References in this
report to “we,” “us” or the “Company” refer to Ion Acquisition Corp 1 Ltd. References to our
“management” or our “management team” refer to our officers and directors, and references to the “Sponsor”
refer to Ion Holdings 1, LP, a Cayman Islands exempted limited partnership. References to our “initial shareholders”
refer to the holders of our Class B ordinary shares (the “Founder Shares”).
ITEM 1A.
RISK FACTORS.
An investment in our securities
involves a high degree of risk. You should consider carefully all of the risks described below, together with the other information
contained in this Annual Report on Form 10-K, the prospectus associated with our initial public offering and the Registration
Statement, before making a decision to invest in our securities. If any of the following events occur, our business, financial
condition and operating results may be materially adversely affected. In that event, the trading price of our securities could
decline, and you could lose all or part of your investment. For risk factors related to the Business Combination, see the definitive
proxy statement/prospectus filed by the Company on February 18, 2021.
Risks Relating to Our Search for, and
Consummation of or Inability to Consummate, a Business Combination.
We are a blank check company with
no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.
We are a blank check
company incorporated under the laws of the Cayman Islands with no operating results. Because we lack an operating history, you
have no basis upon which to evaluate our ability to achieve our business objective of completing our initial business combination.
We have no plans, arrangements or understandings with any prospective target business concerning a business combination and may
be unable to complete our initial business combination. If we fail to complete our initial business combination, we will never
generate any operating revenues.
Our public shareholders may not be
afforded an opportunity to vote on our proposed initial business combination, and even if we hold a vote, holders of our Founder
Shares will participate in such vote, which means we may complete our initial business combination even though a majority of our
public shareholders do not support such a combination.
We may choose not
to hold a shareholder vote to approve our initial business combination unless the business combination would require shareholder
approval under applicable law or stock exchange listing requirements. In such case, the decision as to whether we will seek shareholder
approval of a proposed business combination or will allow shareholders to sell their shares to us in a tender offer will be made
by us, solely in our discretion, and will be based on a variety of factors, such as the timing of the transaction and whether
the terms of the transaction would otherwise require us to seek shareholder approval. Even if we seek shareholder approval, the
holders of our Founder Shares will participate in the vote on such approval. Accordingly, we may complete our initial business
combination even if holders of a majority of our ordinary shares do not approve of the business combination we complete.
Your only opportunity to effect your
investment decision regarding a potential business combination may be limited to the exercise of your right to redeem your shares
from us for cash.
At the time of your
investment in us, you will not be provided with an opportunity to evaluate the specific merits or risks of our initial business
combination. Since our board of directors may complete a business combination without seeking shareholder approval, public shareholders
may not have the right or opportunity to vote on the business combination, unless we seek such shareholder vote. Accordingly,
your only opportunity to effect your investment decision regarding our initial business combination may be limited to exercising
your redemption rights within the period of time (which will be at least 20 business days) set forth in our tender offer documents
mailed to our public shareholders in which we describe our initial business combination.
If we seek shareholder approval of
our initial business combination, our initial shareholders and management team have agreed to vote in favor of such initial business
combination, regardless of how our public shareholders vote.
Our initial shareholders
owned 20% of our issued and outstanding ordinary shares immediately following the completion of the Public Offering. Our initial
shareholders and management team also may from time to time purchase Class A ordinary shares prior to our initial business combination.
Our amended and restated memorandum and articles of association provides that, if we seek shareholder approval of an initial business
combination, such initial business combination will be approved if we receive an ordinary resolution under Cayman Islands law,
which requires the affirmative vote of a majority of the shareholders who attend and vote at a general meeting of the Company,
including the Founder Shares. As a result, in addition to our initial shareholders’ Founder Shares, we would need 7,500,001,
or 37.5%, of the 20,000,000 public shares sold in the Public Offering to be voted in favor of an initial business combination
in order to have our initial business combination approved (assuming all outstanding shares are voted). Accordingly, if we seek
shareholder approval of our initial business combination, the agreement by our initial shareholders and management team to vote
in favor of our initial business combination will increase the likelihood that we will receive an ordinary resolution, being the
requisite shareholder approval for such initial business combination.
The ability of our public shareholders
to redeem their shares for cash may make our financial condition unattractive to potential business combination targets, which
may make it difficult for us to enter into a business combination with a target.
We may seek to enter
into a business combination transaction agreement with a minimum cash requirement for (i) cash consideration to be paid to the
target or its owners, (ii) cash for working capital or other general corporate purposes or (iii) the retention of cash to satisfy
other conditions. If too many public shareholders exercise their redemption rights, we would not be able to meet such closing
condition and, as a result, would not be able to proceed with the business combination. Furthermore, in no event will we redeem
our public shares in an amount that would cause our net tangible assets to be less than $5,000,001. Consequently, if accepting
all properly submitted redemption requests would cause our net tangible assets to be less than $5,000,001 or such greater amount
necessary to satisfy a condition as described above, we would not proceed with such redemption and the related business combination
and may instead search for an alternate business combination. Prospective targets will be aware of these risks and, thus, may
be reluctant to enter into a business combination transaction with us.
The ability of our public shareholders
to exercise redemption rights with respect to a large number of our shares may not allow us to complete the most desirable business
combination or optimize our capital structure.
At the time we enter
into an agreement for our initial business combination, we will not know how many shareholders may exercise their redemption rights,
and therefore will need to structure the transaction based on our expectations as to the number of shares that will be submitted
for redemption. If our initial business combination agreement requires us to use a portion of the cash in the Trust Account to
pay the purchase price, or requires us to have a minimum amount of cash at closing, we will need to reserve a portion of the cash
in the Trust Account to meet such requirements, or arrange for third party financing. In addition, if a larger number of shares
are submitted for redemption than we initially expected, we may need to restructure the transaction to reserve a greater portion
of the cash in the Trust Account or arrange for third party financing. Raising additional third party financing may involve dilutive
equity issuances or the incurrence of indebtedness at higher than desirable levels. Furthermore, this dilution would increase
to the extent that the anti-dilution provision of the Class B ordinary shares results in the issuance of Class A ordinary shares
on a greater than one-to-one basis upon conversion of the Class B ordinary shares at the time of our initial business combination.
In addition, the amount of the deferred underwriting commissions payable to the underwriters will not be adjusted for any shares
that are redeemed in connection with an initial business combination. The per share amount we will distribute to shareholders
who properly exercise their redemption rights will not be reduced by the deferred underwriting commission and after such redemptions,
the amount held in trust will continue to reflect our obligation to pay the entire deferred underwriting commissions. The above
considerations may limit our ability to complete the most desirable business combination available to us or optimize our capital
structure.
The ability of our public shareholders
to exercise redemption rights with respect to a large number of our shares could increase the probability that our initial business
combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your shares.
If our initial business
combination agreement requires us to use a portion of the cash in the Trust Account to pay the purchase price, or requires us
to have a minimum amount of cash at closing, the probability that our initial business combination would be unsuccessful is increased.
If our initial business combination is unsuccessful, you would not receive your pro rata portion of the Trust Account until we
liquidate the Trust Account. If you are in need of immediate liquidity, you could attempt to sell your shares in the open market;
however, at such time our shares may trade at a discount to the pro rata amount per share in the Trust Account. In either situation,
you may suffer a material loss on your investment or lose the benefit of funds expected in connection with your exercise of redemption
rights until we liquidate or you are able to sell your shares in the open market.
The novel coronavirus, or COVID-19,
pandemic, including the efforts to mitigate its impact, has and may continue to have a material adverse effect on our search for
a business combination, as well as any target business with which we ultimately consummate a business combination.
The
COVID-19 pandemic, including efforts to combat it, has and may continue to adversely affect our search for a business combination.
In addition, the outbreak of COVID-19 has resulted in a widespread health crisis that has and may continue to adversely affect
the economies and financial markets worldwide. As such, the business of any potential target business with which we may consummate
a business combination could be materially and adversely affected.
In
response to the pandemic, public health authorities and local, national and international governments have implemented measures
that may directly or indirectly impact our ability to search for and acquire any target business, including measures such as voluntary
or mandatory quarantines, restrictions on travel and orders to limit the activities of non-essential workforce personnel. We may
be unable to complete a business combination if concerns relating to COVID-19 continue to restrict travel, limit the ability to
have meetings with potential investors or the target company’s personnel, vendors and services providers are unavailable
to negotiate and consummate a transaction in a timely manner.
In
addition, countries or supranational organizations in our target markets may develop and implement legislation that makes it more
difficult or impossible for entities outside such countries or target markets to acquire or otherwise invest in companies or businesses
deemed essential or otherwise vital. The extent to which the COVID-19 pandemic impacts our search for and ability to consummate
a business combination will depend on future developments, which are highly uncertain and cannot be predicted, including new information
which may emerge concerning the severity of the COVID-19 pandemic and the actions to contain it or treat its impact. If the disruptions
posed by COVID-19 pandemic continue for an extended period of time and result in protectionist sentiments and legislation in our
target markets, our ability to consummate a business combination, or the operations of a target business with which we ultimately
consummate a business combination, may be materially adversely affected. In addition, our ability to consummate a transaction
may be dependent on the ability to raise equity and debt financing, which may be impacted by the COVID-19 pandemic.The requirement
that we complete our initial business combination within 24 months after the Public Offering may give potential target businesses
leverage over us in negotiating a business combination and may limit the time we have in which to conduct due diligence on potential
business combination targets, in particular as we approach our dissolution deadline, which could undermine our ability to complete
our initial business combination on terms that would produce value for our shareholders.
Any potential target
business with which we enter into negotiations concerning a business combination will be aware that we must complete our initial
business combination within 24 months of the Public Offering. Consequently, such target business may obtain leverage over us in
negotiating a business combination, knowing that if we do not complete our initial business combination with that particular target
business, we may be unable to complete our initial business combination with any target business. This risk will increase as we
get closer to the timeframe described above. In addition, we may have limited time to conduct due diligence and may enter into
our initial business combination on terms that we would have rejected upon a more comprehensive investigation.
The requirement that we complete
our initial business combination within 24 months after the closing of the Company’s initial public offering may give potential
target businesses leverage over us in negotiating a business combination and may limit the time we have in which to conduct due
diligence on potential business combination targets, in particular as we approach our dissolution deadline, which could undermine
our ability to complete our initial business combination on terms that would produce value for our shareholders.
Any potential target
business with which we enter into negotiations concerning a business combination will be aware that we must complete our initial
business combination within 24 months from the closing of the Company’s initial public offering. Consequently, such target
business may obtain leverage over us in negotiating a business combination, knowing that if we do not complete our initial business
combination with that particular target business, we may be unable to complete our initial business combination with any target
business. This risk will increase as we get closer to the timeframe described above. In addition, we may have limited time to
conduct due diligence and may enter into our initial business combination on terms that we would have rejected upon a more comprehensive
investigation.
We may not be able to complete our
initial business combination within 24 months after the closing of the Company’s initial public offering, in which case
we would cease all operations except for the purpose of winding up and we would redeem our public shares and liquidate.
We may not be able to find a suitable
target business and complete our initial business combination within 24 months after the closing of the Company’s Initial
public offering. Our ability to complete our initial business combination may be negatively impacted by general market conditions,
volatility in the capital and debt markets and the other risks described herein. For example, the outbreak of COVID-19 continues
to grow both in the U.S. and globally and, while the extent of the impact of the outbreak on us will depend on future developments,
it could limit our ability to complete our initial business combination, including as a result of increased market volatility,
decreased market liquidity and third-party financing being unavailable on terms acceptable to us or at all. Furthermore,
we may be unable to complete a business combination if continued concerns relating to COVID-19 restrict travel, limit the
ability to have meetings with potential investors or the target company’s personnel, vendors and services providers are
unavailable to negotiate and consummate a transaction in a timely manner. Additionally, the outbreak of COVID-19 may negatively
impact businesses we may seek to acquire. If we have not completed our initial business combination within such time period, we
will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not
more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate
amount then on deposit in the trust account, including interest earned on the funds held in the trust account (less taxes payable
and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption
will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation
distributions, if any) and (iii) as promptly as reasonably possible following such redemption, subject to the approval of
our remaining shareholders and our board of directors, liquidate and dissolve, subject in the case of clauses (ii) and (iii),
to our obligations under Cayman Islands law to provide for claims of creditors and in all cases subject to the other requirements
of applicable law.
If we seek shareholder approval of
our initial business combination, our Sponsor, initial shareholders, directors, officers, advisors and their affiliates may elect
to purchase shares or public warrants from public shareholders, which may influence a vote on a proposed business combination
and reduce the public “float” of our Class A ordinary shares.
If we seek shareholder
approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination
pursuant to the tender offer rules, our Sponsor, directors, officers, advisors or their affiliates may purchase shares or public
warrants in privately negotiated transactions or in the open market either prior to or following the completion of our initial
business combination, although they are under no obligation to do so. There is no limit on the number of shares our initial shareholders,
directors, officers, advisors or their affiliates may purchase in such transactions, subject to compliance with applicable law
and NYSE rules. However, they have no current commitments, plans or intentions to engage in such transactions and have not formulated
any terms or conditions for any such transactions. None of the funds in the Trust Account will be used to purchase shares or public
warrants in such transactions. Such purchases may include a contractual acknowledgment that such shareholder, although still the
record holder of our shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights.
In the event that
our Sponsor, directors, officers, advisors or their affiliates purchase shares in privately negotiated transactions from public
shareholders who have already elected to exercise their redemption rights, such selling shareholders would be required to revoke
their prior elections to redeem their shares. The purpose of any such purchases of shares could be to vote such shares in favor
of the business combination and thereby increase the likelihood of obtaining shareholder approval of the business combination
or to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount
of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met.
The purpose of any such purchases of public warrants could be to reduce the number of public warrants outstanding or to vote such
warrants on any matters submitted to the warrant holders for approval in connection with our initial business combination. 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 within 24 months from the closing
of the Company’s Initial public offering or (B) with respect to any other material provisions relating to shareholders’
rights or pre-initial business combination activity, and (iii) the redemption of our public shares if we are unable
to complete an initial business combination within 24 months from the closing of the Company’s Initial public offering,
subject to applicable law and as further described herein. In no other circumstances will a public shareholder have any right
or interest of any kind in the trust account. Holders of warrants will not have any right to the proceeds held in the trust account
with respect to the warrants. Accordingly, to liquidate your investment, you may be forced to sell your public shares or warrants,
potentially at a loss.
You will not be entitled to protections
normally afforded to investors of many other blank check companies.
Since the net proceeds
of the Public Offering and the sale of the private placement warrants are intended to be used to complete an initial business
combination with a target business, we may be deemed to be a “blank check” company under the United States securities
laws. However, because we have net tangible assets in excess of $5,000,000 and have filed a Current Report on Form 8-K, including
an audited balance sheet demonstrating this fact, we are exempt from rules promulgated by the SEC to protect investors in blank
check companies, such as Rule 419. Accordingly, investors will not be afforded the benefits or protections of those rules. Among
other things, this means that we will have a longer period of time to complete our initial business combination than do companies
subject to Rule 419. Moreover, if the Public Offering had been subject to Rule 419, that rule would have prohibited the release
of any interest earned on funds held in the Trust Account to us unless and until the funds in the Trust Account were released
to us in connection with our completion of an initial business combination.
If we seek shareholder approval of
our initial business combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a “group”
of shareholders are deemed to hold in excess of 20% of our Class A ordinary shares, you will lose the ability to redeem all such
shares in excess of 20% of our Class A ordinary shares.
If we seek shareholder
approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination
pursuant to the tender offer rules, our amended and restated memorandum and articles of association provides that a public shareholder,
together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group”
(as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than
an aggregate of 20% of the shares sold in the Public Offering, which we refer to as the “Excess Shares.” However,
we would not be restricting our shareholders’ ability to vote all of their shares (including Excess Shares) for or against
our initial business combination. Your inability to redeem the Excess Shares will reduce your influence over our ability to complete
our initial business combination and you could suffer a material loss on your investment in us if you sell Excess Shares in open
market transactions. Additionally, you will not receive redemption distributions with respect to the Excess Shares if we complete
our initial business combination. And as a result, you will continue to hold that number of shares exceeding 20% 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.
If the net proceeds of the Public
Offering and the sale of the private placement warrants not being held in the Trust Account are insufficient to allow us to operate
at least until October 6, 2022, it could limit the amount available to fund our search for a target business or businesses and
complete our initial business combination, and we will depend on loans from our Sponsor or management team to fund our search
and to complete our initial business combination.
Of the net proceeds
of the Public Offering, approximately $1,000,000 was made available to us initially outside Trust Account to fund our working
capital requirements. We believe that the funds available to us outside of the Trust Account will be sufficient to allow us to
operate at least until October 6, 2022; however, we cannot assure you that our estimate is accurate. Of the funds available to
us, we could use a portion of the funds available to us to pay fees to consultants to assist us with our search for a target business.
We could also use a portion of the funds as a down payment or to fund a “no-shop” provision (a provision in letters
of intent or merger agreements designed to keep target businesses from “shopping” around for transactions with other
companies or investors on terms more favorable to such target businesses) with respect to a particular proposed business combination,
although we do not have any current intention to do so. If we entered into a letter of intent or merger agreement where we paid
for the right to receive exclusivity from a target business and were subsequently required to forfeit such funds (whether as a
result of our breach or otherwise), we might not have sufficient funds to continue searching for, or conduct due diligence with
respect to, a target business.
In the event that
our offering expenses exceed our estimate of $1,000,000, we may fund such excess with funds not to be held in the trust account.
In such case, the amount of funds we intend to be held outside the trust account would decrease by a corresponding amount. The
amount held in the trust account will not be impacted as a result of such increase or decrease. Conversely, in the event that
the offering expenses are less than our estimate of $1,000,000, the amount of funds we intend to be held outside the trust account
would increase by a corresponding amount. If we are required to seek additional capital, we would need to borrow funds from our
sponsor, management team or other third parties to operate or may be forced to liquidate. Neither our sponsor, members of our
management team nor any of their affiliates is under any obligation to advance funds to us in such circumstances. Any such advances
would be repaid only from funds held outside the trust account or from funds released to us upon completion of our initial business
combination. Up to $1,500,000 of such loans may be convertible into private placement warrants of the post-business combination
entity at a price of $1.00 per warrant at the option of the lender. Such warrants would be identical to the private placement
warrants. Prior to the completion of our initial business combination, we do not expect to seek loans from parties other than
our sponsor or an affiliate of our sponsor as we do not believe third parties will be willing to loan such funds and provide a
waiver against any and all rights to seek access to funds in our trust account. If we are unable to complete our initial business
combination within the required time period because we do not have sufficient funds available to us, we will be forced to cease
operations and liquidate the trust account. Consequently, our public shareholders may only receive an estimated $10.00 per share,
or possibly less, on our redemption of our public shares, and our warrants will expire worthless.
If third parties bring claims against
us, the proceeds held in the Trust Account could be reduced and the per-share redemption amount received by shareholders may be
less than $10.00 per share.
Our placing of funds
in the Trust Account may not protect those funds from third party claims against us. Although we will seek to have all vendors,
service providers, prospective target businesses and other entities with which we do business execute agreements with us waiving
any right, title, interest or claim of any kind in or to any monies held in the Trust Account for the benefit of our public shareholders,
such parties may not execute such agreements, or even if they execute such agreements they may not be prevented from bringing
claims against the Trust Account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or
other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage
with respect to a claim against our assets, including the funds held in the Trust Account. If any third party refuses to execute
an agreement waiving such claims to the monies held in the Trust Account, our management will consider whether competitive alternatives
are reasonably available to us and will only enter into an agreement with such third party if management believes that such third
party’s engagement would be in the best interests of the Company under the circumstances. Marcum LLP, our independent registered
public accounting firm, and the underwriters of the Public Offering will not execute agreements with us waiving such claims to
the monies held in the Trust Account.
Examples of possible
instances where we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant
whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that
would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver.
In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of,
or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the Trust Account for
any reason. Upon redemption of our public shares, if we are unable to complete our initial business combination within the prescribed
timeframe, or upon the exercise of a redemption right in connection with our initial business combination, we will be required
to provide for payment of claims of creditors that were not waived that may be brought against us within the 10 years following
redemption. Accordingly, the per-share redemption amount received by public shareholders could be less than the $10.00 per public
share initially held in the Trust Account, due to claims of such creditors. Pursuant to the letter agreement the form of which
is filed as an exhibit to this Form 10-K, our Sponsor has agreed that it will be liable to us if and to the extent any claims
by a third party for services rendered or products sold to us, or a prospective target business with which we have entered into
a written letter of intent, confidentiality or other similar agreement or business combination agreement, reduce the amount of
funds in the Trust Account to below the lesser of (i) $10.00 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 his obligations
or that he has no indemnification obligations related to a particular claim, our independent directors would determine whether
to take legal action against our Sponsor to enforce its indemnification obligations. While we currently expect that our independent
directors would take legal action on our behalf against our Sponsor to enforce its indemnification obligations to us, it is possible
that our independent directors in exercising their business judgment and subject to their fiduciary duties may choose not to do
so in any particular instance if, for example, the cost of such legal action is deemed by the independent directors to be too
high relative to the amount recoverable or if the independent directors determine that a favorable outcome is not likely. If our
independent directors choose not to enforce these indemnification obligations, the amount of funds in the Trust Account available
for distribution to our public shareholders may be reduced below $10.00 per share.
If, after we distribute the proceeds
in the Trust Account to our public shareholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed
against us that is not dismissed, a bankruptcy court may seek to recover such proceeds, and the members of our board of directors
may be viewed as having breached their fiduciary duties to our creditors, thereby exposing the members of our board of directors
and us to claims of punitive damages.
If, after we distribute
the proceeds in the Trust Account to our public shareholders, we file a bankruptcy petition or an involuntary bankruptcy petition
is filed against us that is not dismissed, any distributions received by shareholders could be viewed under applicable debtor/creditor
and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result,
a bankruptcy court could seek to recover 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 petition or an involuntary bankruptcy petition is filed
against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our shareholders
and the per-share amount that would otherwise be received by our shareholders in connection with our liquidation may be reduced.
If, before distributing
the proceeds in the Trust Account to our public shareholders, we file a bankruptcy petition or an involuntary bankruptcy petition
is filed against us that is not dismissed, the proceeds held in Trust Account could be subject to applicable bankruptcy law, and
may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our shareholders.
To the extent any bankruptcy claims deplete the Trust Account, the per-share amount that would otherwise be received by our shareholders
in connection with our liquidation may be reduced.
If we are deemed to be an investment
company under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities
may be restricted, which may make it difficult for us to complete our initial business combination.
If we are deemed to
be an investment company under the Investment Company Act, our activities may be restricted, including:
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restrictions
on the nature of our investments; and
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restrictions
on the issuance of securities,
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each of which may
make it difficult for us to complete our initial business combination. 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 is to identify and complete
a business combination and thereafter to operate the post-transaction business or assets for the long term. We do not plan to
buy businesses or assets with a view to resale or profit from their resale. We do not plan to buy unrelated businesses or assets
or to be a passive investor.
We do not believe
that our principal activities subject us to the Investment Company Act. To this end, the proceeds held in the Trust Account may
only be invested in United States “government securities” within the meaning of Section 2(a)(16) of the Investment
Company Act having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated
under the Investment Company Act which invest only in direct U.S. government treasury obligations. Pursuant to the trust agreement,
the trustee is not permitted to invest in other securities or assets. By restricting the investment of the proceeds to these instruments,
and by having a business plan targeted at acquiring and growing businesses for the long term (rather than on buying and selling
businesses in the manner of a merchant bank or private equity fund), we intend to avoid being deemed an “investment company”
within the meaning of the Investment Company Act. The Trust Account is intended as a holding place for funds pending the earliest
to occur of either: (i) the completion of our initial business combination; (ii) the redemption of any public shares properly
submitted in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A) 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 within 24 months of the Public Offering
or (B) with respect to any other material provisions relating to shareholders’ rights or pre-initial business combination
activity; or (iii) absent an initial business combination within 24 months of the Public Offering, our return of the funds held
in the Trust Account to our public shareholders as part of our redemption of the public shares. If we do not invest the proceeds
as discussed above, we may be deemed to be subject to the Investment Company Act. If we were deemed to be subject to the Investment
Company Act, compliance with these additional regulatory burdens would require additional expenses for which we have not allotted
funds and may hinder our ability to complete a business combination. If we 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 are required to comply with certain
SEC and other legal requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming
and costly. Those laws and regulations and their interpretation and application may also change from time to time and those changes
could have a material adverse effect on our business, investments and results of operations. In addition, a failure to comply
with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on our business, including
our ability to negotiate and complete our initial business combination, and results of operations.
If we are unable to consummate our
initial business combination within 24 months of the Public Offering, our public shareholders may be forced to wait beyond such
to 24 months before redemption from our Trust Account.
If we are unable to
consummate our initial business combination within 24 months of the Public Offering, the proceeds then on deposit in the Trust
Account including interest earned on the funds held in the trust account (less taxes payable and up to $100,000 of interest to
pay dissolution expenses), will be used to fund the redemption of our public shares, as further described herein. Any redemption
of public shareholders from the Trust Account will be effected automatically by function of our amended and restated memorandum
and articles of association prior to any voluntary winding up. If we are required to wind-up, liquidate the Trust Account and
distribute such amount therein, pro rata, to our public shareholders, as part of any liquidation process, such winding up, liquidation
and distribution must comply with the applicable provisions of the Companies Law. In that case, investors may be forced to wait
beyond 24 months of the Public Offering before the redemption proceeds of our Trust Account become available to them, and they
receive the return of their pro rata portion of the proceeds from our Trust Account. We have no obligation to return funds to
investors prior to the date of our redemption or liquidation unless we consummate our initial business combination prior thereto
and only then in cases where investors have sought to redeem their Class A ordinary shares. Only upon our redemption or any liquidation
will public shareholders be entitled to distributions if we are unable to complete our initial business combination.
Our shareholders may be held liable
for claims by third parties against us to the extent of distributions received by them upon redemption of their shares.
If we are forced to
enter into an insolvent liquidation, any distributions received by shareholders could be viewed as an unlawful payment if it was
proved that immediately following the date on which the distribution was made, we were unable to pay our debts as they fall due
in the ordinary course of business. As a result, a liquidator could seek to recover some or all amounts received by our shareholders.
Furthermore, our directors may be viewed as having breached their fiduciary duties to us or our creditors and/or may have acted
in bad faith, thereby exposing themselves and our Company to claims, by paying public shareholders from the Trust Account prior
to addressing the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons. We and
our directors and officers who knowingly and willfully authorized or permitted any distribution to be paid out of our share premium
account while we were unable to pay our debts as they fall due in the ordinary course of business would be guilty of an offence
and may be liable to a fine of $18,293 and to imprisonment for five years in the Cayman Islands.
We may not hold an annual meeting
of shareholders until after the consummation of our initial business combination, which could delay the opportunity for our shareholders
to elect directors.
In accordance with
NYSE corporate governance requirements, we are not required to hold an annual meeting until no later than one year after our first
fiscal year end following our listing on NYSE. There is no requirement under the Companies Law for us to hold annual or general
meetings to elect directors. Until we hold an annual meeting of shareholders, public shareholders may not be afforded the opportunity
to elect directors and to discuss company affairs with management. Our board of directors is divided into three classes with only
one class of directors being elected in each year and each class (except for those directors appointed prior to our first annual
meeting of shareholders) 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 election of directors until after the consummation of our initial business combination.
Although we have identified general
criteria and guidelines that we believe are important in evaluating prospective target businesses, we may enter into our initial
business combination with a target that does not meet such criteria and guidelines, and as a result, the target business with
which we enter into our initial business combination may not have attributes entirely consistent with our general criteria and
guidelines.
Although we have identified
general criteria and guidelines for evaluating prospective target businesses, it is possible that a target business with which
we enter into our initial business combination will not have all of these positive attributes. If we complete our initial business
combination with a target that does not meet some or all of these guidelines, such combination may not be as successful as a combination
with a business that does meet all of our general criteria and guidelines. In addition, if we announce a prospective business
combination with a target that does not meet our general criteria and guidelines, a greater number of shareholders may exercise
their redemption rights, which may make it difficult for us to meet any closing condition with a target business that requires
us to have a minimum net worth or a certain amount of cash. In addition, if shareholder approval of the transaction is required
by law, or we decide to obtain shareholder approval for business or other reasons, it may be more difficult for us to attain shareholder
approval of our initial business combination if the target business does not meet our general criteria and guidelines. If we are
unable to complete our initial business combination, our public shareholders may only receive their pro rata portion of the funds
in the Trust Account that are available for distribution to public shareholders, and our warrants will expire worthless.
We are not required to obtain an
opinion from an independent investment banking firm or from a valuation or appraisal firm, and consequently, you may have no assurance
from an independent source that the price we are paying for the business is fair to our shareholders from a financial point of
view.
Unless we complete
our initial business combination with an affiliated entity or our board of directors cannot independently determine the fair market
value of the target business or businesses (including with the assistance of financial advisors), we are not required to obtain
an opinion from an independent investment banking firm which is a member of FINRA or from a valuation or appraisal firm that the
price we are paying is fair to our shareholders from a financial point of view. If no opinion is obtained, our shareholders will
be relying on the judgment of our board of directors, who will determine fair market value based on standards generally accepted
by the financial community. Such standards used will be disclosed in our proxy materials or tender offer documents, as applicable,
related to our initial business combination.
Our letter agreement
with our sponsor, ION Co-Investment, officers and directors may be amended without shareholder approval.
Our letter agreement
with our sponsor, ION Co-Investment, officers and directors contain provisions relating to transfer restrictions of our founder
shares and private placement warrants, indemnification of the trust account, waiver of redemption rights and participation in
liquidating distributions from the trust account. The letter agreement may be amended without shareholder approval (although releasing
the parties from the restriction not to transfer the founder shares for 185 days following the date of the Company’s initial
public offering requires 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.
Our initial shareholders control
a substantial interest in us and thus may exert a substantial influence on actions requiring a shareholder vote, potentially in
a manner that you do not support.
Our initial shareholders
own 20% of our issued and outstanding ordinary shares. Accordingly, they may exert a substantial influence on actions requiring
a shareholder vote, potentially in a manner that you do not support, including amendments to our amended and restated memorandum
and articles of association. If our initial shareholders purchase any additional Class A ordinary shares in the aftermarket or
in privately negotiated transactions, this would increase their control. Neither our initial shareholders nor, to our knowledge,
any of our officers or directors, have any current intention to purchase additional securities, other than as disclosed in this
report. Factors that would be considered in making such additional purchases would include consideration of the current trading
price of our Class A ordinary shares. In addition, our board of directors, whose members were elected by our Sponsor, is and will
be divided into three classes, each of which will generally serve for a terms for three years with only one class of directors
being elected in each year. We may not hold an annual meeting of shareholders to elect new directors prior to the completion of
our initial business combination, in which case all of the current directors will continue in office until at least the completion
of the business combination. If there is an annual meeting, as a consequence of our “staggered” board of directors,
only a minority of the board of directors will be considered for election and our initial shareholders, because of their ownership
position, will have considerable influence regarding the outcome. Accordingly, our initial shareholders will continue to exert
control at least until the completion of our initial business combination.
A provision of our warrant agreement
may make it more difficult for us to consummate an initial business combination.
If (i) we issue additional
ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of our initial business
combination at an issue price or effective issue price of less than $9.20 per Class A ordinary share (with such issue price or
effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance
to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable,
prior to such issuance) (the “Newly Issued Price”), (ii) the aggregate gross proceeds from such issuances represent
more than 60% of the total equity proceeds, and interest thereon, available for the funding of our initial business combination,
and (iii) the volume weighted average trading price of the Class A ordinary shares during the 20 trading day period starting on
the trading day prior to the day on which the Company consummates a business combination (such price, the “Market Value”)
is below $9.20 per share, then the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of
the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger price will be adjusted
(to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price. This may make it more
difficult for us to consummate an initial business combination with a target business.
Because we must furnish our shareholders
with target business financial statements, we may lose the ability to complete an otherwise advantageous initial business combination
with some prospective target businesses.
The federal proxy
rules require that the proxy statement with respect to the vote on an initial business combination include historical and pro
forma financial statement disclosure. We will include the same financial statement disclosure in connection with our tender offer
documents, whether or not they are required under the tender offer rules. These financial statements may be required to be prepared
in accordance with, or be reconciled to, accounting principles generally accepted in the United States of America (“GAAP”)
or international financial reporting standards as issued by the International Accounting Standards Board (“IFRS”)
depending on the circumstances and the historical financial statements may be required to be audited in accordance with the standards
of the Public Company Accounting Oversight Board (United States) (“PCAOB”). These financial statement requirements
may limit the pool of potential target businesses we may acquire because some targets may be unable to provide such financial
statements in time for us to disclose such statements in accordance with federal proxy rules and complete our initial business
combination within the prescribed time frame.
Compliance obligations under the
Sarbanes-Oxley Act may make it more difficult for us to effectuate our initial business combination, require substantial financial
and management resources, and increase the time and costs of completing an initial business combination.
Section 404 of the
Sarbanes-Oxley Act requires that we evaluate and report on our system of internal controls beginning with our Annual Report on
Form 10-K for the year ending December 31, 2021. Only in the event we are deemed to be a large accelerated filer or an accelerated
filer, and no longer qualify as an emerging growth company, will we be required to comply with the independent registered public
accounting firm attestation requirement on our internal control over financial reporting. Further, for as long as we remain an
emerging growth company, we will not be required to comply with the independent registered public accounting firm attestation
requirement on our internal control over financial reporting. The fact that we are a blank check company makes compliance with
the requirements of the Sarbanes-Oxley Act particularly burdensome on us as compared to other public companies because a target
business with which we seek to complete our initial business combination may not be in compliance with the provisions of the Sarbanes-Oxley
Act regarding adequacy of its internal controls. The development of the internal control of any such entity to achieve compliance
with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such business combination.
We 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.
We may reincorporate in another jurisdiction
in connection with our initial business combination, and the laws of such jurisdiction may govern some or all of our future material
agreements and we may not be able to enforce our legal rights.
In connection with
our initial business combination, we may relocate the home jurisdiction of our business from the Cayman Islands to another jurisdiction.
If we determine to do this, the laws of such jurisdiction may govern some or all of our future material agreements. The system
of laws and the enforcement of existing laws in such jurisdiction may not be as certain in implementation and interpretation as
in the United States. The inability to enforce or obtain a remedy under any of our future agreements could result in a significant
loss of business, business opportunities or capital.
Risks Relating to the Post-Business
Combination Company
Subsequent to our completion of our
initial business combination, we may be required to take write-downs or write-offs, restructuring and impairment or other charges
that could have a significant negative effect on our financial condition, results of operations and our share price, which could
cause you to lose some or all of your investment.
Even if we conduct
due diligence on a target business with which we combine, we cannot assure you that this diligence will identify all material
issues that may be present within a particular target business, that it would be possible to uncover all material issues through
a customary amount of due diligence, or that factors outside of the target business and outside of our control will not later
arise. As a result of these factors, we may be forced to later write-down or write-off assets, restructure our operations, or
incur impairment or other charges that could result in our reporting losses. Even if our due diligence successfully identifies
certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with our preliminary
risk analysis. Even though these charges may be non-cash items and not have an immediate impact on our liquidity, the fact that
we report charges of this nature could contribute to negative market perceptions about us or our securities. In addition, charges
of this nature may cause us to violate net worth or other covenants to which we may be subject as a result of assuming pre-existing
debt held by a target business or by virtue of our obtaining debt financing to partially finance the initial business combination
or thereafter. Accordingly, any shareholders who choose to remain shareholders following the business combination could suffer
a reduction in the value of their securities. Such shareholders are unlikely to have a remedy for such reduction in value unless
they are able to successfully claim that the reduction was due to the breach by our officers or directors of a duty of care or
other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that the proxy
solicitation or tender offer materials, as applicable, relating to the business combination contained an actionable material misstatement
or material omission.
Further, we had no
cash as of August 13, 2020 and expect to continue to incur costs in pursuit of our financial and acquisition plans that raise
substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustments that
might result from the outcome of this uncertainty. These conditions raise substantial doubts about our ability to continue to
operate as a going concern. Our management believes that sufficient funds can be obtained from existing or additional investors
or other sources, to provide the necessary liquidity to meet our financing requirements.
Resources could be wasted in researching
business combinations that are not completed, which could materially adversely affect subsequent attempts to locate and acquire
or merge with another business. If we are unable to complete our initial business combination, our public shareholders may only
receive their pro rata portion of the funds in the Trust Account that are available for distribution to public shareholders, and
our warrants will expire worthless.
We anticipate that
the investigation of each specific target business and the negotiation, drafting and execution of relevant agreements, disclosure
documents and other instruments will require substantial management time and attention and substantial costs for accountants,
attorneys, consultants and others. If we decide not to complete a specific initial business combination, the costs incurred up
to that point for the proposed transaction likely would not be recoverable. Furthermore, if we reach an agreement relating to
a specific target business, we may fail to complete our initial business combination for any number of reasons including those
beyond our control. Any such event will result in a loss to us of the related costs incurred which could materially adversely
affect subsequent attempts to locate and acquire or merge with another business. If we are unable to complete our initial business
combination, our public shareholders may only receive their pro rata portion of the funds in the Trust Account that are available
for distribution to public shareholders, and our warrants will expire worthless.
We are dependent upon our officers
and directors and their loss could adversely affect our ability to operate.
Our operations are
dependent upon a relatively small group of individuals and, in particular, our officers and directors. We believe that our success
depends on the continued service of our officers and directors, at least until we have completed our initial business combination.
In addition, our officers and directors are not required to commit any specified amount of time to our affairs and, accordingly,
will have conflicts of interest in allocating their time among various business activities, including identifying potential business
combinations and monitoring the related due diligence. We do not have an employment agreement with, or key-man insurance on the
life of, any of our directors or officers. The unexpected loss of the services of one or more of our directors or officers could
have a detrimental effect on us.
Our ability to successfully effect
our initial business combination and to be successful thereafter will be dependent upon the efforts of our key personnel, some
of whom may join us following our initial business combination. The loss of key personnel could negatively impact the operations
and profitability of our post-combination business.
Our ability to successfully
effect our initial business combination is dependent upon the efforts of our key personnel. The role of our key personnel in the
target business, however, cannot presently be ascertained. Although some of our key personnel may remain with the target business
in senior management or advisory positions following our initial business combination, it is likely that some or all of the management
of the target business will remain in place. While we intend to closely scrutinize any individuals we engage after our initial
business combination, we cannot assure you that our assessment of these individuals will prove to be correct. These individuals
may be unfamiliar with the requirements of operating a company regulated by the SEC, which could cause us to have to expend time
and resources helping them become familiar with such requirements.
After our initial business combination,
it is possible that a majority of our directors and officers will live outside the United States and all of our assets will be
located outside the United States; therefore, investors may not be able to enforce federal securities laws or their other legal
rights.
It is possible that
after our initial business combination, a majority of our directors and officers will reside outside of the United States and
all of our assets will be located outside of the United States. As a result, it may be difficult, or in some cases not possible,
for investors in the United States to enforce their legal rights, to effect service of process upon all of our directors or officers
or to enforce judgments of United States courts predicated upon civil liabilities and criminal penalties on our directors and
officers under United States laws.
Our key personnel may negotiate employment
or consulting agreements with a target business in connection with a particular business combination, and a particular business
combination may be conditioned on the retention or resignation of such key personnel. These agreements may provide for them to
receive compensation following our initial business combination and as a result, may cause them to have conflicts of interest
in determining whether a particular business combination is the most advantageous.
Our key personnel
may be able to remain with our Company after the completion of our initial business combination only if they are able to negotiate
employment or consulting agreements in connection with the business combination. Such negotiations would take place simultaneously
with the negotiation of the business combination and could provide for such individuals to receive compensation in the form of
cash payments and/or our securities for services they would render to us after the completion of the business combination. Such
negotiations also could make such key personnel’s retention or resignation a condition to any such agreement. The personal
and financial interests of such individuals may influence their motivation in identifying and selecting a target business, subject
to their fiduciary duties under Cayman Islands law.
We may have a limited ability to
assess the management of a prospective target business and, as a result, may effect our initial business combination with a target
business whose management may not have the skills, qualifications or abilities to manage a public company.
When evaluating the
desirability of effecting our initial business combination with a prospective target business, our ability to assess the target
business’s management may be limited due to a lack of time, resources or information. Our assessment of the capabilities
of the target business’s management, therefore, may prove to be incorrect and such management may lack the skills, qualifications
or abilities we suspected. Should the target business’s management not possess the skills, qualifications or abilities necessary
to manage a public company, the operations and profitability of the post-combination business may be negatively impacted. Accordingly,
any shareholders who choose to remain shareholders following the business combination could suffer a reduction in the value of
their shares. Such shareholders are unlikely to have a remedy for such reduction in value unless they are able to successfully
claim that the reduction was due to the breach by our officers or directors of a duty of care or other fiduciary duty owed to
them, or if they are able to successfully bring a private claim under securities laws that the proxy solicitation or tender offer
materials, as applicable, relating to the business combination contained an actionable material misstatement or material omission.
The officers and directors of an
acquisition candidate may resign upon completion of our initial business combination. The loss of a business combination target’s
key personnel could negatively impact the operations and profitability of our post-combination business.
The role of an acquisition
candidate’s key personnel upon the completion of our initial business combination cannot be ascertained at this time. Although
we contemplate that certain members of an acquisition candidate’s management team will remain associated with the acquisition
candidate following our initial business combination, it is possible that members of the management of an acquisition candidate
will not wish to remain in place.
Our management may not be able to
maintain control of a target business after our initial business combination. We cannot provide assurance that, upon loss of control
of a target business, new management will possess the skills, qualifications or abilities necessary to profitably operate such
business.
We may structure our
initial business combination so that the post-transaction company in which our public shareholders own shares will own less than
100% of the equity interests or assets of a target business, but we will only complete such business combination if the post-transaction
company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest
in the target sufficient for us not to be required to register as an investment company under the Investment Company Act. We will
not consider any transaction that does not meet such criteria. Even if the post-transaction company owns 50% or more of the voting
securities of the target, our shareholders prior to the business combination may collectively own a minority interest in the post
business combination company, depending on valuations ascribed to the target and us in the business combination. For example,
we could pursue a transaction in which we issue a substantial number of new Class A ordinary shares in exchange for all of the
outstanding capital stock or shares 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 may issue notes or other debt
securities, or otherwise incur substantial debt, to complete a business combination, which may adversely affect our leverage and
financial condition and thus negatively impact the value of our shareholders’ investment in us.
Although we have no
commitments as of the date of this report to issue any notes or other debt securities, or to otherwise incur outstanding debt
following the Public Offering, we may choose to incur substantial debt to complete our initial business combination. We and our
officers have agreed that we will not incur any indebtedness unless we have obtained from the lender a waiver of any right, title,
interest or claim of any kind in or to the monies held in the Trust Account. As such, no issuance of debt will affect the per
share amount available for redemption from the Trust Account. Nevertheless, the incurrence of debt could have a variety of negative
effects, including:
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default
and foreclosure on our assets if our operating revenues after an initial business combination
are insufficient to repay our debt obligations;
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acceleration
of our obligations to repay the indebtedness even if we make all principal and interest
payments when due if we breach certain covenants that require the maintenance of certain
financial ratios or reserves without a waiver or renegotiation of that covenant;
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our immediate
payment of all principal and accrued interest, if any, if the debt security is payable
on demand;
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our inability
to obtain necessary additional financing if the debt security contains covenants restricting
our ability to obtain such financing while the debt security is outstanding;
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our inability
to pay dividends on our Class A ordinary shares;
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using a
substantial portion of our cash flow to pay principal and interest on our debt, which
will reduce the funds available for dividends on our Class A ordinary shares if declared,
expenses, capital expenditures, acquisitions and other general corporate purposes;
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limitations
on our flexibility in planning for and reacting to changes in our business and in the
industry in which we operate;
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increased
vulnerability to adverse changes in general economic, industry and competitive conditions
and adverse changes in government regulation; and
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limitations
on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions,
debt service requirements, execution of our strategy and other purposes and other disadvantages
compared to our competitors who have less debt.
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We may only be able to complete one
business combination with the proceeds of the Public Offering and the sale of the private placement warrants, which will cause
us to be solely dependent on a single business which may have a limited number of products or services. This lack of diversification
may negatively impact our operations and profitability.
The net proceeds from
the Public Offering and the Private Placement generated $258,750,000, which was placed in the trust account, and we may receive
an additional $50,000,000 from the sale of the forward purchase shares, that we may use to complete our initial business combination
(after taking into account the fee payable to the underwriters pursuant to that certain Business Combination Marketing Agreement,
entered into prior to the closing of the Company’s initial public offering, or up to $9,056,250 as the over-allotment option
was exercised in full).
We may effectuate
our initial business combination with a single target business or multiple target businesses simultaneously or within a short
period of time. However, we may not be able to effectuate our initial business combination with more than one target business
because of various factors, including the existence of complex accounting issues and the requirement that we prepare and file
pro forma financial statements with the SEC that present operating results and the financial condition of several target businesses
as if they had been operated on a combined basis. By completing our initial business combination with only a single entity, our
lack of diversification may subject us to numerous economic, competitive and regulatory developments. Further, we would not be
able to diversify our operations or benefit from the possible spreading of risks or offsetting of losses, unlike other entities
which may have the resources to complete several business combinations in different industries or different areas of a single
industry. Accordingly, the prospects for our success may be:
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solely dependent
upon the performance of a single business, property or asset, or
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dependent
upon the development or market acceptance of a single or limited number of products,
processes or services.
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This lack of diversification
may subject us to numerous economic, competitive and regulatory risks, any or all of which may have a substantial adverse impact
upon the particular industry in which we may operate subsequent to our initial business combination.
We may attempt to simultaneously
complete business combinations with multiple prospective targets, which may hinder our ability to complete our initial business
combination and give rise to increased costs and risks that could negatively impact our operations and profitability.
If we determine to
simultaneously acquire several businesses that are owned by different sellers, we will need for each of such sellers to agree
that our purchase of its business is contingent on the simultaneous closings of the other business combinations, which may make
it more difficult for us, and delay our ability, to complete our initial business combination. With multiple business combinations,
we could also face additional risks, including additional burdens and costs with respect to possible multiple negotiations and
due diligence investigations (if there are multiple sellers) and the additional risks associated with the subsequent assimilation
of the operations and services or products of the acquired companies in a single operating business. If we are unable to adequately
address these risks, it could negatively impact our profitability and results of operations.
We may attempt to complete our initial
business combination with a private company about which little information is available, which may result in a business combination
with a company that is not as profitable as we suspected, if at all.
In pursuing our business
combination strategy, we may seek to effectuate our initial business combination with a privately held company. Very little public
information generally exists about private companies, and we could be required to make our decision on whether to pursue a potential
initial business combination on the basis of limited information, which may result in a business combination with a company that
is not as profitable as we suspected, if at all.
We do not have a specified maximum
redemption threshold. The absence of such a redemption threshold may make it possible for us to complete our initial business
combination with which a substantial majority of our shareholders do not agree.
Our amended and restated
memorandum and articles of association provide that in no event will we redeem our public shares in an amount that would cause
our net tangible assets to be less than $5,000,001. In addition, our proposed initial business combination may impose a minimum
cash requirement for (i) cash consideration to be paid to the target or its owners, (ii) cash for working capital or other general
corporate purposes or (iii) the retention of cash to satisfy other conditions. As a result, we may be able to complete our initial
business combination even though a substantial majority of our public shareholders do not agree with the transaction and have
redeemed their shares or, if we seek shareholder approval of our initial business combination and do not conduct redemptions in
connection with our initial business combination pursuant to the tender offer rules, have entered into privately negotiated agreements
to sell their shares to our Sponsor, officers, directors, advisors or any of their affiliates. In the event the aggregate cash
consideration we would be required to pay for all Class A ordinary shares that are validly submitted for redemption plus any amount
required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of
cash available to us, we will not complete the business combination or redeem any shares, all Class A ordinary shares submitted
for redemption will be returned to the holders thereof, and we instead may search for an alternate business combination.
In order to effectuate an initial
business combination, special purpose acquisition companies have, in the recent past, amended various provisions of their charters
and other governing instruments, including their warrant agreements. We cannot assure you that we will not seek to amend our amended
and restated memorandum and articles of association or governing instruments in a manner that will make it easier for us to complete
our initial business combination that our shareholders may not support.
In order to effectuate
a business combination, special purpose acquisition companies have, in the recent past, amended various provisions of their charters
and governing instruments, including their warrant agreements. For example, special purpose acquisition companies have amended
the definition of business combination, increased redemption thresholds and extended the time to consummate an initial business
combination and, with respect to their warrants, amended their warrant agreements to require the warrants to be exchanged for
cash and/or other securities. Amending our amended and restated memorandum and articles of association will require a special
resolution under Cayman Islands law, which requires the affirmative vote of a majority of at least two-thirds of the shareholders
who attend and vote at a general meeting of the Company, and amending our warrant agreement will require a vote of holders of
at least 50% of the public warrants and, solely with respect to any amendment to the terms of the private placement warrants or
any provision of the warrant agreement with respect to the private placement warrants, 50% of the then outstanding private placement
warrants. In addition, our amended and restated memorandum and articles of association 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 Public Offering or (B) with respect to any other material provisions relating to shareholders’ rights or
pre-initial business combination activity. We cannot assure you that we will not seek to amend our charter or governing instruments
or extend the time to consummate an initial business combination in order to effectuate our initial business combination.
The provisions of our amended and
restated memorandum and articles of association that relate to our pre-business combination activity (and corresponding provisions
of the agreement governing the release of funds from our Trust Account) may be amended with the approval of holders of not less
than two-thirds of our ordinary shares who attend and vote at a general meeting of the Company (or 65% of our ordinary shares
with respect to amendments to the trust agreement governing the release of funds from our Trust Account), which is a lower amendment
threshold than that of some other special purpose acquisition companies. It may be easier for us, therefore, to amend our amended
and restated memorandum and articles of association to facilitate the completion of an initial business combination that some
of our shareholders may not support.
Our amended and restated
memorandum and articles of association provide that any of its provisions related to pre-business combination activity (including
the requirement to deposit proceeds of the Public Offering and the Private Placement into the Trust Account and not release such
amounts except in specified circumstances, and to provide redemption rights to public shareholders as described herein) may be
amended if approved by special resolution, under Cayman Islands law which requires the affirmative vote of a majority of at least
two-thirds of the shareholders who attend and vote at a general meeting of the Company, and corresponding provisions of the trust
agreement governing the release of funds from our Trust Account may be amended if approved by holders of 65% of our ordinary shares.
Our initial shareholders, who collectively beneficially own 20% of our ordinary shares following the Public Offering, will participate
in any vote to amend our amended and restated memorandum and articles of association and/or trust agreement and will have the
discretion to vote in any manner they choose. As a result, we may be able to amend the provisions of our amended and restated
memorandum and articles of association which govern our pre-business combination behavior more easily than some other special
purpose acquisition companies, and this may increase our ability to complete a business combination with which you do not agree.
Our shareholders may pursue remedies against us for any breach of our amended and restated memorandum and articles of association.
Our Sponsor, officers,
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 within 24 months of the Public Offering or (B) with respect to any other material provisions
relating to shareholders’ rights or pre-initial business combination activity, unless we provide our public shareholders
with the opportunity to redeem their Class A ordinary shares upon approval of any such amendment at a per-share price, payable
in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the
Trust Account and not previously released to us to pay our taxes, divided by the number of then outstanding public shares. Our
shareholders are not parties to, or third-party beneficiaries of, these agreements and, as a result, will not have the ability
to pursue remedies against our Sponsor, officers, 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.
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.
Risks Relating to Acquiring and Operating
a Business in Foreign Countries
If we effect our initial business
combination with a company located outside of the United States, we would be subject to a variety of additional risks that may
adversely affect us.
If we pursue a target
company with operations or opportunities outside of the United States for our initial business combination, we may face additional
burdens in connection with investigating, agreeing to and completing such initial business combination, and if we effect such
initial business combination, we would be subject to a variety of additional risks that may negatively impact our operations.
If we pursue a target
a company with operations or opportunities outside of the United States for our initial business combination, we would be subject
to risks associated with cross-border business combinations, including in connection with investigating, agreeing to and completing
our initial business combination, conducting due diligence in a foreign jurisdiction, having such transaction approved by any
local governments, regulators or agencies and changes in the purchase price based on fluctuations in foreign exchange rates.
If we effect our initial
business combination with such a company, we would be subject to any special considerations or risks associated with companies
operating in an international setting, including any of the following:
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costs and
difficulties inherent in managing cross-border business operations;
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rules and
regulations regarding currency redemption;
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complex
corporate withholding taxes on individuals;
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laws governing
the manner in which future business combinations may be effected;
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exchange
listing and/or delisting requirements;
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tariffs
and trade barriers;
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regulations
related to customs and import/export matters;
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local or
regional economic policies and market conditions;
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unexpected
changes in regulatory requirements;
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challenges
in managing and staffing international operations;
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tax issues,
such as tax law changes and variations in tax laws as compared to the United States;
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currency
fluctuations and exchange controls;
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challenges
in collecting accounts receivable;
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cultural
and language differences;
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employment
regulations;
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underdeveloped
or unpredictable legal or regulatory systems;
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protection
of intellectual property;
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social unrest,
crime, strikes, riots and civil disturbances;
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regime changes
and political upheaval;
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terrorist
attacks and wars; and
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deterioration
of political relations with the United States.
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We may not be able
to adequately address these additional risks. If we were unable to do so, we may be unable to complete such initial business combination,
or, if we complete such initial business combination, our operations might suffer, either of which may adversely impact our business,
financial condition and results of operations.
After our initial business combination,
substantially all of our assets may be located in a foreign country and substantially all of our revenue will be derived from
our operations in such country. Accordingly, our results of operations and prospects will be subject, to a significant extent,
to the economic, political and legal policies, developments and conditions in the country in which we operate.
The economic, political
and social conditions, as well as government policies, of the country in which our operations are located could affect our business.
Economic growth could be uneven, both geographically and among various sectors of the economy and such growth may not be sustained
in the future. If in the future such country’s economy experiences a downturn or grows at a slower rate than expected, there
may be less demand for spending in certain industries. A decrease in demand for spending in certain industries could materially
and adversely affect our ability to find an attractive target business with which to consummate our initial business combination
and if we effect our initial business combination, the ability of that target business to become profitable.
Exchange rate fluctuations and currency
policies may cause a target business’ ability to succeed in the international markets to be diminished.
In the event we acquire
a non-U.S. target, all revenues and income would likely be received in a foreign currency, and the dollar equivalent of our net
assets and distributions, if any, could be adversely affected by reductions in the value of the local currency. The value of the
currencies in our target regions fluctuate and are affected by, among other things, changes in political and economic conditions.
Any change in the relative value of such currency against our reporting currency may affect the attractiveness of any target business
or, following consummation of our initial business combination, our financial condition and results of operations. Additionally,
if a currency appreciates in value against the dollar prior to the consummation of our initial business combination, the cost
of a target business as measured in dollars will increase, which may make it less likely that we are able to consummate such transaction.
Risks Relating to our Management Team
We may not have sufficient funds
to satisfy indemnification claims of our directors and officers.
We have agreed to
indemnify our officers and directors to the fullest extent permitted by law. However, our officers and directors have agreed to
waive any right, title, interest or claim of any kind in or to any monies in the Trust Account and to not seek recourse against
the Trust Account for any reason whatsoever. Accordingly, any indemnification provided will be able to be satisfied by us only
if (i) we have sufficient funds outside of the Trust Account or (ii) we consummate an initial business combination. Our obligation
to indemnify our officers and directors may discourage shareholders from bringing a lawsuit against our officers or directors
for breach of their fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative litigation
against our officers and directors, even though such an action, if successful, might otherwise benefit us and our shareholders.
Furthermore, a shareholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage
awards against our officers and directors pursuant to these indemnification provisions.
Past performance by our management
team and their affiliates, including investments and transactions in which they have participated and businesses with which they
have been associated, may not be indicative of future performance of an investment in the Company.
Information regarding
our management team and their affiliates, including investments and transactions in which they have participated and businesses
with which they have been associated, is presented for informational purposes only. Any past experience and performance by our
management team and their affiliates and the businesses with which they have been associated, is not a guarantee that we will
be able to successfully identify a suitable candidate for our initial business combination, that we will be able to provide positive
returns to our shareholders, or of any results with respect to any initial business combination we may consummate. You should
not rely on the historical experiences of our management team and their affiliates, including investments and transactions in
which they have participated and businesses with which they have been associated, as indicative of the future performance of an
investment in us or as indicative of every prior investment by each of the members of our management team or their affiliates.
The market price of our securities may be influenced by numerous factors, many of which are beyond our control, and our shareholders
may experience losses on their investment in our securities.
We may seek business combination
opportunities in industries or sectors that may be outside of our management’s areas of expertise.
We will consider a
business combination outside of our management’s areas of expertise if a business combination candidate is presented to
us and we determine that such candidate offers an attractive business combination opportunity for our Company. Although our management
will endeavor to evaluate the risks inherent in any particular business combination candidate, we cannot assure you that we will
adequately ascertain or assess all of the significant risk factors. We also cannot assure you that an investment in our units
will not ultimately prove to be less favorable to investors in the Public Offering than a direct investment, if an opportunity
were available, in a business combination candidate. In the event we elect to pursue a business combination outside of the areas
of our management’s expertise, our management’s expertise may not be directly applicable to its evaluation or operation,
and the information contained in this Form 10-K regarding the areas of our management’s expertise would not be relevant
to an understanding of the business that we elect to acquire. As a result, our management may not be able to ascertain or assess
adequately all of the relevant risk factors. Accordingly, any shareholders who choose to remain shareholders following our initial
business combination could suffer a reduction in the value of their shares. Such shareholders are unlikely to have a remedy for
such reduction in value.
Our officers and directors will allocate
their time to other businesses thereby causing conflicts of interest in their determination as to how much time to devote to our
affairs. This conflict of interest could have a negative impact on our ability to complete our initial business combination.
Our officers and directors
are not required to, and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating
their time between our operations and our search for a business combination and their other businesses. We do not intend to have
any full-time employees prior to the completion of our initial business combination. Each of our officers is engaged in other
business endeavors for which he may be entitled to substantial compensation, and our officers are not obligated to contribute
any specific number of hours per week to our affairs. Our independent directors also serve as officers and board members for other
entities. If our officers’ and directors’ other business affairs require them to devote substantial amounts of time
to such affairs in excess of their current commitment levels, it could limit their ability to devote time to our affairs which
may have a negative impact on our ability to complete our initial business combination.
Our officers and directors presently
have, and any of them in the future may have additional, fiduciary or contractual obligations to other entities and, accordingly,
may have conflicts of interest in determining to which entity a particular business opportunity should be presented.
Until we consummate
our initial business combination, we intend to engage in the business of identifying and combining with one or more businesses.
Each of our officers and directors presently has, and any of them in the future may have, additional fiduciary or contractual
obligations to other entities pursuant to which such officer or director is or will be required to present a business combination
opportunity to such entities. Accordingly, they may have conflicts of interest in determining to which entity a particular business
opportunity should be presented. These conflicts may not be resolved in our favor and a potential target business may be presented
to another entity prior to its presentation to us, subject to their fiduciary duties under Cayman Islands law. Our amended and
restated memorandum and articles of association will provide that we renounce our interest in any corporate opportunity offered
to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director
or officer of the Company and it is an opportunity that we are able to complete on a reasonable basis.
In addition, our Sponsor
and our officers and directors may Sponsor or form other special purpose acquisition companies similar to ours or may pursue other
business or investment ventures during the period in which we are seeking an initial business combination. Any such companies,
businesses or investments may present additional conflicts of interest in pursuing an initial business combination. However, we
do not believe that any such potential conflicts would materially affect our ability to complete our initial business combination.
Our officers, directors, security
holders and their respective affiliates may have competitive pecuniary interests that conflict with our interests.
We have not adopted
a policy that expressly prohibits our directors, officers, security holders or affiliates from having a direct or indirect pecuniary
or financial interest in any investment to be acquired or disposed of by us or in any transaction to which we are a party or have
an interest. In fact, we may enter into a business combination with a target business that is affiliated with our Sponsor, our
directors or officers, although we do not intend to do so. Nor do we have a policy that expressly prohibits any such persons from
engaging for their own account in business activities of the types conducted by us. Accordingly, such persons or entities may
have a conflict between their interests and ours.
The personal and financial
interests of our directors and officers may influence their motivation in timely identifying and selecting a target business and
completing a business combination. Consequently, our directors’ and officers’ discretion in identifying and selecting
a suitable target business may result in a conflict of interest when determining whether the terms, conditions and timing of a
particular business combination are appropriate and in our shareholders’ best interest. If this were the case, it 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 which is a member of FINRA or a valuation or appraisal firm regarding the fairness to our Company from a financial
point of view of a business combination with one or more domestic or international businesses affiliated with our Sponsor, officers,
directors or existing holders, potential conflicts of interest still may exist and, as a result, the terms of the business combination
may not be as advantageous to our public shareholders as they would be absent any conflicts of interest.
Since our Sponsor, officers and directors
will lose their entire investment in us if our initial business combination is not completed (other than with respect to public
shares they may acquire after the Public Offering), a conflict of interest may arise in determining whether a particular business
combination target is appropriate for our initial business combination.
On August 12, 2020,
our Sponsor paid $25,000, or approximately $0.0043 per share, to cover certain of our offering costs in exchange for 5,750,000
Founder Shares. Our sponsor purchased 5,200,875 of the Founder Shares and ION Co-Investment purchased 549,125 of the founder
shares. In September 2020, our Sponsor transferred 25,000 founder shares to each of Mr. Seligsohn, Ms. Gazit and Mr. Shemesh
at their original purchase price. In addition, in September 2020, ION Co-Investment transferred 7,163 founder shares to our
Sponsor at their original purchase price. Prior to the initial investment in the Company of $25,000 by the Sponsor, the Company
had no assets, tangible or intangible. The purchase price of the Founder Shares was determined by dividing the amount of cash
contributed to the Company by the number of Founder Shares issued. The number of Founder Shares outstanding was determined based
on the expectation that the total size of the Public Offering would be a maximum of 23,000,000 units if the underwriters’
over-allotment option is exercised in full, and therefore that such Founder Shares would represent 20% of the outstanding shares
after the Public Offering. The Founder Shares will be worthless if we do not complete an initial business combination. In addition,
our Sponsor and Ion Co-Investment have purchased an aggregate of 7,175,000 private placement warrants for an aggregate purchase
price of $7,175,000, or $1.00 per warrant. The private placement warrants will also be worthless if we do not complete our initial
business combination. The personal and financial interests of our officers and directors may influence their motivation in identifying
and selecting a target business combination, completing an initial business combination and influencing the operation of the business
following the initial business combination. This risk may become more acute as the 24-month anniversary of the Public Offering
nears, which is the deadline for our completion of an initial business combination.
If our management following our initial
business combination is unfamiliar with United States securities laws, they may have to expend time and resources becoming familiar
with such laws, which could lead to various regulatory issues.
Following our initial
business combination, our management may resign from their positions as officers or directors of the Company and the management
of the target business at the time of the business combination will remain in place. Management of the target business may not
be familiar with United States securities laws. If new management is unfamiliar with United States securities laws, they may have
to expend time and resources becoming familiar with such laws. This could be expensive and time-consuming and could lead to various
regulatory issues which may adversely affect our operations.
Risks Relating to our Securities
You will not have any rights or interests
in funds from the Trust Account, except under certain limited circumstances. Therefore, to liquidate your investment, you may
be forced to sell your public shares or warrants, potentially at a loss.
Our public shareholders
will be entitled to receive funds from the Trust Account only upon the earliest to occur of: (i) our completion of an initial
business combination, and then only in connection with those Class A ordinary shares that such shareholder properly elected to
redeem, subject to the limitations and 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 within 24 months of the Public Offering or (B) with
respect to any other material provisions relating to shareholders’ rights or pre-initial business combination activity,
and (iii) the redemption of our public shares if we are unable to complete an initial business combination within 24 months of
the Public Offering, subject to applicable law and as further described herein. In no other circumstances will a public shareholder
have any right or interest of any kind in the Trust Account. Holders of warrants will not have any right to the proceeds held
in the Trust Account with respect to the warrants. Accordingly, to liquidate your investment, you may be forced to sell your public
shares or warrants, potentially at a loss.
NYSE may delist our securities from
trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional
trading restrictions.
Our units, Class A
ordinary shares and warrants are listed on NYSE. We cannot assure you that our securities will continue to be listed on NYSE in
the future or prior to our initial business combination. In order to continue listing our securities on NYSE prior to our initial
business combination, we must maintain certain financial, distribution and share price levels. Generally, we must maintain a minimum
amount in shareholders’ equity (generally $2,500,000) and a minimum number of holders of our securities (generally 300 public
holders). Additionally, in connection with our initial business combination, we will be required to demonstrate compliance with
NYSE’s initial listing requirements, which are more rigorous than NYSE’s continued listing requirements, in order
to continue to maintain the listing of our securities on NYSE. For instance, our share price would generally be required to be
at least $4.00 per share and our shareholders’ equity would generally be required to be at least $5.0 million. We cannot
assure you that we will be able to meet those initial listing requirements at that time.
If NYSE delists our
securities from trading on its exchange and we are not able to list our securities on another national securities exchange, we
expect our securities could be quoted on an over-the-counter market. If this were to occur, we could face significant material
adverse consequences, including:
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a limited
availability of market quotations for our securities;
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reduced
liquidity for our securities;
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a determination
that our Class A ordinary shares are a “penny stock” which will require brokers
trading in our Class A ordinary shares to adhere to more stringent rules and possibly
result in a reduced level of trading activity in the secondary trading market for our
securities;
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a limited
amount of news and analyst coverage; and
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a decreased
ability to issue additional securities or obtain additional financing in the future.
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The National Securities
Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain
securities, which are referred to as “covered securities.” Our units, Class A ordinary shares and warrants are listed
on NYSE, and, as a result, qualify as covered securities under the statute. Although the states are preempted from regulating
the sale of our securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud,
and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular
case. While we are not aware of a state having used these powers to prohibit or restrict the sale of securities issued by blank
check companies, other than the State of Idaho, certain state securities regulators view blank check companies unfavorably and
might use these powers, or threaten to use these powers, to hinder the sale of securities of blank check companies in their states.
Further, if we were no longer listed on NYSE, our securities would not qualify as covered securities under the statute and we
would be subject to regulation in each state in which we offer our securities.
You will not be permitted to exercise
your warrants unless we register and qualify the underlying Class A ordinary shares or certain exemptions are available.
If the issuance of
the Class A ordinary shares upon exercise of the warrants is not registered, qualified or exempt from registration or qualification
under the Securities Act and applicable state securities laws, holders of warrants will not be entitled to exercise such warrants
and such warrants may have no value and expire worthless. In such event, holders who acquired their warrants as part of a purchase
of units will have paid the full unit purchase price solely for the Class A ordinary shares included in the units.
We are not registering
the Class A ordinary shares issuable upon exercise of the warrants under the Securities Act or any state securities laws at this
time. However, under the terms of the warrant agreement, we have agreed that, as soon as practicable, but in no event later than
15 business days, after the closing of our initial business combination, we will use our best efforts to file with the SEC a registration
statement covering the registration under the Securities Act of the Class A ordinary shares issuable upon exercise of the warrants
and thereafter will use our best efforts to cause the same to become effective within 60 business days following our initial business
combination and to maintain a current prospectus relating to the Class A ordinary shares issuable upon exercise of the warrants
until the expiration of the warrants in accordance with the provisions of the warrant agreement. We cannot assure you that we
will be able to do so if, for example, any facts or events arise which represent a fundamental change in the information set forth
in the registration statement or prospectus, the financial statements contained or incorporated by reference therein are not current
or correct or the SEC issues a stop order.
If the Class A ordinary
shares issuable upon exercise of the warrants are not registered under the Securities Act, under the terms of the warrant agreement,
holders of warrants who seek to exercise their warrants will not be permitted to do so for cash and, instead, will be required
to do so on a cashless basis in accordance with Section 3(a)(9) of the Securities Act or another exemption.
In no event will warrants
be exercisable for cash or on a cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise
their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the
state of the exercising holder, or an exemption from registration or qualification is available.
If our Class A ordinary
shares are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition
of “covered securities” under Section 18(b)(1) of the Securities Act, we may, at our option, not permit holders of
warrants who seek to exercise their warrants to do so for cash and, instead, require them to do so on a cashless basis in accordance
with Section 3(a)(9) of the Securities Act; in the event we so elect, we will not be required to file or maintain in effect a
registration statement or register or qualify the shares underlying the warrants under applicable state securities laws, and in
the event we do not so elect, we will use our best efforts to register or qualify the shares underlying the warrants under applicable
state securities laws to the extent an exemption is not available.
In no event will we
be required to net cash settle any warrant, or issue securities (other than upon a cashless exercise as described above) or other
compensation in exchange for the warrants in the event that we are unable to register or qualify the shares underlying the warrants
under the Securities Act or applicable state securities laws.
You may only be able to exercise
your public warrants on a “cashless basis” under certain circumstances, and if you do so, you will receive fewer Class
A ordinary shares from such exercise than if you were to exercise such warrants for cash.
The warrant agreement
provides that in the following circumstances holders of warrants who seek to exercise their warrants will not be permitted to
do for cash and will, instead, be required to do so on a cashless basis in accordance with Section 3(a)(9) of the Securities Act:
(i) if the Class A ordinary shares issuable upon exercise of the warrants are not registered under the Securities Act in accordance
with the terms of the warrant agreement; (ii) if we have so elected and the Class A ordinary shares are at the time of any exercise
of a warrant not listed on a national securities exchange such that they satisfy the definition of “covered securities”
under Section 18(b)(1) of the Securities Act; and (iii) if we have so elected and we call the public warrants for redemption.
If you exercise your public warrants on a cashless basis, you would pay the warrant exercise price by surrendering the warrants
for that number of Class A ordinary shares equal to the quotient obtained by dividing (x) the product of the number of Class A
ordinary shares underlying the warrants, multiplied by the excess of the “fair market value” of our Class A ordinary
shares (as defined in the next sentence) over the exercise price of the warrants by (y) the fair market value. The “fair
market value” is the average reported closing price of the Class A ordinary shares for the 10 trading days ending on the
third trading day prior to the date on which the notice of exercise is received by the warrant agent or on which the notice of
redemption is sent to the holders of warrants, as applicable. As a result, you would receive fewer Class A ordinary shares from
such exercise than if you were to exercise such warrants for cash.
The grant of registration rights
to our initial shareholders, forward purchase investors and holders of our private placement warrants may make it more difficult
to complete our initial business combination, and the future exercise of such rights may adversely affect the market price of
our Class A ordinary shares.
Pursuant to the forward
purchase agreements and an agreement to be entered into concurrently with the issuance and sale of the securities in the Public
Offering, our initial shareholders and their permitted transferees can demand that we register the Class A ordinary shares into
which founder shares are convertible, forward purchase shares, 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 securities that may be issued upon conversion of working capital loans may demand that we register
such units, shares, warrants or the Class A ordinary shares issuable upon exercise of such warrants. We will bear the cost of
registering these securities. The registration and availability of such a significant number of securities for trading in the
public market may have an adverse effect on the market price of our Class A ordinary shares. In addition, the existence of the
registration rights may make our initial business combination more costly or difficult to conclude. This is because the shareholders
of the target business may increase the equity stake they seek in the combined entity or ask for more cash consideration to offset
the negative impact on the market price of our Class A ordinary shares that is expected when the ordinary shares owned by our
initial shareholders, holders of our private placement warrants or holders of our working capital loans or their respective permitted
transferees are registered.
We may issue additional Class A ordinary
shares or preferred shares to complete our initial business combination or under an employee incentive plan after completion of
our initial business combination. We may also issue Class A ordinary shares upon the conversion of the Founder Shares at a ratio
greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions contained
therein. Any such issuances would dilute the interest of our shareholders and likely present other risks.
Our amended and restated
memorandum and articles of association authorizes the issuance of up to 500,000,000 Class A ordinary shares, par value $0.0001
per share, 50,000,000 Class B ordinary shares, par value $0.0001 per share, and 5,000,000 preferred shares, par value $0.0001
per share. There are 474,125,000 and 43,531,250 authorized but unissued Class A ordinary shares and Class B ordinary shares, respectively,
available for issuance, which amount does not take into account shares reserved for issuance upon exercise of outstanding warrants
or shares issuable upon conversion of the Class B ordinary shares. The Class B ordinary shares are automatically convertible into
Class A ordinary shares concurrently with or immediately following the consummation of our initial business combination, initially
at a one-for-one ratio but subject to adjustment as set forth herein and in our amended and restated memorandum and articles of
association, including in certain circumstances in which we issue Class A ordinary shares or equity-linked securities related
to our initial business combination. Immediately after the Public Offering, there will be no preferred shares issued and outstanding.
We may issue a substantial
number of additional Class A ordinary shares or preferred shares to complete our initial business combination or under an employee
incentive plan after completion of our initial business combination. We may also issue Class A ordinary shares upon conversion
of the Class B ordinary shares at a ratio greater than one-to-one at the time of our initial business combination as a result
of the anti-dilution provisions as set forth therein. However, our amended and restated memorandum and articles of association
provide, among other things, that prior to our initial business combination, we may not issue additional shares that would entitle
the holders thereof to (i) receive funds from the Trust Account or (ii) vote on any initial business combination. These provisions
of our amended and restated memorandum and articles of association, like all provisions of our amended and restated memorandum
and articles of association, may be amended with a shareholder vote. The issuance of additional ordinary or preferred shares:
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may significantly
dilute the equity interest of investors in the Public Offering;
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may subordinate
the rights of holders of Class A ordinary shares if preferred shares are issued with
rights senior to those afforded our Class A ordinary shares;
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could cause
a change in control if a substantial number of Class A ordinary shares are issued, which
may affect, among other things, our ability to use our net operating loss carry forwards,
if any, and could result in the resignation or removal of our present officers and directors;
and
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may adversely
affect prevailing market prices for our units, Class A ordinary shares and/or warrants.
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Unlike some other similarly structured
special purpose acquisition companies, our initial shareholders will receive additional Class A ordinary shares if we issue certain
shares to consummate an initial business combination.
The Founder Shares
will automatically convert into Class A ordinary shares concurrently with or immediately following the consummation of our initial
business combination on a one-for-one basis, subject to adjustment for share splits, share capitalizations, reorganizations, recapitalizations
and the like, and subject to further adjustment as provided herein. In the case that additional Class A ordinary shares or equity-linked
securities are issued or deemed issued in connection with our initial business combination, the number of Class A ordinary shares
issuable upon conversion of all Founder Shares will equal, in the aggregate, 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.
We may amend the terms of the warrants
in a manner that may be adverse to holders of public warrants with the approval by the holders of at least 50% of the then outstanding
public warrants. As a result, the exercise price of your warrants could be increased, the exercise period could be shortened and
the number of Class A ordinary shares purchasable upon exercise of a warrant could be decreased, all without your approval.
Our warrants were
issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent,
and us. The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder for the
purpose of (i) curing any ambiguity or to correct any defective provision or mistake, including to conform the provisions of the
warrant agreement to the description of the terms of the warrants and the warrant agreement, (ii) adjusting the provisions relating
to cash dividends on ordinary shares as contemplated by and in accordance with the warrant agreement or (iii) adding or changing
any provisions with respect to matters or questions arising under the warrant agreement as the parties to the warrant agreement
may deem necessary or desirable and that the parties deem to not adversely affect the rights of the registered holders of the
warrants, provided that the approval by the holders of at least 50% of the then-outstanding public warrants is required to make
any change that adversely affects the interests of the registered holders of public warrants. Accordingly, we may amend the terms
of the public warrants in a manner adverse to a holder of public warrants if holders of at least 50% of the then outstanding public
warrants approve of such amendment. Although our ability to amend the terms of the public warrants with the consent of at least
50% of the then outstanding public warrants is unlimited, examples of such amendments could be amendments to, among other things,
increase the exercise price of the warrants, convert the warrants into cash or shares, shorten the exercise period or decrease
the number of Class A ordinary shares purchasable upon exercise of a warrant.
Our warrant agreement designates
the courts of the State of New York or the United States District Court for the Southern District of New York as the sole and
exclusive forum for certain types of actions and proceedings that may be initiated by holders of our warrants, which could limit
the ability of warrant holders to obtain a favorable judicial forum for disputes with our Company.
Our warrant agreement
provides that, subject to applicable law, (i) any action, proceeding or claim against us arising out of or relating in any way
to the warrant agreement, including under the Securities Act, will be brought and enforced in the courts of the State of New York
or the United States District Court for the Southern District of New York, and (ii) that we irrevocably submit to such jurisdiction,
which jurisdiction shall be the exclusive forum for any such action, proceeding or claim. We will waive any objection to such
exclusive jurisdiction and that such courts represent an inconvenient forum.
Notwithstanding the
foregoing, these provisions of the warrant agreement will not apply to suits brought to enforce any liability or duty created
by the Exchange Act or any other claim for which the federal district courts of the United States of America are the sole and
exclusive forum. Any person or entity purchasing or otherwise acquiring any interest in any of our warrants shall be deemed to
have notice of and to have consented to the forum provisions in our warrant agreement. If any action, the subject matter of which
is within the scope the forum provisions of the warrant agreement, is filed in a court other than a court of the State of New
York or the United States District Court for the Southern District of New York (a “foreign action”) in the name of
any holder of our warrants, such holder shall be deemed to have consented to: (x) the personal jurisdiction of the state and federal
courts located in the State of New York in connection with any action brought in any such court to enforce the forum provisions
(an “enforcement action”), and (y) having service of process made upon such warrant holder in any such enforcement
action by service upon such warrant holder’s counsel in the foreign action as agent for such warrant holder.
This choice-of-forum
provision may limit a warrant holder’s ability to bring a claim in a judicial forum that it finds favorable for disputes
with our Company, which may discourage such lawsuits. Alternatively, if a court were to find this provision of our warrant agreement
inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional
costs associated with resolving such matters in other jurisdictions, which could materially and adversely affect our business,
financial condition and results of operations and result in a diversion of the time and resources of our management and board
of directors.
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 share
splits, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 trading-day
period ending on the third trading day prior to the date on which we give 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.
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. None of the private placement
warrants will be redeemable by us so long as they are held by the Sponsor or its permitted transferees.
Our warrants may have an adverse
effect on the market price of our Class A ordinary shares and make it more difficult to effectuate our initial business combination.
We issued warrants
to purchase 5,175,000 of our Class A ordinary shares as part of the units sold in the Public Offering and, simultaneously with
the Public Offering, we issued in a Private Placement an aggregate of 7,175,000 private placement warrants, at $1.00 per warrant.
In addition, if the Sponsor makes any working capital loans, it may convert those loans into up to an additional 1,500,000 private
placement warrants, at the price of $1.00 per warrant. To the extent we issue ordinary shares to effectuate a business transaction,
the potential for the issuance of a substantial number of additional Class A ordinary shares upon exercise of these warrants could
make us a less attractive acquisition vehicle to a target business. Such warrants, when exercised, will increase the number of
issued and outstanding Class A ordinary shares and reduce the value of the Class A ordinary shares issued to complete the business
transaction. Therefore, our warrants may make it more difficult to effectuate a business transaction or increase the cost of acquiring
the target business.
Because each unit contains one-fifth
of one warrant and only a whole warrant may be exercised, the units may be worth less than units of other special purpose acquisition
companies.
Each unit contains
one-fifth of one warrant. Pursuant to the warrant agreement, no fractional warrants were issued upon separation of the units,
and only whole units can trade. If, upon exercise of the warrants, a holder would be entitled to receive a fractional interest
in a share, we will, upon exercise, round down to the nearest whole number the number of Class A ordinary shares to be issued
to the warrant holder. This is different from other offerings similar to ours whose units include one ordinary share and one warrant
to purchase one whole share. We have established the components of the units in this way in order to reduce the dilutive effect
of the warrants upon completion of a business combination since the warrants will be exercisable in the aggregate for one-fifth
of the number of shares compared to units that each contain a whole warrant to purchase one share, thus making us, we believe,
a more attractive merger partner for target businesses. Nevertheless, this unit structure may cause our units to be worth less
than if it included a warrant to purchase one whole share.
General Risk Factors
We are 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 August 12 before that time, in which case we would no longer be an emerging growth company as of the following
December 31. We cannot predict whether investors will find our securities less attractive because we will rely on these exemptions.
If some investors find our securities less attractive as a result of our reliance on these exemptions, the trading prices of our
securities may be lower than they otherwise would be, there may be a less active trading market for our securities and the trading
prices of our securities may be more volatile.
Further, Section 102(b)(1)
of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards
until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not
have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting
standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements
that apply to non-emerging growth companies but any such an election to opt out is irrevocable. We have elected not to opt out
of such extended transition period which means that when a standard is issued or revised and it has different application dates
for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private
companies adopt the new or revised standard. This may make comparison of our financial statements with another public company
which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition
period difficult or impossible because of the potential differences in accounting standards used.
Additionally, we are
a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take
advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial
statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of
our ordinary shares held by non-affiliates exceeds $250 million as of the prior August 12, or (2) our annual revenues exceeded
$100 million during such completed fiscal year and the market value of our ordinary shares held by non-affiliates exceeds $700
million as of the prior August 12th. To the extent we take advantage of such reduced disclosure obligations, it may also make
comparison of our financial statements with other public companies difficult or impossible.
Provisions in our amended and restated
memorandum and articles of association may inhibit a takeover of us, which could limit the price investors might be willing to
pay in the future for our Class A ordinary shares and could entrench management.
Our amended and restated
memorandum and articles of association contain provisions that may discourage unsolicited takeover proposals that shareholders
may consider to be in their best interests. These provisions include a staggered board of directors and the ability of the board
of directors to designate the terms of and issue new series of preferred shares, which may make the removal of management more
difficult and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for
our securities.
Because we are incorporated under
the laws of the Cayman Islands, you may face difficulties in protecting your interests, and your ability to protect your rights
through the U.S. Federal courts may be limited.
We are an exempted
company incorporated under the laws of the Cayman Islands. As a result, it may be difficult for investors to effect service of
process within the United States upon our directors or officers, or enforce judgments obtained in the United States courts against
our directors or officers.
Our corporate affairs
will be governed by our amended and restated memorandum and articles of association, the Companies 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 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.
Cyber incidents or attacks directed
at us could result in information theft, data corruption, operational disruption and/or financial loss.
We depend on digital
technologies, including information systems, infrastructure and cloud applications and services, including those of third parties
with which we may deal. Sophisticated and deliberate attacks on, or security breaches in, our systems or infrastructure, or the
systems or infrastructure of third parties or the cloud, could lead to corruption or misappropriation of our assets, proprietary
information and sensitive or confidential data. As an early stage company without significant investments in data security protection,
we may not be sufficiently protected against such occurrences. We may not have sufficient resources to adequately protect against,
or to investigate and remediate any vulnerability to, cyber incidents. It is possible that any of these occurrences, or a combination
of them, could have adverse consequences on our business and lead to financial loss.
We are subject to changing law and
regulations regarding regulatory matters, corporate governance and public disclosure that have increased both our costs and the
risk of non-compliance.
We are subject to
rules and regulations by various governing bodies, including, for example, the Securities and Exchange Commission, which are charged
with the protection of investors and the oversight of companies whose securities are publicly traded, and to new and evolving
regulatory measures under applicable law. Our efforts to comply with new and changing laws and regulations have resulted in and
are likely to continue to result in, increased general and administrative expenses and a diversion of management time and attention
from revenue-generating activities to compliance activities.
Moreover, because
these laws, regulations and standards are subject to varying interpretations, their application in practice may evolve over time
as new guidance becomes available. This evolution may result in continuing uncertainty regarding compliance matters and additional
costs necessitated by ongoing revisions to our disclosure and governance practices. If we fail to address and comply with these
regulations and any subsequent changes, we may be subject to penalty and our business may be harmed.
We employ a mail forwarding service,
which may delay or disrupt our ability to receive mail in a timely manner.
Mail addressed to
the Company and received at its registered office will be forwarded unopened to the forwarding address supplied by Company to
be dealt with. None of the Company, its directors, officers, advisors or service providers (including the organization which provides
registered office services in the Cayman Islands) will bear any responsibility for any delay howsoever caused in mail reaching
the forwarding address, which may impair your ability to communicate with us.