have standing to initiate a shareholder derivative action in a federal court of the United States.
The circumstances in which any such action may be brought, and the procedures and defenses that may be available in respect to any such
action, may result in the rights of shareholders of a BVI company being more limited than those of shareholders of a company organized
in the United States. Accordingly, shareholders may have fewer alternatives available to them if they believe that corporate wrongdoing
has occurred.
The British Virgin Islands
Courts are also unlikely:
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to recognize or enforce against us judgments of courts of the United States based on certain civil liability provisions of U.S. securities laws where that liability is in respect of penalties, taxes, fines or similar fiscal or revenue obligations of the company; and
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to impose liabilities against us, in original actions brought in the British Virgin Islands, based on certain civil liability provisions of U.S. securities laws that are penal in nature.
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There is no statutory recognition
in the British Virgin Islands of judgments obtained in the United States, although the courts of the British Virgin Islands will in certain
circumstances recognize such a foreign judgment and treat it as a cause of action in itself which may be sued upon as a debt at common
law so that no retrial of the issues would be necessary provided that the U.S. judgment:
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the
U.S. court issuing the judgment had jurisdiction in the matter and the company either submitted to such jurisdiction or was resident
or carrying on business within such jurisdiction and was duly served with process;
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is
final and for a liquidated sum;
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the
judgment given by the U.S. court was not in respect of penalties, taxes, fines or similar fiscal or revenue obligations of the company;
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in
obtaining judgment there was no fraud on the part of the person in whose favor judgment was given or on the part of the court;
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recognition
or enforcement of the judgment would not be contrary to public policy in the British Virgin Islands; and
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the
proceedings pursuant to which judgment was obtained were not contrary to natural justice.
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In appropriate circumstances,
a British Virgin Islands Court may give effect in the British Virgin Islands to other kinds of final foreign judgments such as declaratory
orders, orders for performance of contracts and injunctions.
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 our board of directors,
management or controlling shareholders than they would as public shareholders of a U.S. company.
We may qualify as a passive foreign investment
company, or “PFIC,” which could result in adverse U.S. federal income tax consequences to U.S. investors.
If we are determined to be
a PFIC for any taxable year (or portion thereof) that is included in the holding period of a U.S. Holder of our ordinary shares, rights
or warrants, the U.S. Holder may be subject to adverse U.S. federal income tax consequences and may be subject to additional reporting
requirements. Our actual PFIC status for our current taxable year may depend on whether we qualify for the PFIC start-up exception.
Depending on the particular circumstances the application of the start-up exception may be subject to uncertainty, and there cannot
be any assurance that we will qualify for the start-up exception. Accordingly, there can be no assurances with respect to our status
as a PFIC for our current taxable year or any future taxable year. Our actual PFIC status for any taxable year, however, will not be determinable
until after the end of such taxable year. If we determine we are a PFIC for any taxable year, we will endeavor to provide to a U.S. Holder
such information as the Internal Revenue Service (“IRS”) may require, including a PFIC annual information statement, in order
to enable the U.S. Holder to make and maintain a “qualified electing fund” election, but there can be no assurance that we
will timely provide such required information, and such election would likely be unavailable with respect to our rights and warrants.
We urge U.S. investors to
consult their own tax advisors regarding the possible application of the PFIC rules.
U.S. federal income tax reform could adversely
affect us and holders of our units.
We could be adversely affected
by changes in applicable U.S. tax laws, regulations, or administrative interpretations thereof. For example, the U.S. federal tax legislation
commonly referred to as the Tax Cuts and Jobs Act, enacted in December 2017, resulted in fundamental changes to the Code. This legislation,
among other things, changes the U.S. federal tax rates, imposes significant additional limitations on the deductibility of interest, allows
the expensing of capital expenditures, and puts into effect the migration from a “worldwide” system of taxation to a territorial
system. We continue to examine the impact this tax reform legislation may have on us. The impact of this tax reform, or of any future
administrative guidance interpreting provisions thereof, on holders of our units is uncertain and could be adverse. This report does not
discuss any such tax legislation or the manner in which it might affect holders of our units. We urge prospective investors to consult
with their legal and tax advisors with respect to any such legislation and the potential tax consequences of investing in our units.
After our initial business combination, it
is likely 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 likely 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 to 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.
We are an “emerging growth company”
and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our securities less
attractive to investors.
We are an “emerging
growth” within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from
various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not
limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced
disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements
of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously
approved. As a result, our shareholders may not have access to certain information they may deem important. We could be an emerging growth
company for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our
ordinary shares held by non-affiliates exceeds $700 million as of any December 31 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 accountant standards
used.
The development of fintech is in its early
stage and any adverse development in fintech market may adversely affect our business and results of operations.
Fintech, as defined by Financial
Stability Board, is “technically enabled financial innovation that could result in new business models, applications, processes
or products with an associated material effect on financial markets and institutions and the provision of financial services”. As
of today, consumers and investors are benefiting from both the emergence of new fintech solutions and the evolution of exiting financial
services providers. This has generated a wide range of financial services and products more efficiently and effectively. Some established
fintech business today make only light or early-stage use of the technologies to deliver new products and services to reach their
customers in different financial segments. However, fintech companies are not all profitable. Fintech companies’ failure to achieve
profitability may have a negative impact in our business and operation.
There is no assurance that a fintech business
may be embraced and welcomed by users in the market place. Any negative sentiment to fintech business may adversely affect our business
and results of operations.
As a relatively new technology,
fintech has only recently been deployed in the market place of digital payment, digital wallet, mobile phone banking, distributed financial
record keeping, peer to peer lending, credit rating by artificial intelligence, financial cloud computing, big data and analytics in financial
services to individual credit, etc. However, there can be no assurance that those in the banking database will welcome the emergence of
new technology in the financial system. If privacy and privacy protection are not adequately paired up, consumers may refuse to embrace
the deployment of fintech and may refuse to receive services from fintech. Therefore, our business and operation may adversely be impacted
by the reverse of the market.
We are subject to regulatory risks with regard
to the deployment of fintech, which could negatively affect our business, results of operations and financial position.
Fintech is already delivering
significant benefits to consumers and investors; to financial services firms and financial market infrastructure; and to financial stability
and financial inclusion. The increase use of fintech solutions and emerging technologies also brings risk, to which regulators and supervisors
are responding. Fintech is moving from “under the regulatory” and is attracting growing responses and supervisory scrutiny
per a report titled Regulation and Supervision of Fintech by KPMG in March 2019. Fintech industry regulation differs greatly from country
to country. We foresee that the industry is subject to further governmental supervision and regulation by governmental authorities in
the country where fintech are to be deployed. We will see governmental authorities are likely to issue new laws, rules and regulations
governing the financial transactions via fintech platform, in the areas of cyber security, open banking, outsourcing of cloud computing,
data and AI and accounting and regulatory treatment. We cannot assure you that we are able to successfully foresee any changes in law
and regulations which may adversely affect our reputation, business, financial condition and results of operations upon our initial business
combination.
Erosion or loss of user confidence in fintech
could adversely impact our business, results of operations and financial condition. Financial transaction involving fintech may suffer
from hacking and fraud risks, which may adversely erode user confidence in the technology and reduce demand for our products and services.
Transactions involving fintech
are entirely digital and, as with any virtual system, face risk from hackers, malware and operational glitches. Hackers can target fintech
platform to gain unauthorized access to transactions performed by and over fintech. Certain features of fintech, such as decentralization,
the open source protocols, and peer-to-peer connectivity, may increase the risk of fraud or cyber-attack by potentially reducing
the likelihood of a coordinated response. Fintech users may suffer from hacking risks and may face financial losses, which may erode the
confidence of fintech users, adversely affecting the operation of our business and negatively affect demand for our products.
The functionality of most fintech platform
relies on the Internet. A significant disruption of Internet connectivity could adversely affect our business, results of operations and
financial condition.
We may be subject to information
technology system failures or network disruptions caused by natural disasters, accidents, power disruptions, telecommunications failures,
acts of terrorism or war, computer viruses, physical or electronic break-ins, or other events or disruptions. System redundancy and other
continuity measures may be ineffective or inadequate, and our business continuity and disaster recovery planning may not be sufficient
for all eventualities. Such a significant disruption of Internet connectivity affecting large numbers of users or geographic areas could
impede the functionality of a fintech platform by, among other things, preventing users access, interfering with transactions on fintech
platform.
We have identified a material weakness
in our internal control over financial reporting. This material weakness could continue to adversely affect our ability to report our
results of operations and financial condition accurately and in a timely manner.
Following the issuance
of the SEC Statement on April 12, 2021, our management and our audit committee concluded that, in light of the SEC statement, it was
appropriate to restated previously issued and audited financial statements as of and for the period ended December 31, 2020.
Our management and our
audit committee also concluded that it was appropriate to restate previously issued financial statements for the Affected Periods.
Our management is responsible
for establishing and maintaining adequate internal control over financial reporting designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Our
management is likewise required, on a quarterly basis, to evaluate the effectiveness of our internal controls and to disclose any changes
and material weaknesses identified through such evaluation of those internal controls. A material weakness is a deficiency, or a combination
of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement
of our annual or interim financial statements will not be prevented or detected on a timely basis.
Our management is responsible
for establishing and maintaining adequate internal control over financial reporting designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Our
management is likewise required, on a quarterly basis, to evaluate the effectiveness of our internal controls and to disclose any changes
and material weaknesses identified through such evaluation of those internal controls. A material weakness is a deficiency, or a
combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material
misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.
As described elsewhere
in this Amendment No. 1, we have identified a material weakness in our internal control over financial reporting related to the Company’s
application of ASC 480-10-S99-3A to its accounting classification of the Public Shares. As a result of this material weakness, our management
has concluded that our internal control over financial reporting was not effective as of December 31, 2020. Historically, a portion of
the Public Shares was classified as permanent equity to maintain shareholders’ equity greater than $5 million on the basis that
the Company will not redeem its Public Shares in an amount that would cause its net tangible assets to be less than $5,000,001, as described
in the Charter. Pursuant to the Company’s re-evaluation of the Company’s application of ASC 480-10-S99-3A to its accounting
classification of the Public Shares, the Company’s management has determined that the Public Shares include certain provisions
that require classification of all of the Public Shares as temporary equity regardless of the net tangible assets redemption limitation
contained in the Charter. For a discussion of management’s consideration of the material weakness identified related to the Company’s
application of ASC 480-10-S99-3A to its accounting classification of the Public Share, see “Note 2” to the accompanying financial
statements, as well as Part II, Item 9A: Controls and Procedures included in this Transition Report.
As described in Item 9A.
“Controls and Procedures,” we have concluded that our internal control over financial reporting was ineffective as of December
31, 2020 because material weaknesses existed in our internal control over financial reporting. We have taken a number of measures to
remediate the material weaknesses described therein; however, if we are unable to remediate our material weaknesses in a timely manner
or we identify additional material weaknesses, we may be unable to provide required financial information in a timely and reliable manner
and we may incorrectly report financial information. Likewise, if our financial statements are not filed on a timely basis, we could
be subject to sanctions or investigations by the stock exchange on which our ordinary share is listed, the SEC or other regulatory authorities.
Failure to timely file will cause us to be ineligible to utilize short form registration statements on Form S-3/F-3 or Form S-4/F-4,
which may impair our ability to obtain capital in a timely fashion to execute our business strategies of issue shares to effect an acquisition.
In either case, there could result a material adverse effect on our business. The existence of material weaknesses or significant deficiencies
in internal control over financial reporting could adversely affect our reputation or investor perceptions of us, which could have a
negative effect on the trading price of our shares. In addition, we will incur additional costs to remediate material weaknesses in our
internal control over financial reporting, as described in Item 9A. “Controls and Procedures”.
We can give no assurance
that the measures we have taken and plan to take in the future will remediate the material weakness identified or that any additional
material weaknesses or restatements of financial results will not arise in the future due to a failure to implement and maintain adequate
internal control over financial reporting or circumvention of these controls. In addition, even if we are successful in strengthening
our controls and procedures, in the future those controls and procedures may not be adequate to prevent or identify irregularities or
errors or to facilitate the fair presentation of our financial statements.
We may face litigation and other risks
as a result of the material weakness in our internal control over financial reporting.
Following the issuance
of the SEC Statement, our management and our audit committee concluded that it was appropriate to restate our previously issued audited
financial statements as of December 31, 2020.
Our management and our
audit committee also concluded that it was appropriate to restate our previously issued financial statements for the Affected Periods.
See “—We have identified a material weakness in our internal control over financial reporting. This material weakness
could continue to adversely affect our ability to report our results of operations and financial condition accurately and in a timely
manner.” As part of the restatement, we identified a material weakness in our internal controls over financial reporting.
As a result of such material
weakness, the restatement, the change in accounting for the warrants, the change in the classification of all of the Public Shares as
temporary equity, and other matters raised or that may in the future be raised by the SEC, we face potential for litigation or other
disputes which may include, among others, claims invoking the federal and state securities laws, contractual claims or other claims arising
from the restatement and material weaknesses in our internal control over financial reporting and the preparation of our financial statements.
As of the date of this Transition Report, we have no knowledge of any such litigation or dispute. However, we can provide no assurance
that such litigation or dispute will not arise in the future. Any such litigation or dispute, whether successful or not, could have a
material adverse effect on our business, results of operations and financial condition or our ability to complete a business combination.
Item 1B. Unresolved Staff Comments
None.
Item 2. Properties
We currently maintain our
executive offices at 25 Mall Road, Suite 330, Burlington, MA 01803. The cost for this space is included in the $10,000 per month fee (up
to $120,000 in the aggregate) that the Company pays East Stone Capital Limited, an affiliate of our executive officers, for office space,
utilities and secretarial and administrative services. We believe, based on rents and fees for similar services in Burlington, MA that
this amount is at least as favorable as we could have obtained from an unaffiliated person. We consider our current office space adequate
for our current operations.
Item 3. Legal Proceedings
To the knowledge of our management,
there is no litigation currently pending or contemplated against us, any of our officers or directors in their capacity as such or against
any of our property.
Item 4. Mine Safety Disclosures
Not applicable.