References in this report
to “we,” “us” or the “Company” refer to Broadstone Acquisition Corp. References to our “management”
or our “management team” refer to our officers and directors, and references to the “sponsor” refer to Broadstone
Sponsor LLP, a United Kingdom limited liability partnership.
ITEM 1A. RISK FACTORS.
An investment in our securities involves a
high degree of risk. You should consider carefully all of the risks described below, together with the other information contained in
this Annual Report on Form 10-K and the prospectus associated with our initial public offering, before making a decision to invest
in our securities. If any of the following events occur, our business, financial condition and operating results may be materially adversely
affected. In that event, the trading price of our securities could decline, and you could lose all or part of your investment.
We are a blank check
company with no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.
We are a blank check company
incorporated under the laws of the Cayman Islands with no operating results. Because we lack an operating history, you have no basis upon
which to evaluate our ability to achieve our business objective of completing our initial business combination 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 initial business combination, and even if we hold a vote, holders of our founder
shares will participate in such vote, which means we may complete our initial business combination even though a majority of our public
shareholders do not support such a combination.
We may choose not to hold
a shareholder vote to approve our initial business combination unless the business combination would require shareholder approval under
applicable law or stock exchange listing requirements. In such case, the decision as to whether we will seek shareholder approval of a
proposed business combination or will allow shareholders to sell their shares to us in a tender offer will be made by us, solely in our
discretion, and will be based on a variety of factors, such as the timing of the transaction and whether the terms of the transaction
would otherwise require us to seek shareholder approval. Even if we seek shareholder approval, the holders of our founder shares will
participate in the vote on such approval. Accordingly, we may complete our initial business combination even if holders of a majority
of our ordinary shares do not approve of the business combination we complete.
Your only opportunity
to effect your investment decision regarding a potential business combination may be limited to the exercise of your right to redeem your
shares from us for cash.
At the time of your investment
in us, you will not be provided with an opportunity to evaluate the specific merits or risks of our initial business combination. Since
our board of directors may complete a business combination without seeking shareholder approval, public shareholders may not have the
right or opportunity to vote on the business combination, unless we seek such shareholder vote. Accordingly, your only opportunity to
effect your investment decision regarding our initial business combination may be limited to exercising your redemption rights within
the period of time (which will be at least 20 business days) set forth in our tender offer documents mailed to our public shareholders
in which we describe our initial business combination.
If we seek shareholder
approval of our initial business combination, our initial shareholders and management team have agreed to vote in favor of such initial
business combination, regardless of how our public shareholders vote.
Our initial shareholders
own shares representing approximately 20% of our outstanding ordinary shares and have agreed to vote their shares in favor of an initial
business combination. Our initial shareholders and management team also may from time to time purchase Class A ordinary shares
prior to our initial business combination. Our amended and restated memorandum and articles of association provides that, if we seek shareholder
approval of an initial business combination, such initial business combination will be approved if we receive approval pursuant to an
ordinary resolution under Cayman Islands law, which requires the affirmative vote of a majority of the shareholders who attend and vote
at a general meeting of the company, including the founder shares. Accordingly, if we seek stockholder approval of our initial business
combination, the agreement by our initial shareholders and management team to vote in favor of our initial business combination will increase
the likelihood that we will receive the requisite shareholder approval for such initial business combination.
The ability of our
public shareholders to redeem their shares for cash may make our financial condition unattractive to potential business combination targets,
which may make it difficult for us to enter into a business combination with a target.
We may seek to enter into
a business combination transaction agreement with a minimum cash requirement for (i) cash consideration to be paid to the target
or its owners, (ii) cash for working capital or other general corporate purposes or (iii) the retention of cash to satisfy other
conditions. If too many public shareholders exercise their redemption rights, we would not be able to meet such closing condition and,
as a result, would not be able to proceed with the business combination. Furthermore, in no event will we redeem our public shares in
an amount that would cause our net tangible assets to be less than $5,000,001. Consequently, if accepting all properly submitted redemption
requests would cause our net tangible assets to be less than $5,000,001 or such greater amount necessary to satisfy a condition as described
above, we would not proceed with such redemption and the related business combination and may instead search for an alternate business
combination. Prospective targets will be aware of these risks and, thus, may be reluctant to enter into a business combination transaction
with us.
The ability of our
public shareholders to exercise redemption rights with respect to a large number of our shares may not allow us to complete the most desirable
business combination or optimize our capital structure.
At the time we enter into
an agreement for our initial business combination, we will not know how many shareholders may exercise their redemption rights, and therefore
will need to structure the transaction based on our expectations as to the number of shares that will be submitted for redemption. If
our initial business combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price, or
requires us to have a minimum amount of cash at closing, we will need to reserve a portion of the cash in the trust account to meet such
requirements, or arrange for third party financing. In addition, if a larger number of shares are submitted for redemption than we initially
expected, we may need to restructure the transaction to reserve a greater portion of the cash in the trust account or arrange for third
party financing. Raising additional third party financing may involve dilutive equity issuances or the incurrence of indebtedness at higher
than desirable levels. Furthermore, this dilution would increase to the extent that the anti-dilution provision of the Class B ordinary
shares results in the issuance of Class A ordinary shares on a greater than one-to-one basis upon conversion of the Class B
ordinary shares at the time of our initial business combination. In addition, the amount of the deferred underwriting commissions payable
to the underwriters will not be adjusted for any shares that are redeemed in connection with an initial business combination. The per
share amount we will distribute to shareholders who properly exercise their redemption rights will not be reduced by the deferred underwriting
commission and after such redemptions, the amount held in trust will continue to reflect our obligation to pay the entire deferred underwriting
commissions. The above considerations may limit our ability to complete the most desirable business combination available to us or optimize
our capital structure.
The ability of our
public shareholders to exercise redemption rights with respect to a large number of our shares could increase the probability that our
initial business combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your shares.
If our initial business combination
agreement requires us to use a portion of the cash in the trust account to pay the purchase price, or requires us to have a minimum amount
of cash at closing, the probability that our initial business combination would be unsuccessful is increased. If our initial business
combination is unsuccessful, you would not receive your pro rata portion of the trust account until we liquidate the trust account.
If you are in need of immediate liquidity, you could attempt to sell your shares in the open market; however, at such time our shares
may trade at a discount to the pro rata amount per share in the trust account. In either situation, you may suffer a material loss
on your investment or lose the benefit of funds expected in connection with your exercise of redemption rights until we liquidate or you
are able to sell your shares in the open market.
The requirement that
we complete our initial business combination by September 15, 2022 may give potential target businesses leverage over us in negotiating
a business combination and may limit the time we have in which to conduct due diligence on potential business combination targets, in
particular as we approach our dissolution deadline, which could undermine our ability to complete our initial business combination on
terms that would produce value for our shareholders.
Any potential target business
with which we enter into negotiations concerning a business combination will be aware that we must complete our initial business combination
by September 15, 2022. Consequently, such target business may obtain leverage over us in negotiating a business combination, knowing
that if we do not complete our initial business combination with that particular target business, we may be unable to complete our initial
business combination with any target business. This risk will increase as we get closer to the timeframe described above. In addition,
we may have limited time to conduct due diligence and may enter into our initial business combination on terms that we would have rejected
upon a more comprehensive investigation.
Our search for a business
combination, and any target business with which we ultimately consummate a business combination, may be materially adversely affected
by the recent coronavirus (COVID-19) outbreak and the status of debt and equity markets.
Since it was first reported
to have emerged in December 2019, a novel strain of coronavirus, which causes COVID-19, has spread across the world, including the
United States. On January 30, 2020, the World Health Organization declared the outbreak of the coronavirus disease (COVID-19) a “Public
Health Emergency of International Concern.” On January 31, 2020, U.S. Health and Human Services Secretary Alex M. Azar II declared
a public health emergency for the United States to aid the U.S. healthcare community in responding to COVID-19, and on March 11,
2020 the World Health Organization characterized the outbreak as a “pandemic.” The COVID-19 outbreak has resulted in, and
a significant outbreak of other infectious diseases could result in, a widespread health crisis adversely affecting the economies and
financial markets worldwide, potentially including the business of any potential target business with which we intend to consummate a
business combination. Furthermore, we may be unable to complete a business combination at all if concerns relating to COVID-19 continue
to restrict travel, limit the ability to have meetings with potential investors or make it impossible or impractical to negotiate and
consummate a transaction with the target company’s personnel, vendors and service providers in a timely manner, if at all. The extent
to which COVID-19 impacts our search for a business combination will depend on future developments, which are highly uncertain and cannot
be predicted, including new information that may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or its
impact, among others. If the disruptions posed by COVID-19 or other matters of global concern continue for an extensive period of time,
our ability to consummate a business combination, or the operations of a target business with which we ultimately consummate a business
combination, may be materially adversely affected.
In addition, our ability
to consummate a transaction may be dependent on the ability to raise equity and debt financing, which may be impacted by COVID-19 and
other events, including as a result of increased market volatility, decreased market liquidity and third-party financing being unavailable
on terms acceptable to us or at all.
We may not be able
to complete our initial business combination by September 15, 2022, in which case we would cease all operations except for the purpose
of winding up and we would redeem our public shares and liquidate.
We may not be able to find
a suitable target business and complete our initial business combination by September 15, 2022. Our ability to complete our initial
business combination may be negatively impacted by general market conditions, volatility in the capital and debt markets and the other
risks described herein. If we 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 up to $100,000 of interest to pay dissolution expenses), divided by the number
of then issued and outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders
(including the right to receive further liquidation distributions, if any) and (iii) as promptly as reasonably possible following
such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in
each case to our obligations under Cayman Islands law to provide for claims of creditors and other requirements of applicable law.
If we seek shareholder
approval of our initial business combination, our sponsor, initial shareholders, directors, officers, advisors and their affiliates may
elect to purchase shares or public warrants from public shareholders, which may influence a vote on a proposed business combination and
reduce the public “float” of our Class A ordinary shares.
If we seek shareholder approval
of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to
the tender offer rules, our sponsor, directors, officers, advisors or their affiliates may purchase shares or public warrants in privately
negotiated transactions or in the open market either prior to or following the completion of our initial business combination, although
they are under no obligation to do so. There is no limit on the number of shares our initial shareholders, directors, officers, advisors
or their affiliates may purchase in such transactions, subject to compliance with applicable law and the NYSE rules. However, they have
no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such
transactions. None of the funds in the trust account will be used to purchase shares or public warrants in such transactions. Such purchases
may include a contractual acknowledgment that such shareholder, although still the record holder of our shares, is no longer the beneficial
owner thereof and therefore agrees not to exercise its redemption rights.
In the event that our sponsor,
directors, officers, advisors or their affiliates purchase shares in privately negotiated transactions from public shareholders who have
already elected to exercise their redemption rights, such selling shareholders would be required to revoke their prior elections to redeem
their shares. The purpose of any such purchases of shares could be to vote such shares in favor of the business combination and thereby
increase the likelihood of obtaining shareholder approval of the business combination or to satisfy a closing condition in an agreement
with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination,
where it appears that such requirement would otherwise not be met. The purpose of any such purchases of public warrants could be to reduce
the number of public warrants outstanding or to vote such warrants on any matters submitted to the warrantholders for approval in connection
with our initial business combination. Any such purchases of our securities may result in the completion of our initial business combination
that may not otherwise have been possible. Any such purchases will be reported pursuant to Section 13 and Section 16 of the
Exchange Act to the extent such purchasers are subject to such reporting requirements.
In addition, if such purchases
are made, the public “float” of our Class A ordinary shares or public warrants and the number of beneficial holders of
our securities may be reduced, possibly making it difficult to obtain or maintain the quotation, listing or trading of our securities
on a national securities exchange.
If a shareholder fails
to receive notice of our offer to redeem our public shares in connection with our initial business combination, or fails to comply with
the procedures for submitting or tendering its shares, such shares may not be redeemed.
We will comply with the proxy
rules or tender offer rules, as applicable, when conducting redemptions in connection with our initial business combination. Despite
our compliance with these rules, if a shareholder fails to receive our proxy materials or tender offer documents, as applicable, such
shareholder may not become aware of the opportunity to redeem its shares. In addition, proxy materials or tender offer documents, as applicable,
that we will furnish to holders of our public shares in connection with our initial business combination will describe the various procedures
that must be complied with in order to validly tender or submit public shares for redemption. For example, we intend to require our public
shareholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,”
to, at the holder’s option, either deliver their share certificates to our transfer agent, or to deliver their shares to our transfer
agent electronically prior to the date set forth in the proxy materials or tender offer documents, as applicable. In the case of proxy
materials, this date may be up to two business days prior to the scheduled vote on the proposal to approve the initial business combination.
In addition, if we conduct redemptions in connection with a shareholder vote, we intend to require a public shareholder seeking redemption
of its public shares to also submit a written request for redemption to our transfer agent two business days prior to the scheduled vote
in which the name of the beneficial owner of such shares is included. In the event that a shareholder fails to comply with these or any
other procedures disclosed in the proxy or tender offer materials, as applicable, its shares may not be redeemed.
You will not have any
rights or interests in funds from the trust account, except under certain limited circumstances. Therefore, to liquidate your investment,
you may be forced to sell your public shares or warrants, potentially at a loss.
Our public shareholders will
be entitled to receive funds from the trust account only upon the earliest to occur of: (i) our completion of an initial business
combination, and then only in connection with those Class A ordinary shares that such shareholder properly elected to redeem, subject
to the limitations and on the conditions described herein; (ii) the redemption of any public shares properly submitted in connection
with a shareholder vote to amend our amended and restated memorandum and articles of association (A) to modify the substance or timing
of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we
do not complete our initial business combination by September 15, 2022 or (B) with respect to any other provisions relating
to shareholders’ rights or pre-initial business combination activity; and (iii) the redemption of our public shares if we are
unable to complete an initial business combination by September 15, 2022, subject to applicable law and as further described herein.
In no other circumstances will a public shareholder have any right or interest of any kind in the trust account. Holders of warrants will
not have any right to the proceeds held in the trust account with respect to the warrants. Accordingly, to liquidate your investment,
you may be forced to sell your public shares or warrants, potentially at a loss.
The NYSE may delist
our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject
us to additional trading restrictions.
Our units, Class A ordinary
shares and warrants are listed on the NYSE. We cannot assure you that our securities will be, or will continue to be, listed on the NYSE
in the future or prior to our initial business combination. In order to continue listing our securities on the NYSE prior to our initial
business combination, we must maintain certain financial, distribution and share price levels. Generally, following our initial public
offering, we must maintain a minimum amount of 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 the NYSE’s initial listing requirements, which are more rigorous than the NYSE’s continued listing requirements,
in order to continue to maintain the listing of our securities on the NYSE. For instance, our share price would generally be required
to be at least $4.00 per share and our shareholders’ equity would generally be required to be at least $5.0 million. We cannot
assure you that we will be able to meet those initial listing requirements at that time.
If the NYSE delists our securities
from trading on its exchange and we are not able to list our securities on another national securities exchange, we expect our securities
could be quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including:
•a limited availability
of market quotations for our securities;
•reduced
liquidity for our securities;
•a
determination that our Class A ordinary shares are a “penny stock,” which will require brokers trading in our Class A
ordinary shares to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading
market for our securities;
•a
limited amount of news and analyst coverage; and
•decreased
ability to issue additional securities or obtain additional financing in the future.
The
National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale
of certain securities, which are referred to as “covered securities.” Because we expect that our units and eventually
our Class A ordinary shares and warrants will be listed on the NYSE, our units, Class A ordinary shares and warrants will
qualify as covered securities under the statute. Although the states are preempted from regulating the sale of our securities, the federal
statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity,
then the states can regulate or bar the sale of covered securities in a particular case. While we are not aware of a state having used
these powers to prohibit or restrict the sale of securities issued by blank check companies, other than the State of Idaho, certain state
securities regulators view blank check companies unfavorably and might use these powers, or threaten to use these powers, to hinder the
sale of securities of blank check companies in their states. Further, if we were no longer listed on the NYSE, our securities would not
qualify as covered securities under the statute and we would be subject to regulation in each state in which we offer our securities.
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 in Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate
of 15% of the shares sold in the Public Offering without our prior consent, which we refer to as the “Excess Shares.” However,
we would not be restricting our shareholders’ ability to vote all of their shares (including Excess Shares) for or against our initial
business combination. Your inability to redeem the Excess Shares will reduce your influence over our ability to complete our initial business
combination and you could suffer a material loss on your investment in us if you sell Excess Shares in open-market transactions. Additionally,
you will not receive redemption distributions with respect to the Excess Shares if we complete our initial business combination. And as
a result, you will continue to hold that number of shares exceeding 15% and, in order to dispose of such shares, would be required to
sell your shares in open-market transactions, potentially at a loss.
Because of our limited
resources and the significant competition for business combination opportunities, it may be more difficult for us to complete our initial
business combination. If we are unable to complete our initial business combination, our public shareholders may receive only their pro rata
portion of the funds in the trust account that are available for distribution to public shareholders, and our warrants will expire worthless.
We expect to encounter competition
from other entities having a business objective similar to ours, including private investors (which may be individuals or investment partnerships),
other blank check companies and other entities, domestic and international, competing for the types of businesses we intend to acquire.
Many of these individuals and entities are well-established and have extensive experience in identifying and effecting, directly or indirectly,
acquisitions of companies operating in or providing services to various industries. Many of these competitors possess similar or greater
technical, human and other resources to ours or more local industry knowledge than we do and our financial resources will be relatively
limited when contrasted with those of many of these competitors. While we believe there are numerous target businesses we could potentially
acquire with the net proceeds of the Public Offering and the sale of the private placement warrants, our ability to compete with respect
to the acquisition of certain target businesses that are sizable will be limited by our available financial resources. This inherent competitive
limitation gives others an advantage in pursuing the acquisition of certain target businesses. Furthermore, we are obligated to offer
holders of our public shares the right to redeem their shares for cash at the time of our initial business combination in conjunction
with a shareholder vote or via a tender offer. Target companies will be aware that this may reduce the resources available to us for our
initial business combination. Any of these obligations may place us at a competitive disadvantage in successfully negotiating a business
combination. If we are unable to complete our initial business combination, our public shareholders may receive only their pro rata
portion of the funds in the trust account that are available for distribution to public shareholders, and our warrants will expire worthless.
Subsequent to our completion
of our initial business combination, we may be required to take write-downs or write-offs, restructuring and impairment or other charges
that could have a significant negative effect on our financial condition, our results of operations and our share price, which could cause
you to lose some or all of your investment.
Even if we conduct due diligence
on a target business with which we combine, we cannot assure you that this diligence will identify all material issues that may be present
within a particular target business, that it would be possible to uncover all material issues through a customary amount of due diligence,
or that factors outside of the target business and outside of our control will not later arise. As a result of these factors, we may be
forced to later write down or write off assets, restructure our operations, or incur impairment or other charges that could result in
our reporting losses. Even if our due diligence successfully identifies certain risks, unexpected risks may arise and previously known
risks may materialize in a manner not consistent with our preliminary risk analysis. Even though these charges may be non-cash items and
not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to negative market perceptions
about us or our securities. In addition, charges of this nature may cause us to violate net worth or other covenants to which we may be
subject as a result of assuming pre-existing debt held by a target business or by virtue of our obtaining debt financing to partially
finance the initial business combination or thereafter. Accordingly, any shareholders who choose to remain shareholders following the
business combination could suffer a reduction in the value of their securities. Such shareholders are unlikely to have a remedy for such
reduction in value unless they are able to successfully claim that the reduction was due to the breach by our officers or directors of
a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that
the proxy solicitation or tender offer materials, as applicable, relating to the business combination contained an actionable material
misstatement or material omission.
If third parties bring
claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by shareholders
may be less than $10.00 per share.
Our placing of funds in the
trust account may not protect those funds from third party claims against us. Although we will seek to have all vendors, service providers,
prospective target businesses and other entities with which we do business execute agreements with us waiving any right, title, interest
or claim of any kind in or to any monies held in the trust account for the benefit of our public shareholders, such parties may not execute
such agreements, or even if they execute such agreements they may not be prevented from bringing claims against the trust account, including,
but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the
enforceability of the waiver, in each case in order to gain advantage with respect to a claim against our assets, including the funds
held in the trust account. If any third party refuses to execute an agreement waiving such claims to the monies held in the trust account,
our management will consider whether competitive alternatives are reasonably available to us and will only enter into an agreement with
such third party if management believes that such third party’s engagement would be in the best interests of the company under
the circumstances.
Examples of possible instances
where we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular
expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute
a waiver or in cases where management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee
that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts
or agreements with us and will not seek recourse against the trust account for any reason. Upon redemption of our public shares, if we
are unable to complete our initial business combination within the prescribed timeframe, or upon the exercise of a redemption right in
connection with our initial business combination, we will be required to provide for payment of claims of creditors that were not waived
that may be brought against us within the 10 years following redemption. Accordingly, the per-share redemption amount received by
public shareholders could be less than the $10.00 per public share initially held in the trust account, due to claims of such creditors.
Pursuant to a letter agreement signed in connection with the Public Offering, our sponsor has agreed that it will be liable to us if and
to the extent any claims by a third party for services rendered or products sold to us, or a prospective target business with which we
have entered into a written letter of intent, confidentiality or other similar agreement or business combination agreement, reduce the
amount of funds in the trust account to below the lesser of (i) $10.00 per public share and (ii) the actual amount per public
share held in the trust account as of the date of the liquidation of the trust account, if less than $10.00 per share due to reductions
in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective
target business who executed a waiver of any and all rights to the monies held in the trust account (whether or not such waiver is enforceable)
nor will it apply to any claims under our indemnity of the underwriters of the Public Offering against certain liabilities, including
liabilities under the Securities Act. However, we have not asked our sponsor to reserve for such indemnification obligations, nor have
we independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and we believe that our sponsor’s
only assets are securities of our company. Therefore, we cannot assure you that our sponsor would be able to satisfy those obligations.
As a result, if any such claims were successfully made against the trust account, the funds available for our initial business combination
and redemptions could be reduced to less than $10.00 per public share. In such event, we may not be able to complete our initial business
combination, and you would receive such lesser amount per share in connection with any redemption of your public shares. None of our officers
or directors will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.
Our directors may decide
not to enforce the indemnification obligations of our sponsor, resulting in a reduction in the amount of funds in the trust account available
for distribution to our public shareholders.
In the event that the proceeds
in the trust account are reduced below the lesser of (i) $10.00 per share and (ii) the actual amount per public share held in
the trust account as of the date of the liquidation of the trust account if less than $10.00 per share due to reductions in the value
of the trust assets, in each case less taxes payable, and our sponsor asserts that it is unable to satisfy 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 and subject to their fiduciary duties may choose not to do so in any particular instance if, for
example, the cost of such legal action is deemed by the independent directors to be too high relative to the amount recoverable or if
the independent directors determine that a favorable outcome is not likely. If our independent directors choose not to enforce these indemnification
obligations, the amount of funds in the trust account available for distribution to our public shareholders may be reduced below $10.00
per share.
We may not have sufficient
funds to satisfy indemnification claims of our directors and officers.
We have agreed to indemnify
our officers and directors to the fullest extent permitted by law. However, our officers and directors have agreed to waive any right,
title, interest or claim of any kind in or to any monies in the trust account and to not seek recourse against the trust account for any
reason whatsoever. Accordingly, any indemnification provided will be able to be satisfied by us only if (i) we have sufficient funds
outside of the trust account or (ii) we consummate an initial business combination. Our obligation to indemnify our officers and
directors may discourage shareholders from bringing a lawsuit against our officers or directors for breach of their fiduciary duty. These
provisions also may have the effect of reducing the likelihood of derivative litigation against our officers and directors, even though
such an action, if successful, might otherwise benefit us and our shareholders. Furthermore, a shareholder’s investment may be adversely
affected to the extent we pay the costs of settlement and damage awards against our officers and directors pursuant to these indemnification
provisions.
If, after we distribute
the proceeds in the trust account to our public shareholders, we file a bankruptcy or insolvency petition or an involuntary bankruptcy
or insolvency petition is filed against us that is not dismissed, a bankruptcy court may seek to recover such proceeds, and the members
of our board of directors may be viewed as having breached their fiduciary duties to our creditors, thereby exposing the members of our
board of directors and us to claims of punitive damages.
If, after we distribute the
proceeds in the trust account to our public shareholders, we file a bankruptcy or insolvency petition or an involuntary bankruptcy or
insolvency petition is filed against us that is not dismissed, any distributions received by shareholders could be viewed under applicable
debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a
result, a bankruptcy court could seek to recover some or all amounts received by our shareholders. In addition, our board of directors
may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith, thereby exposing itself and us
to claims of punitive damages, by paying public shareholders from the trust account prior to addressing the claims of creditors.
If, before distributing
the proceeds in the trust account to our public shareholders, we file a bankruptcy or insolvency petition or an involuntary bankruptcy
or insolvency petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the
claims of our shareholders and the per-share amount that would otherwise be received by our shareholders in connection with our liquidation
may be reduced.
If, before distributing the
proceeds in the trust account to our public shareholders, we file a bankruptcy or insolvency petition or an involuntary bankruptcy or
insolvency petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy
law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our shareholders.
To the extent any bankruptcy claims deplete the trust account, the per-share amount that would otherwise be received by our shareholders
in connection with our liquidation may be reduced.
If we are deemed to
be an investment company under the Investment Company Act, we may be required to institute burdensome compliance requirements and our
activities may be restricted, which may make it difficult for us to complete our initial business combination.
If we are deemed to be an
investment company under the Investment Company Act, our activities may be restricted, including:
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restrictions on the nature of our investments; and
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restrictions on the issuance of securities, each of which may make it difficult for us to complete our
initial business combination. In addition, we may have imposed upon us burdensome requirements, including:
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registration as an investment company;
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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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In order not to be regulated
as an investment company under the Investment Company Act, unless we can qualify for an exclusion, we must ensure that we are engaged
primarily in a business other than investing, reinvesting or trading of securities and that our activities do not include investing, reinvesting,
owning, holding or trading “investment securities” constituting more than 40% of our assets (exclusive of U.S. government
securities and cash items) on an unconsolidated basis. Our business will be to identify and complete a business combination and thereafter
to operate the post-transaction business or assets for the long term. We do not plan to buy businesses or assets with a view to resale
or profit from their resale. We do not plan to buy unrelated businesses or assets or to be a passive investor.
We do not believe that our
anticipated principal activities will subject us to the Investment Company Act. To this end, the proceeds held in the trust account may
only be invested in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company
Act having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under
the Investment Company Act that invest only in direct U.S. government treasury obligations. Pursuant to the trust agreement, the trustee
is not permitted to invest in other securities or assets. By restricting the investment of the proceeds to these instruments, and by having
a business plan targeted at acquiring and growing businesses for the long term (rather than on buying and selling businesses in the manner
of a merchant bank or private equity fund), we intend to avoid being deemed an “investment company” within the meaning of
the Investment Company Act. The trust account is intended as a holding place for funds pending the earliest to occur of either: (i) the
completion of our initial business combination; (ii) the redemption of any public shares properly submitted in connection with a
shareholder vote to amend our amended and restated memorandum and articles of association (A) to modify the substance or timing of
our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do
not complete our initial business combination by September 15, 2022 or (B) with respect to any other provisions relating to
shareholders’ rights or pre-initial business combination activity; or (iii) absent an initial business combination by September 15,
2022, our return of the funds held in the trust account to our public shareholders as part of our redemption of the public shares. If
we do not invest the proceeds as discussed above, we may be deemed to be subject to the Investment Company Act. If we were deemed to be
subject to the Investment Company Act, compliance with these additional regulatory burdens would require additional expenses for which
we have not allotted funds and may hinder our ability to complete a business combination. If we are unable to complete our initial business
combination, our public shareholders may only receive their pro rata portion of the funds in the trust account that are available
for distribution to public shareholders, and our warrants will expire worthless.
Changes in laws or
regulations, or a failure to comply with any laws and regulations, may adversely affect our business, including our ability to negotiate
and complete our initial business combination, and results of operations.
We are subject to laws and
regulations enacted by national, regional and local governments. In particular, we will be required to comply with certain SEC and other
legal requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those
laws and regulations and their interpretation and application may also change from time to time and those changes could have a material
adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable laws or regulations,
as interpreted and applied, could have a material adverse effect on our business, including our ability to negotiate and complete our
initial business combination, and results of operations.
If we are unable to
consummate our initial business combination by September 15, 2022, our public shareholders may be forced to wait beyond 24 months
before redemption from our trust account can occur.
If we are unable to consummate
our initial business combination by September 15, 2022, the proceeds then on deposit in the trust account, including interest (which
interest shall be net of taxes payable and up to $100,000 of interest to pay dissolution expenses), will be used to fund the redemption
of our public shares, as further described herein. Any redemption of public shareholders from the trust account will be effected automatically
by function of our amended and restated memorandum and articles of association prior to any voluntary winding up. If we are required to
wind up, liquidate the trust account and distribute such amount therein, pro rata, to our public shareholders, as part of any liquidation
process, such winding up, liquidation and distribution must comply with the applicable provisions of the Companies Law. In that case,
investors may be forced to wait beyond 24 months from the closing of the Public Offering before the redemption proceeds of our trust
account become available to them, and they receive the return of their pro rata portion of the proceeds from our trust account. We
have no obligation to return funds to investors prior to the date of our redemption or liquidation unless we consummate our initial business
combination prior thereto and only then in cases where investors have sought to redeem their Class A ordinary shares. Only upon our
redemption or any liquidation will public shareholders be entitled to distributions if we are unable to complete our initial business
combination.
Our shareholders may
be held liable for claims by third parties against us to the extent of distributions received by them upon redemption of their shares.
If we are forced to enter
into an insolvent liquidation, any distributions received by shareholders could be viewed as an unlawful payment if it was proved that,
immediately following the date on which the distribution was made, we were unable to pay our debts as they fall due in the ordinary course
of business. As a result, a liquidator could seek to recover some or all amounts received by our shareholders. Furthermore, our directors
may be viewed as having breached their fiduciary duties to us or our creditors and/or may have acted in bad faith, thereby exposing themselves
and our company to claims, by paying public shareholders from the trust account prior to addressing the claims of creditors. We cannot
assure you that claims will not be brought against us for these reasons. We and our directors and officers who knowingly and willfully
authorized or permitted any distribution to be paid out of our share premium account while we were unable to pay our debts as they fall
due in the ordinary course of business would be guilty of an offense and may be liable for a fine of $18,292.68 and to imprisonment for
five years in the Cayman Islands.
We may not hold an
annual general meeting until after the consummation of our initial business combination, which could delay the opportunity for our shareholders
to appoint directors.
In accordance with the NYSE
corporate governance requirements, we are not required to hold an annual general meeting until no later than one year after our first
fiscal year end following our listing on the NYSE. There is no requirement under the Companies Law for us to hold annual or extraordinary
general meetings to appoint directors. Until we hold an annual general meeting, public shareholders may not be afforded the opportunity
to appoint directors and to discuss company affairs with management. Our board of directors is divided into three classes with only one
class of directors being appointed in each year and each class (except for those directors appointed prior to our first annual general
meeting) serving a three-year term. In addition, as holders of our Class A ordinary shares, our public shareholders will not have
the right to vote on the appointment of directors until after the consummation of our initial business combination.
We are not registering
the Class A ordinary shares issuable upon exercise of the warrants under the Securities Act or any state securities laws at this
time, 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 are not registering the
Class A ordinary shares issuable upon exercise of the warrants under the Securities Act or any state securities laws at this time.
However, under the terms of the warrant agreement, we have agreed that, as soon as practicable, but in no event later than 15 business
days, after the closing of our initial business combination, we will use commercially reasonable efforts to file with the SEC a registration
statement covering the registration under the Securities Act of the Class A ordinary shares issuable upon exercise of the warrants
and thereafter will use commercially reasonable efforts to cause the same to become effective within 60 business days following our initial
business combination and to maintain a current prospectus relating to the Class A ordinary shares issuable upon exercise of the warrants
until the expiration of the warrants in accordance with the provisions of the warrant agreement. We cannot assure you that we will be
able to do so if, for example, any facts or events arise which represent a fundamental change in the information set forth in the registration
statement or prospectus, the financial statements contained or incorporated by reference therein are not current or correct or the SEC
issues a stop order.
If the Class A ordinary
shares issuable upon exercise of the warrants are not registered under the Securities Act, under the terms of the warrant agreement, holders
of warrants who seek to exercise their warrants will not be permitted to do so for cash and, instead, will be required to do so on a cashless
basis in accordance with Section 3(a)(9) of the Securities Act or another exemption from registration. If holders exercise their
warrants on a cashless basis, the number of Class A ordinary shares that they will receive upon such cashless exercise will be based
on a formula subject to a maximum amount of shares equal to 0.361 Class A ordinary shares per warrant (subject to adjustment).
In no event will warrants
be exercisable for cash or on a cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise their
warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the
exercising holder, or an exemption from registration or qualification is available.
If our Class A ordinary
shares are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition
of “covered securities” under Section 18(b)(1) of the Securities Act, we may, at our option, not permit holders
of warrants who seek to exercise their warrants to do so for cash and, instead, require them to do so on a cashless basis in accordance
with Section 3(a)(9) of the Securities Act. In the event we so elect, we will not be required to file or maintain in effect
a registration statement or register or qualify the shares underlying the warrants under applicable state securities laws, and in the
event we do not so elect, we will use commercially reasonable efforts to register or qualify the shares underlying the warrants under
applicable state securities laws to the extent an exemption is not available. Exercising the warrants on a cashless basis could have the
effect of reducing the potential “upside” of the holder’s investment in our company because the warrant holder will
hold a smaller number of Class A ordinary shares upon a cashless exercise of the warrants they hold than upon a cash exercise.
In no event will we be required
to net cash settle any warrant, or issue securities (other than upon a cashless exercise as described above) or other compensation in
exchange for the warrants in the event that we are unable to register or qualify the shares underlying the warrants under the Securities
Act or applicable state securities laws. 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 will 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. There may be a circumstance
in which an exemption from registration exists for holders of our private placement warrants to exercise their warrants while a corresponding
exemption does not exist for holders of the public warrants included as part of units sold in the Public Offering. In such an instance,
our sponsor and its permitted transferees (which may include our directors and executive officers) would be able to exercise their warrants
and sell the ordinary shares underlying their warrants while holders of our public warrants would not be able to exercise their warrants
and sell the underlying ordinary shares. If and when the warrants become redeemable by us, we may exercise our redemption right even if
we are unable to register or qualify the underlying Class A ordinary shares for sale under all applicable state securities laws.
As a result, we may redeem the warrants as set forth above even if the holders are otherwise unable to exercise their warrants.
The warrants may become
exercisable and redeemable for a security other than the Class A ordinary shares, and you do not have any information regarding such
other security at this time.
In certain situations, including
if we are not the surviving entity in our initial business combination, the warrants may become exercisable for a security other than
the Class A ordinary shares. As a result, if the surviving company redeems your warrants for securities pursuant to the warrant agreement,
you may receive a security in a company about which you do not have information at this time. Pursuant to the warrant agreement, the surviving
company will be required to use commercially reasonable efforts to register the issuance of the security underlying the warrants within
20 business days of the closing of an initial business combination.
The grant of registration
rights to our initial shareholders and holders of our private placement warrants may make it more difficult to complete our initial business
combination, and the future exercise of such rights may adversely affect the market price of our Class A ordinary shares.
Our initial shareholders
and their permitted transferees can demand that we register the Class A ordinary shares into which founder shares are convertible,
holders of our private placement warrants and their permitted transferees can demand that we register the private placement warrants
and the Class A ordinary shares issuable upon exercise of the private placement warrants, and holders of warrants that may be issued
upon conversion of working capital loans may demand that we register the Class A ordinary shares issuable upon exercise of such
warrants. We will bear the cost of registering these securities. The registration and availability of such a significant number of securities
for trading in the public market may have an adverse effect on the market price of our Class A ordinary shares. In addition, the
existence of the registration rights may make our initial business combination more costly or difficult to conclude. This is because
the shareholders of the target business may increase the equity stake they seek in the combined entity or ask for more cash consideration
to offset the negative impact on the market price of our Class A ordinary shares that is expected when the ordinary shares owned
by our initial shareholders, holders of our private placement warrants or holders of our working capital loans or their respective permitted
transferees are registered.
Because we neither
are limited to evaluating a target business in a particular industry sector nor have selected any target businesses with which to pursue
our initial business combination, you will be unable to ascertain the merits or risks of any particular target business’s operations.
Our efforts to identify a
prospective initial business combination target will not be limited to a particular industry, sector or geographic region. While we may
pursue an initial business combination opportunity in any industry or sector, we intend to capitalize on the ability of our management
team to identify and acquire a business or businesses that can benefit from our management team’s established global relationships
and operating experience. Our management team has extensive experience in identifying and executing strategic investments globally and
has done so successfully in a number of sectors, on fundamentally sound but stressed businesses in the UK and Europe. Our amended and
restated memorandum and articles of association prohibits us from effectuating a business combination with another blank check company
or similar company with nominal operations. Because we have not yet selected or approached any specific target business with respect to
a business combination, there is no basis to evaluate the possible merits or risks of any particular target business’s operations,
results of operations, cash flows, liquidity, financial condition or prospects. To the extent we complete our initial business combination,
we may be affected by numerous risks inherent in the business operations with which we combine. For example, if we combine with a financially
unstable business or an entity lacking an established record of sales or earnings, we may be affected by the risks inherent in the business
and operations of a financially unstable or a development stage entity. Although our officers and directors will endeavor to evaluate
the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all of the significant
risk factors or that we will have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our control
and leave us with no ability to control or reduce the chances that those risks will adversely impact a target business. We also cannot
assure you that an investment in our units will ultimately prove to be more favorable to investors than a direct investment, if such
opportunity were available, in a business combination target. Accordingly, any shareholders who choose to remain shareholders following
the business combination could suffer a reduction in the value of their securities. Such shareholders are unlikely to have a remedy for
such reduction in value unless they are able to successfully claim that the reduction was due to the breach by our officers or directors
of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws
that the proxy solicitation or tender offer materials, as applicable, relating to the business combination contained an actionable material
misstatement or material omission.
Past performance by
our management team and their affiliates, including investments and transactions in which they have participated and businesses with which
they have been associated, may not be indicative of future performance of an investment in the Company.
Information regarding our
management team and their affiliates, including investments and transactions in which they have participated and businesses with which
they have been associated, is presented for informational purposes only. Any past experience and performance by our management team and
their affiliates and the businesses with which they have been associated, is not a guarantee that we will be able to successfully identify
a suitable candidate for our initial business combination, that we will be able to provide positive returns to our shareholders, or of
any results with respect to any initial business combination we may consummate. You should not rely on the historical experiences of our
management team and their affiliates, including investments and transactions in which they have participated and businesses with which
they have been associated, as indicative of the future performance of an investment in us or as indicative of every prior investment by
each of the members of our management team or their affiliates. The market price of our securities may be influenced by numerous factors,
many of which are beyond our control, and our shareholders may experience losses on their investment in our securities.
We may seek business
combination opportunities in industries or sectors that may be outside of our management’s areas of expertise.
We will consider a business
combination outside of our management’s areas of expertise if a business combination candidate is presented to us and we determine
that such candidate offers an attractive business combination opportunity for our company. Although our management will endeavor to evaluate
the risks inherent in any particular business combination candidate, we cannot assure you that we will adequately ascertain or assess
all of the significant risk factors. We also cannot assure you that an investment in our units will not ultimately prove to be less
favorable to investors in the Public Offering than a direct investment, if an opportunity were available, in a business combination candidate.
In the event that we elect to pursue a business combination outside of the areas of our management’s expertise, our management’s
expertise may not be directly applicable to its evaluation or operation, and the information contained in our final prospectus regarding
the areas of our management’s expertise would not be relevant to an understanding of the business that we elect to acquire. As a
result, our management may not be able to ascertain or assess adequately all of the relevant risk factors. Accordingly, any shareholders
who choose to remain shareholders following our initial business combination could suffer a reduction in the value of their shares. Such
shareholders are unlikely to have a remedy for such reduction in value.
Although we have identified
general criteria and guidelines that we believe are important in evaluating prospective target businesses, we may enter into our initial
business combination with a target that does not meet such criteria and guidelines, and as a result, the target business with which we
enter into our initial business combination may not have attributes entirely consistent with our general criteria and guidelines.
Although we have identified
general criteria and guidelines for evaluating prospective target businesses, it is possible that a target business with which we enter
into our initial business combination will not have all of these positive attributes. If we complete our initial business combination
with a target that does not meet some or all of these guidelines, such combination may not be as successful as a combination with a business
that does meet all of our general criteria and guidelines. In addition, if we announce a prospective business combination with a target
that does not meet our general criteria and guidelines, a greater number of shareholders may exercise their redemption rights, which may
make it difficult for us to meet any closing condition with a target business that requires us to have a minimum net worth or a certain
amount of cash. In addition, if shareholder approval of the transaction is required by law, or we decide to obtain shareholder approval
for business or other reasons, it may be more difficult for us to attain shareholder approval of our initial business combination if the
target business does not meet our general criteria and guidelines. If we are unable to complete our initial business combination, our
public shareholders may only receive their pro rata portion of the funds in the trust account that are available for distribution
to public shareholders, and our warrants will expire worthless.
We are not required
to obtain an opinion from an independent investment banking firm or from a valuation or appraisal firm, and consequently, you may have
no assurance from an independent source that the price we pay in our initial business combination is fair to our company from a financial
point of view.
Unless we complete our initial
business combination with an affiliated entity or our board of directors cannot independently determine the fair market value of the target
business or businesses (including with the assistance of financial advisors), we are not required to obtain an opinion from an independent
investment banking firm or from a valuation or appraisal firm that the price we are paying 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 proxy materials
or tender offer documents, as applicable, related to our initial business combination.
We may issue additional
Class A ordinary shares or preference shares to complete our initial business combination or under an employee incentive plan after
completion of our initial business combination. We may also issue Class A ordinary shares upon the conversion of the founder shares
at a ratio greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions contained
therein. Any such issuances would dilute the interest of our shareholders and likely present other risks.
We may issue a substantial
number of additional Class A ordinary shares or preference shares to complete our initial business combination or under an employee
incentive plan after completion of our initial business combination. We may also issue Class A ordinary shares in connection with
the redemption of our warrants or Class A ordinary shares upon conversion of the Class B ordinary shares at a ratio greater
than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions as set forth therein. However,
our amended and restated memorandum and articles of association provide, among other things, that prior to our initial business combination,
we may not issue additional shares that would entitle the holders thereof to (i) receive funds from the trust account or (ii) vote
as a class with our public shares on any initial business combination. These provisions of our amended and restated memorandum and articles
of association, like all provisions of our amended and restated memorandum and articles of association, may be amended with a shareholder
vote. The issuance of additional ordinary or preference shares:
• may significantly
dilute the equity interest of investors in the Public Offering;
•
may subordinate the rights of holders of Class A ordinary shares if preference shares are issued with rights senior to those afforded
our Class A ordinary shares;
•
could cause a change in control if a substantial number of Class A ordinary shares are issued, which may affect, among other things,
our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers
and directors; and
•
may adversely affect prevailing market prices for our units, Class A ordinary shares and/or warrants.
Unlike
some other similarly structured special purpose acquisition companies, our initial shareholders will receive additional Class A ordinary
shares if we issue certain shares to consummate an initial business combination.
The founder shares will automatically
convert into Class A ordinary shares at the time of the consummation of our initial business combination on a one-for-one basis,
subject to adjustment for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like, and subject to
further adjustment as provided herein. In the case that additional Class A ordinary shares or equity-linked securities are issued
or deemed issued in connection with our initial business combination, the number of Class A ordinary shares issuable upon conversion
of all founder shares will equal, in the aggregate, 20% of the total number of Class A ordinary shares outstanding after such conversion
(after giving effect to any redemptions of Class A ordinary shares by public shareholders), including the total number of Class A
ordinary shares issued, or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed
issued, by the Company in connection with or in relation to the consummation of the initial business combination, excluding any Class A
ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, or to be issued,
to any seller in the initial business combination and any private placement warrants issued to our sponsor, officers or directors upon
conversion of working capital loans; provided that such conversion of founder shares will never occur on a less than one-for-one basis.
Resources could be
expended in researching business combinations that are not completed, which could materially adversely affect subsequent attempts to locate
and acquire or merge with another business. If we are unable to complete our initial business combination, our public shareholders may
only receive their pro rata portion of the funds in the trust account that are available for distribution to public shareholders,
and our warrants will expire worthless.
We anticipate that the investigation
of each specific target business and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments
will require substantial management time and attention and substantial costs for accountants, attorneys, consultants and others. If we
decide not to complete a specific initial business combination, the costs incurred up to that point for the proposed transaction likely
would not be recoverable. Furthermore, if we reach an agreement relating to a specific target business, we may fail to complete our initial
business combination for any number of reasons including those beyond our control. Any such event will result in a loss to us of the related
costs incurred which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we
are unable to complete our initial business combination, our public shareholders may only receive their pro rata portion of the funds
in the trust account that are available for distribution to public shareholders, and our warrants will expire worthless.
We may be a passive
foreign investment company, or “PFIC,” which could result in adverse United States federal income tax consequences to U.S.
investors.
If we are a PFIC for any
taxable year (or portion thereof) that is included in the holding period of a U.S. Holder of our Class A ordinary shares or warrants,
the U.S. Holder may be subject to adverse U.S. federal income tax consequences and may be subject to additional reporting requirements.
Our PFIC status for our current and subsequent taxable years may depend on whether we qualify for the PFIC start-up exception. Depending
on the particular circumstances the application of the start-up exception may be subject to uncertainty, and there cannot be any assurance
that we will qualify for the start-up exception. Accordingly, there can be no assurances with respect to our status as a PFIC for our
current taxable year or any subsequent taxable year (and, in the case of the startup exception, potentially not until after the two taxable years
following our current taxable year). However, our actual PFIC status for any taxable year will not be determinable until after the end
of such taxable year. Moreover, if we determine we are a PFIC for any taxable year, upon request, we will endeavor to provide to a U.S.
Holder such information as the Internal Revenue Service (“IRS”) may require, including a PFIC annual information statement,
in order to enable the U.S. Holder to make and maintain a “qualified electing fund” election, but there can be no assurance
that we will timely provide such required information, and such election would be unavailable with respect to our warrants in all cases.
We urge U.S. investors to consult their own tax advisors regarding the possible application of the PFIC rules.
We may reincorporate
in another jurisdiction in connection with our initial business combination and such reincorporation may result in taxes imposed on shareholders.
We may, in connection with
our initial business combination and subject to requisite shareholder approval by special resolution under the Companies Law, reincorporate
in the jurisdiction in which the target company or business is located or in another jurisdiction. The transaction may require a shareholder
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.
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.
We are dependent upon
our officers and directors and their loss could adversely affect our ability to operate.
Our operations are dependent
upon a relatively small group of individuals and, in particular, our officers and directors and the members of our advisory board. We
believe that our success depends on the continued service of our officers, directors and members of our advisory board, at least until
we have completed our initial business combination. In addition, our officers and directors are not required to commit any specified amount
of time to our affairs and, accordingly, will have conflicts of interest in allocating their time among various business activities, including
identifying potential business combinations and monitoring the related due diligence. We do not have an employment agreement with, or
key-man insurance on the life of, any of our directors or officers. The unexpected loss of the services of one or more of our directors
or officers could have a detrimental effect on us.
Our ability to successfully
effect our initial business combination and to be successful thereafter will be dependent upon the efforts of our key personnel, some
of whom may join us following our initial business combination. The loss of key personnel could negatively impact the operations and profitability
of our post-combination business.
Our ability to successfully
effect our initial business combination is dependent upon the efforts of our key personnel. However, the role of our key personnel in
the target business cannot presently be ascertained. Although some of our key personnel may remain with the target business in senior
management or advisory positions following our initial business combination, it is likely that some or all of the management of the target
business will remain in place. While we intend to closely scrutinize any individuals we engage after our initial business combination,
we cannot assure you that our assessment of these individuals will prove to be correct. These individuals may be unfamiliar with the
requirements of operating a company regulated by the SEC, which could cause us to have to expend time and resources helping them become
familiar with such requirements.
Our key personnel may
negotiate employment or consulting agreements with a target business in connection with a particular business combination, and a particular
business combination may be conditioned on the retention or resignation of such key personnel. These agreements may provide for them to
receive compensation following our initial business combination and as a result, may cause them to have conflicts of interest in determining
whether a particular business combination is the most advantageous.
Our key personnel may be
able to remain with our company after the completion of our initial business combination only if they are able to negotiate employment
or consulting agreements in connection with the business combination. Such negotiations would take place simultaneously with the negotiation
of the business combination and could provide for such individuals to receive compensation in the form of cash payments and/or our securities
for services they would render to us after the completion of the business combination. Such negotiations also could make such key personnel’s
retention or resignation a condition to any such agreement. The personal and financial interests of such individuals may influence their
motivation in identifying and selecting a target business, subject to their fiduciary duties under Cayman Islands law.
We may have a limited
ability to assess the management of a prospective target business and, as a result, may effect our initial business combination with a
target business whose management may not have the skills, qualifications or abilities to manage a public company.
When evaluating the desirability
of effecting our initial business combination with a prospective target business, our ability to assess the target business’s management
may be limited due to a lack of time, resources or information. Our assessment of the capabilities of the target business’s management,
therefore, may prove to be incorrect and such management may lack the skills, qualifications or abilities we suspected. Should the target
business’s management not possess the skills, qualifications or abilities necessary to manage a public company, the operations and
profitability of the post-combination business may be negatively impacted. Accordingly, any shareholders who choose to remain shareholders
following the business combination could suffer a reduction in the value of their shares. Such shareholders are unlikely to have a remedy
for such reduction in value unless they are able to successfully claim that the reduction was due to the breach by our officers or directors
of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws
that the proxy solicitation or tender offer materials, as applicable, relating to the business combination contained an actionable material
misstatement or material omission.
The officers and directors
of an acquisition candidate may resign upon completion of our initial business combination. The loss of a business combination target’s
key personnel could negatively impact the operations and profitability of our post-combination business.
The role of an acquisition
candidate’s key personnel upon the completion of our initial business combination cannot be ascertained at this time. Although we
contemplate that certain members of an acquisition candidate’s management team will remain associated with the acquisition candidate
following our initial business combination, it is possible that members of the management of an acquisition candidate will not wish to
remain in place, which could negatively impact the operations and profitability of our post-combination business.
Our officers and directors
will allocate their time to other businesses thereby causing conflicts of interest in their determination as to how much time to devote
to our affairs. This conflict of interest could have a negative impact on our ability to complete our initial business combination.
Our officers and directors
are not required to, and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating their
time between our operations and our search for a business combination and their other businesses. We do not intend to have any full-time
employees prior to the completion of our initial business combination. Each of our officers is engaged in other business endeavors for
which he may be entitled to substantial compensation, and our officers are not obligated to contribute any specific number of hours per
week to our affairs. Our independent directors also serve as officers and board members for other entities. If our officers’ and
directors’ other business affairs require them to devote substantial amounts of time to such affairs in excess of their current
commitment levels, it could limit their ability to devote time to our affairs which may have a negative impact on our ability to complete
our initial business combination.
Our officers and directors
presently have, and any of them in the future may have additional, fiduciary or contractual obligations to other entities and, accordingly,
may have conflicts of interest in determining to which entity a particular business opportunity should be presented.
Each of our officers and
directors presently has, and any of them in the future may have, additional fiduciary or contractual obligations to other entities pursuant
to which such officer or director is or will be required to present a business combination opportunity to such entity. Accordingly, they
may have conflicts of interest in determining to which entity a particular business opportunity should be presented. These conflicts may
not be resolved in our favor and a potential target business may be presented to another entity prior to its presentation to us, subject
to their fiduciary duties under Cayman Islands law. Our amended and restated memorandum and articles of association provide that we renounce
our interest in any corporate opportunity offered to any director or officer.
In addition, our sponsor
and our officers and directors pursue other business or investment ventures during the period in which we are seeking an initial business
combination. Any such companies, businesses or investments may present additional conflicts of interest in pursuing an initial business
combination. However, the members of our management team have agreed not to participate in the formation of, or become an officer or director
of, any other special purpose acquisition company with a class of securities registered under the Exchange Act, until we have entered
into a definitive agreement regarding our initial business combination or we have failed to complete our initial business combination
within 24 months after the closing of the Public Offering. We do not believe that any such potential conflicts would materially affect
our ability to complete our initial business combination.
Our officers, directors,
security holders and their respective affiliates may have competitive pecuniary interests that conflict with our interests.
We have not adopted a policy
that expressly prohibits our directors, officers, security holders or affiliates from having a direct or indirect pecuniary or financial
interest in any investment to be acquired or disposed of by us or in any transaction to which we are a party or have an interest. In fact,
we may enter into a business combination with a target business that is affiliated with our sponsor, our directors or officers, although
we do not intend to do so. We do not have a policy that expressly prohibits any such persons from engaging for their own account in business
activities of the types conducted by us. Accordingly, such persons or entities may have a conflict between their interests and ours.
The personal and financial
interests of our directors and officers may influence their motivation in timely identifying and selecting a target business and completing
a business combination. Consequently, our directors’ and officers’ discretion in identifying and selecting a suitable target
business may result in a conflict of interest when determining whether the terms, conditions and timing of a particular business combination
are appropriate and in our shareholders’ best interest. If this were the case, it would be a breach of their fiduciary duties to
us as a matter of Cayman Islands law and we or our shareholders might have a claim against such individuals for infringing on our shareholders’
rights. However, we might not ultimately be successful in any claim we may make against them for such reason.
We may engage in a
business combination with one or more target businesses that have relationships with entities that may be affiliated with our sponsor,
officers, directors or existing holders which may raise potential conflicts of interest.
In light of the involvement
of our sponsor, officers and directors with other entities, we may decide to acquire one or more businesses affiliated with our sponsor,
officers, directors or existing holders. Our directors also serve as officers and board members for other entities. Such entities may
compete with us for business combination opportunities. Our sponsor, officers and directors are not currently aware of any specific opportunities
for us to complete our initial business combination with any entities with which they are affiliated, and there have been no substantive
discussions concerning a business combination with any such entity or entities. Although we will not be specifically focusing on, or targeting,
any transaction with any affiliated entities, we would pursue such a transaction if we determined that such affiliated entity met our
criteria for a business combination and such transaction was approved by a majority of our independent and disinterested directors. Despite
our agreement to obtain an opinion from an independent investment banking firm that is a member of FINRA or a valuation or appraisal firm
regarding the fairness to our company from a financial point of view of a business combination with one or more domestic or international
businesses affiliated with our sponsor, officers, directors or existing holders, potential conflicts of interest still may exist and,
as a result, the terms of the business combination may not be as advantageous to our public shareholders as they would be absent any conflicts
of interest.
We may only be able
to complete one business combination with the proceeds of the initial public offering and the sale of the private placement warrants,
which will cause us to be solely dependent on a single business which may have a limited number of products or services. This lack of
diversification may negatively impact our operations and profitability.
Approximately $305 million
of the net proceeds of the initial public offering and certain of the proceeds of the private placement of warrants were placed in the
Trust Account (including $10.6 million of deferred underwriting commissions).
We may effectuate our initial
business combination with a single target business or multiple target businesses simultaneously or within a short period of time. However,
we may not be able to effectuate our initial business combination with more than one target business because of various factors, including
the existence of complex accounting issues and the requirement that we prepare and file pro forma financial statements with the SEC
that present operating results and the financial condition of several target businesses as if they had been operated on a combined basis.
By completing our initial business combination with only a single entity, our lack of diversification may subject us to numerous economic,
competitive and regulatory developments. Further, we would not be able to diversify our operations or benefit from the possible spreading
of risks or offsetting of losses, unlike other entities which may have the resources to complete several business combinations in different
industries or different areas of a single industry. Accordingly, the prospects for our success may be:
• solely dependent upon
the performance of a single business, property or asset; or
•
dependent upon the development or market acceptance of a single or limited number of products, processes or services.
This lack of diversification
may subject us to numerous economic, competitive and regulatory risks, any or all of which may have a substantial adverse impact upon
the particular industry in which we may operate subsequent to our initial business combination.
We may attempt to simultaneously complete business combinations
with multiple prospective targets, which may hinder our ability to complete our initial business combination and give rise to increased
costs and risks that could negatively impact our operations and profitability.
If we determine to simultaneously
acquire several businesses that are owned by different sellers, we will need for each of such sellers to agree that our purchase of its
business is contingent on the simultaneous closings of the other business combinations, which may make it more difficult for us, and delay
our ability, to complete our initial business combination. With multiple business combinations, we could also face additional risks, including
additional burdens and costs with respect to possible multiple negotiations and due diligence investigations (if there are multiple sellers)
and the additional risks associated with the subsequent assimilation of the operations and services or products of the acquired companies
in a single operating business. If we are unable to adequately address these risks, it could negatively impact our profitability and results
of operations.
We may attempt to complete
our initial business combination with a private company about which little information is available, which may result in a business combination
with a company that is not as profitable as we suspected, if at all.
In pursuing our business
combination strategy, we may seek to effectuate our initial business combination with a privately held company. Very little public information
generally exists about private companies, and we could be required to make our decision on whether to pursue a potential initial business
combination on the basis of limited information, which may result in a business combination with a company that is not as profitable as
we suspected, if at all.
Our management may
not be able to maintain control of a target business after our initial business combination. We cannot provide assurance that, upon loss
of control of a target business, new management will possess the skills, qualifications or abilities necessary to profitably operate such
business.
We may structure our initial
business combination so that the post-transaction company in which our public shareholders own shares will own less than 100% of the equity
interests or assets of a target business, but we will only complete such business combination if the post-transaction company owns or
acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient
for us not to be required to register as an investment company under the Investment Company Act. We will not consider any transaction
that does not meet such criteria. Even if the post-transaction company owns 50% or more of the voting securities of the target, our shareholders
prior to the business combination may collectively own a minority interest in the post-business combination company, depending on valuations
ascribed to the target and us in the business combination. For example, we could pursue a transaction in which we issue a substantial
number of new Class A ordinary shares in exchange for all of the outstanding capital stock, shares or other equity securities of
a target. In this case, we would acquire a 100% interest in the target. However, as a result of the issuance of a substantial number of
new Class A ordinary shares, our shareholders immediately prior to such transaction could own less than a majority of our issued
and outstanding Class A ordinary shares subsequent to such transaction. In addition, other minority shareholders may subsequently
combine their holdings resulting in a single person or group obtaining a larger share of the company’s shares than we initially
acquired. Accordingly, this may make it more likely that our management will not be able to maintain control of the target business. 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 our initial business
combination with which a substantial majority of our shareholders do not agree.
Our amended and restated
memorandum and articles of association provide that in no event will we redeem our public shares in an amount that would cause our net
tangible assets to be less than $5,000,001. In addition, our proposed initial business combination may impose a minimum cash requirement
for (i) cash consideration to be paid to the target or its owners, (ii) cash for working capital or other general corporate
purposes or (iii) the retention of cash to satisfy other conditions. As a result, we may be able to complete our initial business
combination even though a substantial majority of our public shareholders do not agree with the transaction and have redeemed their shares
or, if we seek shareholder approval of our initial business combination and do not conduct redemptions in connection with our initial
business combination pursuant to the tender offer rules, have entered into privately negotiated agreements to sell their shares to our
sponsor, officers, directors, advisors or any of their affiliates. In the event the aggregate cash consideration we would be required
to pay for all Class A ordinary shares that are validly submitted for redemption plus any amount required to satisfy cash conditions
pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the
business combination or redeem any shares, all Class A ordinary shares submitted for redemption will be returned to the holders thereof,
and we instead may search for an alternate business combination.
In order to effectuate
an initial business combination, special purpose acquisition companies have, in the recent past, amended various provisions of their charters
and other governing instruments, including their warrant agreements. We cannot assure you that we will not seek to amend our amended and
restated memorandum and articles of association or governing instruments in a manner that will make it easier for us to complete our initial
business combination and that our shareholders may not support.
In order to effectuate a
business combination, special purpose acquisition companies have, in the recent past, amended various provisions of their charters and
governing instruments, including their warrant agreements. For example, special purpose acquisition companies have amended the definition
of business combination, increased redemption thresholds and extended the time to consummate an initial business combination and, with
respect to their warrants, amended their warrant agreements to require the warrants to be exchanged for cash and/or other securities.
Amending our amended and restated memorandum and articles of association requires a special resolution under Cayman Islands law, which
requires the affirmative vote of a majority of at least two-thirds of the shareholders who attend and vote at a general meeting of the
company, and amending our warrant agreement will require a vote of holders of at least 50% of the public warrants and, solely with respect
to any amendment to the terms of the private placement warrants or any provision of the warrant agreement with respect to the private
placement warrants, 50% of the then outstanding private placement warrants. In addition, our amended and restated memorandum and articles
of association requires us to provide our public shareholders with the opportunity to redeem their public shares for cash if we propose
an amendment to our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation
to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete an
initial business combination within 24 months of the closing of the Public Offering or (B) with respect to any other provisions
relating to shareholders’ rights or pre-initial business combination activity. To the extent any of such amendments would be deemed
to fundamentally change the nature of the securities offered through this registration statement, we would register, or seek an exemption
from registration for, the affected securities. We cannot assure you that we will not seek to amend our charter or governing instruments
or extend the time to consummate an initial business combination in order to effectuate our initial business combination.
The provisions of our
amended and restated memorandum and articles of association that relate to our pre-business combination activity (and corresponding provisions
of the agreement governing the release of funds from our trust account) may be amended with the approval of holders of not less than two-thirds
of our ordinary shares who attend and vote at a general meeting of the company (or 65% of our ordinary shares with respect to amendments
to the trust agreement governing the release of funds from our trust account), which is a lower amendment threshold than that of some
other special purpose acquisition companies. It may be easier for us, therefore, to amend our amended and restated memorandum and articles
of association to facilitate the completion of an initial business combination that some of our shareholders may not support.
Our amended and restated
memorandum and articles of association provide that any of its provisions related to pre-business combination activity (including the
requirement to deposit proceeds of the Public Offering and the private placement of warrants into the trust account and not release such
amounts except in specified circumstances, and to provide redemption rights to public shareholders as described herein) may be amended
if approved by special resolution, under Cayman Islands law which requires the affirmative vote of a majority of at least two-thirds of
the shareholders who attend and vote at a general meeting of the company, and corresponding provisions of the trust agreement governing
the release of funds from our trust account may be amended if approved by holders of 65% of our ordinary shares. Our initial shareholders,
who will collectively beneficially own 20% of our ordinary shares upon the closing of the Public Offering (assuming they do not purchase
any units in the Public Offering), will participate in any vote to amend our amended and restated memorandum and articles of association
and/or trust agreement and will have the discretion to vote in any manner they choose. As a result, we may be able to amend the provisions
of our amended and restated memorandum and articles of association which govern our pre-business combination behavior more easily than
some other special purpose acquisition companies, and this may increase our ability to complete a business combination with which you
do not agree. Our shareholders may pursue remedies against us for any breach of our amended and restated memorandum and articles of association.
Our sponsor, officers, directors
and director nominees have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and
restated memorandum and articles of association (A) to modify the substance or timing of our obligation to allow redemption in connection
with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination by
September 15, 2022 or (B) with respect to any other provisions relating to shareholders’ rights or pre-initial business
combination activity, unless we provide our public shareholders with the opportunity to redeem their Class A ordinary shares upon
approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account,
including interest (which interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares.
Our shareholders are not parties to, or third-party beneficiaries of, these agreements and, as a result, will not have the ability to
pursue remedies against our sponsor, officers, directors or director nominees for any breach of these agreements. As a result, in the
event of a breach, our shareholders would need to pursue a shareholder derivative action, subject to applicable law.
Our letter agreement
with our sponsor, officers and directors may be amended without shareholder approval.
Our letter agreement with
our sponsor, officers and directors contain provisions relating to transfer restrictions of our founder shares and private placement warrants,
indemnification of the trust account, waiver of redemption rights and participation in liquidating distributions from the trust account.
The letter agreement may be amended without shareholder approval (although releasing the parties from the restriction not to transfer
the founder shares for 185 days following the date of our final prospectus will require the prior written consent of the underwriters).
While we do not expect our board to approve any amendment to the letter agreement prior to our initial business combination, it may be
possible that our board, in exercising its business judgment and subject to its fiduciary duties, chooses to approve one or more amendments
to the letter agreement. Any such amendments to the letter agreement would not require approval from our shareholders and may have an
adverse effect on the value of an investment in our securities.
We may be unable to
obtain additional financing to complete our initial business combination or to fund the operations and growth of a target business, which
could compel us to restructure or abandon a particular business combination.
We have not selected any
specific business combination target but intend to target businesses with enterprise values that are greater than we could acquire with
the net proceeds of the Public Offering and the sale of the private placement warrants. As a result, if the cash portion of the purchase
price exceeds the amount available from the trust account, net of amounts needed to satisfy any redemption by public shareholders, we
may be required to seek additional financing to complete such proposed initial business combination. We cannot assure you that such financing
will be available on acceptable terms, if at all. To the extent that additional financing proves to be unavailable when needed to complete
our initial business combination, we would be compelled to either restructure the transaction or abandon that particular business combination
and seek an alternative target business candidate. Further, we may be required to obtain additional financing in connection with the closing
of our initial business combination for general corporate purposes, including for maintenance or expansion of operations of the post-transaction
businesses, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, or to fund
the purchase of other companies. If we are unable to complete our initial business combination, our public shareholders may only receive
their pro rata portion of the funds in the trust account that are available for distribution to public shareholders, and our warrants
will expire worthless. In addition, even if we do not need additional financing to complete our initial business combination, we may require
such financing to fund the operations or growth of the target business. The failure to secure additional financing could have a material
adverse effect on the continued development or growth of the target business. None of our officers, directors or shareholders is required
to provide any financing to us in connection with or after our initial business combination.
Our initial shareholders
control a substantial interest in us and thus may exert a substantial influence on actions requiring a shareholder vote, potentially in
a manner that you do not support.
Our initial shareholders
owned 20% of our issued and outstanding ordinary shares upon the closing of the Public Offering. Accordingly, they may exert a substantial
influence on actions requiring a shareholder vote, potentially in a manner that you do not support, including amendments to our amended
and restated memorandum and articles of association. If our initial shareholders purchase any additional Class A ordinary shares
in the aftermarket or in privately negotiated transactions, this would increase their control. Neither our initial shareholders nor, to
our knowledge, any of our officers or directors have any current intention to purchase additional securities, other than as disclosed
in our final prospectus. Factors that would be considered in making such additional purchases would include consideration of the current
trading price of our Class A ordinary shares. In addition, our board of directors, whose members were appointed by our sponsor, is
and will be divided into three classes, each of which will generally serve for a term of three years with only one class of directors
being appointed in each year. We may not hold an annual general meeting to appoint new directors prior to the completion of our initial
business combination, in which case all of the current directors will continue in office until at least the completion of the business
combination. If there is an annual general meeting, as a consequence of our “staggered” board of directors, only a minority
of the board of directors will be considered for appointment and our initial shareholders, because of their ownership position, will have
considerable influence regarding the outcome. Accordingly, our initial shareholders will continue to exert control at least until the
completion of our initial business combination.
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. As a result, the exercise price of your warrants could be increased, the exercise period could
be shortened and the number of Class A ordinary shares purchasable upon exercise of a warrant could be decreased, all without your
approval.
Our warrants will be issued
in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. The
warrant agreement provides that the terms of the warrants may be amended without the consent of any holder 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 of public warrants 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, convert the warrants into cash or shares, shorten the exercise period or decrease the number of Class A ordinary
shares purchasable upon exercise of a warrant.
A provision of our
warrant agreement may make it more difficult for us to consummate an initial business combination.
If (i) we issue additional
Class A 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 $9.20 per Class A ordinary share, (ii) the aggregate gross proceeds from
such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of our initial business
combination on the date of the consummation of our initial business combination (net of redemptions), and (iii) the Market Value
of our Class A ordinary shares is below $9.20 per share, then the exercise price of the warrants will be adjusted (to the nearest
cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $10.00 and $18.00 per share redemption
trigger prices will be adjusted (to the nearest cent) to be equal to 100% and 180% of the higher of the Market Value and the Newly Issued
Price, respectively.
We may redeem your
unexpired warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless.
We have the ability to redeem
outstanding warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided
that the closing price of our Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for adjustments to the number
of shares issuable upon exercise or the exercise price of a warrant for any 20 trading days within a 30-trading day period ending
on the third trading day prior to the date on which we send proper notice of such redemption to the warrants holders and provided certain
other conditions are met. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable
to register or qualify the underlying securities for sale under all applicable state securities laws. As a result, we may redeem the warrants
as set forth above even if the holders are otherwise unable to exercise the warrants. Redemption of the outstanding warrants could force
you to (i) exercise your warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so,
(ii) sell your warrants at the then-current market price when you might otherwise wish to hold your warrants or (iii) accept
the nominal redemption price which, at the time the outstanding warrants are called for redemption, is likely to be substantially less
than the market value of your warrants.
In addition, we have the
ability to redeem the outstanding public warrants at any time after they become exercisable and prior to their expiration, at a price
of $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that the closing
price of our Class A ordinary shares equals or exceeds $10.00 per share (as adjusted for adjustments to the number of shares issuable
upon exercise or the exercise price of a warrant for any 20 trading days within a 30 trading-day period ending on the third trading day
prior to proper notice of such redemption and provided that certain other conditions are met, including that holders
will be able to exercise their warrants prior to redemption for a number of Class A ordinary shares determined based on the redemption
date and the fair market value of our Class A ordinary shares. The value received upon exercise of the warrants (1) may be less
than the value the holders would have received if they had exercised their warrants at a later time where the underlying share price is
higher and (2) may not compensate the holders for the value of the warrants, including because the number of ordinary shares received
is capped at 0.361 Class A ordinary shares per warrant (subject to adjustment) irrespective of the remaining life of the warrants.
Our warrants may have
an adverse effect on the market price of our Class A ordinary shares and make it more difficult to effectuate our initial business
combination.
We issued warrants to purchase
15,265,150 of our Class A ordinary shares as part of our initial public offering and, simultaneously with the closing of the initial
public offering, we issued 8,106,060 private placement warrants, each exercisable to purchase one Class A ordinary share at $11.50
per share. In addition, if our sponsor or an affiliate of our sponsor or certain of our officers and directors makes any working capital
loans, such lender may convert those loans into up to an additional 1,500,000 private placement warrants, at the price of $1.50 per warrant.
To the extent we issue ordinary shares to effectuate a business transaction, the potential for the issuance of a substantial number of
additional Class A ordinary shares upon exercise of these warrants could make us a less attractive acquisition vehicle to a target
business. Such warrants, when exercised, will increase the number of issued and outstanding Class A ordinary shares and reduce the
value of the Class A ordinary shares issued to complete the business transaction. Therefore, our warrants may make it more difficult
to effectuate a business transaction or increase the cost of acquiring the target business.
To the extent we issue ordinary
shares to effectuate a business transaction, the potential for the issuance of a substantial number of additional Class A ordinary
shares upon exercise of these warrants could make us a less attractive acquisition vehicle to a target business. Such warrants, when exercised,
will increase the number of issued and outstanding Class A ordinary shares and reduce the value of the Class A ordinary shares
issued to complete the business transaction. Therefore, our warrants may make it more difficult to effectuate a business transaction or
increase the cost of acquiring the target business.
Because we must furnish
our shareholders with target business financial statements, we may lose the ability to complete an otherwise advantageous initial business
combination with some prospective target businesses.
The federal proxy rules require
that the proxy statement with respect to the vote on an initial business combination include historical and pro forma financial statement
disclosure. We will include the same financial statement disclosure in connection with our tender offer documents, whether or not they
are required under the tender offer rules. These financial statements may be required to be prepared in accordance with, or be reconciled
to, accounting principles generally accepted in the United States of America (“GAAP”) or international financial reporting
standards as issued by the International Accounting Standards Board (“IFRS”) depending on the circumstances and the historical
financial statements may be required to be audited in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (“PCAOB”). These financial statement requirements may limit the pool of potential target businesses we may acquire
because some targets may be unable to provide such financial statements in time for us to disclose such statements in accordance with
federal proxy rules and complete our initial business combination within the prescribed time frame.
We are an emerging
growth company and a smaller reporting company within the meaning of the Securities Act, and if we take advantage of certain exemptions
from disclosure requirements available to emerging growth companies or smaller reporting companies, this could make our securities less
attractive to investors and may make it more difficult to compare our performance with other public companies.
We are an “emerging
growth company” within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions
from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but
not limited to, not being required to comply with the auditor internal controls attestation requirements of Section 404 of the Sarbanes-Oxley
Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from
the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments
not previously approved. As a result, our shareholders may not have access to certain information they may deem important. We could be
an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier, including if
the market value of our Class A ordinary shares held by non-affiliates exceeds $700 million as of any June 30 before that
time, in which case we would no longer be an emerging growth company as of the following December 31. We cannot predict whether investors
will find our securities less attractive because we will rely on these exemptions. If some investors find our securities less attractive
as a result of our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would be, there
may be a less active trading market for our securities and the trading prices of our securities may be more volatile.
Further, Section 102(b)(1) of
the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until
private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class
of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS
Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging
growth companies but any such an election to opt out is irrevocable. We have elected not to opt out of such extended transition period
which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an
emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may
make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging growth
company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting
standards used.
Additionally, we are a “smaller
reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage
of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements.
We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our ordinary shares
held by non-affiliates equals or exceeds $250 million as of the prior June 30th, and (2) our annual revenues equaled
or exceeded $100 million during such completed fiscal year and the market value of our ordinary shares held by non-affiliates equals
or exceeds $700 million as of the prior June 30th. To the extent we take advantage of such reduced disclosure obligations, it
may also make comparison of our financial statements with other public companies difficult or impossible.
Compliance obligations
under the Sarbanes-Oxley Act may make it more difficult for us to effectuate our initial business combination, require substantial financial
and management resources, and increase the time and costs of completing an initial business combination.
Section 404 of the Sarbanes-Oxley
Act requires that we evaluate and report on our system of internal controls beginning with our Annual Report on Form 10-K for the
year ending December 31, 2021. Only in the event that we are deemed to be a large accelerated filer or an accelerated filer, and
no longer qualify as an emerging growth company, will we be required to comply with the independent registered public accounting firm
attestation requirement on our internal control over financial reporting. Further, for as long as we remain an emerging growth company,
we will not be required to comply with the independent registered public accounting firm attestation requirement on our internal control
over financial reporting. The fact that we are a blank check company makes compliance with the requirements of the Sarbanes-Oxley Act
particularly burdensome on us as compared to other public companies because a target business with which we seek to complete our initial
business combination may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of its internal controls.
The development of the internal controls of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and
costs necessary to complete any such business combination.
Because we are incorporated
under the laws of the Cayman Islands, you may face difficulties in protecting your interests, and your ability to protect your rights
through the U.S. Federal courts may be limited.
We are an exempted company
incorporated under the laws of the Cayman Islands. As a result, it may be difficult for investors to effect service of process within
the United States upon our directors or officers, or enforce judgments obtained in the United States courts against our directors or officers.
Our corporate affairs will
be governed by our amended and restated memorandum and articles of association, the Companies Law (as the same may be supplemented or
amended from time to time) and the common law of the Cayman Islands. We will also be subject to the federal securities laws of the United
States. The rights of shareholders to take action against the directors, actions by minority shareholders and the fiduciary responsibilities
of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law
of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from English common
law, the decisions of whose courts are of persuasive authority, but are not binding on a court in the Cayman Islands. The rights of our
shareholders and the fiduciary responsibilities of our directors under Cayman Islands law are different from what they would be under
statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands has a different body of securities
laws as compared to the United States, and certain states, such as Delaware, may have more fully developed and judicially interpreted
bodies of corporate law. In addition, Cayman Islands companies may not have standing to initiate a shareholders’ derivative action
in a Federal court of the United States.
We have been advised by Maples
and Calder, 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 contain provisions that may discourage unsolicited takeover proposals that shareholders may consider
to be in their best interests. These provisions include a staggered board of directors and the ability of the board of directors to designate
the terms of and issue new series of preference shares, which may make the removal of management more difficult and may discourage transactions
that otherwise could involve payment of a premium over prevailing market prices for our securities.
Cyber incidents or
attacks directed at us could result in information theft, data corruption, operational disruption and/or financial loss.
We depend on digital technologies,
including information systems, infrastructure and cloud applications and services, including those of third parties with which we may
deal. Sophisticated and deliberate attacks on, or security breaches in, our systems or infrastructure, or the systems or infrastructure
of third parties or the cloud, could lead to corruption or misappropriation of our assets, proprietary information and sensitive or confidential
data. As an early stage company without significant investments in data security protection, we may not be sufficiently protected against
such occurrences. We may not have sufficient resources to adequately protect against, or to investigate and remediate any vulnerability
to, cyber incidents. It is possible that any of these occurrences, or a combination of them, could have adverse consequences on our business
and lead to financial loss.
If we effect our initial
business combination with a company located outside of the United States, we would be subject to a variety of additional risks that may
adversely affect us.
If we pursue a target company
with operations or opportunities outside of the United States for our initial business combination, we may face additional burdens in
connection with investigating, agreeing to and completing such initial business combination, and if we effect such initial business combination,
we would be subject to a variety of additional risks that may negatively impact our operations.
If we pursue a target a company
with operations or opportunities outside of the United States for our initial business combination, we would be subject to risks associated
with cross-border business combinations, including in connection with investigating, agreeing to and completing our initial business combination,
conducting due diligence in a foreign jurisdiction, having such transaction approved by any local governments, regulators or agencies
and changes in the purchase price based on fluctuations in foreign exchange rates.
If we effect our initial
business combination with such a company, we would be subject to any special considerations or risks associated with companies operating
in an international setting, including any of the following:
• costs and difficulties
inherent in managing cross-border business operations;
•
rules and regulations regarding currency redemption;
•
complex corporate withholding taxes on individuals;
•
laws governing the manner in which future business combinations may be effected;
•
exchange listing and/or delisting requirements;
•
tariffs and trade barriers;
•
regulations related to customs and import/export matters;
•
local or regional economic policies and market conditions;
•
unexpected changes in regulatory requirements;
•
challenges in managing and staffing international operations;
•
longer payment cycles;
•
tax issues, such as tax law changes and variations in tax laws as compared to the United States;
•
currency fluctuations and exchange controls;
•
rates of inflation;
•
challenges in collecting accounts receivable;
•
cultural and language differences;
•
employment regulations;
•
underdeveloped or unpredictable legal or regulatory systems;
•
corruption;
•
protection of intellectual property;
•
social unrest, crime, strikes, riots and civil disturbances;
•
epidemics and pandemics;
•
regime changes and political upheaval;
•
terrorist attacks and wars; and
•
deterioration of political relations with the United States.
We may not be able to adequately
address these additional risks. If we were unable to do so, we may be unable to complete such initial business combination, or, if we
complete such initial business combination, our operations might suffer, either of which may adversely impact our business, financial
condition and results of operations.
If our management following
our initial business combination is unfamiliar with United States securities laws, they may have to expend time and resources becoming
familiar with such laws, which could lead to various regulatory issues.
Following our initial business
combination, our management may resign from their positions as officers or directors of the company and the management of the target business
at the time of the business combination will remain in place. Management of the target business may not be familiar with United States
securities laws. If new management is unfamiliar with United States securities laws, they may have to expend time and resources becoming
familiar with such laws. This could be expensive and time-consuming and could lead to various regulatory issues which may adversely affect
our operations.
After our initial business
combination, substantially all of our assets may be located in a foreign country and substantially all of our revenue will be derived
from our operations in such country. Accordingly, our results of operations and prospects will be subject, to a significant extent, to
the economic, political and legal policies, developments and conditions in the country in which we operate.
The economic, political and
social conditions, as well as government policies, of the country in which our operations are located could affect our business. Economic
growth could be uneven, both geographically and among various sectors of the economy and such growth may not be sustained in the future.
If in the future such country’s economy experiences a downturn or grows at a slower rate than expected, there may be less demand
for spending in certain industries. A decrease in demand for spending in certain industries could materially and adversely affect our
ability to find an attractive target business with which to consummate our initial business combination and if we effect our initial business
combination, the ability of that target business to become profitable.
Exchange rate fluctuations
and currency policies may cause a target business’s ability to succeed in the international markets to be diminished.
In the event that 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 reincorporate
in another jurisdiction in connection with our initial business combination, and the laws of such jurisdiction may govern some or all
of our future material agreements and we may not be able to enforce our legal rights.
In connection with our initial
business combination, we may relocate the home jurisdiction of our business from the Cayman Islands to another jurisdiction. If we determine
to do this, the laws of such jurisdiction may govern some or all of our future material agreements. The system of laws and the enforcement
of existing laws in such jurisdiction may not be as certain in implementation and interpretation as in the Cayman Islands or the United
States. The inability to enforce or obtain a remedy under any of our future agreements could result in a significant loss of business,
business opportunities or capital.
We are subject to changing
law and regulations regarding regulatory matters, corporate governance and public disclosure that have increased both our costs and the
risk of non-compliance.
We are subject to rules and
regulations by various governing bodies, including, for example, the Securities and Exchange Commission, which are charged with the protection
of investors and the oversight of companies whose securities are publicly traded, and to new and evolving regulatory measures under applicable
law. Our efforts to comply with new and changing laws and regulations have resulted in and are likely to continue to result in, increased
general and administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance
activities.
Moreover, because these laws,
regulations and standards are subject to varying interpretations, their application in practice may evolve over time as new guidance becomes
available. This evolution may result in continuing uncertainty regarding compliance matters and additional costs necessitated by ongoing
revisions to our disclosure and governance practices. If we fail to address and comply with these regulations and any subsequent changes,
we may be subject to penalty and our business may be harmed.