General
We
are an early stage blank check company incorporated on February 13, 2019 as a Cayman Islands exempted company and incorporated
for the purpose of effecting a merger, share exchange, asset acquisition, stock purchase, reorganization or similar business combination
with one or more businesses, which we refer to throughout this report as our initial business combination. We have not selected
any specific business combination target, have generated no operating revenues to date and will not generate operating revenues
until we consummate our initial business combination.
On
December 14, 2020, the Company (including its successor after the Domestication (as defined below), “Thunder Bridge II”),
entered into a Master Transactions Agreement (the “MTA”) with Thunder Bridge II Surviving Pubco, Inc., a Delaware
corporation (“Surviving Pubco”), TBII Merger Sub Inc., a Delaware corporation and wholly-owned subsidiary of
Surviving Pubco (“TBII Merger Sub”), ADK Merger Sub LLC, a Delaware limited liability company and wholly owned
subsidiary of Surviving Pubco (“ADK Merger Sub”), ADK Service Provider Merger Sub LLC, a Delaware limited liability
company and wholly owned subsidiary of Surviving Pubco (“ADK Service Provider Merger Sub”), ADK Blocker Merger
Sub LLC, a Delaware limited liability company and wholly owned subsidiary of Surviving Pubco (“ADK Blocker Merger Sub”
and collectively with the TBII Merger Sub, ADK Merger Sub and ADK Service Provider Merger Sub, the “Merger Subs”),
Ay Dee Kay LLC, d/b/a indie Semiconductor, a California limited liability company (the “Company”), the corporate
entities listed therein holding membership unites in the Company (the “ADK Blockers”), ADK Service Provider
Holdco LLC, a Delaware limited liability company (“ADK Service Provider Holdco”), and solely in his capacity
as Company Securityholder Representative, Donald McClymont (the “Company Securityholder Representative”). Pursuant
to the MTA, subject to the terms and conditions set forth therein, upon the closing of the transactions contemplated thereby (the
“Closing”): (i) Thunder Bridge II will domesticate into a Delaware corporation (the “Domestication”),
(ii) TBII Merger Sub will merge with and into Thunder Bridge II (the “Thunder Bridge II Merger”) with Thunder
Bridge II being the surviving corporation and pursuant to which Thunder Bridge II equity holders will receive corresponding shares
in Surviving Pubco, (iii) ADK Merger Sub will merge with and into the Company (the “Company Merger”) with the
Company being the surviving limited liability company (in such capacity after the Company Merger, the “Surviving Company”),
(iv) the ADK Blockers will merge with and into ADK Blocker Merger Sub, with ADK Blocker Merger Sub being the surviving limited
liability company (the “Blocker Mergers,”) and (v) ADK Service Provider Merger Sub will merge with and into
ADK Service Provider Holdco, with ADK Service Provider Holdco being the surviving limited liability company (“Service
Provider Merger,” and collectively with the Thunder Bridge II Merger, the Company Merger and the Blocker Mergers, the
“Mergers,” and the Mergers collectively with the other transactions contemplated by the Merger Agreement, the
“Transactions”). Following the Mergers, Surviving Pubco will be the successor issuer and public company pursuant
to the federal securities laws, and Surviving Pubco’s corporate name will change to “indie Semiconductor, Inc.”
As
a result of the Transactions, each issued and outstanding Class A ordinary share and Class B ordinary share of Thunder Bridge
II will convert into a share of Class A common stock of Surviving Pubco, and each issued and outstanding warrant to purchase Class
A ordinary shares of Thunder Bridge II will be exercisable by its terms to purchase an equal number of shares of Class A common
stock of Surviving Pubco. Each share of Surviving Pubco Class A common stock will provide the holder with the rights to vote,
receive dividends, share in distributions in connection with a liquidation and other stockholder rights with respect to Surviving
Pubco.
Merger
Consideration
The
merger consideration (the “Merger Consideration”) to be paid to holders of the limited liability company interests
of the Company (collectively, the “Company Equity Holders”) pursuant to the MTA will be an amount equal to
90,000,000 shares of Class A common stock of Thunder Bridge II, subject to adjustment as described below, paid in either shares
of Class A common stock of Surviving Pubco or limited liability company interests in the Company (valued at $10.00 per unit) (the
“Post-Merger Company Units”), which will be exchangeable on a one-for-one basis for shares of Class A common
stock of Surviving Pubco. The Merger Consideration is subject to adjustment downward for the amount that Company indebtedness
exceeds Company indebtedness at closing. In addition, Company Equity Holders will receive the right to receive the Earn Out Shares
described below, if any.
Those
Company Equity Holders that receive Post-Merger Company Units will also receive one share of Class V common stock of Surviving
Pubco, which will have no economic rights in Surviving Pubco but will entitle the holder to vote as a stockholder of Surviving
Pubco, with the number of votes equal to the number of Post-Merger Company Units held by the Company Equity Holder. After the
Closing, each Company Equity Holder will be permitted to exchange its Post-Merger Company Unit for a share of Class A common stock
of Surviving Pubco on a one-for-one basis.
Significant
Activities Since Inception
On
August 13, 2019, the Company consummated its IPO of 34,500,000 units. Each Unit Consists of one Class A Ordinary Share, and one-half
redeemable Warrant (“Public Warrant”), each whole warrant entitles the holder to purchase on Class A Share at $11.50
per share. The Units were sold at an offering price of $10. Per Unit, generating gross proceeds of $345,000,000. Simultaneously
with the Initial Public Offering, the Sponsor purchased an aggregate of 8,650,000 Private Placement Warrants at $1.00 per Private
Placement Warrant, generating gross proceeds of $8,650,000.
A
total of $345,000,000 of the net proceeds from our initial public offering and the Private Placement were deposited in a trust
account established for the benefit of the Company’s public shareholders.
Objective
and Business Opportunity
Since
our initial public offering in August 2019, we have concentrated our efforts in identifying businesses in the financial services
industry, including asset and wealth management, lending and leasing, and businesses providing financial technological services
to, or operating in, the financial services industry. We have placed a particular emphasis on businesses that provide data processing,
storage and transmission services, data bases and payment processing services, fraud detection, data analysis or verification,
client or customer interface, or have adopted operations in the financial services industry that are more technologically driven
than the operational platforms of the legacy operators (collectively “FinTech”). We are not, however, required to
complete our initial business combination with a financial services or financial technology business and, as a result, we may
pursue a business combination outside of that industry. We will continue to seek to acquire established businesses that we believe
are fundamentally sound but potentially in need of financial, operational, strategic or managerial enhancement or redirection
to maximize value. We do not intend to acquire start-up or other early-stage companies, companies with speculative business plans
or companies that are excessively leveraged.
As
we search for and evaluate opportunities, we have concentrated our efforts on identifying businesses which either provide disruptive
technological innovation to the financial services industry, with particular emphasis on businesses that provide data processing;
transactional and data security; data analysis; transaction clearing and payment processing; operational automation; rewards,
loyalty, and client or customer engagement platforms by which financial services engage their clients and market and provide enhanced
products and services to them; digital marketing; or companies that through the adoption of such technologies and practices can
better compete and thrive in the rapidly evolving financial services global marketplace. We believe that these emerging technologies
are blurring the lines between traditional product offerings and delivery methods of financial services companies as well as the
product mix and services offered within the financial services industry as companies seek to redesign or re-engineer their customer
or client experience.
We
believe our management team and senior special advisor have the skills and experience to identify, evaluate and consummate a business
combination and is positioned to assist businesses we acquire. However, our management team’s network and investing and
operating experience do not guarantee a successful initial business combination. The members of our management team are not required
to devote any significant amount of time to our business and are concurrently involved with other businesses. There is no guarantee
that our current officers and directors will continue in their respective roles, or in any other role, after our initial business
combination, and their expertise may only be of benefit to us until our initial business combination is completed.
Furthermore,
our sponsor, management team, senior special advisor and their affiliates have a broad network of contacts and corporate relationships
developed through extensive experience sourcing, acquiring, growing, financing and selling businesses; maintaining dialogues with
sellers, capital providers and target management teams; and executing transactions under varying economic and financial conditions.
We
believe that these networks of contacts and relationships have provided us with an important source of investment opportunities.
In addition, target business candidates have been brought to our attention from various unaffiliated sources, including investment
market participants, private equity groups, investment banking firms, consultants, accounting firms and large business enterprises.
We have not participated in the auction processes for prospective target companies.
Business
Strategy
We
will seek to capitalize on the significant financial services, asset and fund management, financial technology and banking experience,
private and public equity experience, and contacts of our management team and senior special advisor, including Gary Simanson,
our President and Chief Executive Officer and a Director, William Houlihan, our Chief Financial Officer, John Wu, our Chief Investment
Officer, David E. Mangum, a Director, Mary Ann Gillespie, a Director, Robert Harthheimer, a Director, Stewart Paperin, a Director,
Allerd Derk Stikker, a Director and Pete Kight, our senior special advisor, to identify, evaluate, acquire and operate a target
business. If we elect to pursue an investment outside of the financial services or FinTech industry, our management’s expertise
related to that industry may not be directly applicable to its evaluation or operation, and the information contained in this
report regarding that industry might not be relevant to an understanding of the business that we elect to acquire. Members of
our management team and senior special advisor have extensive experience in the financial services industry, the financial technology
industry, the asset and wealth management industry, as well as extensive experience in operating financial services companies
in a public company environment and a private company environment, serving on both public and private company boards of directors,
including financial institutions and FinTech companies, strong knowledge and experience in financial, legal and regulatory matters,
initial public offerings, private equity and venture capital, as well as mergers and acquisitions in the financial services industry.
We
believe that potential sellers of target businesses will view the fact that members of our management team and our senior advisor
have successfully closed business combinations with vehicles similar to our company as a positive factor in considering whether
or not to enter into a business combination with us. However, past performance of our management team and senior special advisor
is not a guarantee either (i) of success with respect to any business combination we may consummate or (ii) that we will be able
to identify a suitable candidate for our initial business combination. You should not rely on the historical performance record
of our management team as indicative of our future performance. Additionally, in the course of their respective careers, members
of our management team and senior special advisor have been involved in businesses and deals that were unsuccessful.
We
have identified the following criteria that we have and intend to continue to use in evaluating business transaction opportunities.
We expect that no individual criterion will entirely determine a decision to pursue a particular opportunity. Any particular business
transaction opportunity which we ultimately determine to pursue may not meet one or more of these criteria:
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History of
free cash flow generation. We will seek to acquire one or more businesses or assets that have a history of, or potential
for, strong, stable free cash flow generation, with predictable and recurring revenue streams.
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Revenues and
Enterprise Value. We will seek to acquire one or more businesses with annual revenues of approximately $150 million
to $750 million and an enterprise value of approximately $500 million to $1.5 billion.
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Strong management
team. We will seek to acquire one or more businesses or assets that have strong, experienced management teams or those
that provide a platform for us to assemble an effective and experienced management team. We will focus on management teams
with a proven track record of driving revenue growth, enhancing profitability and creating value for their shareholders.
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Opportunities
for add-on acquisitions. We will seek to acquire one or more businesses or assets that we can grow both organically
and through acquisitions. In addition, we believe that our ability to source proprietary opportunities and execute transactions
will help the business we acquire grow through acquisition, and thus serve as a platform for further add-on acquisitions.
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Spin-offs/divestitures
of non-core businesses or assets from larger companies. We will focus on one or more businesses or assets that are
part of larger companies where the owners seek to divest or spin-off such businesses in order to free up capital to focus
on core activities.
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Defensible
business niche. We will seek to acquire on one or more businesses or assets that have a leading or niche market position
and that demonstrate advantages when compared to their competitors, which may help to create barriers to entry against new
competitors. We anticipate that these barriers to entry will enhance the ability of these businesses or assets to generate
strong profitability and free cash flow.
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Diversified
customer and supplier base. We seek to acquire one or more businesses or assets that have a diversified customer and
supplier base, which are generally better able to endure economic downturns, industry consolidation, changing business preferences
and other factors that may negatively impact their customers, suppliers and competitors.
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Competitive
Strengths
We
believe we have the following competitive strengths:
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Management
Operating and Investing Experience. Our directors and executive officers have significant executive, investment and
operational experience in the financial services and financial technology industries. Although in the course of their careers
they have been involved in some unsuccessful businesses and deals, we believe that this breadth of experience provides us
with a competitive advantage in evaluating businesses and acquisition opportunities in our target industry.
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Established
Deal Sourcing Network. As a result of their extensive experience in the financial services industry as well as their
other corporate relationships, our management team members have developed a broad array of contacts in the industry. We believe
that these contacts are important in generating acquisition opportunities for us. Additionally, Mr. Simanson is the principal
of Thunder Bridge Capital, LLC, a private investment vehicle seeking strategic loan asset purchase relationships and equity
opportunities in the financial services and FinTech industries. Through this entity, the principals are presented with and
exposed to numerous domestic and global opportunities in the financial services and FinTech industries.
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Strong Financial
Position and Flexibility. With a trust account currently (as of December 31, 2020) in the amount of approximately
$347.5 million and a public market for our ordinary shares, we offer a target business a variety of options to facilitate
a future business transaction and fund the growth and expansion of business operations. Because we are able to consummate
an initial business transaction using our capital stock, debt, cash or a combination of the foregoing, we have the flexibility
to design an acquisition structure to address the needs of the parties. We have not, however, taken any steps to secure third
party financing and would only do so simultaneously with the consummation of our initial business transaction. Accordingly,
our flexibility in structuring an initial business transaction may be constrained by our ability to arrange third-party financing,
if required.
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Status as
a Public Company. We believe our structure makes us an attractive business transaction partner to prospective target
businesses. As an existing public company, we offer a target business an alternative to the traditional initial public offering
through a merger or other business transaction with us. In this situation, the owners of the target business would exchange
their shares of stock in the target business for shares of our stock. Once public, we believe the target business would have
greater access to capital and additional means of creating management incentives that are better aligned with shareholders’
interests than it would as a private company. We believe that being a public company can also augment a company’s profile
among potential new customers and vendors and aid it in attracting and retaining talented employees.
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Our
Investment Process
In
evaluating a prospective target business, we will conduct a thorough due diligence review, which will encompass, among other things,
meetings with incumbent management and employees, document reviews, inspection of facilities, as well as a review of financial
and other information that will be made available to us. We will also utilize our operational and capital planning experience.
Due to the relationships among our sponsor, management team and their respective affiliates, we believe that we have the capacity
to appropriately source opportunities, and to conduct critical business, financial and other analyses of prospective target businesses
ourselves, and accordingly, relative to other blank check companies, we believe we have less reliance on unaffiliated third parties
to provide such key elements of the investment process.
Each
of our directors and officers presently has, and in the future any of our directors and officers may have additional, fiduciary
or contractual obligations to other entities pursuant to which such officer or director is or will be required to present acquisition
opportunities to such entity. Accordingly, subject to his or her fiduciary duties under Cayman Islands law, if any of our officers
or directors becomes aware of an acquisition opportunity which is suitable for an entity to which he or she has then current fiduciary
or contractual obligations, he or she will need to honor his or her fiduciary or contractual obligations to present such acquisition
opportunity to such entity, and only present it to us if such entity rejects the opportunity. Our amended and restated memorandum
and articles of association provides that, subject to his or her fiduciary duties under Cayman Islands law, we renounce our interest
in any corporate opportunity offered to any officer or director unless such opportunity is expressly offered to such person solely
in his or her capacity as a director or officer of our company and such opportunity is one we are legally and contractually permitted
to undertake and would otherwise be reasonable for us to pursue. We do not believe, however, that any fiduciary duties or contractual
obligations of our directors or officers would materially undermine our ability to complete our business combination.
Sourcing
of Potential Business Combination Targets
We
believe that the operational and transactional experience of our management team and senior special advisor and their respective
affiliates, and the relationships they have developed as a result of such experience, provides us with a substantial number of
potential business combination targets. These individuals and entities have developed a broad network of contacts and corporate
relationships around the world. This network has grown through sourcing, acquiring and financing businesses, relationships with
sellers, financing sources and target management teams and experience in executing transactions under varying economic and financial
market conditions. We believe that these networks of contacts and relationships provides us important sources of investment opportunities.
In addition, target business candidates have been brought to our attention from various unaffiliated sources, including investment
market participants, private equity funds and large business enterprises seeking to divest noncore assets or divisions.
Our
acquisition criteria, due diligence processes and value creation methods are not intended to be exhaustive. Any evaluation relating
to the merits of a particular initial business combination may be based, to the extent relevant, on these general guidelines as
well as other considerations, factors and criteria that our management may deem relevant. In the event that we decide to enter
into our initial business combination with a target business that does not meet the above criteria and guidelines, we will disclose
that the target business does not meet the above criteria in our shareholder communications related to our initial business combination,
which would be in the form of tender offer documents or proxy solicitation materials that we would file with the SEC.
We
are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor, officers
or directors, or making the acquisition through a joint venture or other form of shared ownership with our sponsor, officers or
directors. In the event we seek to complete an initial business combination with a target that is affiliated with our sponsor,
officers or directors, we, or a committee of independent directors, would obtain an opinion from an independent investment banking
firm or another independent firm that commonly renders valuation opinions for the type of company we are seeking to acquire or
an independent accounting firm, that such an initial business combination is fair to our company from a financial point of view.
We are not required to obtain such an opinion in any other context.
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, we are not required to obtain an opinion from an independent investment
banking firm, another independent firm that commonly renders valuation opinions for the type of company we are seeking to acquire
or from an independent accounting firm that the price we are paying for a target is fair to our company 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
tender offer documents or proxy solicitation materials, as applicable, related to our initial business combination.
If
any of our officers or directors becomes aware of a business combination opportunity that falls within the line of business of
any entity to which he or she has pre-existing fiduciary or contractual obligations, he or she may be required to present such
business combination opportunity to such entity prior to presenting such business combination opportunity to us, subject to his
or her fiduciary duties under Cayman Islands law. All of our officers currently have certain relevant fiduciary duties or contractual
obligations that may take priority over their duties to us.
Other
Acquisition Considerations
Members
of our management team directly and indirectly own our ordinary shares and/or private placement warrants, and, accordingly, may
have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate
our initial business combination. Further, each of our officers and directors may have a conflict of interest with respect to
evaluating a particular business combination if the retention or resignation of any such officers and directors was included by
a target business as a condition to any agreement with respect to our initial business combination.
Initial
Business Combination
The
NASDAQ rules require that our initial business combination must be with one or more target businesses that together have an aggregate
fair market value equal to at least 80% of the balance in the trust account (less any deferred underwriting commissions and taxes
payable on interest earned) at the time of our signing a definitive agreement in connection with our initial business combination.
If our Board of Directors is not able to independently determine the fair market value of the target business or businesses, we
will obtain an opinion from an independent investment banking firm or another independent firm that commonly renders valuation
opinions for the type of company we are seeking to acquire or an independent accounting firm with respect to the satisfaction
of such criteria. We do not intend to purchase multiple businesses in unrelated industries in conjunction with our initial business
combination.
We
anticipate structuring our initial business combination so that the post-transaction company in which our public shareholders
own shares will own or acquire 100% of the equity interests or assets of the target business or businesses. We may, however, structure
our initial business combination such that the post-transaction company owns or acquires less than 100% of such interests or assets
of the target business in order to meet certain objectives of the target management team or shareholders or for other reasons,
but we will only complete such business combination if the post-transaction company owns or acquires 50% or more of the outstanding
voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required
to register as an investment company under the Investment Company Act of 1940, as amended, or the Investment Company Act. Even
if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our shareholders prior to
the business combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed
to the target and us in the business combination transaction. For example, we could pursue a transaction in which we issue a substantial
number of new shares in exchange for all of the outstanding capital stock of a target. In this case, we would acquire a 100% controlling
interest in the target. However, as a result of the issuance of a substantial number of new shares, our shareholders immediately
prior to our initial business combination could own less than a majority of our outstanding shares subsequent to our initial business
combination. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the
post-transaction company, the portion of such business or businesses that is owned or acquired is what will be valued for purposes
of the 80% of net assets test. If our initial business combination involves more than one target business, the 80% of net assets
test will be based on the aggregate value of all of the target businesses.
Status
as a Public Company
We
believe our structure makes us an attractive business combination partner to target businesses. As an existing public company,
we offer a target business an alternative to the traditional initial public offering through a merger or other business combination.
In this situation, the owners of the target business would exchange their shares of stock in the target business for our shares
or for a combination of our shares and cash, allowing us to tailor the consideration to the specific needs of the sellers. Although
there are various costs and obligations associated with being a public company, we believe target businesses will find this method
a more certain and cost effective method to becoming a public company than the typical initial public offering. In a typical initial
public offering, there are additional expenses incurred in marketing, road show and public reporting efforts that may not be present
to the same extent in connection with a business combination with us.
Furthermore,
once a proposed business combination is completed, the target business will have effectively become public, whereas an initial
public offering is always subject to the underwriters’ ability to complete the offering, as well as general market conditions,
which could delay or prevent the offering from occurring. Once public, we believe the target business would then have greater
access to capital and an additional means of providing management incentives consistent with shareholders’ interests. It
can offer further benefits by augmenting a company’s profile among potential new customers and vendors and aid in attracting
talented employees.
While
we believe that our structure and our management team and senior special advisor’s backgrounds makes us an attractive business
partner, some potential target businesses may have a negative view of us since we are a blank check company, without an operating
history, and there is uncertainty relating to our ability to obtain shareholder approval of our proposed initial business combination
and retain sufficient funds in our trust account in connection therewith.
We
are an “emerging growth company,” as defined by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”).
We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary
of the completion of our initial public offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or
(c) in which we are deemed to be a large accelerated filer, which means the market value of our ordinary shares that is held by
non-affiliates exceeds $700 million as of the prior June 30th, and (2) the date on which we have issued more than $1.0
billion in non-convertible debt securities during the prior three-year period.
Financial
Position
With
funds available for a business combination in the amount of $ 349,583,138, as of December 31, 2020, assuming no redemptions and
after payment of $12,075,000 of deferred underwriting fees, before fees and expenses associated with our initial business combination,
we offer a target business a variety of options such as creating a liquidity event for its owners, providing capital for the potential
growth and expansion of its operations or strengthening its balance sheet by reducing its debt ratio. Because we are able to complete
our initial business combination using our cash, debt or equity securities, or a combination of the foregoing, we have the flexibility
to use the most efficient combination that will allow us to tailor the consideration to be paid to the target business to fit
its needs and desires. However, we have not taken any steps to secure third party financing and there can be no assurance it will
be available to us.
Effecting
Our Initial Business Combination
We
are not presently engaged in, and we will not engage in, any operations until we consummate our initial business combination.
We intend to effectuate our initial business combination using cash from the proceeds of our initial public offering and the private
placement of the private placement warrants, our shares, debt or a combination of these as the consideration to be paid in our
initial business combination. We may, although we do not currently intend to, seek to complete our initial business combination
with a company or business that may be financially unstable or in its early stages of development or growth, start-up companies
or companies with speculative business plans or excess leverage, which would subject us to the numerous risks inherent in such
companies and businesses.
If
our initial business combination is paid for using equity or debt securities, or not all of the funds released from the trust
account are used for payment of the consideration in connection with our initial business combination or used for redemptions
of our Class A ordinary shares, we may apply the balance of the cash released to us from the trust account for general corporate
purposes, including for maintenance or expansion of operations of the post-transaction company, the payment of principal or interest
due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working
capital.
We
may seek to raise additional funds through a private offering of debt or equity securities in connection with the completion of
our initial business combination, and we may effectuate our initial business combination using the proceeds of such offering rather
than using the amounts held in the trust account.
In
the case of an initial business combination funded with assets other than the trust account assets, our tender offer documents
or proxy materials disclosing the business combination would disclose the terms of the financing and, only if required by law,
we would seek shareholder approval of such financing. There are no prohibitions on our ability to raise funds privately or through
loans in connection with our initial business combination.
Selection
of a Target Business and Structuring of Our Initial Business Combination
The
NASDAQ rules require that our initial business combination must be with one or more target businesses that together have an aggregate
fair market value equal to at least 80% of the balance in the trust account (less any deferred underwriting commissions and taxes
payable on interest earned) at the time of our signing a definitive agreement in connection with our initial business combination.
The fair market value of the target or targets will be determined by our Board of Directors based upon one or more standards generally
accepted by the financial community, such as discounted cash flow valuation or value of comparable businesses. Our shareholders
will be relying on the business judgment of our Board of Directors, which will have significant discretion in choosing the standard
used to establish the fair market value of the target or targets, and different methods of valuation may vary greatly in outcome
from one another. Such standards used will be disclosed in our tender offer documents or proxy solicitation materials, as applicable,
related to our initial business combination.
If
our Board of Directors is not able to independently determine the fair market value of the target business or businesses, we will
obtain an opinion from an independent investment banking firm or another independent firm that commonly renders valuation opinions
for the type of company we are seeking to acquire or an independent accounting firm, with respect to the satisfaction of such
criteria. We do not intend to purchase multiple businesses in unrelated industries in conjunction with our initial business combination.
Subject to this requirement, our management will have virtually unrestricted flexibility in identifying and selecting one or more
prospective target businesses, although we will not be permitted to effectuate our initial business combination with another blank
check company or a similar company with nominal operations.
In
any case, we will only complete an initial business combination in which we own or acquire 50% or more of the outstanding voting
securities of the target or otherwise acquire a controlling interest in the target sufficient for it not to be required to register
as an investment company under the Investment Company Act. If we own or acquire less than 100% of the equity interests or assets
of a target business or businesses, the portion of such business or businesses that are owned or acquired by the post-transaction
company is what will be valued for purposes of the 80% of net assets test. There is no basis for investors in our initial public
offering to evaluate the possible merits or risks of any target business with which we may ultimately complete our initial business
combination.
To
the extent we effect our initial business combination with a company or business that may be financially unstable or in its early
stages of development or growth we may be affected by numerous risks inherent in such company or business. Although our management
will endeavor to evaluate the risks inherent in a particular target business, there can be no assurances that we will properly
ascertain or assess all significant risk factors.
In
evaluating a prospective target business, we expect to conduct a thorough due diligence review which will encompass, among other
things, meetings with incumbent management and employees, document reviews, inspection of facilities, as well as a review of financial,
operational, legal and other information which will be made available to us.
The
time required to select and evaluate a target business and to structure and complete our initial business combination, and the
costs associated with this process, are not currently ascertainable with any degree of certainty. Any costs incurred with respect
to the identification and evaluation of a prospective target business with which our initial business combination is not ultimately
completed will result in our incurring losses and will reduce the funds we can use to complete another business combination.
Lack
of Business Diversification
For
an indefinite period of time after the completion of our initial business combination, the prospects for our success may depend
entirely on the future performance of a single business. Unlike other entities that have the resources to complete business combinations
with multiple entities in one or several industries, it is probable that we will not have the resources to diversify our operations
and mitigate the risks of being in a single line of business. By completing our initial business combination with only a single
entity, our lack of diversification may:
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subject us to negative
economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact on the particular
industry in which we operate after our initial business combination; and
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cause us to depend
on the marketing and sale of a single product or limited number of products or services.
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Limited
Ability to Evaluate the Target’s Management Team
Although
we intend to closely scrutinize the management of a prospective target business when evaluating the desirability of effecting
our initial business combination with that business, our assessment of the target business’s management may not prove to
be correct. In addition, the future management may not have the necessary skills, qualifications or abilities to manage a public
company. Furthermore, the future role of members of our management team and senior special advisor, if any, in the target business
cannot presently be stated with any certainty. While it is possible that one or more of our directors will remain associated in
some capacity with us following our initial business combination, it is unlikely that any of them will devote their full efforts
to our affairs subsequent to our initial business combination. Moreover, there can be no assurances that members of our management
team and senior special advisor will have significant experience or knowledge relating to the operations of the particular target
business.
There
can be no assurances that any of our key personnel will remain in senior management or advisory positions with the combined company.
The determination as to whether any of our key personnel will remain with the combined company will be made at the time of our
initial business combination.
Following
a business combination, we may seek to recruit additional managers to supplement the incumbent management of the target business.
There can be no assurances that we will have the ability to recruit additional managers, or that such additional managers will
have the requisite skills, knowledge or experience necessary to enhance the incumbent management.
Shareholders
May Not Have the Ability to Approve Our Initial Business Combination
We
may conduct redemptions without a shareholder vote pursuant to the tender offer rules of the SEC subject to the provisions of
our amended and restated memorandum and articles of association. However, we will seek shareholder approval if it is required
by law or applicable stock exchange rule, or we may decide to seek shareholder approval for business or other legal reasons.
Under
the NASDAQ’s listing rules, shareholder approval would be required for our initial business combination if, for example:
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we issue ordinary
shares that will be equal to or in excess of 20% of the number of Class A ordinary shares then outstanding (other than in
a public offering);
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any of our directors,
officers or substantial shareholders (as defined by NASDAQ rules) has a 5% or greater interest (or such persons collectively
have a 10% or greater interest), directly or indirectly, in the target business or assets to be acquired or otherwise and
the present or potential issuance of ordinary shares could result in an increase in issued and outstanding ordinary shares
or voting power of 5% or more; or
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the issuance or
potential issuance of ordinary shares will result in our undergoing a change of control.
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Permitted
Purchases of our Securities
In
the event 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 in privately negotiated transactions or in the open market either prior to or following the completion of
our initial business combination. There is no limit on the number of shares such persons may purchase. However, they have no current
commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions.
In the event our sponsor, directors, officers, advisors or their affiliates determine to make any such purchases at the time of
a shareholder vote relating to our initial business combination, such purchases could have the effect of influencing the vote
necessary to approve such transaction. None of the funds in the trust account will be used to purchase shares in such transactions.
They will not make any such purchases when they are in possession of any material non-public information not disclosed to the
seller or if such purchases are prohibited by Regulation M under the Exchange Act. Such a purchase may include a contractual acknowledgement
that such 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. We have adopted an insider trading policy which requires insiders to: (i) refrain
from purchasing shares during certain blackout periods and when they are in possession of any material non-public information
and (ii) to clear all trades with our legal counsel prior to execution. We cannot currently determine whether our insiders will
make such purchases pursuant to a Rule 10b5-1 plan, as it will be dependent upon several factors, including but not limited to,
the timing and size of such purchases. Depending on such circumstances, our insiders may either make such purchases pursuant to
a Rule 10b5-1 plan or determine that such a plan is not necessary.
In
the event that our sponsor, directors, officers, advisors or 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. We do not currently anticipate that such purchases, if any, would constitute
a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private
rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject
to such rules, the purchasers will comply with such rules.
The
purpose of such purchases would be to (i) vote such shares in favor of the business combination and thereby increase the likelihood
of obtaining shareholder approval of the business combination or (ii) to satisfy a closing condition in an agreement with a target
that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where
it appears that such requirement would otherwise not be met. This may result in the completion of our initial business combination
that may not otherwise have been possible.
In
addition, if such purchases are made, the public “float” of our ordinary shares may be reduced and the number of beneficial
holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading
of our securities on a national securities exchange.
Our
sponsor, officers, directors, advisors and/or their affiliates anticipate that they may identify the shareholders with whom our
sponsor, officers, directors, advisors or their affiliates may pursue privately negotiated purchases by either the shareholders
contacting us directly or by our receipt of redemption requests submitted by shareholders following our mailing of proxy materials
in connection with our initial business combination. To the extent that our sponsor, officers, directors or their affiliates enter
into a private purchase, they would identify and contact only potential selling shareholders who have expressed their election
to redeem their shares for a pro rata share of the trust account or vote against the business combination. Such persons would
select the shareholders from whom to acquire shares based on the number of shares available, the negotiated price per share and
such other factors as any such person may deem relevant at the time of purchase. The price per share paid in any such transaction
may be different than the amount per share a public shareholder would receive if it elected to redeem its shares in connection
with our initial business combination. Our sponsor, officers, directors, advisors or their affiliates will only purchase shares
if such purchases comply with Regulation M under the Exchange Act and the other federal securities laws.
Any
purchases by our sponsor, officers, directors, advisors and/or their affiliates who are affiliated purchasers under Rule 10b-18
under the Exchange Act will only be made to the extent such purchases are able to be made in compliance with Rule 10b-18, which
is a safe harbor from liability for manipulation under Section 9(a)(2) and Rule 10b-5 of the Exchange Act. Rule 10b-18 has certain
technical requirements that must be complied with in order for the safe harbor to be available to the purchaser. Our sponsor,
officers, directors, advisors and/or their affiliates will not make purchases of ordinary shares if the purchases would violate
Section 9(a)(2) or Rule 10b-5 of the Exchange Act.
Redemption
Rights for Public Shareholders Upon Completion of our Initial Business Combination
We
will provide our public shareholders with the opportunity to redeem all or a portion of their ordinary shares upon the completion
of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the
trust account as of two business days prior to the consummation of the initial business combination, including interest (which
interest shall be net of taxes payable) divided by the number of then outstanding public shares, subject to the limitations described
herein. The amount in the trust account as of December 31, 2020, was $10.13 per public share. The per-share amount we will distribute
to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions we will pay to the
underwriters. Our sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed
to waive their redemption rights with respect to their founder shares and any public shares they may hold in connection with the
completion of our initial business combination.
Manner
of Conducting Redemptions
We
will provide our public shareholders with the opportunity to redeem all or a portion of their Class A ordinary shares upon the
completion of our initial business combination either (i) in connection with a shareholder meeting called to approve the business
combination or (ii) by means of a tender offer. The decision as to whether we will seek shareholder approval of a proposed business
combination or conduct a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors
such as the timing of the transaction and whether the terms of the transaction would require us to seek shareholder approval under
the law or stock exchange listing requirement. Under NASDAQ rules, asset acquisitions and stock purchases would not typically
require shareholder approval while direct mergers with our company where we do not survive and any transactions where we issue
more than 20% of our issued and outstanding ordinary shares or seek to amend our amended and restated memorandum and articles
of association would require shareholder approval. We intend to conduct redemptions without a shareholder vote pursuant to the
tender offer rules of the SEC unless shareholder approval is required by law or stock exchange listing requirement or we choose
to seek shareholder approval for business or other legal reasons. So long as we obtain and maintain a listing for our securities
on NASDAQ, we are required to comply with NASDAQ rules.
If
a shareholder vote is not required and we do not decide to hold a shareholder vote for business or other legal reasons, we will,
pursuant to our amended and restated memorandum and articles of association:
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conduct the redemptions
pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers; and
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file tender offer
documents with the SEC prior to completing our initial business combination which contain substantially the same financial
and other information about the initial business combination and the redemption rights as is required under Regulation 14A
of the Exchange Act, which regulates the solicitation of proxies.
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Upon
the public announcement of our initial business combination, we or our sponsor will terminate any plan established in accordance
with Rule 10b5-1 to purchase our Class A ordinary shares in the open market if we elect to redeem our public shares through a
tender offer, to comply with Rule 14e-5 under the Exchange Act.
In
the event we conduct redemptions pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business
days, in accordance with Rule 14e-1(a) under the Exchange Act, and we will not be permitted to complete our initial business combination
until the expiration of the tender offer period. In addition, the tender offer will be conditioned on public shareholders not
tendering more than a specified number of public shares which are not purchased by our sponsor, which number will be based on
the requirement that we will only redeem our public shares so long as (after such redemption) our net tangible assets will be
at least $5,000,001 either prior to or upon consummation of our initial business combination, after payment of the deferred underwriting
commission (so that we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset or
cash requirement which may be contained in the agreement relating to our initial business combination. If public shareholders
tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete the initial business combination.
If,
however, shareholder approval of the transaction is required by law or stock exchange listing requirement, or we decide to obtain
shareholder approval for business or other legal reasons, we will, pursuant to our amended and restated memorandum and articles
of association:
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conduct the redemptions
in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation
of proxies, and not pursuant to the tender offer rules; and
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file proxy materials
with the SEC.
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We
expect that a final proxy statement would be mailed to public shareholders at least 10 days prior to the shareholder vote. However,
we expect that a draft proxy statement would be made available to such shareholders well in advance of such time, providing additional
notice of redemption if we conduct redemptions in conjunction with a proxy solicitation. Although we are not required to do so,
we currently intend to comply with the substantive and procedural requirements of Regulation 14A in connection with any shareholder
vote even if we are not able to maintain our NASDAQ listing or Exchange Act registration.
In
the event that we seek shareholder approval of our initial business combination, we will distribute proxy materials and, in connection
therewith, provide our public shareholders with the redemption rights described above upon completion of the initial business
combination.
If
we seek shareholder approval, we will complete our initial business combination only if a majority of the issued and outstanding
Class A ordinary shares voted are voted in favor of the business combination. In such case, pursuant to the terms of a letter
agreement entered into with us, our sponsor, officers and directors have agreed (and their permitted transferees will agree) to
vote any founder shares held by them and any public shares purchased during or after our initial public offering in favor of our
initial business combination. We expect that at the time of any shareholder vote relating to our initial business combination,
our sponsor and its permitted transferees will own at least 20% of our issued and outstanding ordinary shares entitled to vote
thereon. Each public shareholder may elect to redeem their public shares irrespective of whether they vote for or against the
proposed transaction. In addition, our sponsor, officers and directors have entered into a letter agreement with us, pursuant
to which they have agreed to waive their redemption rights with respect to their founder shares and public shares in connection
with the completion of a business combination.
Our
amended and restated memorandum and articles of association provides that we will only redeem our public shares so long as (after
such redemption) our net tangible assets will be at least $5,000,001 either prior to or upon consummation of our initial business
combination, after payment of the deferred underwriting commission (so that we are not subject to the SEC’s “penny
stock” rules). Redemptions of our public shares may also be subject to a higher net tangible asset test or cash requirement
pursuant to an agreement relating to our initial business combination. For example, the proposed business combination may require:
(i) cash consideration to be paid to the target or its owners, (ii) cash to be transferred to the target for working capital or
other general corporate purposes or (iii) the retention of cash to satisfy other conditions in accordance with the terms of the
proposed business combination. In the event the aggregate cash consideration we would be required to pay for all 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, and all Class A ordinary shares submitted for redemption will be returned to the holders thereof.
Limitation
on Redemption Upon Completion of Our Initial Business Combination if We Seek Shareholder Approval
Notwithstanding
the foregoing, 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 Excess Shares. We believe this restriction will discourage shareholders from accumulating
large blocks of shares, and subsequent attempts by such holders to use their ability to exercise their redemption rights against
a proposed business combination as a means to force us or our sponsor or its affiliates to purchase their shares at a significant
premium to the then-current market price or on other undesirable terms. Absent this provision, a public shareholder holding more
than an aggregate of 15% of the shares sold in our initial public offering could threaten to exercise its redemption rights if
such holder’s shares are not purchased by us or our sponsor or its affiliates at a premium to the then-current market price
or on other undesirable terms. By limiting our shareholders’ ability to redeem no more than 15% of the shares sold in our
initial public offering, we believe we will limit the ability of a small group of shareholders to unreasonably attempt to block
our ability to complete our initial business combination, particularly in connection with a business combination with a target
that requires as a closing condition that we have a minimum net worth or a certain amount of cash. However, we would not be restricting
our shareholders’ ability to vote all of their shares (including Excess Shares) for or against our initial business combination.
Our sponsor, officers and directors have, pursuant to a letter agreement entered into with us, waived their right to have any
founder shares or public shares held by them redeemed in connection with our initial business combination. Unless any of our other
affiliates acquires founder shares through a permitted transfer from an initial shareholder, and thereby becomes subject to the
letter agreement, no such affiliate is subject to this waiver. However, to the extent any such affiliate acquires public shares
in our initial public offering or thereafter through open market purchases, it would be a public shareholder and restricted from
seeking redemption rights with respect to any Excess Shares.
Tendering
Share Certificates in Connection with a Tender Offer or Redemption Rights
We
may require our public shareholders seeking to exercise their redemption rights, whether they are record holders or hold their
shares in “street name,” to either tender their certificates (if any) to our transfer agent prior to the date set
forth in the tender offer documents, or up to two business days prior to the vote on the proposal to approve the business combination
in the event we distribute proxy materials, or to deliver their shares to the transfer agent electronically using The Depository
Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, rather than simply voting against the initial business combination.
The tender offer or proxy materials, as applicable, that we will furnish to holders of our public shares in connection with our
initial business combination will indicate whether we are requiring public shareholders to satisfy such delivery requirements.
Accordingly, a public shareholder would have from the time we send out our tender offer materials until the close of the tender
offer period, or up to two days prior to the vote on the business combination if we distribute proxy materials, as applicable,
to tender its shares if it wishes to seek to exercise its redemption rights. Pursuant to the tender offer rules, the tender offer
period will be not less than 20 business days and, in the case of a shareholder vote, a final proxy statement would be mailed
to public shareholders at least 10 days prior to the shareholder vote. However, we expect that a draft proxy statement would be
made available to such shareholders well in advance of such time, providing additional notice of redemption if we conduct redemptions
in conjunction with a proxy solicitation. Given the relatively short exercise period, it is advisable for shareholders to use
electronic delivery of their public shares.
There
is a nominal cost associated with the above-referenced tendering process and the act of certificating the shares or delivering
them through the DWAC System. The transfer agent will typically charge the tendering broker $80.00 and it would be up to the broker
whether or not to pass this cost on to the redeeming holder. However, this fee would be incurred regardless of whether or not
we require holders seeking to exercise redemption rights to tender their shares. The need to deliver shares is a requirement of
exercising redemption rights regardless of the timing of when such delivery must be effectuated.
Any
request to redeem such shares, once made, may be withdrawn at any time up to the date set forth in the tender offer materials
or the date of the shareholder meeting set forth in our proxy materials, as applicable. Furthermore, if a holder of a public share
delivered its certificate in connection with an election of redemption rights and subsequently decides prior to the applicable
date not to elect to exercise such rights, such holder may simply request that the transfer agent return the certificate (physically
or electronically). It is anticipated that the funds to be distributed to holders of our public shares electing to redeem their
shares will be distributed promptly after the completion of our initial business combination.
If
our initial business combination is not approved or completed for any reason, then our public shareholders who elected to exercise
their redemption rights would not be entitled to redeem their shares for the applicable pro rata share of the trust account. In
such case, we will promptly return any certificates delivered by public holders who elected to redeem their shares.
If
our initial proposed business combination is not completed, we may continue to try to complete a business combination with a different
target by August 13, 2021.
Redemption
of Public Shares and Liquidation if No Initial Business Combination
Our
sponsor, officers and directors have agreed that we have until August 13, 2021 to complete our initial business combination. If
we are unable to complete our initial business combination by August 13, 2021 or with such time provided, 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 (less up to $100,000 of interest to pay dissolution expenses (which interest shall be net of taxes payable)
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), subject to applicable law,
and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders
and our Board of Directors, liquidate and dissolve, subject in each case to our obligations under Cayman Islands law to provide
for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions
with respect to our warrants, which will expire worthless if we fail to complete our initial business combination by August 13,
2021.
Our
sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have waived their rights
to liquidating distributions from the trust account with respect to their founder shares if we fail to complete our initial business
combination by August 13, 2021. However, if our sponsor, officers or directors acquire public shares after our initial public
offering, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail
to complete our initial business combination within such time period.
Our
sponsor, officers and directors have agreed, pursuant to a written letter agreement with us, that they will not propose any amendment
to our amended and restated memorandum and articles of association that would (i) modify the substance or timing of our obligation
to redeem 100% of our public shares if we do not complete our initial business combination by August 13, 2021 or (ii) with respect
to the other provisions relating to shareholders’ rights or pre-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 (which interest shall
be net of taxes payable) divided by the number of then outstanding public shares. However, we will only redeem our public shares
so long as (after such redemption) our net tangible assets will be at least $5,000,001 either prior to or upon consummation of
our initial business combination, after payment of the deferred underwriting commission (so that we are not subject to the SEC’s
“penny stock” rules). If this optional redemption right is exercised with respect to an excessive number of public
shares such that we cannot satisfy the net tangible asset requirement (described above), we would not proceed with the amendment
or the related redemption of our public shares.
We
expect to use the amounts held outside the trust account ($133,695 as of December 31, 2020) to pay for all costs and expenses
associated with implementing our plan of dissolution, as well as payments to any creditors, if we do not complete an initial business
combination by August 13, 2021, although there can be no assurances that there will be sufficient funds for such purpose. However,
if those funds are not sufficient to cover the costs and expenses associated with implementing our plan of dissolution, to the
extent that there is any interest accrued in the trust account not required to pay taxes, we may request the trustee to release
to us an additional amount of up to $100,000 of such accrued interest to pay those costs and expenses.
If
we were to expend all of the net proceeds of our initial public offering and the sale of the private placement warrants, other
than the proceeds deposited in the trust account, and without taking into account interest, if any, earned on the trust account,
the per-share redemption amount received by shareholders upon our dissolution would be approximately $10.13 (based on the trust
account balance as of December 31, 2020). The proceeds deposited in the trust account could, however, become subject to the claims
of our creditors which would have higher priority than the claims of our public shareholders. There can be no assurances that
the actual per-share redemption amount received by shareholders will not be substantially less than $10.13. While we intend to
pay such amounts, if any, there can be no assurances that we will have funds sufficient to pay or provide for all creditors’
claims.
Although
we have sought and will continue to have all third parties (other than our independent auditors), prospective target businesses
or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind
in or to any monies held in the trust account for the benefit of our public shareholders, there is no guarantee that they will
execute such agreements or even if they execute such agreements that they would be prevented from bringing claims against the
trust account including but not limited to fraudulent inducement, breach of fiduciary responsibility or other similar claims,
as well as claims challenging the enforceability of the waiver, in each case in order to gain an advantage with respect to a claim
against our assets, including the funds held in the trust account. If any third party refuses to execute an agreement waiving
such claims to the monies held in the trust account, our management will perform an analysis of the alternatives available to
it and will only enter into an agreement with a third party that has not executed a waiver if management believes that such third
party’s engagement would be significantly more beneficial to us than any alternative. Examples of possible instances where
we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular
expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to
execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. 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 time frame, 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. Our sponsor
has agreed that it will be liable to us if and to the extent any claims by a third-party (other than our independent auditors)
for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction
agreement, reduce the amount of funds in the trust account to below (i) $10.00 per public share or (ii) such lesser amount per
public share held in the trust account as of the date of the liquidation of the trust account, due to reductions in value of the
trust assets, in each case net of the amount of interest which may be withdrawn to pay taxes, except as to any claims by a third
party who executed a waiver of any and all rights to seek access to the trust account and except as to any claims under our indemnity
of the underwriters of our initial public offering against certain liabilities, including liabilities under the Securities Act.
In the event that an executed waiver is deemed to be unenforceable against a third party, then our sponsor will not be responsible
to the extent of any liability for such third-party claims. We have not independently verified whether our sponsor has sufficient
funds to satisfy their indemnity obligations and believe that our sponsor’s only assets are securities of our company. None
of our other officers will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective
target businesses.
In
the event that the proceeds in the trust account are reduced below (i) $10.00 per public share or (ii) such lesser amount per
public share held in the trust account as of the date of the liquidation of the trust account, due to reductions in value of the
trust assets, in each case net of the amount of interest which may be withdrawn to pay taxes, and our sponsor asserts that it
is unable to satisfy its indemnification obligations or that it has no indemnification obligations related to a particular claim,
our independent directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations.
While we currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce
its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment may
choose not to do so in any particular instance. Accordingly, there can be no assurances that due to claims of creditors the actual
value of the per-share redemption price will not be substantially less than $10.00 per share.
We
seek to reduce the possibility that our sponsor will have to indemnify the trust account due to claims of creditors by endeavoring
to have all third parties (other than our independent auditors), prospective target businesses or other entities with which we
do business execute agreements with us waiving any right, title, interest or claim of any kind in or to monies held in the trust
account. Our sponsor will also not be liable as to any claims under our indemnity of the underwriters of our initial public offering
against certain liabilities, including liabilities under the Securities Act. We may have access to use the amounts held outside
the trust account ($497,549 as of December 31, 2020), to pay any such potential claims (including costs and expenses incurred
in connection with our liquidation, currently estimated to be no more than approximately $100,000) but these amounts may be spent
on expenses incurred as a result of being a public company or due diligence expenses on prospective business combination candidates.
In the event that we liquidate and it is subsequently determined that the reserve for claims and liabilities is insufficient,
shareholders who received funds from our trust account could be liable for claims made by creditors.
If
we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the proceeds held
in the trust account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to
the claims of third parties with priority over the claims of our shareholders. To the extent any bankruptcy claims deplete the
trust account, there can be no assurances we will be able to return $10.00 per share to our public shareholders. Additionally,
if we file a bankruptcy petition or an involuntary bankruptcy 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 court could seek to recover all amounts received
by our shareholders. Furthermore, our Board of Directors may be viewed as having breached its fiduciary duty to our creditors
and/or may have acted in bad faith, and thereby exposing itself and our company to claims of punitive damages, by paying public
shareholders from the trust account prior to addressing the claims of creditors. There can be no assurances that claims will not
be brought against us for these reasons.
Our
public shareholders will be entitled to receive funds from the trust account only upon the earlier of (i) the completion of our
initial business combination, (ii) the redemption of any public shares properly tendered in connection with a shareholder vote
to amend our amended and restated memorandum and articles of association to (A) modify the substance or timing of our obligation
to redeem 100% of our public shares if we do not complete our initial business combination by August 13, 2021 or (B) with respect
to any other provision relating to shareholders’ rights or pre-business combination activity and (iii) the redemption of
all of our public shares if we are unable to complete our initial business combination by August 13, 2021, subject to applicable
law. In no other circumstances will a shareholder have any right or interest of any kind to or in the trust account. In the event
we seek shareholder approval in connection with our initial business combination, a shareholder’s voting in connection with
the business combination alone will not result in a shareholder’s redeeming its shares to us for an applicable pro rata
share of the trust account. Such shareholder must have also exercised its redemption rights described above.
Amended
and Restated Memorandum and Articles of Association
Our
amended and restated memorandum and articles of association contains certain requirements and restrictions relating to our initial
public offering that apply to us until the consummation of our initial business combination. If we seek to amend any provisions
of our amended and restated memorandum and articles of association relating to shareholders’ rights or pre-business combination
activity, we will provide dissenting public shareholders with the opportunity to redeem their public shares in connection with
any such vote. Our sponsor, officers and directors have agreed to waive any redemption rights with respect to their founder shares
and public shares in connection with the completion of our initial business combination. Specifically, our amended and restated
memorandum and articles of association provides, among other things, that:
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prior to the consummation
of our initial business combination, we shall either (1) seek shareholder approval of our initial business combination at
a meeting called for such purpose at which shareholders may seek to redeem their shares, regardless of whether they vote for
or against the proposed business combination, into their pro rata share of the aggregate amount then on deposit in the trust
account, including interest (which interest shall be net of taxes payable) or (2) provide our public shareholders with the
opportunity to tender their shares to us by means of a tender offer (and thereby avoid the need for a shareholder vote) for
an amount equal to their pro rata share of the aggregate amount then on deposit in the trust account, including interest (which
interest shall be net of taxes payable) in each case subject to the limitations described herein;
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we will consummate
our initial business combination only if we have net tangible assets of at least $5,000,001 upon such consummation and, solely
if we seek shareholder approval, a majority of the issued and outstanding ordinary shares voted are voted in favor of the
business combination;
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if our initial business
combination is not consummated by August 13, 2021, then our existence will terminate and we will distribute all amounts in
the trust account; and
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prior to our initial
business combination, we may not issue additional ordinary shares that would entitle the holders thereof to (i) receive funds
from the trust account or (ii) vote on any initial business combination.
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These
provisions cannot be amended without the approval of a special resolution which requires the approval of holders of at least two-thirds
of our ordinary shares who attend and vote in a general meeting. In the event we seek shareholder approval in connection with
our initial business combination, our amended and restated memorandum and articles of association provides that we may consummate
our initial business combination only if approved by a majority of the ordinary shares voted by our shareholders at a duly held
shareholders meeting.
Competition
In
identifying, evaluating and selecting a target business for our initial business combination, we have encountered, and may continue
to encounter, intense competition from other entities having a business objective similar to ours, including other blank check
companies, private equity groups and leveraged buyout funds, and operating businesses seeking strategic acquisitions. Many of
these entities are well established and have extensive experience identifying and effecting business combinations directly or
through affiliates. Moreover, many of these competitors possess greater financial, technical, human and other resources than us.
Our ability to acquire larger target businesses is limited by our available financial resources. This inherent limitation gives
others an advantage in pursuing the acquisition of a target business. Furthermore, our obligation to pay cash in connection with
our public shareholders who exercise their redemption rights may reduce the resources available to us for our initial business
combination and our outstanding warrants, and the future dilution they potentially represent, may not be viewed favorably by certain
target businesses. In addition, if we issue additional ordinary shares or equity-linked securities for capital raising purposes
in connection with the closing of our initial business combination at a newly issued price of less than $9.50 per share, then
the exercise price of the warrants will be adjusted to be equal to 115% of the newly issued price and the redemption price of
the warrants shall be adjusted to equal 180% of the newly issued price. This may make it more difficult for us to consummate an
initial business combination with a target business. Any of these factors may place us at a competitive disadvantage in successfully
negotiating an initial business combination.
Indemnity
Our
sponsor has agreed that it will be liable to us if and to the extent any claims by a third-party (other than our independent auditors)
for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction
agreement, reduce the amount of funds in the trust account to below (i) $10.00 per public share or (ii) such lesser amount per
public share held in the trust account as of the date of the liquidation of the trust account due to reductions in the value of
the trust assets, in each case net of the interest which may be withdrawn to pay taxes, except as to any claims by a third party
who executed a waiver of any and all rights to seek access to the trust account and except as to any claims under our indemnity
of the underwriters of our initial public offering against certain liabilities, including liabilities under the Securities Act.
Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, our sponsor will not be responsible
to the extent of any liability for such third party claims. We have not independently verified whether our sponsor has sufficient
funds to satisfy their indemnity obligations and believe that our sponsor’s only assets are securities of our company. We
have not asked our sponsor to reserve for such obligations.
Employees
We
have three officers. Members of our management team are not obligated to devote any specific number of hours to our matters but
they devote as much of their time as they deem necessary to our affairs and intend to continue doing so until we have completed
our initial business combination. The amount of time that our officers or any other members of our management team devotes in
any time period may vary based on whether a target business has been selected for our initial business combination and the current
stage of the business combination process.
Periodic
Reporting and Financial Information
We
have registered our units, Class A ordinary shares and warrants under the Exchange Act and have reporting obligations, including
the requirement that we file annual, quarterly and current reports with the SEC. In accordance with the requirements of the Exchange
Act, our annual reports will contain financial statements audited and reported on by our independent registered public auditors.
We
will provide shareholders with audited financial statements of the prospective target business as part of the tender offer materials
or proxy solicitation materials sent to shareholders to assist them in assessing the target business. These financial statements
may be required to be prepared in accordance with, or be reconciled to, U.S. GAAP, or IFRS, depending on the circumstances and
the historical financial statements may be required to be audited in accordance with the PCAOB. These financial statement requirements
may limit the pool of potential target businesses we may acquire because some targets may be unable to provide such 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. While this may limit the pool of potential acquisition candidates, we do not believe that this
limitation will be material.
We
will be required to evaluate our internal control procedures for the fiscal year ending December 31, 2020 as required by the Sarbanes-Oxley
Act. Only in the event we are deemed to be a large accelerated filer or an accelerated filer will we be required to have our internal
control procedures audited. A target company may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding
adequacy of their internal controls. The development of the internal controls of any such entity to achieve compliance with the
Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition.
We
are an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As
such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other
public companies that are not “emerging growth companies” including, but not limited to, not being required to comply
with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive
compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory
vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. If some investors
find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of
our securities may be more volatile.
In
addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended
transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards.
In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards
would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period.
We
will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary
of the completion of our initial public offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or
(c) in which we are deemed to be a large accelerated filer, which means the market value of our ordinary shares that is held by
non-affiliates exceeds $700 million as of the prior June 30th, and (2) the date on which we have issued more than $1.0
billion in non-convertible debt securities during the prior three-year period. References herein to “emerging growth company”
shall have the meaning associated with it in the JOBS Act.
You should carefully
consider all of the risks described below, together with the other information contained in this report, including the financial
statements. If any of the following risks occur, our business, financial condition or results of operations may be materially and
adversely affected. In that event, the trading price of our securities could decline, and an investor could lose all or part of
their investment. The risk factors described below are not necessarily exhaustive and you are encouraged to perform your own investigation
with respects to us and our business. For risk factors related to the Business Combination with indie Semiconductor, Inc., see
the S-4 to be filed by the Company.
We are a company with limited operating
history and no revenues, and you have little basis on which to evaluate our ability to achieve our business objective.
We
are an early stage company established under the laws of the Cayman Islands with limited operating results and no revenues. Because
we lack significant operating history, you have little basis upon which to evaluate our ability to achieve our business objective
of completing our initial business combination with one or more target businesses. We may be unable to complete our initial business
combination. If we fail to complete our initial business combination, we will never generate any operating revenues.
Our
public shareholders may not be afforded an opportunity to vote on our proposed business combination, which means we may complete
our initial business combination even if a majority of our public shareholders do not support such a combination.
We
may not hold a shareholder vote to approve our initial business combination unless the business combination would require shareholder
approval under applicable Cayman Islands law or the rules of NASDAQ or if we decide to hold a shareholder vote for business or
other reasons. Examples of transactions that would not ordinarily require shareholder approval include asset acquisitions and
share purchases, while transactions such as direct mergers with our company or transactions where we issue more than 20% of our
outstanding shares would require shareholder approval. For instance, the NASDAQ rules currently allow us to engage in a tender
offer in lieu of a shareholder meeting but would still require us to obtain shareholder approval if we were seeking to issue more
than 20% of our outstanding shares to a target business as consideration in any business combination. Therefore, if we were structuring
a business combination that required us to issue more than 20% of our outstanding shares, we would seek shareholder approval of
such business combination. Except as required by law or NASDAQ rules, 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. Accordingly, we may consummate our initial business
combination even if holders of a majority of the issued and outstanding ordinary shares do not approve of the business combination
we consummate. Please see the section entitled “Business — Effecting Our Initial Business Combination — Shareholders
may not have the ability to approve our initial business combination” for additional information.
If
we seek shareholder approval of our initial business combination, our sponsor, officers and directors have agreed to vote in favor
of such initial business combination, regardless of how our public shareholders vote.
Our
sponsor, officers and directors have agreed (and their permitted transferees will agree), pursuant to the terms of a letter agreement
entered into with us, to vote any founder shares held by them, as well as any public shares purchased during or after our initial
public offering, in favor of our initial business combination. Our sponsor owns 20% of our issued and outstanding ordinary shares.
As a result, in addition to our initial shareholder’s founder shares and 100,000 units owned by one of our officers, we
would need only 12,837,501, or 37.3%, of the 34,500,000 public shares sold in our initial public offering to be voted in favor
of a transaction (assuming all outstanding shares are voted) in order to have our initial business combination approved. Accordingly,
if we seek shareholder approval of our initial business combination, it is more likely that the necessary shareholder approval
will be received than would be the case if such persons agreed to vote their founder shares in accordance with the majority of
the votes cast by our public shareholders.
Your
only opportunity to affect the investment decision regarding a potential business combination will be limited to the exercise
of your right to redeem your shares from us for cash, unless we seek shareholder approval of the business combination.
You
may not be provided with an opportunity to evaluate the specific merits or risks of one or more target businesses. 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 approval. Accordingly, if we do not seek shareholder
approval, your only opportunity to affect the investment decision regarding a potential business combination may be limited to
exercising your redemption rights within the period of time (which will be at least 20 business days) set forth in our tender
offer documents mailed to our public shareholders in which we describe our initial business combination.
The
ability of our public shareholders to redeem their shares for cash may make our financial condition unattractive to potential
business combination targets, which may make it difficult for us to enter into a business combination with a target.
We
may seek to enter into a business combination transaction agreement with a prospective target that requires as a closing condition
that we have a minimum net worth or a certain amount of cash. If too many public shareholders exercise their redemption rights,
we would not be able to meet such closing condition and, as a result, would not be able to proceed with the business combination.
Furthermore, we will only redeem our public shares so long as (after such redemption) our net tangible assets will be at least
$5,000,001 either prior to or upon consummation of our initial business combination, after payment of the deferred underwriting
commission (so that we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset or
cash requirement which may be contained in the agreement relating to our initial business combination. Consequently, if accepting
all properly submitted redemption requests would cause our net tangible assets to be less than $5,000,001 either prior to or upon
consummation of our initial business combination or such greater amount necessary to satisfy a closing condition as described
above, we would not proceed with such redemption and the related business combination and may instead search for an alternate
business combination. Prospective targets 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 we 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 provisions of the Class B ordinary shares result in the issuance
of Class A ordinary shares on a greater than one-to-one basis upon conversion of the Class B shares at the time of the initial
business combination. 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 public shareholders would have to wait for liquidation
in order to redeem their 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, public shareholders would not receive their pro rata portion
of the trust account until we liquidate the trust account. If public shareholders are in need of immediate liquidity, they could
attempt to sell their 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, public shareholders may suffer a material loss on their investment or lose
the benefit of funds expected in connection with our redemption until we liquidate or they are able to sell their shares in the
open market.
The
requirement that we complete our initial business combination within the prescribed time frame may give potential target businesses
leverage over us in negotiating a business combination and may decrease our ability to conduct due diligence on potential business
combination targets 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 August 13, 2021. Consequently, such target business may obtain leverage over us in negotiating
a business combination, knowing that if we do not complete our initial business combination with that particular target business,
we may be unable to complete our initial business combination with any target business. This risk will increase as we get closer
to the timeframe described above. In addition, we may have limited time to conduct due diligence and may enter into our initial
business combination on terms that we would have rejected upon a more comprehensive investigation.
We
may not be able to complete our initial business combination within the prescribed time frame, in which case we would cease all
operations except for the purpose of winding up and we would redeem our public shares and liquidate, in which case our public
shareholders may only receive $10.13 per share (based on the balance of our trust account as of December 31, 2020), or less than
such amount in certain circumstances, and our warrants will expire worthless.
Our
sponsor, officers and directors have agreed that we must complete our initial business combination by August 13, 2021. We may
not be able to find a suitable target business and complete our initial business combination within such time period. 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
(which interest shall be net of taxes payable, and less up to $100,000 of interest to pay dissolution expenses) divided by the
number of then outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders
(including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as
reasonably possible following such redemption, subject to the approval of our remaining shareholders and our Board of Directors,
liquidate and dissolve, subject in each case to our obligations under Cayman Islands law to provide for claims of creditors and
the requirements of other applicable law. In such case, our public shareholders may only receive $10.13 per share, or less than
such amount in certain circumstances based on the balance of our trust account as of December 31, 2020, and our warrants will
expire worthless.
If
we seek shareholder approval of our initial business combination, our sponsor, directors, officers, advisors and their affiliates
may elect to purchase shares from public shareholders, which may influence a vote on a proposed business combination and reduce
the public “float” of our 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 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. Please see “Business — Permitted purchases of our securities”
for a description of how such persons will determine which shareholders to seek to acquire shares from. Such a purchase may include
a contractual acknowledgement that such shareholder, although still the record holder of our shares is no longer the beneficial
owner thereof and therefore agrees not to exercise its redemption rights. In the event that our sponsor, directors, officers,
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 price per share paid in any such transaction may be different than the amount per share a public shareholder would
receive if it elected to redeem its shares in connection with our initial business combination. The purpose of such purchases
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. This may result in the completion of our initial business combination that may not otherwise
have been possible.
In
addition, if such purchases are made, the public “float” of our ordinary shares and the number of beneficial holders
of our securities may be reduced, possibly making it difficult to 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 tender offer rules or proxy 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 tender offer or proxy materials,
as applicable, such shareholder may not become aware of the opportunity to redeem its shares. In addition, the tender offer documents
or proxy materials, 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 redeem public shares.
In the event that a shareholder fails to comply with these procedures, its shares may not be redeemed.
Our
public shareholders will not have any rights or interests in funds from the trust account, except under certain limited circumstances.
To liquidate their investment, therefore, they may be forced to sell their public shares or warrants, potentially at a loss.
Our
public shareholders will be entitled to receive funds from the trust account only upon the earlier to occur of: (i) the completion
of our initial business combination, (ii) the redemption of any public shares properly tendered in connection with a shareholder
vote to amend our amended and restated memorandum and articles of association to (A) modify the substance or timing of our obligation
to redeem 100% of our public shares if we do not complete our initial business combination by August 13, 2021 or (B) with respect
to any other provision relating to shareholders’ rights or pre-business combination activity and (iii) the redemption of
all of our public shares if we are unable to complete our initial business combination by August 13, 2021, 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. Accordingly, to liquidate an investment, our public shareholders may be forced to sell their public shares
or warrants, potentially at a loss.
NASDAQ
may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our
securities and subject us to additional trading restrictions.
Our
units, Class A ordinary shares and warrants are listed on NASDAQ. There can be no assurances that our securities will continue
to be listed on NASDAQ in the future or prior to our initial business combination. In order to continue listing our securities
on NASDAQ prior to our initial business combination, we must maintain certain financial, distribution and stock price levels.
Generally, we must maintain a minimum amount in shareholders’ equity (generally $2,500,000) and a minimum number of holders
of our securities (generally 300 public holders). Additionally, in connection with our initial business combination, we will be
required to demonstrate compliance with NASDAQ’s initial listing requirements, which are more rigorous than NASDAQ’s
continued listing requirements, in order to continue to maintain the listing of our securities on NASDAQ. For instance, our stock
price would generally be required to be at least $4.00 per share, our shareholders’ equity would generally be required to
be at least $5.0 million and we would be required to have a minimum of 300 round lot holders (with at least 50% of such round
lot holders holding securities with a market value of at least $2,500) of our securities. There can be no assurances that we will
be able to meet those initial listing requirements at that time.
If
NASDAQ delists our securities from trading on its exchange and we are not able to list our securities on another national securities
exchange, we expect our securities could be quoted on an over-the-counter market. If this were to occur, we could face significant
material adverse consequences, including:
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a limited availability
of market quotations for our securities;
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reduced liquidity
for our securities;
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a determination
that our Class A ordinary shares is 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.
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The
National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating
the sale of certain securities, which are referred to as “covered securities.” Since our units, Class A ordinary shares
and warrants are listed on NASDAQ, they are covered securities. Although the states are preempted from regulating the sale of
our securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there
is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case.
While we are not aware of a state having used these powers to prohibit or restrict the sale of securities issued by blank check
companies, other than the State of Idaho, certain state securities regulators view blank check companies unfavorably and might
use these powers, or threaten to use these powers, to hinder the sale of securities of blank check companies in their states.
Further, if we were no longer listed on NASDAQ, our securities would not be covered securities and we would be subject to regulation
in each state in which we offer our securities, including in connection with our initial business combination.
Our
shareholders will not be entitled to protections normally afforded to investors of some other blank check companies.
Since
the net proceeds of our 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 identified, we may be deemed to be a “blank check”
company under the United States securities laws. However, because we had net tangible assets in excess of $5,000,000 at the time
of our initial public offering, we are exempt from rules promulgated by the SEC to protect investors in blank check companies,
such as Rule 419. Accordingly, investors are not afforded the benefits or protections of those rules. Among other things, this
means our securities are tradable and we have a longer period of time to complete our initial business combination than do companies
subject to Rule 419. Moreover, 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 our initial public offering, which we refer to as the
“Excess Shares.” However, we would not be restricting our shareholders’ ability to vote all of their shares
(including Excess Shares) for or against our initial business combination. Your inability to redeem the Excess Shares will reduce
your influence over our ability to complete our initial business combination and you could suffer a material loss on your investment
in us if you sell Excess Shares in open market transactions. Additionally, you will not receive redemption distributions with
respect to the Excess Shares if we complete our initial business combination. And as a result, you will continue to hold that
number of shares exceeding 15% and, in order to dispose of such shares, would be required to sell your shares in open market transactions,
potentially at a loss.
Because
of our limited resources and the significant competition for business combination opportunities, it may be more difficult for
us to complete our initial business combination. If we are unable to complete our initial business combination, our public shareholders
may receive only approximately $10.13 per share (based on the balance of our trust account as of December 31, 2020), or less in
certain circumstances, on our redemption, and our warrants will expire worthless.
We
expect to encounter intense competition from other entities having a business objective similar to ours, including private investors
(which may be individuals or investment partnerships), other blank check companies and other entities, domestic and international,
competing for the types of businesses we intend to acquire. Many of these individuals and entities are well-established and have
extensive experience in identifying and effecting, directly or indirectly, acquisitions of companies operating in or providing
services to various industries. Many of these competitors possess greater technical, human and other resources 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 from our 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, if we are obligated to pay cash for the Class
A ordinary shares redeemed and, in the event we seek shareholder approval of our initial business combination, we make purchases
of our Class A ordinary shares, potentially reducing 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 only receive $10.13 per share (based on the balance
of our trust account as of December 31, 2020), or less in certain circumstances and our warrants will expire worthless.
If
the net proceeds of our initial public offering and sale of the private placement warrants not being held in the trust account
are insufficient to allow us to operate until August 13, 2021, we may be unable to complete our initial business combination.
The
funds available to us outside of the trust account may not be sufficient to allow us to operate until August 13, 2021, assuming
that our initial business combination is not completed during that time. We expect to incur significant costs in pursuit of our
acquisition plans. Our affiliates are not obligated to make loans to us in the future, and we may not be able to raise additional
financing from unaffiliated parties necessary to fund our expenses. Any such event in the future may negatively impact the analysis
regarding our ability to continue as a going concern at such time.
We
believe that the funds currently available to us outside of the trust account, will be sufficient to allow us to operate until
August 13, 2021; however there can be no assurances 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
designed to keep target businesses from “shopping” around for transactions with other companies on terms more favorable
to such target businesses) with respect to a particular proposed business combination, although we do not have any current intention
to do so. If we entered into a letter of intent where we paid for the right to receive exclusivity from a target business and
were subsequently required to forfeit such funds (whether as a result of our breach or otherwise), we might not have sufficient
funds to continue searching for, or conduct due diligence with respect to, a target business. If we are unable to complete our
initial business combination, our public shareholders may only receive $10.13 per share (based on the balance of our trust account
as of December 31, 2020), or less in certain circumstances and our warrants will expire worthless.
If
funds available to us outside of the trust account are insufficient, it could limit the amount available to fund our search for
a target business or businesses and complete our initial business combination and we will depend on loans from our sponsor or
management team to fund our search, to pay our taxes and to complete our initial business combination. If we are unable to obtain
these loans, we may not be able to complete our initial business combination.
As
of December 31, 2020, we had $133,695 held outside the trust account that is available to us to fund our working capital requirements.
If we are required to seek additional capital, we would need to borrow funds from our sponsor, management team or other third
parties to operate or may be forced to liquidate. Neither our sponsor, members of our management team nor any of their affiliates
is under any obligation to advance funds to us in such circumstances. Any such advances would be repaid only from funds held outside
the trust account or from funds released to us upon completion of our initial business combination. If we are unable to complete
our initial business combination because we do not have sufficient funds available to us, we will be forced to cease operations
and liquidate the trust account. In such case, our public shareholders may only receive $10.13 per share (based on the balance
of our trust account as of December 31, 2020), or less in certain circumstances and our warrants will expire worthless.
Subsequent
to the 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 extensive due diligence on a target business with which we combine, there can be no assurances that this diligence
will surface all material issues that may be present inside a particular target business, that it would be possible to uncover
all material issues through a customary amount of due diligence, or that factors outside of the target business and outside of
our control will not later arise. As a result of these factors, we may be forced to later write-down or write-off assets, restructure
our operations, or incur impairment or other charges that could result in our reporting losses. Even if our due diligence successfully
identifies certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with
our preliminary risk analysis. 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 post-combination debt financing.
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.
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 have sought
and will continue to seek to have all third parties (other than our independent auditors), prospective target businesses or other
entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to
any monies held in the trust account for the benefit of our public shareholders, 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 perform an analysis of the alternatives available to it and will only enter into an
agreement with a third party that has not executed a waiver if management believes that such third party’s engagement would
be significantly more beneficial to us than any alternative.
Examples
of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third party
consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants
that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver.
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 share
initially held in the trust account, due to claims of such creditors
Our
sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (other than our independent auditors)
for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction
agreement, reduce the amount of funds in the trust account to below (i) $10.00 per public share or (ii) such lesser amount per
public share held in the trust account as of the date of the liquidation of the trust account due to reductions in the value of
the trust assets, in each case net of the interest which may be withdrawn to pay taxes, except as to any claims by a third party
who executed a waiver of any and all rights to seek access to the trust account and except as to any claims under our indemnity
of the underwriters of our initial public offering against certain liabilities, including liabilities under the Securities Act.
Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, our sponsor will not be responsible
to the extent of any liability for such third party claims. We have not independently verified whether our sponsor has sufficient
funds to satisfy their indemnity obligations and believe that our sponsor’s only assets are securities of our company. Our
sponsor may not have sufficient funds available to satisfy those obligations. We have not asked our sponsor to reserve for such
obligations, and therefore, no funds are currently set aside to cover any such 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 third parties and prospective
target businesses.
Our
independent 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 public share or (ii) such lesser
amount per share held in the trust account as of the date of the liquidation of the trust account due to reductions in the value
of the trust assets, in each case net of the interest which may be withdrawn to pay taxes, and our sponsor asserts that it is
unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, our independent
directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations. While we
currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification
obligations to us, it is possible that our independent directors in exercising their business judgment may choose not to do so
in any particular instance. If our independent directors choose not to enforce these indemnification obligations, the amount of
funds in the trust account available for distribution to our public shareholders may be reduced below $10.00 per share.
If,
after we distribute the proceeds in the trust account to our public shareholders, we file a bankruptcy petition or an involuntary
bankruptcy petition is filed against us that is not dismissed, a bankruptcy court may seek to recover such proceeds, and the members
of our Board of Directors may be viewed as having breached their fiduciary duties to our creditors, thereby exposing the members
of our Board of Directors and us to claims of punitive damages.
If,
after we distribute the proceeds in the trust account to our public shareholders, we file a bankruptcy petition or an involuntary
bankruptcy 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 court could seek to recover 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 petition or an involuntary
bankruptcy petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over
the claims of our 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 petition or an involuntary
bankruptcy petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable
bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the
claims of our shareholders. To the extent any bankruptcy claims deplete the trust account, the per-share amount that would otherwise
be received by our shareholders in connection with our liquidation may be reduced.
If
we are deemed to be an investment company under the Investment Company Act, we may be required to institute burdensome compliance
requirements and our activities may be restricted, which may make it difficult for us to complete our initial business combination.
If
we are deemed to be an investment company under the Investment Company Act, our activities may be restricted, including:
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restrictions on
the nature of our investments; and
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restrictions on
the issuance of securities;
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each of which may
make it difficult for us to complete our initial business combination.
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In
addition, we may have imposed upon us burdensome requirements, including:
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registration as
an investment company;
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adoption of a specific
form of corporate structure; and
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reporting, record
keeping, voting, proxy and disclosure requirements and other rules and regulations.
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We
do not believe that our principal activities subject us to the Investment Company Act. The proceeds held in the trust account
may be invested by the trustee only in United States government treasury bills with a maturity of 180 days or less or in money
market funds investing solely in United States Treasuries and meeting certain conditions under Rule 2a-7 under the Investment
Company Act. Because the investment of the proceeds are restricted to these instruments, we believe we will meet the requirements
for the exemption provided in Rule 3a-1 promulgated under the Investment Company Act. If we were deemed to be subject to the Investment
Company Act, compliance with these additional regulatory burdens would require additional expenses for which we have not allotted
funds and may hinder our ability to complete a business combination. If we are unable to complete our initial business combination,
our public shareholders may receive only approximately $10.13 per share (based on the balance of our trust account as of December
31, 2020), on the liquidation of our trust account and our warrants will expire worthless.
Changes
in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, investments and
results of operations.
We
are subject to laws and regulations enacted by national, regional and local governments. In particular, we are required to comply
with certain SEC and other legal requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult,
time consuming and costly. Those laws and regulations and their interpretation and application 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 and results of operations.
If
we are unable to consummate our initial business combination by August 13, 2021, our public shareholders may be forced to wait
beyond August 13, 2021 before redemption from our trust account.
If
we are unable to consummate our initial business combination by August 13, 2021, we will distribute the aggregate amount then
on deposit in the trust account (less up to $100,000 of the net interest earned thereon to pay dissolution expenses), pro rata
to our public shareholders by way of redemption and cease all operations except for the purposes of winding up of our affairs,
as further described herein. Any redemption of public shareholders from the trust account shall be effected automatically by function
of our amended and restated memorandum and articles of association prior to any voluntary winding up. If we are required to windup,
liquidate the trust account and distribute such amount therein, pro rata, to our public shareholders, as part of any liquidation
process, such winding up, liquidation and distribution must comply with the applicable provisions of the Companies Law. In that
case, investors may be forced to wait beyond August 13, 2021 before the redemption proceeds of our trust account become available
to them and they receive the return of their pro rata portion of the proceeds from our trust account. We have no obligation to
return funds to investors prior to the date of our redemption or liquidation unless we consummate our initial business combination
prior thereto and only then in cases where investors have sought to redeem their ordinary shares. Only upon our redemption or
any liquidation will public shareholders be entitled to distributions if we are unable to complete our initial business combination.
Our
shareholders may be held liable for claims by third parties against us to the extent of distributions received by them upon redemption
of their shares.
If
we are forced to enter into an insolvent liquidation, any distributions received by shareholders could be viewed as an unlawful
payment if it was proved that immediately following the date on which the distribution was made, we were unable to pay our debts
as they fall due in the ordinary course of business. As a result, a liquidator could seek to recover 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, and thereby exposing themselves and our company to claims, by paying public shareholders from the
trust account prior to addressing the claims of creditors. There can be no assurances 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 $18,292.68 and to imprisonment for five years in the Cayman Islands.
We
may not hold an annual meeting of shareholders until after the consummation of our initial business combination. Our public shareholders
will not have the right to elect directors prior to the consummation of our initial business combination.
In
accordance with NASDAQ corporate governance requirements, we are not required to hold an annual meeting until no later than one
year after our first fiscal year end following our listing on NASDAQ (or until December 31, 2020). There is no requirement under
the Companies Law for us to hold annual or general meetings or elect directors. Until we hold an annual meeting of shareholders,
public shareholders may not be afforded the opportunity to discuss company affairs with management. In addition, as holders of
our Class A ordinary shares, our public shareholders will not have the right to vote on the election of directors prior to consummation
of our initial business combination.
We
have not registered the Class A ordinary shares issuable upon exercise of the warrants under the Securities Act or any state securities
laws at this time, and such registration may not be in place when an investor desires to exercise warrants, thus precluding such
investor from being able to exercise its warrants except on a cashless basis and potentially causing such warrants to expire worthless.
We
have not registered the Class A ordinary shares issuable upon exercise of the warrants issued in our initial public offering 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, and within 60 business days following our initial business combination to have declared
effective, a registration statement covering such shares and 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. There can be no assurances that we will be able to do so if, for example, any facts or events arise which represent
a fundamental change in the information set forth in the registration statement or prospectus, the financial statements contained
or incorporated by reference therein are not current or correct or the SEC issues a stop order. If the shares issuable upon exercise
of the warrants issued in our initial public offering are not registered under the Securities Act, we will be required to permit
holders to exercise their warrants on a cashless basis. However, no warrant will 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
is available. Notwithstanding the foregoing, if a registration statement covering the Class A ordinary shares issuable upon exercise
of the warrants is not effective within a specified period following the consummation of our initial business combination, warrant
holders may, until such time as there is an effective registration statement and during any period when we shall have failed to
maintain an effective registration statement, exercise warrants on a cashless basis pursuant to the exemption provided by Section
3(a)(9) of the Securities Act, provided that such exemption is available. If that exemption, or another exemption, is not available,
holders will not be able to exercise their warrants on a cashless basis. We will use our best efforts to register or qualify the
shares under applicable blue sky 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 or other compensation in exchange for the warrants in the event that we are unable to
register or qualify the shares underlying the warrants issued in our initial public offering under applicable state securities
laws and no exemption is available. If the issuance of the shares upon exercise of the warrants is not so registered or qualified
or exempt from registration or qualification, the holder of such warrant shall not be entitled to exercise such warrant and such
warrant 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. If and when the warrants
become redeemable by us, we may not exercise our redemption right if the issuance of shares upon exercise of the warrants is not
exempt from registration or qualification under applicable state blue sky laws or we are unable to effect such registration or
qualification. We will use our best efforts to register or qualify such shares under the blue sky laws of the state of residence
in those states in which the warrants were offered by us in our initial public offering.
The
grant of registration rights to our sponsor and holders of our private placement warrants may make it more difficult to complete
our initial business combination, and the future exercise of such rights may adversely affect the market price of our Class A
ordinary shares.
Pursuant
to the agreement entered into concurrently with the issuance and sale of the securities in our initial public offering, our sponsor
and its permitted transferees can demand that we register their founder shares, after those shares convert to our Class A ordinary
shares at the time of our initial business combination. In addition, holders of our private placement warrants and their permitted
transferees can demand that we register the private placement warrants and the Class A ordinary shares issuable upon exercise
of the private placement warrants, and holders of warrants that may be issued upon conversion of working capital loans, may demand
that we register such warrants or the Class A ordinary shares issuable upon exercise of such warrants. We will bear the cost of
registering these securities. The registration and availability of such a significant number of securities for trading in the
public market may have an adverse effect on the market price of our Class A ordinary shares. In addition, the existence of the
registration rights may make our initial business combination more costly or difficult to conclude. This is because the shareholders
of the target business may increase the equity stake they seek in the combined entity or ask for more cash consideration to offset
the negative impact on the market price of our Class A ordinary shares that is expected when the ordinary shares owned by our
sponsor, holders of our private placement warrants or holders of our working capital loans or their respective permitted transferees
are registered.
Because
we are not limited to a particular industry or any specific target businesses with which to pursue our initial business combination,
you will be unable to ascertain the merits or risks of any particular target business’s operations.
We
may seek to complete a business combination with an operating company in any industry or sector. However, we will not, under our
amended and restated memorandum and articles of association, be permitted to effectuate our initial business combination with
another blank check company or similar company with nominal operations. To the extent we complete our initial business combination,
we may be affected by numerous risks inherent in the business operations with which we combine. For example, if we combine with
a financially unstable business or an entity lacking an established record of sales or earnings, we may be affected by the risks
inherent in the business and operations of a financially unstable entity. Although our officers and directors will endeavor to
evaluate the risks inherent in a particular target business, there can be no assurances 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 shares. Such
shareholders are unlikely to have a remedy for such reduction in value.
Past
performance by our management team and senior special advisor and their respective affiliates may not be indicative of future
performance of an investment in us.
Information
regarding performance by, or businesses associated with, our management team and senior special advisor and their affiliates is
presented for informational purposes only. Past performance by our management team and senior special advisor, including their
affiliates’ past performance, is not a guarantee either (i) of success with respect to any business combination we may consummate
or (ii) that we will be able to locate a suitable candidate for our initial business combination. You should not rely on the historical
record of our management team and senior special advisor and their affiliates as indicative of our future performance. Additionally,
in the course of their respective careers, members of our management team and senior special advisor have been involved in businesses
and deals that were unsuccessful.
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 acquisition opportunity for our company. In the event
we elect to pursue an acquisition outside of the areas of our management’s expertise, our management’s expertise may
not be directly applicable to its evaluation or operation, and the information contained in this report 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 adequately ascertain or assess all of the significant 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 legal reasons, it may be more difficult
for us to attain shareholder approval of our initial business combination if the target business does not meet our general criteria
and guidelines. If we are unable to complete our initial business combination, our public shareholders may receive only approximately
$10.00 per share on the liquidation of our trust account and our warrants will expire worthless.
We
may seek business combination opportunities with a financially unstable business or an entity lacking an established record of
revenue or earnings.
To
the extent we complete our initial business combination with a financially unstable business or an entity lacking an established
record of sales or earnings, we may be affected by numerous risks inherent in the operations of the business with which we combine.
These risks include volatile revenues or earnings and difficulties in obtaining and retaining key personnel. Although our officers
and directors will endeavor to evaluate the risks inherent in a particular target business, we may not be able to properly ascertain
or assess all of the significant risk factors and we may not have adequate time to complete due diligence. Furthermore, some of
these risks may be outside of our control and leave us with no ability to control or reduce the chances that those risks will
adversely impact a target business.
We
are not required to obtain an opinion from an independent investment banking or from an independent accounting 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 company from
a financial point of view.
Unless
we complete our business combination with an affiliated entity, or our Board of Directors cannot independently determine the fair
market value of the target business or businesses, we are not required to obtain an opinion from an independent investment banking
firm or another independent firm that commonly renders valuation opinions for the type of company we are seeking to acquire or
from an independent accounting firm that the price we are paying for a target is fair to our company 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
tender offer documents or proxy solicitation materials, as applicable, related to our initial business combination. However, if
our Board of Directors is unable to determine the fair value of an entity with which we seek to complete an initial business combination
based on such standards, we will be required to obtain an opinion.
We
may issue additional Class A ordinary 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
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 contained in our amended and restated memorandum and articles of association. 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 1,000,000 undesignated preference
shares, par value $0.0001 per share. As of December 31, 2020, there were 139,600,000 and 11,375,000 authorized but unissued Class
A and Class B ordinary shares available, respectively, for issuance, which amount takes into account shares reserved for issuance
upon exercise of outstanding warrants but not upon conversion of the Class B ordinary shares. Class B ordinary shares are convertible
into Class A ordinary shares, 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. There are currently no preference shares issued and outstanding.
We
may issue a substantial number of additional ordinary shares, and may issue preference shares, in order 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 contained in our amended and restated memorandum and articles
of association. However, our amended and restated memorandum and articles of association provides, among other things, that prior
to our initial business combination, we may not issue additional ordinary shares that would entitle the holders thereof to (i)
receive funds from the trust account or (ii) vote on any initial business combination. The issuance of additional ordinary shares
or preference shares:
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may significantly
dilute the equity interest of investors;
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may
subordinate the rights of holders of ordinary shares if preference shares are issued with rights senior to those afforded our
ordinary shares;
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could
cause a change in control if a substantial number of ordinary shares are issued, which may affect, among other things, our ability
to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and
directors; and
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may
adversely affect prevailing market prices for our units, ordinary shares and/or warrants.
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We
may be a passive foreign investment company, or “PFIC,” which could result in adverse U.S. federal income tax consequences
to U.S. investors.
If
we are determined to be a PFIC (under the rules described below) for any taxable year (or portion thereof) that is included in
the holding period of a U.S. Holder (as defined below) of our 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. The term “U.S. Holder”
means a beneficial owner of ordinary shares or warrants who or that is for U.S. federal income tax purposes: (i) an individual
citizen or resident of the United States, (ii) a corporation (or other entity treated as a corporation for United States federal
income tax purposes) that is created or organized (or treated as created or organized) in or under the laws of the United States,
any state thereof or the District of Columbia, (iii) an estate the income of which is subject to United States federal income
taxation regardless of its source or (iv) a trust if (A) a court within the United States is able to exercise primary supervision
over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the
trust, or (B) it has in effect a valid election to be treated as a U.S. person.
A
foreign (i.e., non-U.S.) corporation will be a PFIC for U.S. tax purposes if at least 75% of its gross income in a taxable year,
including its pro rata share of the gross income of any corporation in which it is considered to own at least 25% of the shares
by value, is passive income. Alternatively, a foreign corporation will be a PFIC if at least 50% of its assets in a taxable year
of the foreign corporation, ordinarily determined based on fair market value and averaged quarterly over the year, including its
pro rata share of the assets of any corporation in which it is considered to own at least 25% of the shares by value, are held
for the production of, or produce, passive income. Passive income generally includes dividends, interest, rents and royalties
(other than rents or royalties derived from the active conduct of a trade or business) and gains from the disposition of passive
assets.
Because
we are a blank check company, with no current active business, we believe that it is likely that we will meet the PFIC asset or
income test for the taxable year ending December 31, 2020. However, pursuant to a start-up exception, a corporation will not be
a PFIC for the first taxable year the corporation has gross income (the “start-up year”, which in our case is the
taxable year ending December 31, 2019), if (1) no predecessor of the corporation was a PFIC; (2) the corporation satisfies the
IRS that it will not be a PFIC for either of the two taxable years following the start-up year; and (3) the corporation is not
in fact a PFIC for either of those years. The applicability of the start-up exception to us will not be known until after the
close of our current taxable year ending December 31, 2020. After the acquisition of a company or assets in a business combination,
we may still meet one of the PFIC tests depending on the timing of the acquisition and the amount of our passive income and assets
as well as the passive income and assets of the acquired business. If the company that we acquire in a business combination is
a PFIC, then we will likely not qualify for the start-up exception and will be a PFIC for our current taxable year ending December
31, 2019. Our actual PFIC status for our current taxable year or any future taxable year, however, will not be determinable until
after the end of such taxable year. Accordingly, there can be no assurance with respect to our status as a PFIC for our current
taxable year ending December 31, 2020 or any future taxable year.
If
we are determined to be a PFIC for any taxable year (or portion thereof) that is included in the holding period of a U.S. Holder
of our ordinary shares or warrants and, in the case of our ordinary shares, the U.S. Holder did not make either a timely qualified
electing fund (“QEF”) election for our first taxable year as a PFIC in which the U.S. Holder held (or was deemed to
hold) ordinary shares or a timely “mark to market” election, each as described below, such holder generally will be
subject to special rules with respect to:
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any gain recognized
by the U.S. Holder on the sale or other disposition of its ordinary shares or warrants; and
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any “excess
distribution” made to the U.S. Holder (generally, any distributions to such U.S. Holder during a taxable year of the
U.S. Holder that are greater than 125% of the average annual distributions received by such U.S. Holder in respect of the
ordinary shares during the three preceding taxable years of such U.S. Holder or, if shorter, such U.S. Holder’s holding
period for the ordinary shares).
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Under
these rules,
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the U.S. Holder’s
gain or excess distribution will be allocated ratably over the U.S. Holder’s holding period for the ordinary shares
and warrants (as applicable);
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the amount allocated
to the U.S. Holder’s taxable year in which the U.S. Holder recognized the gain or received the excess distribution,
or to the period in the U.S. Holder’s holding period before the first day of our first taxable year in which we are
a PFIC, will be taxed as ordinary income;
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the amount allocated
to other taxable years (or portions thereof) of the U.S. Holder and included in its holding period will be taxed at the highest
tax rate in effect for that year and applicable to the U.S. Holder; and
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the interest charge
generally applicable to underpayments of tax will be imposed in respect of the tax attributable to each such other taxable
year of the U.S. Holder.
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In
general, if we are determined to be a PFIC, a U.S. Holder may avoid the PFIC tax consequences described above in respect to our
ordinary shares (but not our warrants) by making a timely QEF election (if eligible to do so) to include in income its pro rata
share of our net capital gains (as long-term capital gain) and other earnings and profits (as ordinary income), on a current basis,
in each case whether or not distributed, in the taxable year of the U.S. Holder in which or with which our taxable year ends.
A U.S. Holder generally may make a separate election to defer the payment of taxes on undistributed income inclusions under the
QEF rules, but if deferred, any such taxes will be subject to an interest charge.
A
U.S. Holder may not make a QEF election with respect to its warrants to acquire our ordinary shares. As a result, if a U.S. Holder
sells or otherwise disposes of such warrants (other than upon exercise of such warrants), any gain recognized generally will be
subject to the special tax and interest charge rules treating the gain as an excess distribution, as described above, if we were
a PFIC at any time during the period the U.S. Holder held the warrants. If a U.S. Holder that exercises such warrants properly
makes a QEF election with respect to the newly acquired ordinary shares (or has previously made a QEF election with respect to
our ordinary shares), the QEF election will apply to the newly acquired ordinary shares, but the adverse tax consequences relating
to PFIC shares, adjusted to take into account the current income inclusions resulting from the QEF election, will continue to
apply with respect to such newly acquired ordinary shares (which generally will be deemed to have a holding period for purposes
of the PFIC rules that includes the period the U.S. Holder held the warrants), unless the U.S. Holder makes a purging election.
The purging election creates a deemed sale of such shares at their fair market value. The gain recognized by the purging election
will be subject to the special tax and interest charge rules treating the gain as an excess distribution, as described above.
As a result of the purging election, the U.S. Holder will have a new basis and holding period in the ordinary shares acquired
upon the exercise of the warrants for purposes of the PFIC rules.
The
QEF election is made on a shareholder-by-shareholder basis and, once made, can be revoked only with the consent of the IRS. A
QEF election may not be made with respect to our warrants. A U.S. Holder generally makes a QEF election by attaching a completed
IRS Form 8621 (Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund), including the information
provided in a PFIC annual information statement, to a timely filed U.S. federal income tax return for the tax year to which the
election relates. Retroactive QEF elections generally may be made only by filing a protective statement with such return and if
certain other conditions are met or with the consent of the IRS. U.S. Holders should consult their own tax advisors regarding
the availability and tax consequences of a retroactive QEF election under their particular circumstances.
In
order to comply with the requirements of a QEF election, a U.S. Holder must receive a PFIC annual information statement from us.
If we determine we are a PFIC for any taxable year, we will endeavor to provide to a U.S. Holder such information as the IRS may
require, including a PFIC annual information statement, in order to enable the U.S. Holder to make and maintain a QEF election.
However, there is no assurance that we will have timely knowledge of our status as a PFIC in the future or of the required information
to be provided.
If
a U.S. Holder has made a QEF election with respect to our ordinary shares, and the special tax and interest charge rules do not
apply to such shares (because of a timely QEF election for our first taxable year as a PFIC in which the U.S. Holder holds (or
is deemed to hold) such shares or a purge of the PFIC taint pursuant to a purging election, as described above), any gain recognized
on the sale of our ordinary shares generally will be taxable as capital gain and no interest charge will be imposed under the
PFIC rules. As discussed above, U.S. Holders of a QEF are currently taxed on their pro rata shares of its earnings and profits,
whether or not distributed. In such case, a subsequent distribution of such earnings and profits that were previously included
in income generally should not be taxable as a dividend to such U.S. Holders. The tax basis of a U.S. Holder’s shares in
a QEF will be increased by amounts that are included in income, and decreased by amounts distributed but not taxed as dividends,
under the above rules.
Although
a determination as to our PFIC status will be made annually, an initial determination that our company is a PFIC will generally
apply for subsequent years to a U.S. Holder who held ordinary shares or warrants while we were a PFIC, whether or not we meet
the test for PFIC status in those subsequent years. A U.S. Holder who makes the QEF election discussed above for our first taxable
year as a PFIC in which the U.S. Holder holds (or is deemed to hold) our ordinary shares, however, will not be subject to the
PFIC tax and interest charge rules discussed above in respect to such shares. In addition, such U.S. Holder will not be subject
to the QEF inclusion regime with respect to such shares for any taxable year of us that ends within or with a taxable year of
the U.S. Holder and in which we are not a PFIC. On the other hand, if the QEF election is not effective for each of our taxable
years in which we are a PFIC and the U.S. Holder holds (or is deemed to hold) our ordinary shares, the PFIC rules discussed above
will continue to apply to such shares unless the holder makes a purging election, as described above, and pays the tax and interest
charge with respect to the gain inherent in such shares attributable to the pre-QEF election period.
Alternatively,
if a U.S. Holder, at the close of its taxable year, owns shares in a PFIC that are treated as marketable stock, the U.S. Holder
may make a mark-to-market election with respect to such shares for such taxable year. If the U.S. Holder makes a valid mark-to-market
election for the first taxable year of the U.S. Holder in which the U.S. Holder holds (or is deemed to hold) ordinary shares in
us and for which we are determined to be a PFIC, such holder generally will not be subject to the PFIC rules described above in
respect to its ordinary shares. Instead, in general, the U.S. Holder will include as ordinary income each year the excess, if
any, of the fair market value of its ordinary shares at the end of its taxable year over the adjusted basis in its ordinary shares.
The U.S. Holder also will be allowed to take an ordinary loss in respect of the excess, if any, of the adjusted basis of its ordinary
shares over the fair market value of its ordinary shares at the end of its taxable year (but only to the extent of the net amount
of previously included income as a result of the mark-to-market election). The U.S. Holder’s basis in its ordinary shares
will be adjusted to reflect any such income or loss amounts, and any further gain recognized on a sale or other taxable disposition
of the ordinary shares will be treated as ordinary income. Currently, a mark-to-market election likely may not be made with respect
to our warrants.
The
mark-to-market election is available only for stock that is regularly traded on a national securities exchange that is registered
with the Securities and Exchange Commission, including the Nasdaq Capital Market, or on a foreign exchange or market that the
IRS determines has rules sufficient to ensure that the market price represents a legitimate and sound fair market value. U.S.
Holders should consult their own tax advisors regarding the availability and tax consequences of a mark-to-market election in
respect to our ordinary shares under their particular circumstances.
If
we are a PFIC and, at any time, have a foreign subsidiary that is classified as a PFIC, U.S. Holders generally would be deemed
to own a portion of the shares of such lower-tier PFIC, and generally could incur liability for the deferred tax and interest
charge described above if we receive a distribution from, or dispose of all or part of our interest in, the lower-tier PFIC or
the U.S. Holders otherwise were deemed to have disposed of an interest in the lower-tier PFIC. We will endeavor to cause any lower-tier
PFIC to provide to a U.S. Holder the information that may be required to make or maintain a QEF election with respect to the lower-tier
PFIC. However, there is no assurance that we will have timely knowledge of the status of any such lower-tier PFIC. In addition,
we may not hold a controlling interest in any such lower-tier PFIC and thus there can be no assurance we will be able to cause
the lower-tier PFIC to provide the required information. U.S. Holders are urged to consult their own tax advisors regarding the
tax issues raised by lower-tier PFICs.
A
U.S. Holder that owns (or is deemed to own) shares in a PFIC during any taxable year of the U.S. Holder, may have to file an IRS
Form 8621(whether or not a QEF or market-to-market election is made) and such other information as may be required by the U.S.
Treasury Department.
The
rules dealing with PFICs and with the QEF and mark-to-market elections are very complex and are affected by various factors in
addition to those described above. Accordingly, U.S. Holders of our ordinary shares or warrants should consult their own tax advisors
concerning the application of the PFIC rules to our ordinary shares or warrants under their particular circumstances.
We
may reincorporate in another jurisdiction in connection with our initial business combination and such reincorporation may result
in taxes imposed on shareholders.
We
may, in connection with our initial business combination and subject to requisite shareholder approval under the Companies Law,
reincorporate in the jurisdiction in which the target company or business is located. The transaction may require a shareholder
to recognize taxable income in the jurisdiction in which the shareholder is a tax resident or in which its members are resident
if it is a tax transparent entity. We do not intend to make any cash distributions to shareholders to pay such taxes. Shareholders
may be subject to withholding taxes or other taxes with respect to their ownership of us after the reincorporation.
Resources
could be wasted in researching acquisitions 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 receive only approximately $10.13 per share (based on the balance of our trust account as of December 31, 2020),
or less than such amount in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless.
The
investigation of each specific target business and the negotiation, drafting and execution of relevant agreements, disclosure
documents and other instruments requires substantial management time and attention and substantial costs for accountants, attorneys
and others. The cost incurred up to the point that we decide not to complete a specific initial business combination 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 receive only
approximately $10.13 per share (based on the balance of our trust account as of December 31, 2020) on the liquidation of our trust
account and our warrants will expire worthless.
We
are dependent upon our officers, directors and senior special advisor and their departure could adversely affect our ability to
operate.
Our
operations are dependent upon a relatively small group of individuals and, in particular, Gary A. Simanson and our other officers
and directors, as well as our senior special advisor. We believe that our success depends on the continued service of our officers
and directors as well as our senior special advisor, at least until we have completed our initial business combination. In addition,
our officers and directors as well as our senior special advisor are not required to commit any specified amount of time to our
affairs and, accordingly, will have conflicts of interest in allocating management time among various business activities, including
identifying potential business combinations and monitoring the related due diligence. We do not have an employment agreement with,
or key-man insurance on the life of, any of our directors or officers or our senior special advisor. The unexpected loss of the
services of one or more of our directors or officers or our senior special advisor could have a detrimental effect on us.
Our
ability to successfully effect our initial business combination and to be successful thereafter will be totally 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, there can be no assurances that our assessment of these individuals will prove
to be correct. These individuals may be unfamiliar with the requirements of operating a company regulated by the SEC, which could
cause us to have to expend time and resources helping them become familiar with such requirements.
Our
key personnel may negotiate employment or consulting agreements with a target business in connection with a particular business
combination. These agreements may provide for them to receive compensation following our initial business combination and as a
result, may cause them to have conflicts of interest in determining whether a particular business combination is the most advantageous.
Our
key personnel may be able to remain with the company after the 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.
The personal and financial interests of such individuals may influence their motivation in identifying and selecting a target
business, subject to his or her fiduciary duties under Cayman Islands law. However, we believe the ability of such individuals
to remain with us after the completion of our initial business combination will not be the determining factor in our decision
as to whether or not we will proceed with any potential business combination. There is no certainty, however, that any of our
key personnel will remain with us after the completion of our initial business combination. There can be no assurance that any
of our key personnel will remain in senior management or advisory positions with us. The determination as to whether any of our
key personnel will remain with us will be made at the time of our initial business combination.
In
addition, the officers and directors of an initial business combination candidate may resign upon completion of our initial business
combination. The departure of an initial business combination target’s key personnel could negatively impact the operations
and profitability of our post-combination business. The role of an initial business combination 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 initial business combination candidate’s management team will remain associated with the initial business
combination candidate following our initial business combination, it is possible that members of the management of an initial
business combination candidate will not wish to remain in place. The loss of key personnel could negatively impact the operations
and profitability of our post-combination business.
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’s management, therefore, may prove to be incorrect and such management may lack the skills, qualifications
or abilities we suspected. Should the target’s management not possess the skills, qualifications or abilities necessary
to manage a public company, the operations and profitability of the post-combination business may be negatively impacted. 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.
Our
officers and directors allocate their time to other businesses thereby causing conflicts of interest in their determination as
to how much time to devote to our affairs. This conflict of interest could have a negative impact on our ability to complete our
initial business combination.
Our
officers and directors are not required to, and do not, commit their full time to our affairs, which may result in a conflict
of interest in allocating their time between our operations and our search for a business combination and their other businesses.
We do not intend to have any full-time employees prior to the completion of our initial business combination. Each of our officers
is engaged in several other business endeavors for which he or she may be entitled to substantial compensation and our officers
are not obligated to contribute any specific number of hours per week to our affairs. Our independent directors also serve as
officers and board members for other entities. If our officers’ and directors’ other business affairs require them
to devote substantial amounts of time to such affairs in excess of their current commitment levels, it could limit their ability
to devote time to our affairs which may have a negative impact on our ability to complete our initial business combination.
Certain
of our officers and directors are now, and all of them may in the future become, affiliated with entities engaged in business
activities similar to those intended to be conducted by us (and they may also participate in the formation of, or become an officer
or director of, another special purpose acquisition company) 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 will continue to engage in the business of identifying and combining with one
or more businesses. Our sponsor and officers and directors are, or may in the future become, affiliated with entities such as
operating companies or investment vehicles) that are engaged in making and managing investments in a similar business, and they
may also participate in the formation of, or become an officer or director of, another special purpose acquisition company.
Our
officers and directors also may become aware of business opportunities which may be appropriate for presentation to us and the
other entities to which they owe certain fiduciary or contractual duties. 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 other entities prior to its presentation to us, subject to his or her
fiduciary duties under Cayman Islands law
Our
officers, directors, security holders and their respective affiliates may have competitive pecuniary interests that conflict with
our interests.
We
have not adopted a policy that expressly prohibits our directors, officers, security holders or affiliates from having a direct
or indirect pecuniary or financial interest in any investment to be acquired or disposed of by us or in any transaction to which
we are a party or have an interest. In fact, we may enter into a business combination with a target business that is affiliated
with our sponsor, our directors or officers, although we do not intend to do so. Nor do we have a policy that expressly prohibits
any such persons from engaging for their own account in business activities of the types conducted by us. Accordingly, such persons
or entities may have a conflict between their interests and ours.
We
may engage in a business combination with one or more target businesses that have relationships with entities that may be affiliated
with our sponsor, officers, directors or existing holders which may raise potential conflicts of interest.
In
light of the involvement of our sponsor, officers and directors with other entities, we may decide to acquire one or more businesses
affiliated with our sponsor, officers and directors. Our officers and directors also serve as officers and board members for other
entities. Such entities may compete with us for business combination opportunities. 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 disinterested
directors. Despite our agreement to obtain an opinion from an independent investment banking firm or another independent firm
that commonly renders valuation opinions for the type of company we are seeking to acquire or an independent accounting 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 officers, directors or existing holders, potential conflicts of interest still may exist and, as
a result, the terms of the business combination may not be as advantageous to our public shareholders as they would be absent
any conflicts of interest.
Since
our sponsor, officers and directors will lose their entire investment in us if our initial business combination is not completed,
a conflict of interest may arise in determining whether a particular business combination target is appropriate for our initial
business combination.
As
of the date of this report, our sponsor, officers and directors own an aggregate of 8,625,000 founder shares and one of our officers
owns 100,000 units. In addition, our sponsor owns 8,650,000 private placement warrants, each exercisable into one Class A ordinary
share at a price of $11.50 per share. Such founder shares and private placement warrants will be worthless if we do not complete
an initial business combination.
The
founder shares are identical to the ordinary shares included in the units sold in our initial public offering except that (i)
holders of the founder shares have the right to vote on the election of directors prior to our initial business combination, (ii)
the founder shares are subject to certain transfer restrictions, (iii) our sponsor, officers and directors have entered into a
letter agreement with us, pursuant to which they have agreed (A) to waive their redemption rights with respect to their founder
shares and public shares in connection with the completion of our initial business combination and (B) to waive their rights to
liquidating distributions from the trust account with respect to their founder shares if we fail to complete our initial business
combination by August 13, 2021 (although they will be entitled to liquidating distributions from the trust account with respect
to any public shares they hold if we fail to complete our initial business combination within the prescribed time frame) and (iv)
the founder shares will automatically convert into our Class A ordinary shares at the time of our initial business combination,
on a one-for-one basis, subject to adjustment pursuant to certain anti-dilution rights, as described herein and in our amended
and restated memorandum and articles of association.
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.
Since
our sponsor, officers and directors will not be eligible to be reimbursed for their out-of-pocket expenses if our initial business
combination is not completed, a conflict of interest may arise in determining whether a particular business combination target
is appropriate for our initial business combination.
At
the closing of our initial business combination, our sponsor, officers and directors, or any of their respective affiliates, will
be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential
target businesses and performing due diligence on suitable business combinations. There is no cap or ceiling on the reimbursement
of out-of-pocket expenses incurred in connection with activities on our behalf. These financial interests of our sponsor, officers
and directors may influence their motivation in identifying and selecting a target business combination and completing an initial
business combination.
We
may issue notes or other debt securities, or otherwise incur substantial debt, to complete a business combination, which may adversely
affect our leverage and financial condition and thus negatively impact the value of our shareholders’ investment in us.
Although
we have no commitments as of the date of this report to issue any notes or other debt securities, or to otherwise incur outstanding
debt, we may choose to incur substantial debt to complete our initial business combination. We 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 ordinary shares;
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using a substantial
portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on
our ordinary shares if declared, expenses, capital expenditures, acquisitions and other general corporate purposes;
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limitations on our
flexibility in planning for and reacting to changes in our business and in the industry in which we operate;
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increased vulnerability
to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation;
and
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limitations on our
ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution
of our strategy and other purposes and other disadvantages compared to our competitors who have less debt.
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We
may only be able to complete one business combination with the proceeds of our initial public offering and the sale of the private
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.
As
of December 31, 2020, $349,583,138 was available for completing our initial business combination (which includes up to approximately
$12,075,000 for the payment of deferred underwriting commission).
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 risks. Further, we would not
be able to diversify our operations or benefit from the possible spreading of risks or offsetting of losses, unlike other entities
which may have the resources to complete several business combinations in different industries or different areas of a single
industry. Accordingly, the prospects for our success may be:
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solely dependent
upon the performance of a single business, property or asset; or
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dependent upon the
development or market acceptance of a single or limited number of products, processes or services.
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This
lack of diversification may subject us to numerous economic, competitive and regulatory risks, any or all of which may have a
substantial adverse impact upon the particular industry in which we may operate subsequent to our initial business combination.
We
may attempt to simultaneously 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 acquisition 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.
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 a 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 transaction. For example, we could pursue a transaction in which we issue a substantial number of new ordinary shares
in exchange for all of the outstanding capital stock of a target. In this case, we would acquire a 100% interest in the target.
However, as a result of the issuance of a substantial number of new ordinary shares, our shareholders immediately prior to such
transaction could own less than a majority of our issued and outstanding 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 stock than we initially acquired. Accordingly, this may make it more likely that our management will not
be able to maintain our control of the target business. 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
do not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for us to
complete a business combination with which a substantial majority of our shareholders do not agree.
Our
amended and restated memorandum and articles of association does not provide a specified maximum redemption threshold, except
that we will only redeem our public shares so long as (after such redemption) our net tangible assets, will be at least $5,000,001
either prior to or upon consummation of our initial business combination, after payment of the deferred underwriting commission
(such that we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement
which may be contained in the agreement relating to our initial business combination. 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 their affiliates. In the event the aggregate
cash consideration we would be required to pay for all 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 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, blank check companies have, in the recent past, amended various provisions
of their charters and modified governing instruments. There can be no assurances 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, blank check companies have, in the past, amended various provisions of their charters
and modified governing instruments. For example, blank check companies have amended the definition of business combination, increased
redemption thresholds and extended the period of time in which it had to consummate a business combination. There can be no assurances
that we will not seek to amend our amended and restated memorandum and articles of association or governing instruments or extend
the time in which we have to consummate a business combination through amending our amended and restated memorandum and articles
of association.
The
provisions of our amended and restated memorandum and articles of association that relate to our pre-initial business combination
activity (and corresponding provisions of the agreement governing the release of funds from our trust account), including an amendment
to permit us to withdraw funds from the trust account such that the per share amount investors will receive upon any redemption
or liquidation is substantially reduced or eliminated, may be amended with the approval of a special resolution which requires
the approval of holders of at least two-thirds of our ordinary shares who attend and vote in a general meeting, which is a lower
amendment threshold than that of some other blank check companies (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). It may be easier
for us, therefore, to amend our amended and restated memorandum and articles of association and the trust agreement to facilitate
the completion of an initial business combination that some of our shareholders may not support.
Some
other blank check companies have a provision in their charter which prohibits the amendment of certain of its provisions, including
those which relate to a company’s pre-initial business combination activity, without approval by a certain percentage of
the company’s shareholders. In those companies, amendment of these provisions requires approval by between 90% and 100%
of the company’s public shareholders. Our amended and restated memorandum and articles of association provides that any
of its provisions, including those related to pre-initial business combination activity (including the requirement to deposit
proceeds of our 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 and in our amended
and restated memorandum and articles of association or an amendment to permit us to withdraw funds from the trust account such
that the per share amount investors will receive upon any redemption or liquidation is substantially reduced or eliminated), but
excluding the provision of the articles relating to the appointment of directors, may be amended if approved by a special resolution
which requires the approval of holders of at least two-thirds of our ordinary shares who attend and vote in a general meeting,
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. Should our sponsor vote all its shares in favor of any such amendment, we would require
19,406,251, or 56.2%, of the public shares issued in our initial public offering to be voted in favor of any such amendment for
its approval. We may not issue additional securities that can vote on amendments to our amended and restated memorandum and articles
of association. Our sponsor, which beneficially owns 20% of our ordinary shares, 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
it chooses. 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 blank check 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.
Certain
agreements related to our initial public offering may be amended without shareholder approval.
Certain
agreements, including the investment management trust agreement between us and Continental Stock Transfer & Trust Company,
the letter agreement among us and our sponsor, officers and directors, the registration rights agreement among us and our sponsor
and the administrative services agreement between us and our sponsor, may be amended without shareholder approval. These agreements
contain various provisions that our public shareholders might deem to be material. While we do not expect our board to approve
any amendment to any of these agreements 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 any such agreement in
connection with the consummation of our initial business combination. Any such amendment may have an adverse effect on the value
of our securities.
We
may be unable to obtain additional financing to complete our initial business combination or to fund the operations and growth
of a target business, which could compel us to restructure or abandon a particular business combination.
If
the net proceeds of our initial public offering and the sale of the private placement warrants prove to be insufficient to allow
us to complete our initial business combination, either because of the size of our initial business combination, the depletion
of the available net proceeds in search of a target business, the obligation to redeem for cash a significant number of shares
from shareholders who elect redemption in connection with our initial business combination or the terms of negotiated transactions
to purchase shares in connection with our initial business combination, we may be required to seek additional financing or to
abandon the proposed business combination. There can be no assurances 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. In addition, even if we do not need additional financing to complete our initial business combination,
we may require such financing to fund the operations or growth of the target business. The failure to secure additional financing,
could have a material adverse effect on the continued development or growth of the target business. None of our officers, directors
or shareholders is required to provide any financing to us in connection with or after our initial business combination. If we
are unable to complete our initial business combination, our public shareholders may only receive approximately $10.13 per share
(based on the balance of our trust account as of December 31, 2020), or less in certain circumstances and our warrants will expire
worthless.
Our
sponsor will control the election of our Board of Directors until consummation of our initial business combination and will hold
a substantial interest in us. As a result, it will elect all of our directors and may exert a substantial influence on actions
requiring shareholder vote, potentially in a manner that you do not support.
Our
sponsor owns 20% of our issued and outstanding ordinary shares. In addition, the founder shares, all of which are held by our
sponsor, will entitle the sponsor to elect all of our directors prior to our initial business combination. Holders of our public
shares will have no right to vote on the election of directors during such time. These provisions of our amended and restated
memorandum and articles of association may only be amended by a special resolution passed by at least 90% of our ordinary shares
voting in a general meeting. As a result, you will not have any influence over the election of directors prior to our initial
business combination.
Neither
our sponsor nor, to our knowledge, any of our officers or directors, have any current intention to purchase additional securities
of ours. 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, as a result of its substantial ownership in our company, our sponsor may exert
a substantial influence on other 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 and approval of major corporate transactions. If
our sponsor purchases any additional ordinary shares in the aftermarket or in privately negotiated transactions, this would increase
its influence over these actions. Accordingly, our sponsor will exert significant influence over actions requiring a shareholder
vote at least until the completion of our initial business combination.
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 a majority of the then outstanding public warrants.
Our
warrants are issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant
agent, and us. The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder
to cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least a majority of the
then outstanding public warrants 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 if holders of at least a majority 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 a majority 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, shorten the exercise period or decrease the
number of ordinary shares purchasable upon exercise of a warrant.
We
may redeem unexpired warrants prior to their exercise at a time that is disadvantageous to its holder, thereby making the warrants
worthless.
We
have the ability to redeem outstanding warrants at any time after they become exercisable and prior to their expiration, at a
price of $0.01 per warrant, provided that the last reported sales price of our Class A ordinary shares equal or exceed $18.00
per share (as adjusted for share splits, share capitalizations, rights issuances, subdivisions, reorganizations, recapitalizations
and the like) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to the date we send
the notice of redemption to the warrant holders. If and when the warrants become redeemable by us, we may not exercise our redemption
right if the issuance of shares upon exercise of the warrants is not exempt from registration or qualification under applicable
state blue sky laws or we are unable to effect such registration or qualification. We will use our best efforts to register or
qualify such shares under the blue sky laws of the state of residence in those states in which the warrants were offered by us
in our initial public offering. Redemption of the outstanding warrants could force you (i) to exercise your warrants and pay the
exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) to sell your warrants at the then-current
market price when you might otherwise wish to hold your warrants or (iii) to accept the nominal redemption price which, at the
time the outstanding warrants are called for redemption, is likely to be substantially less than the market value of your warrants.
None of the private placement warrants will be redeemable by us so long as they are held by our sponsor or its permitted transferees.
Our
management’s ability to require holders of our warrants to exercise such warrants on a cashless basis will cause holders
to receive fewer Class A ordinary shares upon their exercise of the warrants than they would have received had they been able
to exercise their warrants for cash.
If
we call our public warrants for redemption after the redemption criteria described elsewhere in this report have been satisfied,
our management will have the option to require any holder that wishes to exercise his warrant (including any warrants held by
our sponsor, officers or directors, other purchasers of our founder’s shares, or their permitted transferees) to do so on
a “cashless basis.” If our management chooses to require holders to exercise their warrants on a cashless basis, the
number of Class A ordinary shares received by a holder upon exercise will be fewer than it would have been had such holder exercised
his warrant for cash. This will have the effect of reducing the potential “upside” of the holder’s investment
in our company.
Our
warrants and founder shares 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 17,250,000 Class A ordinary shares, at a price of $11.50 per share (subject to adjustment as provided
herein), as part of the units sold in our initial public offering, and simultaneously with the closing of our initial public offering,
we issued 8,650,000 private placement warrants, each exercisable to purchase one Class A ordinary share at a price of $11.50 per
share, subject to adjustment. The founder shares are convertible into Class A ordinary shares on a one-for-one basis, subject
to adjustment as set forth herein and in our amended and restated memorandum and articles of association. In addition, if our
sponsor makes any working capital loans, up to $1,500,000 of such loans may be converted into warrants, at the price of $1.00
per warrant at the option of the lender. Such warrants would be identical to the private placement warrants.
To
the extent we issue Class A 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 or conversion rights could make us a less attractive
acquisition vehicle to a target business. Any such issuance 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
and founder shares may make it more difficult to effectuate a business combination or increase the cost of acquiring the target
business.
The
private placement warrants are identical to the warrants sold as part of the units in our initial public offering except that,
so long as they are held by our sponsor, or its permitted transferees, (i) they will not be redeemable by us, (ii) they (including
the Class A ordinary shares issuable upon exercise of these warrants) may not, subject to certain limited exceptions, be transferred,
assigned or sold by the sponsor until 30 days after the completion of our initial business combination and (iii) they may be exercised
by the holders on a cashless basis.
A
provision of our warrant agreement may make it more difficult for use to consummate an initial business combination.
Unlike
most blank check companies, if we issue additional ordinary shares or equity-linked securities for capital raising purposes in
connection with the closing of our initial business combination at a newly issued price of less than $9.50 per share, then the
exercise price of the warrants will be adjusted to be equal to 115% of the newly issued price and the redemption price of the
warrants, shall be adjusted to equal 180% of the newly issued price. This may make it more difficult for us to consummate an initial
business combination with a target business.
A
market for our securities may not fully develop, which would adversely affect the liquidity and price of our securities.
The
price of our securities may vary significantly due to one or more potential business combinations and general market or economic
conditions. Furthermore, an active trading market for our securities may not be sustained. You may be unable to sell your securities
unless a market can be fully developed and sustained.
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 a proxy statement with respect to a vote on a business combination meeting certain financial
significance tests include historical and/or pro forma financial statement disclosure in periodic reports. We will include the
same financial statement disclosure in connection with our tender offer documents, whether or not they are required under the
tender offer rules. These financial statements may be required to be prepared in accordance with, or be reconciled to, accounting
principles generally accepted in the United States of America, or U.S. GAAP, or international financing reporting standards as
issued by the International Accounting Standards Board, or 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),
or PCAOB. These financial statements may also be required to be prepared in accordance with U.S. GAAP in connection with our current
report on Form 8-K announcing the closing of our initial business combination within four business days following such closing.
These financial statement requirements may limit the pool of potential target businesses we may acquire because some targets may
be unable to provide such statements in time for us to disclose such statements in accordance with federal proxy rules and complete
our initial business combination within the prescribed time frame.
We
are an emerging growth company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure
requirements available to emerging growth 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 attestation requirements
of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports
and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and
shareholder approval of any golden parachute payments not previously approved. As a result, our shareholders may not have access
to certain information they may deem important. We could be an emerging growth company for up to five years, although circumstances
could cause us to lose that status earlier, including if the market value of our ordinary shares held by non-affiliates exceeds
$700 million as of any 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 accountant standards used.
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 acquisition.
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, 2020. Only in the event we are deemed to be a large accelerated filer or an accelerated
filer will we be required to comply with the independent registered public accounting firm attestation requirement on our internal control
over financial reporting. Further, for as long as we remain an emerging growth company, we will not be required to comply with the independent
registered public accounting firm attestation requirement on our internal control over financial reporting. The fact that we are a blank
check company makes compliance with the requirements of the Sarbanes-Oxley Act particularly burdensome on us as compared to other public
companies because a target company with which we seek to complete our initial business combination may not be in compliance with the
provisions of the Sarbanes-Oxley Act regarding adequacy of its 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 acquisition.
Because
we are incorporated under the laws of the Cayman Islands, you may face difficulties in protecting your interests, and your ability
to protect your rights through the U.S. Federal courts may be limited.
We
are an exempted company incorporated under the laws of the Cayman Islands. As a result, it may be difficult for investors to effect
service of process within the United States upon our directors or officers, or enforce judgments obtained in the United States
courts against our directors or officers.
Our
corporate affairs are governed by our amended and restated memorandum and articles of association, the Companies Law (as the same
may be supplemented or amended from time to time) and the common law of the Cayman Islands. The rights of shareholders to take
action against the directors, actions by minority shareholders and the fiduciary responsibilities of our directors to us under
Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands
is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from English common law, the
decisions of whose courts are of persuasive authority, but are not binding on a court in the Cayman Islands. The rights of our
shareholders and the fiduciary responsibilities of our directors under Cayman Islands law are different from what they would be
under statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands has a different
body of securities laws as compared to the United States, and certain states, such as Delaware, may have more fully developed
and judicially interpreted bodies of corporate law. In addition, Cayman Islands companies may not have standing to initiate a
shareholders derivative action in a Federal court of the United States.
We
have been advised by our Cayman Islands legal counsel that the courts of the Cayman Islands are unlikely (i) to recognize or enforce
against us judgments of courts of the United States predicated upon the civil liability provisions of the federal securities laws
of the United States or any state; and (ii) in original actions brought in the Cayman Islands, to impose liabilities against us
predicated upon the civil liability provisions of the federal securities laws of the United States or any state, so far as the
liabilities imposed by those provisions are penal in nature. In those circumstances, although there is no statutory enforcement
in the Cayman Islands of judgments obtained in the United States, the courts of the Cayman Islands will recognize and enforce
a foreign money judgment of a foreign court of competent jurisdiction without retrial on the merits based on the principle that
a judgment of a competent foreign court imposes upon the judgment debtor an obligation to pay the sum for which judgment has been
given provided certain conditions are met. For a foreign judgment to be enforced in the Cayman Islands, such judgment must be
final and conclusive and for a liquidated sum, and must not be in respect of taxes or a fine or penalty, inconsistent with a Cayman
Islands judgment in respect of the same matter, impeachable on the grounds of fraud or obtained in a manner, or be of a kind the
enforcement of which is, contrary to natural justice or the public policy of the Cayman Islands (awards of punitive or multiple
damages may well be held to be contrary to public policy). A Cayman Islands Court may stay enforcement proceedings if concurrent
proceedings are being brought elsewhere.
As
a result of all of the above, public shareholders may have more difficulty in protecting their interests in the face of actions
taken by management, members of the Board of Directors or controlling shareholders than they would as public shareholders of a
United States company.
Provisions
in our amended and restated memorandum and articles of association may inhibit a takeover of us, which could limit the price investors
might be willing to pay in the future for our Class A ordinary shares and could entrench management.
Our
amended and restated memorandum and articles of association contains provisions that may discourage unsolicited takeover proposals
that shareholders may consider to be in their best interests. These provisions include two-year director terms and the ability
of the Board of Directors to designate the terms of and issue new series of preference shares, which may make more difficult the
removal of management and may discourage transactions that otherwise could involve payment of a premium over prevailing market
prices for our securities.
After
our initial business combination, it is possible that a majority of our directors and officers will live outside the United States
and all of our assets will be located outside the United States; therefore investors may not be able to enforce federal securities
laws or their other legal rights.
It
is possible that after our initial business combination, a majority of our directors and officers will reside outside of the United
States and all of our assets will be located outside of the United States. As a result, it may be difficult, or in some cases
not possible, for investors in the United States to enforce their legal rights, to effect service of process upon all of our directors
or officers or to enforce judgments of United States courts predicated upon civil liabilities and criminal penalties on our directors
and officers under United States laws.
If
we effect our initial business combination with a company with operations or opportunities outside of the United States, we would
be subject to a variety of additional risks that may negatively impact our operations.
If
we effect our initial business combination with a company with operations or opportunities outside of the United States, 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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tariffs and trade
barriers;
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regulations related
to customs and import/export matters;
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tax issues, such
as tax law changes and variations in tax laws as compared to the United States;
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currency fluctuations
and exchange controls;
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challenges in collecting
accounts receivable;
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cultural and language
differences;
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employment regulations;
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crime, strikes,
riots, civil disturbances, terrorist attacks and wars; and
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deterioration of
political relations with the United States.
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We
may not be able to adequately address these additional risks. If we were unable to do so, our operations might suffer, which may
adversely impact our results of operations and financial condition.
If
our management following our initial business combination is unfamiliar with United States securities laws, they may have to expend
time and resources becoming familiar with such laws, which could lead to various regulatory issues.
Following
our initial business combination, any or all of our management could resign from their positions as officers of the Company, and
the management of the target business at the time of the business combination will remain in place. Management of the target business
may not be familiar with United States securities laws. If new management is unfamiliar with United States securities laws, they
may have to expend time and resources becoming familiar with such laws. This could be expensive and time-consuming and could lead
to various regulatory issues which may adversely affect our operations.
After
our initial business combination, substantially all of our assets may be located in a foreign country and substantially all of
our revenue will be derived from our operations in such country. Accordingly, our results of operations and prospects will be
subject, to a significant extent, to the economic, political and legal policies, developments and conditions in the country in
which we operate.
The
economic, political and social conditions, as well as government policies, of the country in which our operations are located
could affect our business. Economic growth could be uneven, both geographically and among various sectors of the economy and such
growth may not be sustained in the future. If in the future such country’s economy experiences a downturn or grows at a
slower rate than expected, there may be less demand for spending in certain industries. A decrease in demand for spending in certain
industries could materially and adversely affect our ability to find an attractive target business with which to consummate our
initial business combination and if we effect our initial business combination, the ability of that target business to become
profitable.
Exchange
rate fluctuations and currency policies may cause a target business’ ability to succeed in the international markets to
be diminished.
In
the event we acquire a non-U.S. target, all revenues and income would likely be received in a foreign currency, and the dollar
equivalent of our net assets and distributions, if any, could be adversely affected by reductions in the value of the local currency.
The value of the currencies in our target regions fluctuate and are affected by, among other things, changes in political and
economic conditions. Any change in the relative value of such currency against our reporting currency may affect the attractiveness
of any target business or, following consummation of our initial business combination, our financial condition and results of
operations. Additionally, if a currency appreciates in value against the dollar prior to the consummation of our initial business
combination, the cost of a target business as measured in dollars will increase, which may make it less likely that we are able
to consummate such transaction.
We
may face risks related to financial technology businesses.
Business
combinations with financial technology businesses may involve special considerations and risks. If we complete our initial business
combination with a financial technology business, we will be subject to the following risks, any of which could be detrimental
to us and the business we acquire:
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If the company or
business we acquire provides products or services which relate to the facilitation of financial transactions, such as funds
or securities settlement system, and such product or service fails or is compromised, we may be subject to claims from both
the firms to whom we provide our products and services and the clients they serve;
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If we are unable
to keep pace with evolving technology and changes in the financial services industry, our revenues and future prospects may
decline;
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Our ability to provide
financial technology products and services to customers may be reduced or eliminated by regulatory changes;
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Any business or
company we acquire could be vulnerable to cyber attack or theft of individual identities or personal data;
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Difficulties with
any products or services we provide could damage our reputation and business;
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A failure to comply
with privacy regulations could adversely affect relations with customers and have a negative impact on business;
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We may not be able
to protect our intellectual property and we may be subject to infringement claims.
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Any
of the foregoing could have an adverse impact on our operations following a business combination. However, our efforts in identifying
prospective target businesses will not be limited to financial technology businesses. Accordingly, if we acquire a target business
in another industry, these risks will likely not affect us and we will be subject to other risks attendant with the specific industry
in which we operate or target business which we acquire, none of which can be presently ascertained.
Our warrants are accounted for as derivative
liabilities and are recorded at fair value with changes in fair value each period reported in earnings, which may have an adverse effect
on the market price of our common stock or may make it more difficult for us to consummate an initial business combination.
We have issued 17,250,000
public warrants and, simultaneously with the closing of our initial public offering, we issued in a private placement, 8,650,000 private
placement warrants. We are accounting for the warrants as a warrant liability. At each reporting period (1) the accounting treatment
of the warrants will be re-evaluated for proper accounting treatment as a liability or equity and (2) the fair value of the liability
of the public and private warrants will be remeasured and the change in the fair value of the liability will be recorded as other income
(expense) in our income statement. Changes in the inputs and assumptions for the valuation model we use to determine the fair value of
such liability may have a material impact on the estimated fair value of the embedded derivative liability. The share price of our common
stock represents the primary underlying variable that impacts the value of the derivative instruments. Additional factors that impact
the value of the derivative instruments include the volatility of our stock price, discount rates and stated interest rates. As a result,
our financial statements and results of operations will fluctuate quarterly, based on various factors, such as the share
price of our common stock, many of which are outside of our control. In addition, we may change the underlying assumptions used in our
valuation model, which could in result in significant fluctuations in our results of operations. If our stock price is volatile, we expect
that we will recognize non-cash gains or losses on our warrants or any other similar derivative instruments 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 common stock. In addition, potential targets may seek a SPAC that does not have warrants that are accounted
for as a liability, which may make it more difficult for us to consummate an initial business combination with a target business.
We
have identified a material weakness in our internal control over financial reporting as of December 31, 2020. If we are unable to develop
and maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial
results in a timely manner, which may adversely affect investor confidence in us and materially and adversely affect our business and
operating results.
Following this issuance
of the SEC Statement, on April 12, 2021, our management and our audit committee concluded that, in light of the SEC Statement, it was
appropriate to restate our previously issued audited financial statements as of and for the period ended December 31, 2020 (the “Restatement”).
See “—Our warrants are accounted for as liabilities and the changes in value of our warrants could have a material effect
on our financial results.” As part of such process, we identified a material weakness in our internal controls over financial reporting.
A material weakness is
a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility
that a material misstatement of our annual or interim financial statements will not be prevented, or detected and corrected on a timely
basis.
Effective internal controls
are necessary for us to provide reliable financial reports and prevent fraud. We continue to evaluate steps to remediate the material
weakness. These remediation measures may be time consuming and costly and there is no assurance that these initiatives will ultimately
have the intended effects.
If we identify any new
material weaknesses in the future, any such newly identified material weakness could limit our ability to prevent or detect a misstatement
of our accounts or disclosures that could result in a material misstatement of our annual or interim financial statements. In such case,
we may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports in addition to applicable
stock exchange listing requirements, investors may lose confidence in our financial reporting and our stock price may decline as a result.
We cannot assure you that the measures we have taken to date, or any measures we may take in the future, will be sufficient to avoid
potential future material weaknesses.
We may face
litigation and other risks as a result of the material weakness in our internal control over financial reporting.
Following the issuance
of the SEC Statement, after consultation with our independent registered public accounting firm, our management and our audit committee
concluded that it was appropriate to restate our previously issued audited financial statements as of December 31, 2020 and for the year
ended December 31, 2020. See “—Our warrants are accounted for as liabilities and the changes in value of our warrants could
have a material effect on our financial results.” As part of the Restatement, we identified a material weakness in our internal
controls over financial reporting.
As a result of such material
weakness, the Restatement, the change in accounting for the warrants, and other matters raised or that may in the future be raised by
the SEC, we face potential for litigation or other disputes which may include, among others, claims invoking the federal and state securities
laws, contractual claims or other claims arising from the Restatement and material weaknesses in our internal control over financial
reporting and the preparation of our financial statements. As of the date of this Annual Report, we have no knowledge of any such litigation
or dispute. However, we can provide no assurance that such litigation or dispute will not arise in the future. Any such litigation or
dispute, whether successful or not, could have a material adverse effect on our business, results of operations and financial condition
or our ability to complete a Business Combination.