Item 1. Business.
Introduction
We are a blank check company
formed on January 23, 2020 as a Delaware corporation for the purpose of effecting an initial business combination. Since our initial
public offering, we have focused our search for an initial business combination on businesses that may provide significant opportunities
for attractive investor returns. Our efforts to identify a prospective target business are not limited to a particular industry or geographic
region, although we have focused on targets in an industry where we believe our management team’s and founders’ expertise
provide us with a competitive advantage, including the financial services, healthcare, real estate services, technology and software industries.
Our management team consists
of:
| ● | Howard
W. Lutnick, our Chairman and Chief Executive Officer, who joined Cantor in 1983 and has served as President and Chief Executive Officer
of Cantor since 1992 and as Chairman since 1996; and |
| ● | Jane
Novak, our Chief Financial Officer, who joined Cantor in October 2017 and, since then, has served as the Global Head of Accounting Policy. |
We, the sponsor, and CF&Co.
are all affiliates of Cantor. Cantor is a diversified company specializing in financial and real estate services for customers operating
in the global financial and commercial real estate markets, whose businesses include CF&Co., a leading independent middle market investment
bank and primary dealer; BGC Partners, Inc., whose common stock trades on the Nasdaq Global Select Market under the ticker symbol “BGCP”,
a leading global financial technology and brokerage business primarily servicing the global financial markets; and Newmark Group, Inc.,
whose Class A common stock trades on the Nasdaq Global Select Market under the ticker symbol “NMRK”, a leading full-service
commercial real estate services business. We believe that the combination of our management team’s and our affiliates’ financial
services, financial and real estate technology, and real estate industry expertise and proven ability to grow businesses through acquisitions
make us uniquely qualified to pursue acquisitions.
Past performance of Cantor,
its affiliates and our management team is not a guarantee either (i) that we will be able to identify a suitable candidate for our initial
business combination or (ii) of success with respect to any business combination we may consummate. You should not rely on the historical
performance record of Cantor, its affiliates, or our management team as indicative of our future performance.
Initial Public Offering
On December 28, 2020, we consummated
our initial public offering of 50,000,000 units (including 5,000,000 units sold upon the partial exercise of the underwriters’ over-allotment
option). Each unit consists of one public share and one-third of one public warrant, with each public warrant entitling the holder thereof
to purchase one share of Class A common stock for $11.50 per whole share. The units were sold at a price of $10.00 per unit, generating
gross proceeds to the Company of $500,000,000.
Simultaneously with the closing
of the initial public offering, we completed the private sale of an aggregate of 1,000,000 private placement units to the sponsor at a
purchase price of $10.00 per private placement unit, generating gross proceeds of $10,000,000.
A total of $500,000,000, comprised
of $490,000,000 of the proceeds from the initial public offering and $10,000,000 of the proceeds of the sale of the private placement
units, was placed in the trust account maintained by Continental, acting as trustee.
On
December 22, 2022, at a special meeting of our stockholders, our stockholders approved the Extension. In connection with the Extension,
the sponsor agreed to loan us an aggregate amount of up to $2,767,883 under the Extension Loan, with (i) $461,314 ($0.045 for each public
share that was not redeemed in connection with the Extension) deposited into the trust account in connection with the first funding of
the Monthly Amount on December 28, 2022, and (ii) $461,314 being deposited into the trust account for each calendar month (commencing
on January 29, 2023 and ending on the 28th day of each subsequent month), or portion thereof, that is needed by us to
complete an initial business combination. The Extension Loan does not bear interest and is repayable by us to the sponsor or its
designees upon consummation of our initial business combination. In connection with the stockholder vote to approve the Extension, 39,748,580
public shares were redeemed at $10.11 per share, resulting in a reduction of $402,003,579 in the amount held in the trust account.
We must complete our initial
business combination by June 28, 2023 (or an earlier time if the board determines not to continue to extend the term pursuant to the Extension).
If our initial business combination is not consummated by such date, unless we extend such time with the consent of our stockholders,
then we will proceed to liquidate, and we will distribute all amounts in the trust account.
Our units, public shares and
public warrants are each traded on Nasdaq under the symbols “CFIVU,” “CFIV” and “CFIVW,” respectively.
Our units commenced public trading on December 23, 2020, and our public shares and public warrants commenced separate public trading on
February 16, 2021.
Business Strategy
Our acquisition and value
creation strategy is to identify and acquire a company in an industry that complements the experience and expertise of our management
team. Our acquisition selection process leverages the network of contacts developed by our management team and those of the sponsor and
its affiliates, including relationships in the financial services, healthcare, real estate services, technology and software industries,
comprising management teams of public and private companies, investment bankers, private equity sponsors, venture capital investors, advisers,
attorneys and accountants that we believe should provide us with a number of business combination opportunities. We are deploying a proactive
sourcing strategy and are focusing on companies where we believe the combination of our operating experience, relationships, capital and
capital markets expertise can help accelerate the target’s growth and performance.
Our management team and Cantor
and its affiliates have experience in:
| ● | sourcing,
structuring, acquiring and selling businesses; |
| ● | fostering
relationships with sellers, capital providers and target management teams; |
| ● | negotiating
transactions favorable to investors; |
| ● | executing
transactions in multiple geographies and under varying economic and financial market conditions; |
| ● | accessing
the capital markets, including financing businesses and helping companies transition to public ownership; |
| ● | operating
companies, setting and changing strategies, and identifying, monitoring and recruiting world-class talent; |
| ● | acquiring
and integrating companies; and |
| ● | developing
and growing companies, both organically and through acquisitions and strategic transactions and expanding the product range and geographic
footprint of a number of target businesses. |
Investment Criteria
Following the consummation
of the IPO, we had initially sought to acquire one or more businesses with an aggregate enterprise value of approximately $800 million
to $2.0 billion or more. However, following the Extension and the associated redemptions, we expect to acquire one or more businesses
with an aggregate enterprise value below that range. At the time of the initial public offering, we developed the following high level,
non-exclusive investment criteria that we use to screen for and evaluate target businesses. We have sought and are seeking to acquire
a business that (1) has sustainable competitive advantages, (2) generates, or has the near-term potential to generate, predicable
free cash flows, (3) would benefit from the capabilities of the sponsor and management team to improve its operations and market
position, (4) has an experienced and capable management team, (5) has the potential to grow both organically and through additional
acquisitions and (6) can be acquired at an attractive valuation to maximize potential returns to our stockholders.
While we may pursue an acquisition
opportunity in any business, industry, sector or geographical location, we have focused on industries that complement our management team’s
background. We therefore have focused on potential target companies in the financial services, healthcare, real estate services, technology
and software industries.
These criteria are not intended
to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be based, to the extent relevant,
on these general guidelines as well as other considerations, factors and criteria that our management may deem relevant. In the event
that we decide to enter into our initial business combination with a target business that only meets some but not all of the above criteria
and guidelines, we will disclose that the target business does not meet all of the above criteria in our stockholder communications related
to our initial business combination, which, as discussed in this Report, would be in the form of proxy solicitation materials or tender
offer documents that we would file with the SEC.
Initial Business Combination
So long as we maintain a listing
for our securities on Nasdaq, we must complete one or more business combinations having an aggregate fair market value of at least 80%
of the value of the assets held in the trust account (excluding taxes payable on the interest earned on the trust account) at the time
of our signing a definitive agreement in connection with our initial business combination. Our board of directors will make the determination
as to the fair market value of our initial business combination. If our board of directors is not able to independently determine the
fair market value of our initial business combination, we will obtain an opinion from an independent investment banking firm or another
independent firm that commonly renders valuation opinions with respect to the satisfaction of such criteria. While we consider it unlikely
that our board of directors will not be able to make an independent determination of the fair market value of our initial business combination,
it may be unable to do so if it is less familiar or experienced with the business of a particular target or if there is a significant
amount of uncertainty as to the value of a target’s assets or prospects. Additionally, pursuant to Nasdaq rules, any initial business
combination must be approved by a majority of our independent directors. If we are no longer listed on Nasdaq, we would not be required
to satisfy the above-referenced fair market value test.
We may, at our option, pursue
an Affiliated Joint Acquisition. We do not expect that we would pursue any such opportunity with another SPAC sponsored by Cantor. Any
such parties would co-invest only if (i) permitted by applicable regulatory and other legal limitations; (ii) we and Cantor
considered a transaction to be mutually beneficial to us as well as the affiliated entity; and (iii) other business reasons exist
to do so, such as the strategic merits of including such co-investors, the need for additional capital beyond the amount held in our trust
account to fund the initial business combination and/or the desire to obtain committed capital for closing the initial business combination.
An Affiliated Joint Acquisition
may be effected through a co-investment with us in the target business at the time of our initial business combination, or we could raise
additional proceeds to complete the initial business combination by issuing to such parties a specified future issuance. Any such Affiliated
Joint Acquisition or specified future issuance would be in addition to, and would not include, the FPS. The amount and other terms and
conditions of any such specified future issuance would be determined at the time thereof. We are not obligated to make any specified future
issuance and may determine not to do so. This is not an offer for any specified future issuance. Pursuant to the anti-dilution provisions
of our Class B common stock, any such specified future issuance would result in an adjustment to the conversion ratio such that our
initial stockholders and their permitted transferees, if any, would retain their aggregate percentage ownership at 20% of the sum of the
total number of all shares of common stock outstanding upon completion of the initial public offering (not including the private placement
shares) plus all shares issued in the specified future issuance, unless the holders of a majority of the then-outstanding shares of Class B
common stock agreed to waive such adjustment with respect to the specified future issuance at the time thereof. We cannot determine at
this time whether a majority of the holders of our Class B common stock at the time of any such specified future issuance would agree
to waive such adjustment to the conversion ratio. They may waive such adjustment due to (but not limited to) the following: (i) closing
conditions which are part of the agreement for our initial business combination; (ii) negotiation with Class A stockholders
on structuring an initial business combination; (iii) negotiation with parties providing financing which would trigger the anti-dilution
provisions of the Class B common stock; or (iv) as part of the Affiliated Joint Acquisition. If such adjustment is not waived,
the specified future issuance would not reduce the percentage ownership of holders of our Class B common stock, but would reduce
the percentage ownership of holders of our Class A common stock. If such adjustment is waived, the specified future issuance would
reduce the percentage ownership of holders of both classes of our common stock. The issuance of the FPS will not result in such an adjustment
to the conversion ratio of our Class B common stock.
We anticipate structuring
our initial business combination either (i) in such a way so that the post-transaction company in which our public stockholders own
shares will own or acquire 100% of the equity interests or assets of the target business or businesses, or (ii) in such a way so
that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business in order to meet
certain objectives of the target management team or stockholders, or for other reasons, including an Affiliated Joint Acquisition as described
above. However, we will only complete an initial business combination if the post-transaction company owns or acquires 50% or more of
the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be
required to register as an investment company under the Investment Company Act. Even if the post-transaction company owns or acquires
50% or more of the voting securities of the target, our stockholders prior to the initial business combination may collectively own a
minority interest in the post-transaction company, depending on valuations ascribed to the target and us in the initial business combination.
For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding
capital stock of a target. In this case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance
of a substantial number of new shares, our stockholders immediately prior to our initial business combination could own less than a majority
of our outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests or assets of a target
business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned
or acquired is what will be taken into account for purposes of Nasdaq’s 80% fair market value test. If the initial business combination
involves more than one target business, the 80% fair market value test will be based on the aggregate value of all of the transactions
and we will treat the target businesses together as the initial business combination for purposes of a tender offer or for seeking stockholder
approval, as applicable. So long as we obtain and maintain a listing for our securities on Nasdaq, we would be required to comply with
such 80% rule.
We do not believe we will
need to raise additional funds in order to meet the expenditures required for operating our business. However, if our estimates of the
costs of identifying a target business, undertaking in-depth due diligence and negotiating an initial business combination are less than
the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our initial business combination.
Moreover, we may need to obtain additional financing either to complete our initial business combination or because we become obligated
to redeem a significant number of our public shares upon completion of our initial business combination, in which case we may issue additional
securities or incur debt in connection with such business combination. In addition, we are targeting businesses with enterprise values
that may be greater than the amount currently held in the trust account and the sale of the FPS, and, as a result, if any cash portion
of the purchase price exceeds the amount available from the trust account, net of amounts needed to satisfy redemptions by public stockholders,
we may be required to seek additional financing to complete such proposed initial business combination. We may also obtain financing prior
to the closing of our initial business combination to fund our working capital needs and transaction costs in connection with our search
for and completion of our initial business combination. There is no limitation on our ability to raise funds through the issuance of equity
or equity-linked securities or through loans, advances or other indebtedness in connection with our initial business combination, including
pursuant to forward purchase agreements or backstop arrangements into which we may enter. Subject to compliance with applicable securities
laws, we would only complete such financing simultaneously with the completion of our business combination. If we are unable to complete
our initial business combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate
the trust account. In addition, following our initial business combination, if cash on hand is insufficient, we may need to obtain additional
financing in order to meet our obligations.
Our Business Combination Process
In evaluating prospective
business combinations, we have conducted, and expect to continue to conduct, a thorough due diligence review that encompasses, among other
things, a review of historical and projected financial and operating data, meetings with management and their advisors (if applicable),
on-site inspection of facilities and assets to the extent possible, document reviews, as well as a review of financial, operational, legal
and other information which has been and will be made available to us and which we deem appropriate. We also have utilized, and will continue
to utilize, our expertise and the sponsor’s expertise in analyzing companies and evaluating operating projections, financial projections
and determining the appropriate return expectations.
We are not prohibited from
pursuing an initial business combination with a business that is affiliated with Cantor or its affiliates or the sponsor, or our officers
or directors, including an Affiliated Joint Acquisition. In the event we seek to complete our initial business combination with a business
that is affiliated with Cantor or its affiliates or the sponsor, or our officers or directors, we, or a committee of independent directors,
will obtain an opinion from an independent investment banking firm or another independent firm that commonly renders valuation opinions
that our initial business combination is fair to our stockholders from a financial point of view. The sponsor has committed, pursuant
to the FPA, to purchase, in a private placement for gross proceeds of $15,000,000 to occur concurrently with the consummation of our initial
business combination, 1,500,000 of our units on substantially the same terms as the sale of units in the initial public offering at $10.00
per unit, and 375,000 shares of Class A common stock. The funds from the sale of the FPS will be used as part of the consideration to
the sellers in the initial business combination; any excess funds from this private placement will be used for working capital in the
post-transaction company. This commitment is independent of the percentage of stockholders electing to redeem their public shares and
provides us with a minimum funding level for the initial business combination.
Cantor is the beneficial
owner of founder shares and/or private placement units by virtue of its ownership of the sponsor and members of our management team may
indirectly own such securities. The sponsor has transferred founder shares and private placement shares to our independent directors
and we have paid a cash fee to one of our independent directors as further described herein. Because of such ownership and interests,
Cantor and our officers and directors may have a conflict of interest in determining whether a particular target business is an appropriate
business with which to effectuate our initial business combination. Further, each of our officers and directors may have a conflict of
interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors
were to be included by a target business as a condition to any agreement with respect to our initial business combination.
All of our officers are employed
by Cantor or its affiliates. Cantor is continuously made aware of potential business opportunities, one or more of which we may desire
to pursue for an initial business combination. While Cantor does not have any duty to offer acquisition opportunities to us, Cantor may
become aware of a potential transaction that is an attractive opportunity for us, which Cantor may decide to share with us.
The sponsor, our officers,
our directors, Cantor and their affiliates may participate in the formation of, or become an officer or director of, any other blank check
company prior to completion of our initial business combination. In particular, certain of our executive officers and directors also serve
as executive officers or directors of other SPACs sponsored by Cantor as set forth below, each of which is focused on searching for businesses
that may provide significant opportunities for attractive investor returns in industries similar to the industries in which our search
is focused. As a result, the sponsor and our officers or directors could have conflicts of interest in determining whether to present
business combination opportunities to us or to any other blank check company with which they may become involved.
Each of our officers and directors
presently has, and any of them in the future may have additional, fiduciary, contractual or other obligations or duties to one or more
other entities pursuant to which such officer or director is or will be required to present a business combination opportunity. The Charter
provides that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly
offered to such person solely in his or her capacity as a director or officer of our company, such opportunity is one we are legally and
contractually permitted to undertake and would otherwise be reasonable for us to pursue, and to the extent the director or officer is
permitted to refer that opportunity to us without violating another legal obligation. Accordingly, if any of our officers or directors
becomes aware of a business combination opportunity which is suitable for one or more entities to which he or she has fiduciary, contractual
or other obligations or duties, he or she will honor these obligations and duties to present such business combination opportunity to
such entities first, and only present it to us if such entities reject the opportunity and he or she determines to present the opportunity
to us.
Our Management Team
Members of our management
team are not obligated to devote any specific number of hours to our matters but they devote as much of their time as they deem necessary
to our affairs until we have completed our initial business combination. The amount of time that any member of our management team devotes
in any time period will vary based on the current stage of the business combination process we are in.
We believe our management
team’s operating and transaction experience and relationships with companies will provide us with a substantial number of potential
business combination targets. Over the course of their careers, the members of our management team have developed a broad network of contacts
and corporate relationships in various industries. This network has grown through the activities of our management team sourcing, acquiring
and financing businesses, our management team’s relationships with sellers, financing sources and target management teams and the
experience of our management team in executing transactions under varying economic and financial market conditions.
Status as a Public Company
We believe our structure makes
us an attractive business combination partner to target businesses. As a public company, we offer a target business an alternative to
the traditional initial public offering through a merger or other business combination with us. Following an initial business combination,
we believe the target business would have greater access to capital and additional means of creating management incentives that are better
aligned with stockholders’ interests than it would as a private company. A target business can further benefit by augmenting its
profile among potential new customers and vendors and aid in attracting talented employees. In a business combination transaction with
us, the owners of the target business may, for example, exchange their shares of stock in the target business for shares of Class A
common stock (or shares of a new holding company) or for a combination of shares of Class A common stock and cash, allowing us to
tailor the consideration to the specific needs of the sellers.
Although there are various
costs and obligations associated with being a public company, we believe target businesses will find this method a more expeditious and
cost effective method to becoming a public company than the typical initial public offering. The typical initial public offering process
takes a significantly longer period of time than the typical business combination transaction process, and there are significant expenses
in the initial public offering process, including underwriting discounts and commissions, marketing and road show efforts that may not
be present to the same extent in connection with an initial business combination with us.
Furthermore, once a proposed
initial business combination is completed, the target business will have effectively become public, whereas an initial public offering
is always subject to the underwriters’ ability to complete the offering, as well as general market conditions, which could delay
or prevent the offering from occurring or could have negative valuation consequences. Following an initial business combination, we believe
the target business would then have greater access to capital and an additional means of providing management incentives consistent with
stockholders’ interests and the ability to use its shares as currency for acquisitions. Being a public company can offer further
benefits by augmenting a company’s profile among potential new customers and vendors and aid in attracting talented employees.
While we believe that our
structure and our management team’s backgrounds make us an attractive business partner, some potential target businesses may view
our status as a blank check company, such as our lack of an operating history and our ability to seek stockholder approval of any proposed
initial business combination, negatively.
We are an “emerging
growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As such, we are eligible to take
advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging
growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section
404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements,
and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any
golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may be a less
active trading market for our securities and the prices of our securities may be more volatile.
In addition, Section 107 of
the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided
in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging
growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.
We intend to take advantage of the benefits of this extended transition period.
We will remain an emerging
growth company until the earlier of (1) the last day of the fiscal year (a) following December 28, 2025, (b) in which we
have total annual gross revenue of at least $1.235 billion, or (c) in which we are deemed to be a large accelerated filer, which
means the market value of our Class A common stock that is held by non-affiliates exceeds $700 million as of the prior June 30,
and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year
period. References herein to “emerging growth company” will have the meaning associated with it in the JOBS Act.
Additionally, we are a “smaller
reporting company” as defined in Rule 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 common stock held by non-affiliates exceeds
$250 million as of the prior June 30 or (2) our annual revenues exceed $100 million during such completed fiscal year and
the market value of our common stock held by non-affiliates exceeds $700 million as of the prior June 30.
In addition, only holders
of our founder shares have the right to vote on the election of directors prior to the consummation of our initial business combination.
As a result, Nasdaq considers us to be a “controlled company” within the meaning of Nasdaq corporate governance standards.
Under Nasdaq corporate governance standards, a company of which more than 50% of the voting power for the election of directors is held
by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance
requirements. We have utilized, and will continue to utilize, these exemptions.
Financial Position
With funds available for an
initial business combination in the amount of $104,179,365, based on the balance of our trust account as of December 31, 2022 and excluding
any expected proceeds from the issuance of the FPS, we offer a target business a variety of options such as creating a liquidity event
for its owners, providing capital for the potential growth and expansion of its operations or strengthening its balance sheet by reducing
its debt or leverage ratio. Because we are able to complete our initial business combination using our cash, debt or equity securities,
or a combination of the foregoing, we have the flexibility to use the most efficient combination that will allow us to tailor the consideration
to be paid to the target business to fit its needs and desires. However, we have not taken any steps to secure any third party financing
and there can be no assurance any third party financing will be available to us.
Effecting Our Initial Business Combination
We are not presently engaged
in, and we will not engage in, any operations other than the pursuit of our business combination, at which point we will engage in the
business of the target we acquire in our initial business combination. We intend to effectuate our initial business combination using
cash from the proceeds of the (i) initial public offering remaining in the trust account at the time of the business combination, (ii)
private placement of the private placement units, (iii) $15,000,000 FPA, (iv) sale of our securities in connection with our initial business
combination (pursuant to forward purchase contracts or any backstop agreements we may enter into following the consummation of the initial
public offering or otherwise), (v) shares issued to the owners of the target, (vi) debt issued to bank or other lenders or the owners
of the target, or (vii) a combination of the foregoing. We may seek to complete our initial business combination with a company or business
that may be financially unstable or in its early stages of development or growth, which would subject us to the numerous risks inherent
in such companies and businesses.
If our initial business combination
is paid for using equity or debt securities, or not all of the funds released from the trust account are used for payment of the consideration
in connection with our initial business combination or used for redemptions of our Class A common stock, we may apply the balance
of the cash released to us from the trust account, as well as the $15,000,000 from the FPA, for general corporate purposes, including
for maintenance or expansion of operations of the post-transaction company, the payment of principal or interest due on indebtedness incurred
in completing our initial business combination, to fund the purchase of other companies or for working capital.
In addition to the transactions
contemplated by the FPA, we may seek to raise additional funds through a private offering of debt or equity securities in connection with
the completion of our initial business combination (which may include a specified future issuance), and we may effectuate our initial
business combination using the proceeds of such offering rather than using the amounts held in the trust account. In addition, we are
targeting businesses larger than we could acquire with the remaining net proceeds of our initial public offering, the sale of the private
placement units as well as the $15,000,000 from the FPA, and may as a result be required to seek additional financing to complete such
proposed initial business combination. Subject to compliance with applicable securities laws, we would expect to complete such financing
only simultaneously with the completion of our initial business combination. In the case of an initial business combination funded with
assets other than the trust account assets, our proxy materials or tender offer documents disclosing the initial business combination
would disclose the terms of the financing and, only if required by law, we would seek stockholder approval of such financing. There are
no prohibitions on our ability to raise funds privately, including pursuant to any specified future issuance, or through loans in connection
with our initial business combination. At this time, other than the FPA, we are not a party to any arrangement or understanding with any
third party with respect to raising any additional funds through the sale of securities or otherwise.
Sources of Target Businesses
Target business candidates
have been brought to our attention from various unaffiliated sources, including investment bankers and investment professionals. These
sources introduce us to target businesses in which they think we may be interested on an unsolicited basis, since many of these sources
will have read the prospectus of our initial public offering and know what types of businesses we are targeting. Our officers and directors,
as well as the sponsor and its affiliates, have brought, and may bring, to our attention target business candidates that they become aware
of through their business contacts as a result of formal or informal inquiries or discussions they may have. In addition, we have received
a number of proprietary deal flow opportunities that would not otherwise necessarily be available to us as a result of the business relationships
of our officers and directors and the sponsor and its affiliates.
We may also contact targets
that any of the other SPACs sponsored by Cantor had considered if we become aware that such targets are interested in a potential initial
business combination with us and such transaction would be attractive to our stockholders.
While we have not and do not
anticipate engaging the services of professional firms or other individuals that specialize in business acquisitions on any formal basis,
we may engage these firms or other individuals in the future, in which event we may pay a finder’s fee, consulting fee, advisory
fee or other compensation to be determined in an arm’s length negotiation based on the terms of the transaction. We will engage
a finder only to the extent our management determines that the use of a finder may bring opportunities to us that may not otherwise be
available to us or if finders approach us on an unsolicited basis with a potential transaction that our management determines is in our
best interest to pursue. Payment of finder’s fees is customarily tied to completion of a transaction, in which case any such fee
will be paid out of the funds held in the trust account. In no event, however, will the sponsor or any of our existing officers or directors,
or any entity with which the sponsor or officers are affiliated, be paid any finder’s fee, reimbursement, consulting fee, monies
in respect of any payment of a loan or other compensation by the company prior to, or in connection with any services rendered for any
services they render in order to effectuate, the completion of our initial business combination (regardless of the type of transaction
that it is) other than as described herein. Some of our officers and directors may enter into employment or consulting agreements with
the post-transaction company following our initial business combination. The presence or absence of any such fees or arrangements will
not be used as a criterion in our selection process of an initial business combination candidate.
We are not prohibited from
pursuing an initial business combination with a business that is affiliated with Cantor or its affiliates or the sponsor or our officers
or directors, including an Affiliated Joint Acquisition. In the event we seek to complete our initial business combination with an initial
business combination target that is affiliated with the sponsor, its affiliates, or our officers or directors, we, or a committee of independent
directors, would obtain an opinion from an independent investment banking firm or another independent firm that commonly renders valuation
opinions that such an initial business combination is fair to our stockholders from a financial point of view. We are not required to
obtain such an opinion in any other context.
Each of our officers and directors
presently has, and any of them in the future may have additional, fiduciary, contractual or other obligations or duties to one or more
other entities pursuant to which such officer or director is or will be required to present a business combination opportunity to such
entities. Our officers and directors also may become aware of business opportunities which may be appropriate for presentation to us and
the other entities to which they owe certain fiduciary, contractual or other duties. Accordingly, if any of our officers or directors
becomes aware of a business combination opportunity which is suitable for one or more entities to which he or she has fiduciary, contractual
or other obligations or duties, he or she will honor these obligations and duties to present such business combination opportunity to
such entities first, and only present it to us if such entities reject the opportunity and he or she determines to present the opportunity
to us. 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. The Charter provides that we renounce our interest in any corporate opportunity offered to any director or officer
unless (i) such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company,
(ii) such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to
pursue and (iii) the director or officer is permitted to refer the opportunity to us without violating another legal obligation.
Selection of a Target Business and Structuring
of our Initial Business Combination
So long as we maintain a listing
for our securities on Nasdaq, we must complete one or more business combinations having an aggregate fair market value of at least 80%
of the value of the assets held in the trust account (excluding taxes payable on the interest earned on the trust account) at the time
of our signing a definitive agreement in connection with our initial business combination. The fair market value of our initial business
combination will be determined by our board of directors based upon one or more standards generally accepted by the financial community,
such as discounted cash flow valuation, a valuation based on trading multiples of comparable public businesses or a valuation based on
the financial metrics of merger and acquisition transactions of comparable businesses. If our board of directors is not able to independently
determine the fair market value of our initial business combination, we will obtain an opinion from an independent investment banking
firm or another independent firm that commonly renders valuation opinions with respect to the satisfaction of such criteria. While we
consider it unlikely that our board of directors will not be able to make an independent determination of the fair market value of our
initial business combination, it may be unable to do so if it is less familiar or experienced with the business of a particular target
or if there is a significant amount of uncertainty as to the value of a target’s assets or prospects. We do not intend to purchase
multiple businesses in unrelated industries in conjunction with our initial business combination. Subject to this requirement, our management
will have virtually unrestricted flexibility in identifying and selecting one or more prospective target businesses, although we will
not be permitted to effectuate our initial business combination with another blank check company or a similar company with nominal operations.
In any case, we will only
complete an initial business combination in which we own or acquire 50% or more of the outstanding voting securities of the target or
otherwise acquire a controlling interest in the target sufficient for it not to be required to register as an investment company under
the Investment Company Act. If we own or acquire less than 100% of the equity interests or assets of a target business or businesses,
the portion of such business or businesses that are owned or acquired by the post-transaction company is what will be taken into account
for purposes of Nasdaq’s 80% fair market value test. There is no basis for our investors to evaluate the possible merits or risks
of any target business with which we may ultimately complete our initial business combination.
To the extent we effect our
initial business combination with a company or business that may be financially unstable or in its early stages of development or growth
we may be affected by numerous risks inherent in such company or business. Although our management will endeavor to evaluate the risks
inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all significant risk factors.
In evaluating prospective
business targets, we have conducted, and expect to continue to conduct, a thorough due diligence review, which encompasses, among other
things, meetings with incumbent management and employees, document reviews, inspection of facilities, as well as a review of financial
and other information that is made available to us.
We have engaged CF&Co.,
an affiliate of the sponsor, pursuant to the BCMA as an advisor in connection with our initial business combination to assist us in holding
meetings with our stockholders to discuss any potential initial business combination and the target business’ attributes, introduce
us to potential investors that are interested in purchasing our securities and assist us with our press releases and public filings in
connection with our initial business combination. We will pay CF&Co. the Marketing Fee upon the consummation of our initial business
combination. In addition, we may engage CF&Co., or another affiliate of the sponsor, as a financial advisor in connection with our
initial business combination and/or placement agent for any securities offering to occur concurrently with our initial business combination
and pay such affiliate a customary financial advisory and/or placement agent fee in an amount that constitutes a market standard financial
advisory or placement agent fee for comparable transactions. Furthermore, we may acquire a target company that has engaged CF&Co.,
or another affiliate of the sponsor, as a financial advisor, and such target company may pay such affiliate a financial advisory fee in
connection with our initial business combination.
Any costs incurred with respect
to the identification and evaluation of a prospective target business with which our initial business combination is not ultimately completed
will result in our incurring losses and will reduce the funds we can use to complete another business combination.
Lack of Business Diversification
For an indefinite period of
time after the completion of our initial business combination, the prospects for our success may depend entirely on the future performance
of a single business. Unlike other entities that have the resources to complete business combinations with multiple entities in one or
several industries, it is probable that we will not have the resources to diversify our operations and mitigate the risks of being in
a single line of business. In addition, we are focusing our search for an initial business combination in a single industry. By completing
our initial business combination with only a single entity, our lack of diversification may:
| ● | subject
us to negative economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact on the particular
industry in which we operate after our initial business combination, and |
| ● | cause
us to depend on the marketing and sale of a single product or limited number of products or services. |
Limited Ability to Evaluate the Target’s
Management Team
Although we closely scrutinize
the management of a prospective target business when evaluating the desirability of effecting our initial business combination with such
business, our assessment of the target business’ management may not prove to be correct. In addition, the future management may
not have the necessary skills, qualifications or abilities to manage a public company. Furthermore, the future role of members of our
management team, if any, in the target business cannot presently be stated with any certainty. The determination as to whether any of
the members of our management team will remain with the combined company will be made at the time of our initial business combination.
While it is possible that one or more of our directors will remain associated in some capacity with us following our initial business
combination, it is unlikely that any of them will devote their full efforts to our affairs subsequent to our initial business combination.
Moreover, we cannot assure you that members of our management team will have significant experience or knowledge relating to the operations
of the particular target business.
We cannot assure you that
any of our key personnel will remain in senior management or advisory positions with the combined company. The determination as to whether
any of our key personnel will remain with the combined company will be made at the time of our initial business combination.
Stockholders May Not Have the Ability to Approve
Our Initial Business Combination
We may conduct redemptions
without a stockholder vote pursuant to the tender offer rules of the SEC. However, we will seek stockholder approval if it is required
by applicable law or stock exchange rule, or we may decide to seek stockholder approval for business or other legal reasons. Presented
in the table below is a graphic explanation of the types of initial business combinations we may consider and whether stockholder approval
is currently required under Delaware law for each such transaction.
| Type of Transaction |
|
Whether
Stockholder
Approval is
Required |
| Purchase of assets |
|
No |
| |
|
|
| Purchase of stock of target not involving a merger with the company |
|
No |
| |
|
|
| Merger of target into a subsidiary of the company |
|
No |
| |
|
|
| Merger of the company with a target |
|
Yes |
So long as we maintain a listing
for our securities on Nasdaq, stockholder approval would be required for our initial business combination if, for example:
| ● | we
issue shares of Class A common stock that will be equal to or in excess of 20% of the number of shares of our Class A common
stock then outstanding (other than in a public offering); |
| ● | any
of our directors, officers or substantial stockholders (as defined by Nasdaq rules) has a 5% or greater interest (or such persons collectively
have a 10% or greater interest), directly or indirectly, in the target business or assets to be acquired or otherwise and the present
or potential issuance of common stock could result in an increase in outstanding shares of common stock or voting power of 5% or more;
or |
| ● | the
issuance or potential issuance of common stock will result in our undergoing a change of control. |
Permitted Purchases of our Securities
If we seek stockholder 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 initial stockholders, directors, officers, advisors or any their respective 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. There is no limit on the number of shares our initial stockholders, directors, officers, advisors or any of their
respective affiliates may purchase in such transactions, subject to compliance with applicable law and Nasdaq rules. However, they have
no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such
transactions.
In the event our initial stockholders,
directors, officers, advisors or any of their respective affiliates determine to make any such purchases at the time of a stockholder
vote relating to our initial business combination, such purchases could have the effect of influencing the vote necessary to approve such
transaction. If they engage in such transactions, they will be restricted from making any such purchases when they are in possession of
any material non-public information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange
Act. Such a purchase may include a contractual acknowledgement that such stockholder, although still the record holder of our shares,
is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. We do not currently anticipate that
such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction
subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that
the purchases are subject to such rules, the purchasers will comply with such rules. 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. None of the funds held
in the trust account will be used to purchase shares or public warrants in such transactions prior to completion of our initial business
combination.
The purpose of any such purchases
of shares could be to vote such shares in favor of the initial business combination and thereby increase the likelihood of obtaining stockholder
approval of the initial 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. In addition, if such purchases are made, the public “float” of our shares of Class A common stock or warrants
may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain
the quotation, listing or trading of our securities on a national securities exchange.
The sponsor, our officers,
directors, advisors and/or any of their respective affiliates anticipate that they may identify the stockholders with whom the sponsor,
our officers, directors, advisors or any of their respective affiliates may pursue privately negotiated purchases by either the stockholders
contacting us directly or by our receipt of redemption requests submitted by stockholders following our mailing of proxy materials in
connection with our initial business combination. To the extent that the sponsor, our officers, directors, advisors or any of their respective
affiliates enter into a private purchase, they would identify and contact only potential selling stockholders who have expressed their
election to redeem their shares for a pro rata share of the trust account or vote against our initial business combination, whether or
not such stockholder has already submitted a proxy with respect to our initial business combination. Such persons would select the stockholders
from whom to acquire shares based on the number of shares available, the negotiated price per share and such other factors as any such
person may deem relevant at the time of purchase. The price per share paid in any such transaction may be different than the amount per
share a public stockholder would receive if it elected to redeem its shares in connection with our initial business combination. The sponsor,
our officers, directors, advisors or any of their respective affiliates will purchase shares only if such purchases comply with Regulation
M under the Exchange Act and the other federal securities laws.
Any purchases by the sponsor,
our officers, directors and/or any of their respective affiliates who are affiliated purchasers under Rule 10b-18 under the Exchange Act
will only be made to the extent such purchases are able to be made in compliance with Rule 10b-18, which is a safe harbor from liability
for manipulation under Section 9(a)(2) and Rule 10b-5 of the Exchange Act. Rule 10b-18 has certain technical requirements that must be
complied with in order for the safe harbor to be available to the purchaser. The sponsor, our officers, directors, advisors and/or any
of their respective affiliates will not make purchases of common stock if the purchases would violate Section 9(a)(2) or Rule 10b-5 of
the Exchange Act. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchases
are subject to such reporting requirements.
As of the date of this Report,
there have been no such discussions and no agreements to such effect have been entered into with any such investor or holder. If such
arrangements or agreements are entered into, we will file a Current Report on Form 8-K to disclose any arrangements entered into
or significant purchases made by any of the aforementioned persons. Any such report will include (i) the amount of shares of common
stock purchased and the purchase price; (ii) the purpose of such purchases; (iii) the impact of such purchases on the likelihood
that the business combination transaction will be approved; (iv) the identities or characteristics of security holders who sold shares
if not purchased in the open market or the nature of the sellers; and (v) the number of shares of common stock for which we have
received redemption requests.
Redemption Rights for Public Stockholders upon
Completion of our Initial Business Combination
We will provide our public
stockholders with the opportunity to redeem all or a portion of their shares of Class A common stock upon the completion of our initial
business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account as of two
business days prior to the consummation of the initial business combination including interest 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, subject to the limitations
described herein. As of December 31, 2022, the amount in the trust account was approximately $10.06 per public share. The sponsor and
our officers and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption
rights with respect to any founder shares and any public shares held by them in connection with the completion of our initial business
combination.
Manner of Conducting Redemptions
We will provide our public
stockholders with the opportunity to redeem all or a portion of their shares of Class A common stock upon the completion of our initial
business combination either (i) in connection with a stockholder meeting called to approve the initial business combination, or (ii) by
means of a tender offer. The decision as to whether we will seek stockholder approval of a proposed initial business combination or conduct
a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction
and whether the terms of the transaction would require us to seek stockholder approval under applicable law or stock exchange listing
requirement. Under Nasdaq rules, asset acquisitions and stock purchases would not typically require stockholder approval while direct
mergers with our company where we do not survive and any transactions where we issue more than 20% of our outstanding common stock or
seek to amend the Charter would require stockholder approval. If we structure an initial business combination with a target company in
a manner that requires stockholder approval, we will not have discretion as to whether to seek a stockholder vote to approve the proposed
initial business combination. We may conduct redemptions without a stockholder vote pursuant to the tender offer rules of the SEC unless
stockholder approval is required by applicable law or stock exchange listing requirements or we choose to seek stockholder approval for
business or other legal reasons. So long as we obtain and maintain a listing for our securities on Nasdaq, we will be required to comply
with such rules.
If a stockholder vote is not
required and we do not decide to hold a stockholder vote for business or other legal reasons, we will, pursuant to the Charter:
| ● | conduct
the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers, and |
| ● | file
tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial
and other information about the initial business combination and the redemption rights as is required under Regulation 14A of the Exchange
Act, which regulates the solicitation of proxies. |
In the event we conduct redemptions
pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a)
under the Exchange Act, and we will not be permitted to complete our initial business combination until the expiration of the tender offer
period. In addition, the tender offer will be conditioned on public stockholders not tendering more than a specified number of public
shares which are not purchased by the sponsor, which number will be based on the requirement that we may only redeem our public shares
so long as our net tangible assets are at least $5,000,001 either immediately prior to or upon consummation of our initial business combination
and after payment of underwriters’ fees and commissions (so that we are not subject to the SEC’s “penny stock”
rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business
combination. If public stockholders tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete
the initial business combination.
If, however, stockholder approval
of the transaction is required by applicable law or stock exchange listing requirement, or we decide to obtain stockholder approval for
business or other legal reasons, we will, pursuant to the Charter:
| ● | conduct
the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation
of proxies, and not pursuant to the tender offer rules, and |
| ● | file
proxy materials with the SEC. |
In the event that we seek
stockholder approval of our initial business combination, we will distribute proxy materials and, in connection therewith, provide our
public stockholders with the redemption rights described above upon completion of the initial business combination.
If we seek stockholder approval,
we will complete our initial business combination only if a majority of the outstanding shares of common stock are voted in favor of the
initial business combination. A quorum for such meeting will consist of the holders present in person or by proxy of shares of outstanding
capital stock of the company representing a majority of the voting power of all outstanding shares of capital stock of the company entitled
to vote at such meeting. Our initial stockholders will count toward this quorum and pursuant to the letter agreement, the sponsor and
our officers and directors have agreed to vote their founder shares, private placement shares and any public shares purchased during or
after our initial public offering (including in open market and privately negotiated transactions) in favor of our initial business combination.
For purposes of seeking approval of the majority of our outstanding shares of common stock voted, non-votes will have no effect on the
approval of our initial business combination once a quorum is obtained. As of December 31, 2022, after accounting for the redemption of
public shares in connection with the Extension, the sponsor owns 56.7% of the issued and outstanding shares of common stock. Accordingly,
assuming approval of an initial business combination will require a majority of the outstanding shares of common stock, the sponsor will
have the ability, voting on its own, to satisfy quorum requirements and to approve an initial business combination and none of our public
shares will need to vote in favor of an initial business combination in order to have our initial business combination approved. We intend
to give approximately 30 days (but not less than 10 days nor more than 60 days) prior written notice of any such meeting, if required,
at which a vote shall be taken to approve our initial business combination. These quorum and voting thresholds, and the voting agreements
of our initial stockholders, make it more likely that we will consummate our initial business combination. Each public stockholder may
elect to redeem its public shares irrespective of whether they vote for or against a proposed business combination.
The Charter provides that
we may only redeem our public shares so long as our net tangible assets are at least $5,000,001 either immediately prior to or upon consummation
of our initial business combination and after payment of underwriters’ fees and commissions (so that we are not subject to the SEC’s
“penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating
to our initial business combination. For example, the proposed initial business combination may require: (i) cash consideration to
be paid to the target or its owners, (ii) cash to be transferred to the target for working capital or other general corporate purposes
or (iii) the retention of cash to satisfy other conditions in accordance with the terms of the proposed initial business combination.
In the event the aggregate cash consideration we would be required to pay for all shares of Class A common stock that are validly
submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed initial business combination
exceed the aggregate amount of cash available to us, we will not complete the initial business combination or redeem any shares, and all
shares of Class A common stock submitted for redemption will be returned to the holders thereof.
Limitation on Redemption upon Completion
of our Initial Business Combination if we Seek Stockholder Approval
Notwithstanding the foregoing,
if we seek stockholder 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, the Charter provides that a public stockholder, together with any affiliate of such stockholder
or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange
Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 15% of the shares sold in our initial
public offering (the “Excess Shares”). We believe this restriction will discourage stockholders from accumulating large blocks
of shares, and subsequent attempts by such holders to use their ability to exercise their redemption rights against a proposed initial
business combination as a means to force us or our management to purchase their shares at a significant premium to the then-current market
price or on other undesirable terms. Absent this provision, a public stockholder holding more than an aggregate of 15% of the shares sold
in our initial public offering could threaten to exercise its redemption rights if such holder’s shares are not purchased by us
or our management at a premium to the then-current market price or on other undesirable terms. By limiting our stockholders’ ability
to redeem no more than 15% of the shares sold in our initial public offering without our prior consent, we believe we will limit the ability
of a small group of stockholders to unreasonably attempt to block our ability to complete our initial business combination, particularly
in connection with an initial business combination with a target that requires as a closing condition that we have a minimum net worth
or a certain amount of cash. However, we would not be restricting our stockholders’ ability to vote all of their shares (including
Excess Shares) for or against our initial business combination.
Tendering Stock Certificates in Connection
with Redemption Rights
We may require our public
stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,”
to either tender their certificates to our transfer agent prior to the date set forth in the tender offer materials mailed to such holders,
or up to two business days prior to the vote on the proposal to approve the initial business combination in the event we distribute proxy
materials, or to deliver their shares to the transfer agent electronically using the DWAC System, at the holder’s option. The proxy
materials that we will furnish to holders of our public shares in connection with our initial business combination will indicate whether
we are requiring public stockholders to satisfy such delivery requirements. Accordingly, a public stockholder would have up to two business
days prior to the vote on the initial business combination if we distribute proxy materials to tender its shares if it wishes to seek
to exercise its redemption rights. Given the relatively short exercise period, it is advisable for stockholders to use electronic delivery
of their public shares.
There is a nominal cost associated
with the above-referenced tendering process and the act of certificating the shares or delivering them through the DWAC System. The transfer
agent will typically charge the tendering broker $100.00 and it would be up to the broker whether or not to pass this cost on to the redeeming
holder. However, this fee would be incurred regardless of whether or not we require holders seeking to exercise redemption rights to tender
their shares. The need to deliver shares is a requirement of exercising redemption rights regardless of the timing of when such delivery
must be effectuated.
The foregoing is different
from the procedures used by many blank check companies. In order to perfect redemption rights in connection with their business combinations,
many blank check companies would distribute proxy materials for the stockholders’ vote on an initial business combination, and a
holder could simply vote against a proposed initial business combination and check a box on the proxy card indicating such holder was
seeking to exercise his or her redemption rights. After the initial business combination was approved, the company would contact such
stockholder to arrange for him or her to deliver his or her certificate to verify ownership. As a result, the stockholder then had an
“option window” after the completion of the initial business combination during which he or she could monitor the price of
the company’s stock in the market. If the price rose above the redemption price, he or she could sell his or her shares in the open
market before actually delivering his or her shares to the company for cancellation. As a result, the redemption rights, to which stockholders
were aware they needed to commit before the stockholder meeting, would become “option” rights surviving past the completion
of the initial business combination until the redeeming holder delivered its certificate. The requirement for physical or electronic delivery
prior to the meeting ensures that a redeeming holder’s election to redeem is irrevocable once the initial business combination is
approved.
Any request to redeem such
shares, once made, may be withdrawn with our consent at any time up to the date of the stockholder meeting set forth in our proxy materials.
Furthermore, if a holder of a public share delivered its certificate in connection with an election of redemption rights and subsequently
decides prior to the applicable date not to elect to exercise such rights, such holder may simply request that the transfer agent return
the certificate (physically or electronically). It is anticipated that the funds to be distributed to holders of our public shares electing
to redeem their shares will be distributed promptly after the completion of our initial business combination.
If our initial business combination
is not approved or completed for any reason, then our public stockholders who elected to exercise their redemption rights would not be
entitled to redeem their shares for the applicable pro rata share of the trust account. In such case, we will promptly return any certificates
delivered by public holders who elected to redeem their shares.
If our initial proposed initial
business combination is announced but not completed, we may continue to try to complete an initial business combination with a different
target during the Combination Period.
Redemption of Public Shares and Liquidation
if no Initial Business Combination
The Charter provides that
we will have until the end of the Combination Period to consummate a business combination. If we are unable to complete our initial business
combination by the end of the Combination 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
and not previously released to us to pay our taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number
of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including
the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible
following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject
in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There
will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to complete
our initial business combination within the allotted time period.
The sponsor and our officers
and directors have entered into a letter agreement with us, pursuant to which they have waived their rights to liquidating distributions
from the trust account with respect to any founder shares or private placement shares held by them if we fail to complete our initial
business combination by the end of the Combination Period. However, if the sponsor or our officers or directors acquire public shares
in or after our initial public offering, they will be entitled to liquidating distributions from the trust account with respect to such
public shares if we fail to complete our initial business combination by the end of the Combination Period.
The sponsor and our officers
and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to the Charter (i) to
modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem
100% of our public shares if we do not complete our initial business combination by the end of the Combination Period or (ii) with
respect to any other provision relating to stockholders’ rights or pre-initial business combination activity, unless we provide
our public stockholders with the opportunity to redeem their shares of Class A common stock 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.
If we do not consummate an
initial business combination by the end of the Combination Period, we expect that all costs and expenses associated with implementing
our plan of dissolution, as well as payments to any creditors, will be funded from any amounts held outside the trust account, together
with any loans committed by the sponsor, although we cannot assure you that there will be sufficient funds for such purpose. We will depend
on sufficient interest being earned on the proceeds held in the trust account to pay any tax obligations we may owe. However, if those
funds are not sufficient to cover the costs and expenses associated with implementing our plan of dissolution, to the extent that there
is any interest accrued in the trust account not required to pay taxes on interest income earned on the trust account balance, we may
request the trustee to release to us an additional amount of up to $100,000 of such accrued interest to pay those costs and expenses.
If we were to expend all of
the net proceeds of our initial public offering and the sale of the private placement units, other than the proceeds deposited in the
trust account, and without taking into account interest, if any, earned on the trust account, the per-share redemption amount received
by stockholders upon our dissolution would be approximately $10.05 per share as of December 31, 2022 (which amount will increase by $0.045
per share for each additional month of the Extension as a result of the deposit into the trust account of the Monthly Amount). The proceeds
deposited in the trust account could, however, become subject to the claims of our creditors which would have higher priority than the
claims of our public stockholders. We cannot assure you that the actual per-share redemption amount received by stockholders will not
be substantially less than $10.05 (which amount will increase by $0.045 per share for each additional month of the Extension as a result
of the deposit into the trust account of the Monthly Amount). Under Section 281(b) of the DGCL, our plan of dissolution must provide for
all claims against us to be paid in full or make provision for payments to be made in full, as applicable, if there are sufficient assets.
These claims must be paid or provided for before we make any distribution of our remaining assets to our stockholders. While we intend
to pay such amounts, if any, we cannot assure you that we will have funds sufficient to pay or provide for all creditors’ claims.
Although we seek to have all
vendors, service providers, prospective target businesses or other entities with which we do business execute agreements with us waiving
any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public stockholders,
there is no guarantee that they will execute such agreements or even if they execute such agreements that they would be prevented from
bringing claims against the trust account including but not limited to fraudulent inducement, breach of fiduciary responsibility or other
similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain an advantage with respect
to a claim against our assets, including the funds held in the trust account. If any third party refuses to execute an agreement waiving
such claims to the monies held in the trust account, our management will perform an analysis of the alternatives available to it and will
only enter into an agreement with a third party that has not executed a waiver if management believes that such third party’s engagement
would be significantly more beneficial to us than any alternative. Examples of possible instances where we may engage a third party that
refuses to execute a waiver include the engagement of a third party consultant whose particular expertise or skills are believed by management
to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable
to find a service provider willing to execute a waiver. Withum, our independent registered public accounting firm, and the underwriters
of the initial public offering, did not, or will not, execute agreements with us waiving such claims to the monies held in the trust account.
In addition, there is no guarantee
that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts
or agreements with us and will not seek recourse against the trust account for any reason. The sponsor has agreed that it will be liable
to us if and to the extent any claims by a third party (other than our independent registered public accounting firm) 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
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 from interest, provided
that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all
rights to the monies held in the trust account (whether or not such waiver is enforceable) nor will it apply to any claims under our indemnity
of the underwriters of the initial public offering against certain liabilities, including liabilities under the Securities Act. However,
we have not asked the sponsor to reserve for such indemnification obligations, nor have we independently verified whether the sponsor
has sufficient funds to satisfy its indemnity obligations and believe that the sponsor’s only assets are securities of our company.
Therefore, we cannot assure you that the sponsor would be able to satisfy those obligations. None of our officers or directors will indemnify
us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.
In the event that the proceeds
in the trust account are reduced below (i) $10.00 per public share or (ii) such lesser amount per public share held in the trust
account as of the date of the liquidation of the trust account, due to reductions in value of the trust assets, in each case net of the
amount of interest which may be withdrawn to pay taxes, and the sponsor asserts that it is unable to satisfy its indemnification obligations
or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take
legal action against the sponsor to enforce its indemnification obligations. While we currently expect that our independent directors
would take legal action on our behalf against the sponsor to enforce its indemnification obligations to us, it is possible that our independent
directors in exercising their business judgment may choose not to do so 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. We have not asked the sponsor to reserve for such indemnification obligations and we cannot assure you that the sponsor
would be able to satisfy those obligations. Accordingly, we cannot assure you that due to claims of creditors the actual value of the
per-share redemption price will not be less than $10.00 per public share.
We will seek to reduce the
possibility that the sponsor will have to indemnify the trust account due to claims of creditors by endeavoring to have all vendors, service
providers, prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title,
interest or claim of any kind in or to monies held in the trust account. The sponsor will also not be liable as to any claims under our
indemnity of the underwriters of the initial public offering against certain liabilities, including liabilities under the Securities Act.
We have access to the amounts held outside of the trust account of approximately $370,000 as of December 31, 2022 with which to pay any
such potential claims (including costs and expenses incurred in connection with our liquidation, currently estimated to be no more than
approximately $100,000). In the event that we liquidate and it is subsequently determined that the reserve for claims and liabilities
is insufficient, stockholders who received funds from our trust account could be liable for claims made by creditors.
Under the DGCL, stockholders
may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution.
The pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event
we do not complete our initial business combination by the end of the Combination Period may be considered a liquidating distribution
under Delaware law. If the corporation complies with certain procedures set forth in Section 280 of the DGCL intended to ensure that it
makes reasonable provision for all claims against it, including a 60-day notice period during which any third-party claims can be brought
against the corporation, a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting
period before any liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution
is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any
liability of the stockholder would be barred after the third anniversary of the dissolution.
Furthermore, if the pro rata
portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete
our initial business combination by the end of the Combination Period is not considered a liquidating distribution under Delaware law
and such redemption distribution is deemed to be unlawful (potentially due to the imposition of legal proceedings that a party may bring
or due to other circumstances that are currently unknown), then pursuant to Section 174 of the DGCL, the statute of limitations for claims
of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidating
distribution. If we are unable to complete our initial business combination by the end of the Combination 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 and not previously released to us to pay our taxes (less up to
$100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely
extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any),
subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our
remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law
to provide for claims of creditors and the requirements of other applicable law. Accordingly, it is our intention to redeem our public
shares as soon as reasonably possible following the end of the Combination Period and, therefore, we do not intend to comply with those
procedures. As such, our stockholders could potentially be liable for any claims to the extent of distributions received by them (but
no more) and any liability of our stockholders may extend well beyond the third anniversary of such date.
Because we will not be complying
with Section 280 of the DGCL, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that will
provide for our payment of all existing and pending claims or claims that may be potentially brought against us within the subsequent
10 years. However, because we are a blank check company, rather than an operating company, and our operations will be limited to
searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment
bankers, etc.) or prospective target businesses. As described above, pursuant to the obligation contained in our underwriting agreement,
we will seek to have all vendors, service providers, prospective target businesses or other entities with which we do business execute
agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account. As a result
of this obligation, the claims that could be made against us are significantly limited and the likelihood that any claim that would result
in any liability extending to the trust account is remote. Further, the sponsor may be liable if no waiver against the trust account is
executed, only to the extent necessary to ensure that the amounts in the trust account are not reduced below (i) $10.00 per public share
or (ii) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account, due
to reductions in value of the trust assets, in each case net of the amount of interest withdrawn to pay taxes and will not be liable as
to any claims under our indemnity of the underwriters of the initial public offering against certain liabilities, including liabilities
under the Securities Act. In the event that an executed waiver is deemed to be unenforceable against a third party, the sponsor will not
be responsible to the extent of any liability for such third-party claims.
If we file a bankruptcy petition
or an involuntary bankruptcy petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject
to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over
the claims of our stockholders. To the extent any bankruptcy claims deplete the trust account, we cannot assure you we will be able to
return $10.00 per share to our public stockholders. Additionally, if we file a bankruptcy petition or an involuntary bankruptcy petition
is filed against us that is not dismissed, any distributions received by stockholders 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 of the amounts received by our stockholders. Furthermore, our board of directors may be viewed
as having breached its fiduciary duty to our creditors and/or may have acted in bad faith, thereby exposing itself and our company to
claims of punitive damages, by paying public stockholders 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.
Our public stockholders will
be entitled to receive funds from the trust account only upon the earlier to occur of: (i) the completion of our initial business
combination, (ii) the redemption of any public shares properly tendered in connection with a stockholder vote to amend any provisions
of the Charter (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination
or to redeem 100% of our public shares if we do not complete our initial business combination by the end of the Combination Period or
(B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity, and (iii) the
redemption of all of our public shares if we are unable to complete our business combination by the end of the Combination Period, subject
to applicable law. In no other circumstances will a stockholder have any right or interest of any kind to or in the trust account. Our
public stockholders previously were entitled to receive funds from the trust account if they opted to redeem their public shares in connection
with the stockholder vote to approve the Extension. In the event we seek stockholder approval in connection with our initial business
combination, a stockholder’s voting in connection with the initial business combination alone will not result in such stockholder’s
redemption of its shares for an applicable pro rata share of the trust account. Such stockholder must have also exercised its redemption
rights as described above. These provisions of the Charter, like all provisions of the Charter, may be amended with a stockholder vote.
Competition
In identifying, evaluating
and selecting a target business for our initial business combination, we have encountered intense competition from other entities having
a business objective similar to ours, including other blank check companies, private equity groups and leveraged buyout funds, public
companies and operating businesses seeking strategic business combinations, including affiliates of the sponsor. Many of these entities
are well established and have extensive experience identifying and effecting business combinations directly or through affiliates. Moreover,
many of these competitors possess greater financial, technical, human and other resources than we do. Our ability to acquire larger target
businesses will be limited by our available financial resources. This inherent limitation gives others an advantage in pursuing the initial
business combination of a target business. Furthermore, our obligation to pay cash in connection with our public stockholders who exercise
their redemption rights may reduce the resources available to us for our initial business combination and our outstanding warrants, and
the future dilution they potentially represent, may not be viewed favorably by certain target businesses. Either of these factors may
place us at a competitive disadvantage in successfully negotiating an initial business combination.
Facilities
Our executive offices are
located at 110 East 59th Street, New York, NY 10022, and our telephone number is (212) 938-5000. The cost for our use
of this space is included in the $10,000 per month fee we pay to the sponsor for office space, administrative and shared personnel support
services. We consider our current office space adequate for our current operations.
Employees
We currently have two executive
officers. These individuals are not obligated to devote any specific number of hours to our matters but they devote as much of their time
as they deem necessary to our affairs until we have completed our initial business combination. The amount of time our officers devote
in any time period varies based on the stage of the initial business combination process we are in. We do not intend to have any full
time employees prior to the completion of our initial business combination.
Periodic Reporting and Financial Information
We have registered our units,
public shares and public warrants under the Exchange Act and have reporting obligations, including the requirement that we file annual,
quarterly and current reports with the SEC. In accordance with the requirements of the Exchange Act, our annual reports contain financial
statements audited and reported on by our independent registered public accountants.
We will provide stockholders
with audited financial statements of the prospective target business as part of the tender offer materials or proxy solicitation materials
sent to stockholders to assist them in assessing the target business. In all likelihood, these financial statements will need to be prepared
in accordance with, or reconciled to, U.S. GAAP, or the International Financial Reporting Standards, as issued by the International Accounting
Standards Board, depending on the circumstances, and the historical financial statements may be required to be audited in accordance with
the standards of the PCAOB. These financial statement requirements may limit the pool of potential targets we may conduct an initial business
combination with because some targets may be unable to provide such financial statements in time for us to disclose such financial statements
in accordance with federal proxy rules and complete our initial business combination within the prescribed time frame. We cannot assure
you that any particular target business identified by us as a potential business combination candidate will have financial statements
prepared in accordance with U.S. GAAP or that the potential target business will be able to prepare its financial statements in accordance
with the requirements outlined above. To the extent that these requirements cannot be met, we may not be able to acquire the proposed
target business. While this may limit the pool of potential business combination candidates, we do not believe that this limitation will
be material.
We are required to evaluate
our internal control procedures for the fiscal year ending December 31, 2022 as required by the Sarbanes-Oxley Act. Only in the event
we are deemed to be a large accelerated filer or an accelerated filer will we be required to have our internal control procedures audited.
A target company may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of their internal controls.
The development of the internal controls of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and
costs necessary to complete any such business combination. We have filed a Registration Statement on Form 8-A with the SEC to voluntarily
register our securities under Section 12 of the Exchange Act. As a result, we are subject to the rules and regulations promulgated under
the Exchange Act. We have no current intention of filing a Form 15 to suspend our reporting or other obligations under the Exchange Act
prior or subsequent to the consummation of our initial business combination.
We will remain an emerging
growth company until the earlier of (1) the last day of the fiscal year (a) following December 28, 2025, (b) in which we
have total annual gross revenue of at least $1.235 billion, or (c) in which we are deemed to be a large accelerated filer, which
means the market value of our shares of Class A common stock that are held by non-affiliates exceeds $700 million as of the
prior June 30, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior
three-year period.