Item 1A. Risk Factors.
An investment in our securities involves a
high degree of risk. You should consider carefully all of the risks described below, together with the other information contained in
this Form 10-K, before making a decision to invest in our units. If any of the following events occur, our business, financial condition
and operating results may be materially adversely affected. In that event, the trading price of our securities could decline, and you
could lose all or part of your investment.
Risk Factor Summary
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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. |
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Our shareholders may not be afforded an opportunity to vote on our proposed initial business combination, and even if we hold a vote, holders of our founder shares will participate in such vote, which means we may complete our initial business combination even though a majority of our public shareholders do not support such a combination. |
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Your only opportunity to effect your investment decision regarding a potential business combination may be limited to the exercise of your right to redeem your shares from us for cash. |
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If we seek shareholder approval of our initial business combination, our initial shareholders and management team have agreed to vote in favor of such initial business combination, regardless of how our public shareholders vote. |
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In evaluating a prospective target business for our initial business combination, our management will rely on the availability of all of the funds from the sale of the forward purchase units to be used as part of the consideration to the sellers in the initial business combination. If the sale of the forward purchase units does not close, we may lack sufficient funds to consummate our initial business combination. |
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The ability of our public shareholders to redeem their shares for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult for us to enter into a business combination with a target. |
| ● | The ability of our public shareholders to exercise redemption
rights with respect to a large number of our shares may not allow us to complete the most desirable business combination or optimize
our capital structure. |
| ● | Our independent registered public accounting firm’s
report contains an explanatory paragraph that expresses substantial doubt about our ability to continue as a “going concern”. |
| ● | We have identified material weaknesses in our internal control over
financial reporting. These material weaknesses could continue to adversely affect our ability to report our results of operations and
financial condition accurately in a timely manner. |
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The requirement that we complete our initial business combination by February 12, 2023 may give potential target businesses leverage over us in negotiating a business combination and may limit the time we have in which to conduct due diligence on potential business combination targets, in particular as we approach our dissolution deadline, which could undermine our ability to complete our initial business combination on terms that would produce value for our shareholders. |
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Our search for a business combination, and any target business with which we ultimately consummate a business combination, may be materially adversely affected by the coronavirus (COVID-19) outbreak and the status of debt and equity markets. |
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We may not be able to complete our initial business combination by February 12, 2023, in which case we would cease all operations except for the purpose of winding up and we would redeem our public shares and liquidate. |
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If we seek shareholder approval of our initial business combination, our Sponsor, initial shareholders, directors, executive officers, advisors and their affiliates may elect to purchase shares or public warrants from public shareholders, which may influence a vote on a proposed business combination and reduce the public “float” of our Class A ordinary shares. |
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If a shareholder fails to receive notice of our offer to redeem our public shares in connection with our initial business combination, or fails to comply with the procedures for submitting or tendering its shares, such shares may not be redeemed. |
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Our officers and directors will allocate their time to other businesses thereby causing conflicts of interest in their determination as to how much time to devote to our affairs. This conflict of interest could have a negative impact on our ability to complete our initial business combination. |
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OrION has committed to purchase at least $100,000,000 of forward purchase units and has the right to purchase up to $200,000,000 of additional forward purchase units concurrently with the closing of our initial business combination, but has no obligation to purchase any or all of such additional amount. Our ability to consummate our initial business combination may be adversely impacted if OrION declines to exercise this right. |
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You will not have any rights or interests in funds from the trust account, except under certain limited circumstances. Therefore, to liquidate your investment, you may be forced to sell your public shares or warrants, potentially at a loss. |
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Nasdaq may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions. |
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You will not be entitled to protections normally afforded to investors of many other blank check companies. |
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Because of our limited resources and the significant competition for business combination opportunities, it may be more difficult for us to complete our initial business combination. If we are unable to complete our initial business combination, our public shareholders may receive only their pro rata portion of the funds in the trust account that are available for distribution to public shareholders, and our warrants will expire worthless. |
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If the net proceeds of the initial public offering and the sale of the private placement warrants not being held in the trust account are insufficient to allow us to operate for at least until February 12, 2023, it could limit the amount available to fund our search for a target business or businesses and complete our initial business combination, and we will depend on loans from our Sponsor or management team to fund our search and to complete our initial business combination. |
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Past performance by our management team and their affiliates, including investments and transactions in which they have participated and businesses with which they have been associated, may not be indicative of future performance of an investment in us. |
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Unlike some other similarly structured special purpose acquisition companies, our initial shareholders will receive additional Class A ordinary shares if we issue certain shares to consummate an initial business combination. |
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We may be a passive foreign investment company, or “PFIC,” which could result in adverse United States federal income tax consequences to U.S. investors. |
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We may reincorporate in another jurisdiction in connection with our initial business combination and such reincorporation may result in taxes imposed on shareholders. |
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We may reincorporate in another jurisdiction in connection with our initial business combination, and the laws of such jurisdiction may govern some or all of our future material agreements and we may not be able to enforce our legal rights. |
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An investment in this offering may result in uncertain U.S. federal income tax consequences. |
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Our initial business combination and our structure thereafter may not be tax-efficient to our shareholders and warrant holders. As a result of our business combination, our tax obligations may be more complex, burdensome and/or uncertain. |
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 initial business combination, and even if we hold a vote, holders of our founder shares will participate
in such vote, which means we may complete our initial business combination even though a majority of our public shareholders do not support
such a combination.
We may choose not to hold a shareholder vote to
approve our initial business combination unless the business combination would require shareholder approval under applicable law or stock
exchange listing requirements. In such case, the decision as to whether we will seek shareholder approval of a proposed business combination
or will allow shareholders to sell their shares to us in a tender offer will be made by us, solely in our discretion, and will be based
on a variety of factors, such as the timing of the transaction and whether the terms of the transaction would otherwise require us to
seek shareholder approval. Even if we seek shareholder approval, the holders of our founder shares will participate in the vote on such
approval. Accordingly, we may complete our initial business combination even if holders of a majority of our ordinary shares do not approve
of the business combination we complete.
In evaluating a prospective target business
for our initial business combination, our management will rely on the availability of all the funds from the sale of the forward purchase
units to be used as part of the consideration to the sellers in the initial business combination. If the sale of the forward purchase
units fails to close, we may lack sufficient funds to consummate our initial business combination.
In connection with the consummation of the initial
public offering, we entered into a forward purchase agreement with OrION pursuant to which OrION has committed that it will purchase from
us 10,000,000 forward purchase units, or at its option up to an aggregate maximum of 30,000,000 forward purchase units, each consisting
of one Class A ordinary share, or a forward purchase share, and one-third of one warrant to purchase one Class A ordinary share for $10.00
per unit, or an aggregate amount of $100,000,000, or at OrION’s option up to an aggregate amount of $300,000,000, in a private placement
that will close concurrently with the closing of our initial business combination. The proceeds from the sale of these forward purchase
units, together with the amounts available to us from the trust account (after giving effect to any redemptions of public shares) and
any other equity or debt financing obtained by us in connection with the business combination, will be used to satisfy the cash requirements
of the business combination, including funding the purchase price and paying expenses and retaining specified amounts to be used by the
post-business combination company for working capital or other purposes. The forward purchase shares will be identical to the Class A
ordinary shares included in the units being sold in the initial public offering, except that they will be subject to transfer restrictions
and registration rights, as described herein. The forward purchase warrants will have the same terms as the private placement warrants
so long as they are held by or its permitted assignees and transferees.
Your only opportunity to effect your investment
decision regarding a potential business combination may be limited to the exercise of your right to redeem your shares from us for cash.
At the time of your investment in us, you will
not be provided with an opportunity to evaluate the specific merits or risks of our initial business combination. Since our board of directors
may complete a business combination without seeking shareholder approval, public shareholders may not have the right or opportunity to
vote on the business combination, unless we seek such shareholder vote. Accordingly, your only opportunity to effect your investment decision
regarding our initial business combination may be limited to exercising your redemption rights within the period of time (which will be
at least 20 business days) set forth in our tender offer documents mailed to our public shareholders in which we describe our initial
business combination.
Members of our management team and board of
directors have significant experience as board members, officers or executives of other companies. As a result, certain of those persons
have been, may be, or may become, involved in proceedings, investigations and litigation relating to the business affairs of the companies
with which they were, are, or may in the future be, affiliated. This may have an adverse effect on us, which may impede our ability to
consummate an initial business combination.
During the course of their careers, members of
our management team and board of directors have had significant experience as board members, officers or executives of other companies.
As a result of their involvement and positions in these companies, certain persons were, are now, or may in the future become, involved
in litigation, investigations or other proceedings relating to the business affairs of such companies or transactions entered into by
such companies. Any such litigation, investigations or other proceedings may divert our management team’s and board’s attention
and resources away from identifying and selecting a target business or businesses for our initial business combination and may negatively
affect our reputation, which may impede our ability to complete an initial business combination.
If we seek shareholder approval of our initial
business combination, our initial shareholders and management team have agreed to vote in favor of such initial business combination,
regardless of how our public shareholders vote.
Our initial shareholders owned 20% of our issued
and outstanding ordinary shares immediately following the completion of the initial public offering. Our initial shareholders and management
team also may from time to time purchase Class A ordinary shares prior to our initial business combination. Our amended and restated memorandum
and articles of association provides that, if we seek shareholder approval of an initial business combination, such initial business combination
will be approved if we receive an ordinary resolution under Cayman Islands law, which requires the affirmative vote of a majority of the
shareholders who attend and vote at a general meeting of the company, including the founder shares. As a result, in addition to our initial
shareholders’ founder shares, we would need 12,937,500, or 37.5%, of the 34,500,000 public shares sold in the initial public offering
to be voted in favor of an initial business combination in order to have our initial business combination approved (assuming all outstanding
shares are voted, the over-allotment option is not exercised and the parties to the letter agreement do not acquire any Class A ordinary
shares). Accordingly, if we seek shareholder approval of our initial business combination, the agreement by our initial shareholders and
management team to vote in favor of our initial business combination will increase the likelihood that we will receive an ordinary resolution,
being the requisite shareholder approval for such initial business combination.
The ability of our public shareholders to redeem
their shares for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult
for us to enter into a business combination with a target.
We may seek to enter into a business combination
transaction agreement with minimum cash requirement for (i) cash consideration to be paid to the target or its owners, (ii) cash
for working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions. If too many public
shareholders exercise their redemption rights, we would not be able to meet such closing condition and, as a result, would not be able
to proceed with the business combination. Furthermore, in no event will we redeem our public shares in an amount that would cause our
net tangible assets to be less than $5,000,001. Consequently, if accepting all properly submitted redemption requests would cause our
net tangible assets to be less than $5,000,001 or make us unable to satisfy a minimum cash condition as described above, we would not
proceed with such redemption and the related business combination and may instead search for an alternate business combination. Prospective
targets will be aware of these risks and, thus, may be reluctant to enter into a business combination transaction with us.
The ability of our public shareholders to exercise
redemption rights with respect to a large number of our shares may not allow us to complete the most desirable business combination or
optimize our capital structure.
At the time we enter into an agreement for our
initial business combination, we will not know how many shareholders may exercise their redemption rights, and therefore will need to
structure the transaction based on our expectations as to the number of shares that will be submitted for redemption. If our initial business
combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price, or requires us to have
a minimum amount of cash at closing, we will need to reserve a portion of the cash in the trust account to meet such requirements, or
arrange for third party financing. In addition, if a larger number of shares are submitted for redemption than we initially expected,
we may need to restructure the transaction to reserve a greater portion of the cash in the trust account or arrange for third party financing.
Raising additional third party financing may involve dilutive equity issuances or the incurrence of indebtedness at higher than desirable
levels. Furthermore, this dilution would increase to the extent that the anti-dilution provision of the Class B ordinary shares results
in the issuance of Class A ordinary shares on a greater than one-to-one basis upon conversion of the Class B ordinary shares at the time
of our initial business combination. In addition, the amount of the deferred underwriting commissions payable to the underwriters will
not be adjusted for any shares that are redeemed in connection with an initial business combination. The per share amount we will distribute
to shareholders who properly exercise their redemption rights will not be reduced by the deferred underwriting commission and after such
redemptions, the amount held in trust will continue to reflect our obligation to pay the entire deferred underwriting commissions. The
above considerations may limit our ability to complete the most desirable business combination available to us or optimize our capital
structure.
The ability of our public shareholders to exercise
redemption rights with respect to a large number of our shares could increase the probability that our initial business combination would
be unsuccessful and that you would have to wait for liquidation in order to redeem your shares.
If our initial business combination agreement
requires us to use a portion of the cash in the trust account to pay the purchase price, or requires us to have a minimum amount of cash
at closing, the probability that our initial business combination would be unsuccessful is increased. If our initial business combination
is unsuccessful, you would not receive your pro rata portion of the trust account until we liquidate the trust account. If you are in
need of immediate liquidity, you could attempt to sell your shares in the open market; however, at such time our shares may trade at a
discount to the pro rata amount per share in the trust account. In either situation, you may suffer a material loss on your investment
or lose the benefit of funds expected in connection with your exercise of redemption rights until we liquidate or you are able to sell
your shares in the open market.
We have identified material weaknesses in
our internal control over financial reporting. These material weaknesses could continue to adversely affect our ability to report our
results of operations and financial condition accurately and in a timely manner.
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 in 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 Annual Report,
we identified material weaknesses in our internal control over financial reporting related to our accounting for complex instruments and
relating to the process of recording accounts payable and accrued expenses.
As a result of these material weaknesses, our
management concluded that our internal control over financial reporting was not effective as of December 31, 2021.
Our independent registered public accounting
firm’s report contains an explanatory paragraph that expresses substantial doubt about our ability to continue as a “going
concern.”
We may not have sufficient liquidity to meet anticipated
obligations over the next year from the issuance of these financial statements. In connection with our assessment of “going concern”
considerations in accordance with ASC Topic 205-40 Presentation of Financial Statements – Going Concern, we have until December
21, 2022 to consummate a business combination. It is uncertain that we will be able to consummate a business combination by this time.
If a business combination is not consummated by this date, there will be a mandatory liquidation and subsequent dissolution of the company.
Management has determined that the liquidity condition and mandatory liquidation, should a business combination not occur, and potential
subsequent dissolution raises substantial doubt about our ability to continue as a going concern. No adjustments have been made to the
carrying amounts of assets or liabilities should the company be required to liquidate after December 21, 2022.
The requirement that we complete our initial
business combination by February 12, 2023 may give potential target businesses leverage over us in negotiating a business combination
and may limit the time we have in which to conduct due diligence on potential business combination targets, in particular as we approach
our dissolution deadline, which could undermine our ability to complete our initial business combination on terms that would produce value
for our shareholders.
Any potential target business with which we enter
into negotiations concerning a business combination will be aware that we must complete our initial business combination by February 12,
2023. Consequently, such target business may obtain leverage over us in negotiating a business combination, knowing that if we do not
complete our initial business combination with that particular target business, we may be unable to complete our initial business combination
with any target business. This risk will increase as we get closer to the timeframe described above. In addition, we may have limited
time to conduct due diligence and may enter into our initial business combination on terms that we would have rejected upon a more comprehensive
investigation.
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
outbreak and the status of debt and equity markets.
In March 2020, the World Health Organization declared
COVID-19 a global pandemic. This outbreak of COVID-19 has resulted in, and a significant outbreak of other infectious diseases could result
in, a widespread health crisis that has and may continue to adversely affect the economies and financial markets worldwide, and the business
of any potential target business with which we may consummate a business combination could be materially and adversely affected. Furthermore,
we may be unable to complete a business combination if continued concerns relating to COVID-19 restrict travel, limit the ability to have
meetings with potential investors or the target company’s personnel, vendors and services providers are unavailable to negotiate
and consummate a transaction in a timely manner. The extent to which COVID-19 impacts our search for and ability to consummate a business
combination will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may
emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others. If the disruptions posed
by COVID-19 or other matters of global concern continue for an extensive period of time, and result in protectionist sentiments and legislation
in our target markets, our ability to consummate a business combination, or the operations of a target business with which we ultimately
consummate a business combination, may be materially adversely affected. In addition, our ability to consummate a transaction may be dependent
on the ability to raise equity and debt financing which may be impacted by COVID-19 and other events, including as a result of increased
market volatility, decreased market liquidity in third-party financing being unavailable on terms acceptable to us or at all. Finally,
the outbreak of COVID-19 may also have the effect of heightening many of the other risks described in this “Risk Factors”
section, such as those related to the market for our securities and cross-border transactions.
We may not be able to complete our initial
business combination by February 12, 2023, in which case we would cease all operations except for the purpose of winding up and we would
redeem our public shares and liquidate.
We may not be able to find a suitable target business
and complete our initial business combination by February 12, 2023 after the closing of the initial public offering. Our ability to complete
our initial business combination may be negatively impacted by general market conditions, volatility in the capital and debt markets and
the other risks described herein. For example, the outbreak of COVID-19 continues to grow both in the U.S. and globally and, while the
extent of the impact of the outbreak on us will depend on future developments, it could limit our ability to complete our initial business
combination, including as a result of increased market volatility, decreased market liquidity and third-party financing being unavailable
on terms acceptable to us or at all. Furthermore, we may be unable to complete a business combination if continued concerns relating to
COVID-19 restrict travel, limit the ability to have meetings with potential investors or the target company’s personnel, vendors
and services providers are unavailable to negotiate and consummate a transaction in a timely manner. Additionally, the outbreak of COVID-19
may negatively impact businesses we may seek to acquire. If we have not completed our initial business combination within such time period,
we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten
business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit
in the trust account, including interest earned on the funds held in the trust account (less taxes payable and up to $100,000 of interest
to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public
shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any) and (iii) as promptly
as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate
and dissolve, subject in the case of clauses (ii) and (iii), to our obligations under Cayman Islands law to provide for claims of creditors
and in all cases subject to the other requirements of applicable law.
If we seek shareholder approval of our initial
business combination, the Sponsor, initial shareholders, directors, officers, advisors and their affiliates may elect to purchase shares
or public warrants from public shareholders, which may influence a vote on a proposed business combination and reduce the public “float”
of our Class A ordinary shares.
If we seek shareholder approval of our initial
business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer
rules, our Sponsor, directors, officers, advisors or their affiliates may purchase shares or public warrants in privately negotiated transactions
or in the open market either prior to or following the completion of our initial business combination, although they are under no obligation
to do so. There is no limit on the number of shares our initial shareholders, directors, officers, advisors or their affiliates may purchase
in such transactions, subject to compliance with applicable law and Nasdaq rules. However, they have no current commitments, plans or
intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds
in the trust account will be used to purchase shares or public warrants in such transactions. Such purchases may include a contractual
acknowledgment that such shareholder, although still the record holder of our shares, is no longer the beneficial owner thereof and therefore
agrees not to exercise its redemption rights.
In the event that our Sponsor, directors, officers,
advisors or their affiliates purchase shares in privately negotiated transactions from public shareholders who have already elected to
exercise their redemption rights, such selling shareholders would be required to revoke their prior elections to redeem their shares.
The purpose of any such purchases of shares could be to vote such shares in favor of the business combination and thereby increase the
likelihood of obtaining shareholder approval of the business combination or to satisfy a closing condition in an agreement with a target
that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it
appears that such requirement would otherwise not be met. The purpose of any such purchases of public warrants could be to reduce the
number of public warrants outstanding or to vote such warrants on any matters submitted to the warrant holders for approval in connection
with our initial business combination. Any such purchases of our securities may result in the completion of our initial business combination
that may not otherwise have been possible. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act
to the extent such purchasers are subject to such reporting requirements.
In addition, if such purchases are made, the public
“float” of our Class A ordinary shares or public warrants and the number of beneficial holders of our securities may be reduced,
possibly making it difficult to obtain or maintain the quotation, listing or trading of our securities on a national securities exchange.
If a shareholder fails to receive notice of
our offer to redeem our public shares in connection with our initial business combination, or fails to comply with the procedures for
tendering its shares, such shares may not be redeemed.
We will comply with the proxy rules or tender
offer rules, as applicable, when conducting redemptions in connection with our initial business combination. Despite our compliance with
these rules, if a shareholder fails to receive our proxy materials or tender offer documents, as applicable, such shareholder may not
become aware of the opportunity to redeem its shares. In addition, proxy materials or tender offer documents, as applicable, that we will
furnish to holders of our public shares in connection with our initial business combination will describe the various procedures that
must be complied with in order to validly tender or submit public shares for redemption. For example, we intend to require our public
shareholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,”
to, at the holder’s option, either deliver their stock certificates to our transfer agent, or to deliver their shares to our transfer
agent electronically prior to the date set forth in the proxy materials or tender offer documents, as applicable. In the case of proxy
materials, this date may be up to two business days prior to the date on which the vote on the proposal to approve the initial business
combination is to be held. In addition, if we conduct redemptions in connection with a shareholder vote, we intend to require a public
shareholder seeking redemption of its public shares to also submit a written request for redemption to our transfer agent two business
days prior to the vote in which the name of the beneficial owner of such shares is included. In the event that a shareholder fails to
comply with these or any other procedures disclosed in the proxy or tender offer materials, as applicable, its shares may not be redeemed.
You will not have any rights or interests in
funds from the trust account, except under certain limited circumstances. Therefore, to liquidate your investment, you may be forced to
sell your public shares or warrants, potentially at a loss.
Our public shareholders will be entitled to receive
funds from the trust account only upon the earliest to occur of: (i) our completion of an initial business combination, and then only
in connection with those Class A ordinary shares that such shareholder properly elected to redeem, subject to the limitations and
on the conditions described herein, (ii) the redemption of any public shares properly submitted in connection with a shareholder vote
to amend our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to allow
redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial
business combination by February 12, 2023 or (B) with respect to any other material provisions relating to shareholders’ rights
or pre-initial business combination activity, and (iii) the redemption of our public shares if we are unable to complete an initial business
combination by February 12, 2023, subject to applicable law and as further described herein. In no other circumstances will a public shareholder
have any right or interest of any kind in the trust account. Holders of warrants will not have any right to the proceeds held in the trust
account with respect to the warrants. Accordingly, to liquidate your investment, you may be forced to sell your public shares or warrants,
potentially at a loss.
You will not be entitled to protections normally
afforded to investors of many other blank check companies.
Since the net proceeds of the initial public offering
and the sale of the private placement warrants are intended to be used to complete an initial business combination with a target business
that has not been selected, we may be deemed to be a “blank check” company under the United States securities laws. However,
because we will have net tangible assets in excess of $5,000,000 upon the completion of the initial public offering and the sale of the
private placement warrants and will file a Current Report on Form 8-K, including an audited balance sheet demonstrating this fact, we
are exempt from rules promulgated by the SEC to protect investors in blank check companies, such as Rule 419. Accordingly, investors will
not be afforded the benefits or protections of those rules. Among other things, this means our units will be immediately tradable and
we will have a longer period of time to complete our initial business combination than do companies subject to Rule 419. Moreover, if
the initial public offering were subject to Rule 419, that rule would prohibit the release of any interest earned on funds held in the
trust account to us unless and until the funds in the trust account were released to us in connection with our completion of an initial
business combination.
If we seek shareholder approval of our initial
business combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a “group” of shareholders
are deemed to hold in excess of 15% of our Class A ordinary shares, you will lose the ability to redeem all such shares in excess of 15%
of our Class A ordinary shares.
If we seek shareholder approval of our initial
business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer
rules, our amended and restated memorandum and articles of association provides that a public shareholder, together with any affiliate
of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under
Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 15% of the
shares sold in the initial public offering without our prior consent, which we refer to as the “Excess Shares.” However, we
would not be restricting our shareholders’ ability to vote all of their shares (including Excess Shares) for or against our initial
business combination. Your inability to redeem the Excess Shares will reduce your influence over our ability to complete our initial business
combination and you could suffer a material loss on your investment in us if you sell Excess Shares in open market transactions. Additionally,
you will not receive redemption distributions with respect to the Excess Shares if we complete our initial business combination. And as
a result, you will continue to hold that number of shares exceeding 15% and, in order to dispose of such shares, would be required to
sell your shares in open market transactions, potentially at a loss.
Because of our limited resources and the significant
competition for business combination opportunities, it may be more difficult for us to complete our initial business combination. If we
are unable to complete our initial business combination, our public shareholders may receive only their pro rata portion of the funds
in the trust account that are available for distribution to public shareholders, and our warrants will expire worthless.
We expect to encounter competition from other
entities having a business objective similar to ours, including private investors (which may be individuals or investment partnerships),
other blank check companies and other entities, domestic and international, competing for the types of businesses we intend to acquire.
Many of these individuals and entities are well-established and have extensive experience in identifying and effecting, directly or indirectly,
acquisitions of companies operating in or providing services to various industries. Many of these competitors possess similar or greater
technical, human and other resources to ours or more local industry knowledge than we do and our financial resources will be relatively
limited when contrasted with those of many of these competitors. While we believe there are numerous target businesses we could potentially
acquire with the net proceeds of the initial public offering and the sale of the private placement warrants, our ability to compete with
respect to the acquisition of certain target businesses that are sizable will be limited by our available financial resources. This inherent
competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses. Furthermore, we are obligated
to offer holders of our public shares the right to redeem their shares for cash at the time of our initial business combination in conjunction
with a shareholder vote or via a tender offer. Target companies will be aware that this may reduce the resources available to us for our
initial business combination. Any of these obligations may place us at a competitive disadvantage in successfully negotiating a business
combination. If we are unable to complete our initial business combination, our public shareholders may receive only their pro rata portion
of the funds in the trust account that are available for distribution to public shareholders, and our warrants will expire worthless.
If the net proceeds of the initial public offering
and the sale of the private placement warrants not being held in the trust account are insufficient to allow us to operate for at least
until February 12, 2023, it could limit the amount available to fund our search for a target business or businesses and complete our initial
business combination, and we will depend on loans from our Sponsor or management team to fund our search and to complete our initial business
combination.
Of the net proceeds of the initial public offering,
only $1,000,000 will be available to us initially outside the trust account to fund our working capital requirements. We believe that,
upon closing of the initial public offering, the funds available to us outside of the trust account will be sufficient to allow us to
operate for at least until February 12, 2023; however, we cannot assure you that our estimate is accurate. Of the funds available to us,
we could use a portion of the funds available to us to pay fees to consultants to assist us with our search for a target business. We
could also use a portion of the funds as a down payment or to fund a “no-shop” provision (a provision in letters of intent
or merger agreements designed to keep target businesses from “shopping” around for transactions with other companies or investors
on terms more favorable to such target businesses) with respect to a particular proposed business combination, although we do not have
any current intention to do so. If we entered into a letter of intent or merger agreement where we paid for the right to receive exclusivity
from a target business and were subsequently required to forfeit such funds (whether as a result of our breach or otherwise), we might
not have sufficient funds to continue searching for, or conduct due diligence with respect to, a target business.
Prior to the completion of our initial business
combination, we do not expect to seek loans from parties other than our Sponsor or an affiliate of our Sponsor as we do not believe third
parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.
If we are unable to complete our initial business combination because we do not have sufficient funds available to us, we will be forced
to cease operations and liquidate the trust account. Consequently, our public shareholders may only receive an estimated $10.00 per share,
or possibly less, on our redemption of our public shares, and our warrants will expire worthless.
Subsequent to our completion of our initial
business combination, we may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have
a significant negative effect on our financial condition, results of operations and our share price, which could cause you to lose some
or all of your investment.
Even if we conduct due diligence on a target business
with which we combine, we cannot assure you that this diligence will identify all material issues that may be present within a particular
target business, that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors
outside of the target business and outside of our control will not later arise. As a result of these factors, we may be forced to later
write-down or write-off assets, restructure our operations, or incur impairment or other charges that could result in our reporting losses.
Even if our due diligence successfully identifies certain risks, unexpected risks may arise and previously known risks may materialize
in a manner not consistent with our preliminary risk analysis. Even though these charges may be non-cash items and not have an immediate
impact on our liquidity, the fact that we report charges of this nature could contribute to negative market perceptions about us or our
securities. In addition, charges of this nature may cause us to violate net worth or other covenants to which we may be subject as a result
of assuming pre-existing debt held by a target business or by virtue of our obtaining debt financing to partially finance the initial
business combination or thereafter. Accordingly, any shareholders who choose to remain shareholders following the business combination
could suffer a reduction in the value of their securities. Such shareholders are unlikely to have a remedy for such reduction in value
unless they are able to successfully claim that the reduction was due to the breach by our officers or directors of a duty of care or
other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that the proxy solicitation
or tender offer materials, as applicable, relating to the business combination contained an actionable material misstatement or material
omission.
If third parties bring claims against us, the
proceeds held in the trust account could be reduced and the per-share redemption amount received by shareholders may be less than $10.00
per share.
Our placing of funds in the trust account may
not protect those funds from third party claims against us. Although we will seek to have all vendors, service providers, prospective
target businesses and other entities with which we do business execute agreements with us waiving any right, title, interest or claim
of any kind in or to any monies held in the trust account for the benefit of our public shareholders, such parties may not execute such
agreements, or even if they execute such agreements they may not be prevented from bringing claims against the trust account, including,
but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the
enforceability of the waiver, in each case in order to gain advantage with respect to a claim against our assets, including the funds
held in the trust account. If any third party refuses to execute an agreement waiving such claims to the monies held in the trust account,
our management will consider whether competitive alternatives are reasonably available to us and will only enter into an agreement with
such third party if management believes that such third party’s engagement would be in the best interests of the company under the
circumstances. Marcum LLP, our independent registered public accounting firm, and the underwriters of the initial public offering will
not execute agreements with us waiving such claims to the monies held in the trust account.
Examples of possible instances where we may engage
a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular expertise or skills
are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases
where management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities
will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements
with us and will not seek recourse against the trust account for any reason. Upon redemption of our public shares, if we are unable to
complete our initial business combination within the prescribed timeframe, or upon the exercise of a redemption right in connection with
our initial business combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought
against us within the 10 years following redemption. Accordingly, the per-share redemption amount received by public shareholders could
be less than the $10.00 per public share initially held in the trust account, due to claims of such creditors. Pursuant to the letter
agreement the form of which is filed as an exhibit to the registration statement, our Sponsor has agreed that it will be liable to us
if and to the extent any claims by a third party for services rendered or products sold to us, or a prospective target business with which
we have entered into a written letter of intent, confidentiality or other similar agreement or business combination agreement, reduce
the amount of funds in the trust account to below the lesser of (i) $10.00 per public share and (ii) the actual amount per public share
held in the trust account as of the date of the liquidation of the trust account, if less than $10.00 per share due to reductions in the
value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective
target business who executed a waiver of any and all rights to the monies held in the trust account (whether or not such waiver is enforceable)
nor will it apply to any claims under our indemnity of the underwriters of the initial public offering against certain liabilities, including
liabilities under the Securities Act of 1933, as amended (“Securities Act”). However, we have not asked our Sponsor to reserve
for such indemnification obligations, nor have we independently verified whether our Sponsor has sufficient funds to satisfy its indemnity
obligations and we believe that our Sponsor’s only assets are securities of our company. Therefore, we cannot assure you that our
Sponsor would be able to satisfy those obligations. As a result, if any such claims were successfully made against the trust account,
the funds available for our initial business combination and redemptions could be reduced to less than $10.00 per public share. In such
event, we may not be able to complete our initial business combination, and you would receive such lesser amount per share in connection
with any redemption of your public shares. None of our officers or directors will indemnify us for claims by third parties including,
without limitation, claims by vendors and prospective target businesses.
Our directors may decide not to enforce the
indemnification obligations of our Sponsor, resulting in a reduction in the amount of funds in the trust account available for distribution
to our public shareholders.
In the event that the proceeds in the trust account
are reduced below the lesser of (i) $10.00 per share and (ii) the actual amount per public share held in the trust account as of the date
of the liquidation of the trust account if less than $10.00 per share due to reductions in the value of the trust assets, in each case
less taxes payable, and our Sponsor asserts that it is unable to satisfy his obligations or that he has no indemnification obligations
related to a particular claim, our independent directors would determine whether to take legal action against our Sponsor to enforce its
indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against our
Sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment
and subject to their fiduciary duties may choose not to do so in any particular instance if, for example, the cost of such legal action
is deemed by the independent directors to be too high relative to the amount recoverable or if the independent directors determine that
a favorable outcome is not likely. If our independent directors choose not to enforce these indemnification obligations, the amount of
funds in the trust account available for distribution to our public shareholders may be reduced below $10.00 per share.
We may not have sufficient funds to satisfy
indemnification claims of our directors and officers.
We have agreed to indemnify our officers and directors
to the fullest extent permitted by law. However, our officers and directors have agreed to waive any right, title, interest or claim of
any kind in or to any monies in the trust account and to not seek recourse against the trust account for any reason whatsoever. Accordingly,
any indemnification provided will be able to be satisfied by us only if (i) we have sufficient funds outside of the trust account or (ii)
we consummate an initial business combination. Our obligation to indemnify our officers and directors may discourage shareholders from
bringing a lawsuit against our officers or directors for breach of their fiduciary duty. These provisions also may have the effect of
reducing the likelihood of derivative litigation against our officers and directors, even though such an action, if successful, might
otherwise benefit us and our shareholders. Furthermore, a shareholder’s investment may be adversely affected to the extent we pay
the costs of settlement and damage awards against our officers and directors pursuant to these indemnification provisions.
If, after we distribute the proceeds in the
trust account to our public shareholders, we file a bankruptcy or insolvency petition or an involuntary bankruptcy or insolvency petition
is filed against us that is not dismissed, a bankruptcy or insolvency court may seek to recover such proceeds, and the members of our
board of directors may be viewed as having breached their fiduciary duties to our creditors, thereby exposing the members of our board
of directors and us to claims of punitive damages.
If, after we distribute the proceeds in the trust
account to our public shareholders, we file a bankruptcy or insolvency petition or an involuntary bankruptcy or insolvency petition is
filed against us that is not dismissed, any distributions received by shareholders could be viewed under applicable debtor/creditor and/or
bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy or
insolvency court could seek to recover some or all amounts received by our shareholders. In addition, our board of directors may be viewed
as having breached its fiduciary duty to our creditors and/or having acted in bad faith, thereby exposing itself and us to claims of punitive
damages, by paying public shareholders from the trust account prior to addressing the claims of creditors.
If, before distributing the proceeds in the
trust account to our public shareholders, we file a bankruptcy or insolvency petition or an involuntary bankruptcy or insolvency petition
is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our shareholders
and the per-share amount that would otherwise be received by our shareholders in connection with our liquidation may be reduced.
If, before distributing the proceeds in the trust
account to our public shareholders, we file a bankruptcy or insolvency petition or an involuntary bankruptcy or insolvency petition is
filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may
be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our shareholders. To
the extent any bankruptcy claims deplete the trust account, the per-share amount that would otherwise be received by our shareholders
in connection with our liquidation may be reduced.
Our shareholders may be held liable for claims
by third parties against us to the extent of distributions received by them upon redemption of their shares.
If we are forced to enter into an insolvent liquidation,
any distributions received by shareholders could be viewed as an unlawful payment if it was proved that immediately following the date
on which the distribution was made, we were unable to pay our debts as they fall due in the ordinary course of business. As a result,
a liquidator could seek to recover some or all amounts received by our shareholders. Furthermore, our directors may be viewed as having
breached their fiduciary duties to us or our creditors and/or may have acted in bad faith, thereby exposing themselves and our company
to claims, by paying public shareholders from the trust account prior to addressing the claims of creditors. We cannot assure you that
claims will not be brought against us for these reasons. We and our directors and officers who knowingly and willfully authorized or permitted
any distribution to be paid out of our share premium account while we were unable to pay our debts as they fall due in the ordinary course
of business would be guilty of an offence and may be liable to a fine of $18,293 and to imprisonment for five years in the Cayman Islands.
We may not hold an annual general meeting until
after the consummation of our initial business combination, which could delay the opportunity for our shareholders to appoint directors.
In accordance with Nasdaq corporate governance
requirements, we are not required to hold an annual general meeting until no later than one year after our first fiscal year end following
our listing on Nasdaq. There is no requirement under the Companies Law for us to hold annual or extraordinary general meetings to appoint
directors. Until we hold an annual general meeting, public shareholders may not be afforded the opportunity to appoint directors and to
discuss company affairs with management. Our board of directors is divided into three classes with only one class of directors being appointed
in each year and each class (except for those directors appointed prior to our first annual general meeting) serving a three-year term.
In addition, as holders of our Class A ordinary shares, our public shareholders will not have the right to vote on the appointment of
directors until after the consummation of our initial business combination.
Because we are neither limited to evaluating
a target business in a particular industry sector nor have we selected any target businesses with which to pursue our initial business
combination, you will be unable to ascertain the merits or risks of any particular target business’s operations.
Our efforts to identify a prospective initial
business combination target will not be limited to a particular industry, sector or geographic region. While we may pursue an initial
business combination opportunity in any industry or sector, we intend to capitalize on the ability of our management team to identify
and acquire a business or businesses that can benefit from our management team’s established global relationships and operating
experience. Our management team has extensive experience in identifying and executing strategic investments globally and has done so successfully
in a number of sectors, including global technology sectors. Our amended and restated memorandum and articles of association prohibits
us from effectuating a business combination with another blank check company or similar company with nominal operations. Because we have
not yet selected any specific target business with respect to a business combination, there is no basis to evaluate the possible merits
or risks of any particular target business’s operations, results of operations, cash flows, liquidity, financial condition or prospects.
To the extent we complete our initial business combination, we may be affected by numerous risks inherent in the business operations with
which we combine. For example, if we combine with a financially unstable business or an entity lacking an established record of sales
or earnings, we may be affected by the risks inherent in the business and operations of a financially unstable or a development stage
entity. Although our officers and directors will endeavor to evaluate the risks inherent in a particular target business, we cannot assure
you that we will properly ascertain or assess all of the significant risk factors or that we will have adequate time to complete due diligence.
Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that those
risks will adversely impact a target business. We also cannot assure you that an investment in our units will ultimately prove to be more
favorable to investors than a direct investment, if such opportunity were available, in a business combination target. Accordingly, any
shareholders who choose to remain shareholders following the business combination could suffer a reduction in the value of their securities.
Such shareholders are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction
was due to the breach by our officers or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully
bring a private claim under securities laws that the proxy solicitation or tender offer materials, as applicable, relating to the business
combination contained an actionable material misstatement or material omission.
We may seek business combination opportunities
in industries or sectors that may be outside of our management’s areas of expertise.
We will consider a business combination outside
of our management’s areas of expertise if a business combination candidate is presented to us and we determine that such candidate
offers an attractive business combination opportunity for our company. Although our management will endeavor to evaluate the risks inherent
in any particular business combination candidate, we cannot assure you that we will adequately ascertain or assess all of the significant
risk factors. We also cannot assure you that an investment in our units will not ultimately prove to be less favorable to investors in
the initial public offering than a direct investment, if an opportunity were available, in a business combination candidate. In the event
we elect to pursue a business combination outside of the areas of our management’s expertise, our management’s expertise may
not be directly applicable to its evaluation or operation, and the information regarding the areas of our management’s expertise
would not be relevant to an understanding of the business that we elect to acquire. As a result, our management may not be able to ascertain
or assess adequately all of the relevant risk factors. Accordingly, any shareholders who choose to remain shareholders following our initial
business combination could suffer a reduction in the value of their shares. Such shareholders are unlikely to have a remedy for such reduction
in value.
Although we have identified general criteria
and guidelines that we believe are important in evaluating prospective target businesses, we may enter into our initial business combination
with a target that does not meet such criteria and guidelines, and as a result, the target business with which we enter into our initial
business combination may not have attributes entirely consistent with our general criteria and guidelines.
Although we have identified general criteria and
guidelines for evaluating prospective target businesses, it is possible that a target business with which we enter into our initial business
combination will not have all of these positive attributes. If we complete our initial business combination with a target that does not
meet some or all of these guidelines, such combination may not be as successful as a combination with a business that does meet all of
our general criteria and guidelines. In addition, if we announce a prospective business combination with a target that does not meet our
general criteria and guidelines, a greater number of shareholders may exercise their redemption rights, which may make it difficult for
us to meet any closing condition with a target business that requires us to have a minimum net worth or a certain amount of cash. In addition,
if shareholder approval of the transaction is required by law, or we decide to obtain shareholder approval for business or other reasons,
it may be more difficult for us to attain shareholder approval of our initial business combination if the target business does not meet
our general criteria and guidelines. If we are unable to complete our initial business combination, our public shareholders may only receive
their pro rata portion of the funds in the trust account that are available for distribution to public shareholders, and our warrants
will expire worthless.
We are not required to obtain an opinion from
an independent investment banking firm or from a valuation or appraisal firm, and consequently, you may have no assurance from an independent
source that the price we are paying for the business is fair to our shareholders from a financial point of view.
Unless we complete our initial business combination
with an affiliated entity or our board of directors cannot independently determine the fair market value of the target business or businesses
(including with the assistance of financial advisors), we are not required to obtain an opinion from an independent investment banking
firm which is a member of FINRA or from a valuation or appraisal firm that the price we are paying is fair to our shareholders from a
financial point of view. If no opinion is obtained, our shareholders will be relying on the judgment of our board of directors, who will
determine fair market value based on standards generally accepted by the financial community. Such standards used will be disclosed in
our proxy materials or tender offer documents, as applicable, related to our initial business combination.
Because we must furnish our shareholders with
target business financial statements, we may lose the ability to complete an otherwise advantageous initial business combination with
some prospective target businesses.
The federal proxy rules require that the proxy
statement with respect to the vote on an initial business combination include historical and pro forma financial statement disclosure.
We will include the same financial statement disclosure in connection with our tender offer documents, whether or not they are required
under the tender offer rules. These financial statements may be required to be prepared in accordance with, or be reconciled to, accounting
principles generally accepted in the United States of America (“GAAP”) or international financial reporting standards as issued
by the International Accounting Standards Board (“IFRS”) depending on the circumstances and the historical financial statements
may be required to be audited in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”).
These financial statement requirements may limit the pool of potential target businesses we may acquire because some targets may be unable
to provide such financial statements in time for us to disclose such statements in accordance with federal proxy rules and complete our
initial business combination within the prescribed time frame.
Compliance obligations under the Sarbanes-Oxley
Act may make it more difficult for us to effectuate our initial business combination, require substantial financial and management resources,
and increase the time and costs of completing an initial business combination.
Section 404 of the Sarbanes-Oxley Act requires
that we evaluate and report on our system of internal controls beginning with our Annual Report on Form 10-K for the year ending December
31, 2022. Only in the event we are deemed to be a large accelerated filer or an accelerated filer, and no longer qualify as an emerging
growth company, will we be required to comply with the independent registered public accounting firm attestation requirement on our internal
control over financial reporting. Further, for as long as we remain an emerging growth company, we will not be required to comply with
the independent registered public accounting firm attestation requirement on our internal control over financial reporting. The fact that
we are a blank check company makes compliance with the requirements of the Sarbanes-Oxley Act particularly burdensome on us as compared
to other public companies because a target business with which we seek to complete our initial business combination may not be in compliance
with the provisions of the Sarbanes-Oxley Act regarding adequacy of its internal controls. The development of the internal control of
any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such business
combination.
We do not have a specified maximum redemption
threshold. The absence of such a redemption threshold may make it possible for us to complete our initial business combination with which
a substantial majority of our shareholders do not agree.
Our amended and restated memorandum and articles
of association provide that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less
than $5,000,001. In addition, our proposed initial business combination may impose a minimum cash requirement for (i) cash consideration
to be paid to the target or its owners, (ii) cash for working capital or other general corporate purposes or (iii) the retention of cash
to satisfy other conditions. As a result, we may be able to complete our initial business combination even though a substantial majority
of our public shareholders do not agree with the transaction and have redeemed their shares or, if we seek shareholder approval of our
initial business combination and do not conduct redemptions in connection with our initial business combination pursuant to the tender
offer rules, have entered into privately negotiated agreements to sell their shares to our Sponsor, officers, directors, advisors or any
of their affiliates. In the event the aggregate cash consideration we would be required to pay for all Class A ordinary shares that are
validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination
exceed the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares, all Class A ordinary
shares submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business combination.
In order to effectuate an initial business
combination, special purpose acquisition companies have, in the recent past, amended various provisions of their charters and other governing
instruments, including their warrant agreements. We cannot assure you that we will not seek to amend our amended and restated memorandum
and articles of association or governing instruments in a manner that will make it easier for us to complete our initial business combination
that our shareholders may not support.
In order to effectuate a business combination,
special purpose acquisition companies have, in the recent past, amended various provisions of their charters and governing instruments,
including their warrant agreements. For example, special purpose acquisition companies have amended the definition of business combination,
increased redemption thresholds and extended the time to consummate an initial business combination and, with respect to their warrants,
amended their warrant agreements to require the warrants to be exchanged for cash and/or other securities. Amending our amended and restated
memorandum and articles of association will require a special resolution under Cayman Islands law, being the affirmative vote of a majority
of at least two-thirds of the shareholders who attend and vote at a general meeting of the company, and amending our warrant agreement
will require a vote of holders of at least 50% of the public warrants and, solely with respect to any amendment to the terms of the private
placement warrants or any provision of the warrant agreement with respect to the private placement warrants, 50% of the then outstanding
private placement warrants. In addition, our amended and restated memorandum and articles of association requires us to provide our public
shareholders with the opportunity to redeem their public shares for cash if we propose an amendment to our amended and restated memorandum
and articles of association (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial
business combination or to redeem 100% of our public shares if we do not complete an initial business combination by February 12, 2023
or (B) with respect to any other material provisions relating to shareholders’ rights or pre-initial business combination activity.
To the extent any of such amendments would be deemed to fundamentally change the nature of the securities offered in the initial public
offering, we would register, or seek an exemption from registration for, the affected securities. We cannot assure you that we will not
seek to amend our charter or governing instruments or extend the time to consummate an initial business combination in order to effectuate
our initial business combination.
The provisions of our amended and restated
memorandum and articles of association that relate to our pre-business combination activity (and corresponding provisions of the agreement
governing the release of funds from our trust account) may be amended with the approval of holders of not less than two-thirds of our
ordinary shares who attend and vote at a general meeting of the company (or 65% of our ordinary shares with respect to amendments to the
trust agreement governing the release of funds from our trust account), which is a lower amendment threshold than that of some other special
purpose acquisition companies. It may be easier for us, therefore, to amend our amended and restated memorandum and articles of association
to facilitate the completion of an initial business combination that some of our shareholders may not support.
Our amended and restated memorandum and articles
of association provide that any of its provisions related to pre-business combination activity (including the requirement to deposit proceeds
of the initial public offering and the private placement of warrants into the trust account and not release such amounts except in specified
circumstances, and to provide redemption rights to public shareholders as described herein) may be amended if approved by special resolution,
under Cayman Islands law being the affirmative vote of a majority of at least two-thirds of the shareholders who attend and vote at a
general meeting of the company, and corresponding provisions of the trust agreement governing the release of funds from our trust account
may be amended if approved by holders of 65% of our ordinary shares. Our initial shareholders, who will collectively beneficially own
20% of our ordinary shares upon the closing of the initial public offering (assuming they do not purchase any units in the initial public
offering), will participate in any vote to amend our amended and restated memorandum and articles of association and/or trust agreement
and will have the discretion to vote in any manner they choose. As a result, we may be able to amend the provisions of our amended and
restated memorandum and articles of association which govern our pre-business combination behavior more easily than some other special
purpose acquisition companies, and this may increase our ability to complete a business combination with which you do not agree. Our shareholders
may pursue remedies against us for any breach of our amended and restated memorandum and articles of association.
Our Sponsor, officers and directors have agreed,
pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated memorandum and articles
of association (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination
or to redeem 100% of our public shares if we do not complete our initial business combination by February 12, 2023 or (B) with respect
to any other material provisions relating to shareholders’ rights or pre-initial business combination activity, unless we provide
our public shareholders with the opportunity to redeem their Class A ordinary shares upon approval of any such amendment at a per-share
price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held
in the trust account and not previously released to us to pay our taxes, divided by the number of then outstanding public shares. Our
shareholders are not parties to, or third-party beneficiaries of, these agreements and, as a result, will not have the ability to pursue
remedies against our Sponsor, officers or directors for any breach of these agreements. As a result, in the event of a breach, our shareholders
would need to pursue a shareholder derivative action, subject to applicable law.
We may be unable to obtain additional financing
to complete our initial business combination or to fund the operations and growth of a target business, which could compel us to restructure
or abandon a particular business combination.
We have not selected any specific business combination
target but intend to target businesses with enterprise values that are greater than we could acquire with the net proceeds of the initial
public offering and the sale of the private placement warrants and the forward purchase securities. As a result, if the cash portion of
the purchase price exceeds the amount available from the trust account, net of amounts needed to satisfy any redemption by public shareholders,
we may be required to seek additional financing to complete such proposed initial business combination. We cannot assure you that such
financing will be available on acceptable terms, if at all. To the extent that additional financing proves to be unavailable when needed
to complete our initial business combination, we would be compelled to either restructure the transaction or abandon that particular business
combination and seek an alternative target business candidate. Further, we may be required to obtain additional financing in connection
with the closing of our initial business combination for general corporate purposes, including for maintenance or expansion of operations
of the post-transaction businesses, the payment of principal or interest due on indebtedness incurred in completing our initial business
combination, or to fund the purchase of other companies. If we are unable to complete our initial business combination, our public shareholders
may only receive their pro rata portion of the funds in the trust account that are available for distribution to public shareholders,
and our warrants will expire worthless. In addition, even if we do not need additional financing to complete our initial business combination,
we may require such financing to fund the operations or growth of the target business. The failure to secure additional financing could
have a material adverse effect on the continued development or growth of the target business. None of our officers, directors or shareholders
is required to provide any financing to us in connection with or after our initial business combination.
Our initial shareholders control a substantial
interest in us and thus may exert a substantial influence on actions requiring a shareholder vote, potentially in a manner that you do
not support.
Our initial shareholders own 20% of our issued
and outstanding ordinary shares. Accordingly, they may exert a substantial influence on actions requiring a shareholder vote, potentially
in a manner that you do not support, including amendments to our amended and restated memorandum and articles of association. If our initial
shareholders purchase any additional Class A ordinary shares in the aftermarket or in privately negotiated transactions, this would increase
their control. Neither our initial shareholders nor, to our knowledge, any of our officers or directors, have any current intention to
purchase additional securities, other than as disclosed in this Annual Report on Form 10-K. Factors that would be considered in making
such additional purchases would include consideration of the current trading price of our Class A ordinary shares. In addition, our board
of directors, whose members were elected by our Sponsor, is and will be divided into three classes, each of which will generally serve
for a terms for three years with only one class of directors being elected in each year. We may not hold an annual meeting of shareholders
to elect new directors prior to the completion of our initial business combination, in which case all of the current directors will continue
in office until at least the completion of the business combination. If there is an annual meeting, as a consequence of our “staggered”
board of directors, only a minority of the board of directors will be considered for election and our initial shareholders, because of
their ownership position, will have considerable influence regarding the outcome. Accordingly, our initial shareholders will continue
to exert control at least until the completion of our initial business combination.
Additionally, our anchor investor purchased 2,000,000
units in the initial public offering at the public offering price. Our anchor investor will be able to exert a substantial influence on
actions requiring a shareholder vote. Our anchor investor may have different interests than other public shareholders, in part as a result
of its indirect interests in the securities held by our Sponsor.
OrION has committed to purchase at least $100,000,000
of forward purchase units and has the right to purchase up to $200,000,000 of additional forward purchase units concurrently with the
closing of our initial business combination, but has no obligation to purchase any or all of such additional amount. Our ability to consummate
our initial business combination may be adversely impacted if OrION declines to exercise this right.
OrION has the right to purchase up to $200,000,000
of additional forward purchase units concurrently with the closing of our initial business combination. If our board of directors determines
that additional capital is needed in order to consummate our initial business combination or for other reasons and OrION does not purchase
the up to $200,000,000 of additional forward purchase units or such amount as our board of directors has determined may be needed, we
may not have sufficient capital to satisfy certain conditions to consummate our initial business combination.
Resources could be wasted in researching business
combinations that are not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge with another
business. If we are unable to complete our initial business combination, our public shareholders may only receive their pro rata portion
of the funds in the trust account that are available for distribution to public shareholders, and our warrants will expire worthless.
We anticipate that the investigation of each specific
target business and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require
substantial management time and attention and substantial costs for accountants, attorneys, consultants and others. If we decide not to
complete a specific initial business combination, the costs incurred up to that point for the proposed transaction likely would not be
recoverable. Furthermore, if we reach an agreement relating to a specific target business, we may fail to complete our initial business
combination for any number of reasons including those beyond our control. Any such event will result in a loss to us of the related costs
incurred which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we are unable
to complete our initial business combination, our public shareholders may only receive their pro rata portion of the funds in the trust
account that are available for distribution to public shareholders, and our warrants will expire worthless.
Our key personnel may negotiate employment
or consulting agreements with a target business in connection with a particular business combination, and a particular business combination
may be conditioned on the retention or resignation of such key personnel. These agreements may provide for them to receive compensation
following our initial business combination and as a result, may cause them to have conflicts of interest in determining whether a particular
business combination is the most advantageous.
Our key personnel may be able to remain with our
company after the completion of our initial business combination only if they are able to negotiate employment or consulting agreements
in connection with the business combination. Such negotiations would take place simultaneously with the negotiation of the business combination
and could provide for such individuals to receive compensation in the form of cash payments and/or our securities for services they would
render to us after the completion of the business combination. Such negotiations also could make such key personnel’s retention
or resignation a condition to any such agreement. The personal and financial interests of such individuals may influence their motivation
in identifying and selecting a target business, subject to their fiduciary duties under Cayman Islands law.
We may have a limited ability to assess the
management of a prospective target business and, as a result, may effect our initial business combination with a target business whose
management may not have the skills, qualifications or abilities to manage a public company.
When evaluating the desirability of effecting
our initial business combination with a prospective target business, our ability to assess the target business’s management may
be limited due to a lack of time, resources or information. Our assessment of the capabilities of the target business’s management,
therefore, may prove to be incorrect and such management may lack the skills, qualifications or abilities we suspected. Should the target
business’s management not possess the skills, qualifications or abilities necessary to manage a public company, the operations and
profitability of the post-combination business may be negatively impacted. Accordingly, any shareholders who choose to remain shareholders
following the business combination could suffer a reduction in the value of their shares. Such shareholders are unlikely to have a remedy
for such reduction in value unless they are able to successfully claim that the reduction was due to the breach by our officers or directors
of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws
that the proxy solicitation or tender offer materials, as applicable, relating to the business combination contained an actionable material
misstatement or material omission.
Our initial business combination and our structure
thereafter may not be tax-efficient to our shareholders and warrant holders. As a result of our business combination, our tax obligations
may be more complex, burdensome and/or uncertain.
Although we will attempt to structure our initial
business combination in a tax-efficient manner, tax structuring considerations are complex, the relevant facts and law are uncertain and
may change, and we may prioritize commercial and other considerations over tax considerations. For example, in connection with our initial
business combination and subject to any requisite shareholder approval, we may: structure our business combination in a manner that requires
shareholders and/or warrant holders to recognize gain or income for tax purposes; effect a business combination with a target company
in another jurisdiction; or reincorporate in a different jurisdiction (including, but not limited to, the jurisdiction in which the target
company or business is located). We do not intend to make any cash distributions to shareholders or warrant holders to pay taxes in connection
with our business combination or thereafter. Accordingly, a shareholder or a warrant holder may need to satisfy any liability resulting
from our initial business combination with cash from its own funds or by selling all or a portion of the shares received. In addition,
shareholders and warrant holders may also be subject to additional income, withholding or other taxes with respect to their ownership
of us after our initial business combination.
In addition, we may effect a business combination
with a target company that has business operations outside of the United States, and possibly, business operations in multiple jurisdictions.
If we effect such a business combination, we could be subject to significant income, withholding and other tax obligations in a number
of jurisdictions with respect to income, operations and subsidiaries related to those jurisdictions. Due to the complexity of tax obligations
and filings in other jurisdictions, we may have a heightened risk related to audits or examinations by U.S. federal, state, local and
non-U.S. taxing authorities. This additional complexity and risk could have an adverse effect on our after-tax profitability and financial
condition.
If we effect our initial business combination
with a company located outside of the United States, we would be subject to a variety of additional risks that may adversely affect us.
If we pursue a target company with operations
or opportunities outside of the United States for our initial business combination, we may face additional burdens in connection with
investigating, agreeing to and completing such initial business combination, and if we effect such initial business combination, we would
be subject to a variety of additional risks that may negatively impact our operations.
If we pursue a target a company with operations
or opportunities outside of the United States for our initial business combination, we would be subject to risks associated with cross-border
business combinations, including in connection with investigating, agreeing to and completing our initial business combination, conducting
due diligence in a foreign jurisdiction, having such transaction approved by any local governments, regulators or agencies and changes
in the purchase price based on fluctuations in foreign exchange rates.
If we effect our initial business combination
with such a company, we would be subject to any special considerations or risks associated with companies operating in an international
setting, including any of the following:
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costs and difficulties inherent in managing cross-border business operations; |
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rules and regulations regarding currency redemption; |
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complex 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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local or regional economic policies and market conditions; |
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unexpected changes in regulatory requirements; |
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challenges in managing and staffing international operations; |
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tax issues, such as tax law changes and variations in tax laws as compared to the United States; |
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currency fluctuations and exchange controls; |
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challenges in collecting accounts receivable; |
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cultural and language differences; |
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employment regulations; |
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underdeveloped or unpredictable legal or regulatory systems; |
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protection of intellectual property; |
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social unrest, crime, strikes, riots and civil disturbances; |
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regime changes and political upheaval; |
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terrorist attacks 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, we may be unable to complete such initial business combination, or, if we complete such
initial business combination, our operations might suffer, either of which may adversely impact our business, financial condition and
results of operations.
We may be a passive foreign investment company,
or “PFIC,” which could result in adverse United States federal income tax consequences to U.S. investors.
If we are a PFIC for any taxable year (or portion
thereof) that is included in the holding period of a U.S. Holder of our Class A ordinary shares 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 PFIC status for our current
and subsequent taxable years 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 subsequent
taxable year (and, in the case of the startup exception, potentially not until after the two taxable years following our current taxable
year). Our actual PFIC status for any taxable year, however, will not be determinable until after the end of such taxable year. Moreover,
if we determine we are a PFIC for any taxable year, upon written request, 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 be unavailable with respect to our warrants in all cases. We urge U.S. investors to
consult their own tax advisors regarding the possible application of the PFIC rules.
We may reincorporate in another jurisdiction
in connection with our initial business combination and such reincorporation may result in taxes imposed on shareholders or warrant holders.
We may, in connection with our initial business
combination and subject to requisite shareholder approval by special resolution under the Companies Law, reincorporate in the jurisdiction
in which the target company or business is located or in another jurisdiction. The transaction may require a shareholder or warrant holder
to recognize taxable income in the jurisdiction in which the shareholder or warrant holder is a tax resident or in which its members are
resident if it is a tax transparent entity. We do not intend to make any cash distributions to shareholders or warrant holders to pay
such taxes. Shareholders may be subject to withholding taxes or other taxes with respect to their ownership of us after the reincorporation.
We may reincorporate in another jurisdiction
in connection with our initial business combination, and the laws of such jurisdiction may govern some or all of our future material agreements
and we may not be able to enforce our legal rights.
In connection with our initial business combination,
we may relocate the home jurisdiction of our business from the Cayman Islands to another jurisdiction. If we determine to do this, the
laws of such jurisdiction may govern some or all of our future material agreements. The system of laws and the enforcement of existing
laws in such jurisdiction may not be as certain in implementation and interpretation as in the United States. The inability to enforce
or obtain a remedy under any of our future agreements could result in a significant loss of business, business opportunities or capital.
We may issue notes or other debt securities,
or otherwise incur substantial debt, to complete a business combination, which may adversely affect our leverage and financial condition
and thus negatively impact the value of our shareholders’ investment in us.
Although we have no commitments as of the date
of this Annual Report on Form 10-K to issue any notes or other debt securities, or to otherwise incur outstanding debt following the initial
public offering, we may choose to incur substantial debt to complete our initial business combination. We and our officers have agreed
that we will not incur any indebtedness unless we have obtained from the lender a waiver of any right, title, interest or claim of any
kind in or to the monies held in the trust account. As such, no issuance of debt will affect the per share amount available for redemption
from the trust account. Nevertheless, the incurrence of debt could have a variety of negative effects, including:
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default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations; |
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acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant; |
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our immediate payment of all principal and accrued interest, if any, if the debt 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 Class A ordinary shares; |
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using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our Class A ordinary shares if declared, expenses, capital expenditures, acquisitions and other general corporate purposes; |
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limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate; |
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increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and |
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limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt. |
We may only be able to complete one business
combination with the proceeds of the initial public offering and the sale of the private placement warrants, which will cause us to be
solely dependent on a single business which may have a limited number of products or services. This lack of diversification may negatively
impact our operations and profitability.
The net proceeds from the initial public offering
and the private placement provided us with $345,000,000 that we may use to complete our initial business combination (after taking into
account the $11,375,000 of deferred underwriting commissions being held in the trust account).
We may effectuate our initial business combination
with a single target business or multiple target businesses simultaneously or within a short period of time. However, we may not be able
to effectuate our initial business combination with more than one target business because of various factors, including the existence
of complex accounting issues and the requirement that we prepare and file pro forma financial statements with the SEC that present operating
results and the financial condition of several target businesses as if they had been operated on a combined basis. By completing our initial
business combination with only a single entity, our lack of diversification may subject us to numerous economic, competitive and regulatory
developments. Further, we would not be able to diversify our operations or benefit from the possible spreading of risks or offsetting
of losses, unlike other entities which may have the resources to complete several business combinations in different industries or different
areas of a single industry. Accordingly, the prospects for our success may be:
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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. |
This lack of diversification may subject us to
numerous economic, competitive and regulatory risks, any or all of which may have a substantial adverse impact upon the particular industry
in which we may operate subsequent to our initial business combination.
We may attempt to simultaneously complete business
combinations with multiple prospective targets, which may hinder our ability to complete our initial business combination and give rise
to increased costs and risks that could negatively impact our operations and profitability.
If we determine to simultaneously acquire several
businesses that are owned by different sellers, we will need for each of such sellers to agree that our purchase of its business is contingent
on the simultaneous closings of the other business combinations, which may make it more difficult for us, and delay our ability, to complete
our initial business combination. With multiple business combinations, we could also face additional risks, including additional burdens
and costs with respect to possible multiple negotiations and due diligence investigations (if there are multiple sellers) and the additional
risks associated with the subsequent assimilation of the operations and services or products of the acquired companies in a single operating
business. If we are unable to adequately address these risks, it could negatively impact our profitability and results of operations.
We may attempt to complete our initial business
combination with a private company about which little information is available, which may result in a business combination with a company
that is not as profitable as we suspected, if at all.
In pursuing our business combination strategy,
we may seek to effectuate our initial business combination with a privately held company. Very little public information generally exists
about private companies, and we could be required to make our decision on whether to pursue a potential initial business combination on
the basis of limited information, which may result in a business combination with a company that is not as profitable as we suspected,
if at all.
Risks Relating to our Sponsor and Management Team
Our ability to successfully effect our initial
business combination and to be successful thereafter will be dependent upon the efforts of our key personnel, some of whom may join us
following our initial business combination. The loss of key personnel could negatively impact the operations and profitability of our
post-combination business.
Our ability to successfully effect our initial
business combination is dependent upon the efforts of our key personnel. The role of our key personnel in the target business, however,
cannot presently be ascertained. Although some of our key personnel may remain with the target business in senior management or advisory
positions following our initial business combination, it is likely that some or all of the management of the target business will remain
in place. While we intend to closely scrutinize any individuals we engage after our initial business combination, we cannot assure you
that our assessment of these individuals will prove to be correct. These individuals may be unfamiliar with the requirements of operating
a company regulated by the SEC, which could cause us to have to expend time and resources helping them become familiar with such requirements.
We are dependent upon our officers and directors
and their loss could adversely affect our ability to operate.
Our operations are dependent upon a relatively
small group of individuals and, in particular, our officers and directors. We believe that our success depends on the continued service
of our officers and directors, at least until we have completed our initial business combination. In addition, our officers and directors
are not required to commit any specified amount of time to our affairs and, accordingly, will have conflicts of interest in allocating
their time among various business activities, including identifying potential business combinations and monitoring the related due diligence.
We do not have an employment agreement with, or key-man insurance on the life of, any of our directors or officers. The unexpected loss
of the services of one or more of our directors or officers could have a detrimental effect on us.
Since our Sponsor, officers and directors will
lose their entire investment in us if our initial business combination is not completed (other than with respect to public shares they
may acquire during or after the initial public offering), a conflict of interest may arise in determining whether a particular business
combination target is appropriate for our initial business combination.
On December 31, 2020, our Sponsor paid $25,000,
or approximately $0.003 per share, to cover certain of our offering costs in exchange for 8,625,000 founder shares.
Prior to the initial investment in the company
of $25,000 by the Sponsor, the company had no assets, tangible or intangible. The purchase price of the founder shares was determined
by dividing the amount of cash contributed to the company by the number of founder shares issued. The number of founder shares outstanding
was determined based on the expectation that the total size of the initial public offering would be a maximum of 34,500,000 units if the
underwriters’ over-allotment option is exercised in full, and therefore that such founder shares would represent 20% of the outstanding
shares after the initial public offering. Up to 1,125,000 founder shares were subject to forfeiture by the Sponsor depending on the extent
to which the underwriters’ over-allotment option was exercised. In connection with the underwriters’ full exercise of their
over-allotment option on February 12, 2021, the 1,125,000 shares were no longer subject to forfeiture. The founder shares will be worthless
if we do not complete an initial business combination. In addition, our Sponsor purchased an aggregate of 5,933,334 warrants for an aggregate
purchase price of $8,900,000, or $1.50 per warrant. The private placement warrants will also be worthless if we do not complete our initial
business combination. The personal and financial interests of our officers and directors may influence their motivation in identifying
and selecting a target business combination, completing an initial business combination and influencing the operation of the business
following the initial business combination. This risk may become more acute as February 12, 2023 nears, which is the deadline for our
completion of an initial business combination.
Our executive officers and directors will allocate
their time to other businesses thereby causing conflicts of interest in their determination as to how much time to devote to our affairs.
This conflict of interest could have a negative impact on our ability to complete our initial business combination.
Our executive officers and directors are not required
to, and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our
operations and our search for a business combination and their other businesses. We do not intend to have any full-time employees prior
to the completion of our initial business combination. Each of our executive officers is engaged in several other business endeavors for
which he may be entitled to substantial compensation, and our executive officers are not obligated to contribute any specific number of
hours per week to our affairs. Our independent directors also serve as officers and board members for other entities. If our executive
officers’ and directors’ other business affairs require them to devote substantial amounts of time to such affairs in excess
of their current commitment levels, it could limit their ability to devote time to our affairs which may have a negative impact on our
ability to complete our initial business combination. In particular, our officers and directors are actively engaged in ScION Tech Growth
I, a special purpose acquisition company that completed its initial public offering in December 2020. ScION Tech Growth I has until December
21, 2022 to complete an initial business combination, and, like us, may pursue an initial business combination target in any businesses
or industry, although it is focused on a searching for an initial business combination in the same business and industry as we are: technology-enabled
businesses that offer specific technology solutions, broader technology software and services in the financial services sector. Any such
companies, businesses or investments, including ScION Tech Growth I, may present additional conflicts of interest in pursuing an initial
business combination target. However, we do not believe that any such potential conflicts would materially affect our ability to complete
our initial business combination.
Our officers and directors presently have,
and any of them in the future may have additional, fiduciary or contractual obligations to other entities and, accordingly, may have conflicts
of interest in determining to which entity a particular business opportunity should be presented.
Until we consummate our initial business combination,
we intend to engage in the business of identifying and combining with one or more businesses. Each of our officers and directors presently
has, and any of them in the future may have, additional fiduciary or contractual obligations to other entities pursuant to which such
officer or director is or will be required to present a business combination opportunity to such entity. Accordingly, they may have conflicts
of interest in determining to which entity a particular business opportunity should be presented. These conflicts may not be resolved
in our favor and a potential target business may be presented to another entity prior to its presentation to us. Our amended and restated
memorandum and articles of association provides that we renounce our interest in any corporate opportunity offered to any director or
officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of the company
and such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue,
and to the extent the director or officer is permitted to refer that opportunity to us without violating another legal obligation. In
addition, our Sponsor and our officers and directors may Sponsor or form other special purpose acquisition companies similar to ours or
may pursue other business or investment ventures during the period in which we are seeking an initial business combination. As a result,
our Sponsor, officers and directors could have conflicts of interest in determining whether to present business combination opportunities
to us or to any other special purpose acquisition company with which they may become involved. In particular, our officers and directors
are actively engaged in ScION Tech Growth I, a special purpose acquisition company that completed its initial public offering in December
2020. ScION Tech Growth I has until December 21, 2022 to complete an initial business combination, and, like us, may pursue an initial
business combination target in any businesses or industry, although it is focused on a searching for an initial business combination in
the same business and industry as we are: technology-enabled businesses that offer specific technology solutions, broader technology software
and services in the financial services sector. Any such companies, businesses or ventures, including ScION Tech Growth I, may present
additional conflicts of interest in pursuing an initial business combination target. However, we do not believe that any such potential
conflicts would materially affect our ability to complete our initial business combination.
Our executive officers, directors, security
holders and their respective affiliates may have competitive pecuniary interests that conflict with our interests.
We have not adopted a policy that expressly prohibits
our directors, executive officers, security holders or affiliates from having a direct or indirect pecuniary or financial interest in
any investment to be acquired or disposed of by us or in any transaction to which we are a party or have an interest. In fact, we may
enter into a business combination with a target business that is affiliated with our Sponsor, our directors or executive officers, although
we do not intend to do so. Nor do we have a policy that expressly prohibits any such persons from engaging for their own account in business
activities of the types conducted by us. Accordingly, such persons or entities may have a conflict between their interests and ours.
Our executive officers and directors are actively
engaged in ScION Tech Growth I, a special purpose acquisition company that completed its initial public offering in December 2020, and
will continue to serve as executive officers and directors of ScION Tech Growth I until the business combination. ScION Tech Growth I
has until December 21, 2022 to complete an initial business combination, and, like us, may pursue an initial business combination target
in any businesses or industry, although it is focused on a searching for an initial business combination in the same business and industry
as we are: technology-enabled businesses that offer specific technology solutions, broader technology software and services in the financial
services sector. Any such companies, businesses or investments, including ScION Tech Growth I, may present additional conflicts of interest
in pursuing an initial business combination target. However, we do not believe that any such potential conflicts would materially affect
our ability to complete our 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. If this were the case, it would be a breach of their fiduciary duties to us as a matter
of Cayman Islands law and we or our shareholders might have a claim against such individuals for infringing on our shareholders’
rights. See the section titled “Description of Securities—Certain Differences in Corporate Law—Shareholder Suits”
in Exhibit 4.5 hereto for further information on the ability to bring such claims. However, we might not ultimately be successful in any
claim we may make against them for such reason.
We may engage in a business combination with
one or more target businesses that have relationships with entities that may be affiliated with our Sponsor, executive officers, directors
or existing holders which may raise potential conflicts of interest.
In light of the involvement of our Sponsor, executive
officers and directors with other entities, we may decide to acquire one or more businesses affiliated with our Sponsor, executive officers,
directors or existing holders. Our directors also serve as officers and board members for other entities. Such entities may compete with
us for business combination opportunities. Our Sponsor, officers and directors are not currently aware of any specific opportunities for
us to complete our initial business combination with any entities with which they are affiliated, and there have been no substantive discussions
concerning a business combination with any such entity or entities. Although we will not be specifically focusing on, or targeting, any
transaction with any affiliated entities, we would pursue such a transaction if we determined that such affiliated entity met our criteria
for a business combination and such transaction was approved by a majority of our independent and disinterested directors. Despite our
agreement to obtain an opinion from an independent investment banking firm which is a member of FINRA or a valuation or appraisal firm
regarding the fairness to our company from a financial point of view of a business combination with one or more domestic or international
businesses affiliated with our Sponsor, executive officers, directors or existing holders, potential conflicts of interest still may exist
and, as a result, the terms of the business combination may not be as advantageous to our public shareholders as they would be absent
any conflicts of interest.
The officers and directors of an acquisition
candidate may resign upon completion of our initial business combination. The loss of a business combination target’s key personnel
could negatively impact the operations and profitability of our post-combination business.
The role of an acquisition candidate’s key
personnel upon the completion of our initial business combination cannot be ascertained at this time. Although we contemplate that certain
members of an acquisition candidate’s management team will remain associated with the acquisition candidate following our initial
business combination, it is possible that members of the management of an acquisition candidate will not wish to remain in place.
Our management may not be able to maintain
control of a target business after our initial business combination. We cannot provide assurance that, upon loss of control of a target
business, new management will possess the skills, qualifications or abilities necessary to profitably operate such business.
We may structure our initial business combination
so that the post-transaction company in which our public shareholders own shares will own less than 100% of the equity interests or assets
of a target business, but we will only complete such business combination if the post-transaction company owns or acquires 50% or more
of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for us not to
be required to register as an investment company under the Investment Company Act. We will not consider any transaction that does not
meet such criteria. Even if the post-transaction company owns 50% or more of the voting securities of the target, our shareholders prior
to the business combination may collectively own a minority interest in the post business combination company, depending on valuations
ascribed to the target and us in the business combination. For example, we could pursue a transaction in which we issue a substantial
number of new Class A ordinary shares in exchange for all of the outstanding capital stock, shares or other equity interests of a target.
In this case, we would acquire a 100% interest in the target. However, as a result of the issuance of a substantial number of new Class
A ordinary shares, our shareholders immediately prior to such transaction could own less than a majority of our issued and outstanding
Class A ordinary shares subsequent to such transaction. In addition, other minority shareholders may subsequently combine their holdings
resulting in a single person or group obtaining a larger share of the company’s shares than we initially acquired. Accordingly,
this may make it more likely that our management will not be able to maintain control of the target business.
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, each of which may make it difficult for us to complete our initial business combination. In addition, we may have imposed upon us burdensome requirements, including: |
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registration as an investment company with the SEC; |
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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. |
In order not to be regulated as an investment
company under the Investment Company Act, unless we can qualify for an exclusion, we must ensure that we are engaged primarily in a business
other than investing, reinvesting or trading of securities and that our activities do not include investing, reinvesting, owning, holding
or trading “investment securities” constituting more than 40% of our assets (exclusive of U.S. government securities and cash
items) on an unconsolidated basis. Our business will be to identify and complete a business combination and thereafter to operate the
post-transaction business or assets for the long term. We do not plan to buy businesses or assets with a view to resale or profit from
their resale. We do not plan to buy unrelated businesses or assets or to be a passive investor.
We do not believe that our anticipated principal
activities will subject us to the Investment Company Act. To this end, the proceeds held in the trust account may only be invested in
United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity
of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which
invest only in direct U.S. government treasury obligations. Pursuant to the trust agreement, the trustee is not permitted to invest in
other securities or assets. By restricting the investment of the proceeds to these instruments, and by having a business plan targeted
at acquiring and growing businesses for the long term (rather than on buying and selling businesses in the manner of a merchant bank or
private equity fund), we intend to avoid being deemed an “investment company” within the meaning of the Investment Company
Act. The initial public offering is not intended for persons who are seeking a return on investments in government securities or investment
securities. The trust account is intended as a holding place for funds pending the earliest to occur of either: (i) the completion of
our initial business combination; (ii) the redemption of any public shares properly submitted 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 allow
redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial
business combination by February 12, 2023 or (B) with respect to any other material provisions relating to shareholders’ rights
or pre-initial business combination activity; or (iii) absent an initial business combination by February 12, 2023, our return of the
funds held in the trust account to our public shareholders as part of our redemption of the public shares. If we do not invest the proceeds
as discussed above, we may be deemed to be subject to the Investment Company Act. If we were deemed to be subject to the Investment Company
Act, compliance with these additional regulatory burdens would require additional expenses for which we have not allotted funds and may
hinder our ability to complete a business combination. If we are unable to complete our initial business combination, our public shareholders
may only receive their pro rata portion of the funds in the trust account that are available for distribution to public shareholders,
and our warrants will expire worthless.
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.
Although after giving effect to the initial public
offering we expect to meet, on a pro forma basis, the minimum initial listing standards set forth in Nasdaq listing standards, we cannot
assure you that our securities will be, or will continue to be, listed on Nasdaq in the future or prior to our initial business combination.
In order to continue listing our securities on Nasdaq prior to our initial business combination, we must maintain certain financial, distribution
and share price levels. Generally, we must maintain a minimum 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 and 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 of our securities, with at least 50% of such round lot
holders holding securities with a market value of at least $2,500. We cannot assure you that we will be able to meet those initial listing
requirements at that time. If Nasdaq delists our securities from trading on its exchange and we are not able to list our securities on
another national securities exchange, we expect our securities could be quoted on an over-the-counter market. If this were to occur, we
could face significant material adverse consequences, including:
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a limited availability of market quotations for our securities; |
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reduced liquidity for our securities; |
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a determination that our Class A ordinary shares are a “penny stock” which will require brokers trading in our Class A ordinary shares to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities; |
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a limited amount of news and analyst coverage; and |
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a decreased ability to issue additional securities or obtain additional financing in the future. |
The National Securities Markets Improvement Act
of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred
to as “covered securities.” Our units, Class A ordinary shares and warrants qualify as covered securities under the statute.
Although the states are preempted from regulating the sale of our securities, the federal statute does allow the states to investigate
companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the
sale of covered securities in a particular case. While we are not aware of a state having used these powers to prohibit or restrict the
sale of securities issued by blank check companies, other than the State of Idaho, certain state securities regulators view blank check
companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities of blank check companies
in their states. Further, if we were no longer listed on Nasdaq, our securities would not qualify as covered securities under the statute
and we would be subject to regulation in each state in which we offer our securities.
We may issue additional Class A ordinary shares
or preference shares to complete our initial business combination or under an employee incentive plan after completion of our initial
business combination. We may also issue Class A ordinary shares upon the conversion of the founder shares at a ratio greater than one-to-one
at the time of our initial business combination as a result of the anti-dilution provisions contained therein. Any such issuances would
dilute the interest of our shareholders and likely present other risks.
Our amended and restated memorandum and articles
of association authorizes the issuance of up to 200,000,000 Class A ordinary shares, par value $0.0001 per share, 20,000,000 Class B ordinary
shares, par value $0.0001 per share, and 2,000,000 preference shares, par value $0.0001 per share. Immediately after the initial public
offering, there were 165,500,000 and 11,375,000 authorized but unissued Class A ordinary shares and Class B ordinary shares, respectively,
available for issuance which amount does not take into account shares reserved for issuance upon exercise of outstanding warrants, the
forward purchase warrants, shares issuable upon conversion of the Class B ordinary shares, or shares issued upon the sale of the forward
purchase shares. The Class B ordinary shares are automatically convertible into Class A ordinary shares concurrently with or immediately
following the consummation of our initial business combination, initially at a one-for-one ratio but subject to adjustment as set forth
herein and in our amended and restated memorandum and articles of association, including in certain circumstances in which we issue Class
A ordinary shares or equity-linked securities related to our initial business combination. Immediately after the initial public offering,
there were no preference shares issued and outstanding.
We may issue a substantial number of additional
Class A ordinary shares or preference shares to complete our initial business combination or under an employee incentive plan after completion
of our initial business combination. We may also issue Class A ordinary shares upon conversion of the Class B ordinary shares at a ratio
greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions as set forth therein.
However, our amended and restated memorandum and articles of association provide, among other things, that prior to our initial business
combination, we may not issue additional shares that would entitle the holders thereof to (i) receive funds from the trust account or
(ii) vote on any initial business combination. These provisions of our amended and restated memorandum and articles of association, like
all provisions of our amended and restated memorandum and articles of association, may be amended with a shareholder vote. The issuance
of additional ordinary or preference shares:
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may significantly dilute the equity interest of investors in the initial public offering; |
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may subordinate the rights of holders of Class A ordinary shares if preference shares are issued with rights senior to those afforded our Class A ordinary shares; |
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could cause a change in control if a substantial number of Class A ordinary shares are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; and |
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may adversely affect prevailing market prices for our units, Class A ordinary shares and/or warrants. |
You will not be permitted to exercise your
warrants unless we register and qualify the underlying Class A ordinary shares or certain exemptions are available.
If the issuance of the Class A ordinary shares
upon exercise of the warrants is not registered, qualified or exempt from registration or qualification under the Securities Act and applicable
state securities laws, holders of warrants will not be entitled to exercise such warrants and such warrants may have no value and expire
worthless. In such event, holders who acquired their warrants as part of a purchase of units will have paid the full unit purchase price
solely for the Class A ordinary shares included in the units.
We are not registering the Class A ordinary shares
issuable upon exercise of the warrants under the Securities Act or any state securities laws at this time. However, under the terms of
the warrant agreement, we have agreed that, as soon as practicable, but in no event later than 15 business days, after the closing of
our initial business combination, we will use our best efforts to file with the SEC a registration statement covering the registration
under the Securities Act of the Class A ordinary shares issuable upon exercise of the warrants and thereafter will use our best efforts
to cause the same to become effective within 60 business days following our initial business combination and to maintain a current prospectus
relating to the Class A ordinary shares issuable upon exercise of the warrants until the expiration of the warrants in accordance with
the provisions of the warrant agreement. We cannot assure you that we will be able to do so if, for example, any facts or events arise
which represent a fundamental change in the information set forth in the registration statement or prospectus, the financial statements
contained or incorporated by reference therein are not current or correct or the SEC issues a stop order.
If the Class A ordinary shares issuable upon exercise
of the warrants are not registered under the Securities Act, under the terms of the warrant agreement, holders of warrants who seek to
exercise their warrants will not be permitted to do so for cash and, instead, will be required to do so on a cashless basis in accordance
with Section 3(a)(9) of the Securities Act or another exemption.
In no event will warrants be exercisable for cash
or on a cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance
of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption
from registration or qualification is available.
If our Class A ordinary shares are at the time
of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of “covered securities”
under Section 18(b)(1) of the Securities Act, we may, at our option, not permit holders of warrants who seek to exercise their warrants
to do so for cash and, instead, require them to do so on a cashless basis in accordance with Section 3(a)(9) of the Securities Act; in
the event we so elect, we will not be required to file or maintain in effect a registration statement or register or qualify the shares
underlying the warrants under applicable state securities laws, and in the event we do not so elect, we will use our best efforts to register
or qualify the shares underlying the warrants under applicable state securities laws to the extent an exemption is not available.
In no event will we be required to net cash settle
any warrant, or issue securities (other than upon a cashless exercise as described above) or other compensation in exchange for the warrants
in the event that we are unable to register or qualify the shares underlying the warrants under the Securities Act or applicable state
securities laws.
You may only be able to exercise your public
warrants on a “cashless basis” under certain circumstances, and if you do so, you will receive fewer Class A ordinary shares
from such exercise than if you were to exercise such warrants for cash.
The warrant agreement provides that in the following
circumstances holders of warrants who seek to exercise their warrants will not be permitted to do for cash and will, instead, be required
to do so on a cashless basis in accordance with Section 3(a)(9) of the Securities Act: (i) if the Class A ordinary shares issuable upon
exercise of the warrants are not registered under the Securities Act in accordance with the terms of the warrant agreement; (ii) if we
have so elected and the Class A ordinary shares are at the time of any exercise of a warrant not listed on a national securities exchange
such that they satisfy the definition of “covered securities” under Section 18(b)(1) of the Securities Act; and (iii) if we
have so elected and we call the public warrants for redemption.
If you exercise your public warrants on a cashless
basis, you would pay the warrant exercise price by surrendering the warrants for that number of Class A ordinary shares equal to the quotient
obtained by dividing (x) the product of the number of Class A ordinary shares underlying the warrants, multiplied by the excess of the
“fair market value” of our Class A ordinary shares (as defined in the next sentence) over the exercise price of the warrants
by (y) the fair market value. The “fair market value” is the average reported closing price of the Class A ordinary shares
for the 10 trading days ending on the third trading day prior to the date on which the notice of exercise is received by the warrant agent
or on which the notice of redemption is sent to the holders of warrants, as applicable. As a result, you would receive fewer Class A ordinary
shares from such exercise than if you were to exercise such warrants for cash.
The grant of registration rights to our initial
shareholders and holders of our private placement warrants and forward purchase securities may make it more difficult to complete our
initial business combination, and the future exercise of such rights may adversely affect the market price of our Class A ordinary shares.
Our initial shareholders and their permitted transferees
can demand that we register the Class A ordinary shares into which founder shares are convertible, holders of our private placement warrants
and their permitted transferees can demand that we register the private placement warrants and the Class A ordinary shares issuable upon
exercise of the private placement warrants, holders of securities that may be issued upon conversion of working capital loans or holders
of our forward purchase securities and their permitted transferees may demand that we register such units, shares, warrants or the Class
A ordinary shares issuable upon exercise of such warrants and any other securities of the company acquired by them prior to the consummation
of our initial business combination. In addition, our anchor investor, an affiliate of our Sponsor, which purchased units in the initial
public offering, is our affiliate (as defined in the Securities Act) following the initial public offering and we will file a registration
statement following the initial public offering to register the resale of the units (including the Class A ordinary shares and warrants
included in the units) purchased by our anchor investor in the initial public offering. We will bear the cost of registering these securities.
The registration and availability of such a significant number of securities for trading in the public market may have an adverse effect
on the market price of our Class A ordinary shares. In addition, the existence of the registration rights may make our initial business
combination more costly or difficult to conclude. This is because the shareholders of the target business may increase the equity stake
they seek in the combined entity or ask for more cash consideration to offset the negative impact on the market price of our Class A ordinary
shares that is expected when the ordinary shares owned by our initial shareholders, holders of our private placement warrants, holders
of our working capital loans or holders of our forward purchase securities or their respective permitted transferees are registered.
Unlike some other similarly structured special
purpose acquisition companies, our initial shareholders will receive additional Class A ordinary shares if we issue certain shares to
consummate an initial business combination.
The founder shares will automatically convert
into Class A ordinary shares concurrently with or immediately following the consummation of our initial business combination on a one-for-one
basis, subject to adjustment for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like, and subject
to further adjustment as provided herein. In the case that additional Class A ordinary shares or equity-linked securities are issued or
deemed issued in connection with our initial business combination, the number of Class A ordinary shares issuable upon conversion of all
founder shares will equal, in the aggregate, 20% of the total number of Class A ordinary shares outstanding after such conversion (after
giving effect to any redemptions of Class A ordinary shares by public shareholders), including the total number of Class A ordinary shares
issued, or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by
the Company in connection with or in relation to the consummation of the initial business combination (including the forward purchase
shares but not the forward purchase warrants), excluding any Class A ordinary shares or equity-linked securities exercisable for or convertible
into Class A ordinary shares issued, or to be issued, to any seller in the initial business combination and any private placement warrants
issued to our Sponsor, officers or directors upon conversion of working capital loans; provided that such conversion of founder shares
will never occur on a less than one-for-one basis.
Our letter agreement with our Sponsor, officers
and directors may be amended without shareholder approval.
Our letter agreement with our Sponsor, officers
and directors contain provisions relating to transfer restrictions of our founder shares and private placement warrants, indemnification
of the trust account, waiver of redemption rights and participation in liquidating distributions from the trust account. The letter agreement
may be amended without shareholder approval (although releasing the parties from the restriction not to transfer the founder shares for
185 days following the date of the prospectus will require the prior written consent of the underwriters). While we do not expect our
board to approve any amendment to the letter agreement prior to our initial business combination, it may be possible that our board, in
exercising its business judgment and subject to its fiduciary duties, chooses to approve one or more amendments to the letter agreement.
Any such amendments to the letter agreement would not require approval from our shareholders and may have an adverse effect on the value
of an investment in our securities.
Participation in this offering by our anchor
investor could reduce the public float for our securities.
Our anchor investor purchased 2,000,000
units in the initial public offering at the initial public offering price. Such purchase could reduce the available public float for
our securities.
Our initial shareholders paid an aggregate
of $25,000, or approximately $0.003 per founder share and, accordingly, you will experience immediate and substantial dilution from the
purchase of our Class A ordinary shares.
The difference between the public offering price
per share (allocating all of the unit purchase price to the Class A ordinary share and none to the warrant included in the unit) and the
pro forma net tangible book value per share of our Class A ordinary shares after the initial public offering constitutes the dilution
to you and the other investors in the initial public offering. Our initial shareholders acquired the founder shares at a nominal price,
significantly contributing to this dilution. Upon closing of the initial public offering, and assuming no value is ascribed to the warrants
included in the units, you and the other public shareholders will incur an immediate and substantial dilution of approximately 94.4% (or
$9.44 per share, assuming no exercise of the underwriters’ over-allotment option), the difference between the pro forma net tangible
book value per share after the initial public offering of $0.56 and the initial offering price of $10.00 per unit. This dilution would
increase to the extent that the anti-dilution provisions of the founder shares result in the issuance of Class A ordinary shares on a
greater than one-to-one basis upon conversion of the founder shares at the time of our initial business combination. In addition, because
of the anti-dilution protection in the founder shares, any equity or equity-linked securities issued in connection with our initial business
combination would be disproportionately dilutive to our Class A ordinary shares.
We may amend the terms of the warrants in a
manner that may be adverse to holders of public warrants with the approval by the holders of at least 50% of the then outstanding public
warrants. As a result, the exercise price of your warrants could be increased, the exercise period could be shortened and the number of
Class A ordinary shares purchasable upon exercise of a warrant could be decreased, all without your approval.
Our warrants will be issued in registered form
under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. The warrant agreement provides
that the terms of the warrants may be amended without the consent of any holder for the purpose of (i) curing any ambiguity or to correct
any defective provision or mistake, including to conform the provisions of the warrant agreement to the description of the terms of the
warrants and the warrant agreement set forth in the prospectus, (ii) adjusting the provisions relating to cash dividends on ordinary shares
as contemplated by and in accordance with the warrant agreement or (iii) adding or changing any provisions with respect to matters or
questions arising under the warrant agreement as the parties to the warrant agreement may deem necessary or desirable and that the parties
deem to not adversely affect the rights of the registered holders of the warrants, provided that the approval by the holders of at least
50% of the then outstanding public warrants is required to make any change that adversely affects the interests of the registered holders
of public warrants. Accordingly, we may amend the terms of the public warrants in a manner adverse to a holder of public warrants if holders
of at least 50% of the then outstanding public warrants approve of such amendment. Although our ability to amend the terms of the public
warrants with the consent of at least 50% of the then outstanding public warrants is unlimited, examples of such amendments could be amendments
to, among other things, increase the exercise price of the warrants, convert the warrants into cash or shares, shorten the exercise period
or decrease the number of Class A ordinary shares purchasable upon exercise of a warrant.
Our warrant agreement designates the courts
of the State of New York or the United States District Court for the Southern District of New York as the sole and exclusive forum for
certain types of actions and proceedings that may be initiated by holders of our warrants, which could limit the ability of warrant holders
to obtain a favorable judicial forum for disputes with our company.
Our warrant agreement provides that, subject to
applicable law, (i) any action, proceeding or claim against us arising out of or relating in any way to the warrant agreement, including
under the Securities Act, will be brought and enforced in the courts of the State of New York or the United States District Court for
the Southern District of New York, and (ii) that we irrevocably submit to such jurisdiction, which jurisdiction shall be the exclusive
forum for any such action, proceeding or claim. We will waive any objection to such exclusive jurisdiction and that such courts represent
an inconvenient forum.
Notwithstanding the foregoing, these provisions
of the warrant agreement will not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim
for which the federal district courts of the United States of America are the sole and exclusive forum. Any person or entity purchasing
or otherwise acquiring any interest in any of our warrants shall be deemed to have notice of and to have consented to the forum provisions
in our warrant agreement. If any action, the subject matter of which is within the scope of the forum provisions of the warrant agreement,
is filed in a court other than a court of the State of New York or the United States District Court for the Southern District of New York
(a “foreign action”) in the name of any holder of our warrants, such holder shall be deemed to have consented to: (x) the
personal jurisdiction of the state and federal courts located in the State of New York in connection with any action brought in any such
court to enforce the forum provisions (an “enforcement action”), and (y) having service of process made upon such warrant
holder in any such enforcement action by service upon such warrant holder’s counsel in the foreign action as agent for such warrant
holder.
This choice-of-forum provision may limit a warrant
holder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with our company, which may discourage
such lawsuits. Alternatively, if a court were to find this provision of our warrant agreement inapplicable or unenforceable with respect
to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters
in other jurisdictions, which could materially and adversely affect our business, financial condition and results of operations and result
in a diversion of the time and resources of our management and board of directors.
We may redeem your unexpired warrants prior
to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless.
We have the ability to redeem the outstanding
public warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided
that the closing price of our Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for adjustments to the number
of shares issuable upon exercise or the exercise price of a warrant) for any 20 trading days within a 30 trading-day period ending on
the third trading day prior to proper notice of such redemption and provided that certain other conditions are met. If and when
the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying
securities for sale under all applicable state securities laws. As a result, we may redeem the warrants as set forth above even if the
holders are otherwise unable to exercise the warrants. Redemption of the outstanding warrants could force you to (i) exercise your
warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) sell your warrants at
the then-current market price when you might otherwise wish to hold your warrants or (iii) accept the nominal redemption price which,
at the time the outstanding warrants are called for redemption, is likely to substantially less than the market value of your warrants.
None of the private placement warrants or forward purchase warrants will be redeemable by us so long as they are held by the Sponsor or
OrION, as applicable, or their respective permitted transferees.
Our warrants may have an adverse effect on
the market price of our Class A ordinary shares and make it more difficult to effectuate our initial business combination.
We issued warrants to purchase 11,500,000 of our
Class A ordinary shares as part of the units offered and, simultaneously with the closing of the initial public offering, we issued in
a private placement an aggregate of 5,933,334 warrants, at $1.50 per warrant. We may also issue up to 10,000,000 forward purchase warrants
pursuant to the forward purchase agreement. In addition, if the Sponsor makes any working capital loans, it may convert those loans into
up to an additional 1,000,000 private placement warrants, at the price of $1.50 per warrant. To the extent we issue ordinary shares to
effectuate a business transaction, the potential for the issuance of a substantial number of additional Class A ordinary shares upon exercise
of these warrants could make us a less attractive acquisition vehicle to a target business. Such warrants, when exercised, will increase
the number of issued and outstanding Class A ordinary shares and reduce the value of the Class A ordinary shares issued to complete the
business transaction. Therefore, our warrants may make it more difficult to effectuate a business transaction or increase the cost of
acquiring the target business.
Because each unit contains one-third of one
warrant and only a whole warrant may be exercised, the units may be worth less than units of other special purpose acquisition companies.
Each unit contains one-third of one warrant. Pursuant
to the warrant agreement, no fractional warrants will be issued upon separation of the units, and only whole units will trade. If, upon
exercise of the warrants, a holder would be entitled to receive a fractional interest in a share, we will, upon exercise, round down to
the nearest whole number the number of Class A ordinary shares to be issued to the warrant holder. This is different from other offerings
similar to ours whose units include one ordinary share and one warrant to purchase one whole share. We have established the components
of the units in this way in order to reduce the dilutive effect of the warrants upon completion of a business combination since the warrants
will be exercisable in the aggregate for one-third of the number of shares compared to units that each contain a whole warrant to purchase
one share, thus making us, we believe, a more attractive merger partner for target businesses. Nevertheless, this unit structure may cause
our units to be worth less than if it included a warrant to purchase one whole share.
General Risk Factors
We are a blank check company with no operating
history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.
We are a blank check company incorporated under
the laws of the Cayman Islands with no operating results, and we will not commence operations until obtaining funding through the initial
public offering. Because we lack an operating history, you have no basis upon which to evaluate our ability to achieve our business objective
of completing our initial business combination. We have no plans, arrangements or understandings with any prospective target business
concerning a business combination and may be unable to complete our initial business combination. If we fail to complete our initial business
combination, we will never generate any operating revenues.
Past performance by our management team and
their affiliates, including investments and transactions in which they have participated and businesses with which they have been associated,
may not be indicative of future performance of an investment in the Company.
Information regarding our management team and
their affiliates, including investments and transactions in which they have participated and businesses with which they have been associated,
is presented for informational purposes only. Any past experience and performance by our management team and their affiliates and the
businesses with which they have been associated, is not a guarantee that we will be able to successfully identify a suitable candidate
for our initial business combination, that we will be able to provide positive returns to our shareholders, or of any results with respect
to any initial business combination we may consummate. You should not rely on the historical experiences of our management team and their
affiliates, including investments and transactions in which they have participated and businesses with which they have been associated,
as indicative of the future performance of an investment in us or as indicative of every prior investment by each of the members of our
management team or their affiliates. The market price of our securities may be influenced by numerous factors, many of which are beyond
our control, and our shareholders may experience losses on their investment in our securities.
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, including our ability to negotiate and complete our initial
business combination, and results of operations.
We are subject to laws and regulations enacted
by national, regional and local governments. In particular, we will be required to comply with certain SEC and other legal requirements,
including with the law of the jurisdiction of our incorporation. Compliance with, and monitoring of, applicable laws and regulations may
be difficult, time consuming and costly. Those laws and regulations and their interpretation and application may also change from time
to time and those changes could have a material adverse effect on our business, investments and results of operations. In addition, a
failure to comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on our business,
including our ability to negotiate and complete our initial business combination, and results of operations.
We are an emerging growth company and a smaller
reporting company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements
available to emerging growth companies or smaller reporting companies, this could make our securities less attractive to investors and
may make it more difficult to compare our performance with other public companies.
We are an “emerging growth company”
within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from various reporting
requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, not
being required to comply with the auditor internal controls attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced
disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements
of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously
approved. As a result, our shareholders may not have access to certain information they may deem important. We could be an emerging growth
company for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our
Class A ordinary shares held by non-affiliates exceeds $700 million as of any June 30 before that time, in which case we would no longer
be an emerging growth company as of the following December 31. We cannot predict whether investors will find our securities less attractive
because we will rely on these exemptions. If some investors find our securities less attractive as a result of our reliance on these exemptions,
the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities
and the trading prices of our securities may be more volatile.
Further, Section 102(b)(1) of the JOBS Act exempts
emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that
is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered
under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company
can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but
any such an election to opt out is irrevocable. We have elected not to opt out of such extended transition period which means that when
a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company,
can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our
financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has
opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards
used.
Additionally, we are a “smaller reporting
company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure
obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting
company until the last day of the fiscal year in which (1) the market value of our ordinary shares held by non-affiliates exceeds $250
million as of the prior June 30, or (2) our annual revenues exceeded $100 million during such completed fiscal year and the market value
of our ordinary shares held by non-affiliates exceeds $700 million as of the prior June 30th. To the extent we take advantage
of such reduced disclosure obligations, it may also make comparison of our financial statements with other public companies difficult
or impossible.
Our warrants are accounted for as liabilities
and the changes in value of our warrants could have a material effect on our financial results.
On April 12, 2021, the Acting Director of the
Division of Corporation Finance and Acting Chief Accountant of the SEC together issued the SEC Staff Statement. Specifically, the SEC
Staff Statement focused on certain settlement terms and provisions related to certain tender offers following a business combination,
which terms are similar to those contained in the warrant agreement governing our warrants. As a result of the SEC Staff Statement, we
reevaluated the accounting treatment of our 11,500,000 public warrants and 5,933,334 private placement warrants, and determined to classify
the 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, 2021 contained elsewhere in this Annual Report are derivative liabilities related to our warrants. Accounting Standards
Codification 815, Derivatives and Hedging (“ASC 815”), provides for the remeasurement of the fair value of such derivatives
at each balance sheet date, with a resulting non-cash gain or loss related to the change in the fair value being recognized in earnings
in the statement of operations. As a result of the recurring fair value measurement, our financial statements and results of operations
may fluctuate quarterly, based on factors, which are outside of our control. Due to the recurring fair value measurement, we expect that
we will recognize non-cash gains or losses on our warrants each reporting period and that the amount of such gains or losses could be
material. The impact of changes in fair value on earnings may have an adverse effect on the market price of our ordinary shares. In addition,
potential targets may seek a special purpose acquisition company that does not have warrants that are accounted for as liability, which
may make it more difficult for us to consummate an initial business combination with a target business.