Item
1. Business.
Overview
We
are an early stage blank check company incorporated in January 2021 as a Delaware corporation and formed for the purpose of effecting
a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more
businesses, which we refer to throughout this Report as our initial business combination.
Our
registration statement for our initial public offering became effective on September 28, 2021. On October 1, 2021, we consummated our
initial public offering of 30,000,000 units, generating gross proceeds of $300.0 million, and incurring offering costs of approximately
$16.5 million, inclusive of approximately $10.5 million in deferred underwriting commissions.
Substantially
concurrently with the closing of our initial public offering, we consummated the private placement of 6,666,667 private placement warrants
at a price of $1.50 per private placement warrant to our sponsor, our direct anchor investors and our other anchor investors, generating
gross proceeds of $10.0 million.
Upon
the closing of our initial public offering and the private placement, $300.0 million ($10.00 per unit) of the net proceeds of our initial
public offering and certain of the proceeds of the private placement were placed in a trust account located in the United States and
invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended),
with a maturity of 185 days or less, or in any open-ended investment company that holds itself out as a money market fund meeting certain
conditions of Rule 2a-7 of the Investment Company Act and that invest only in direct U.S. government obligations, until the earlier of:
(i) the completion of our initial business combination and (ii) the distribution of the funds in the trust account as described below.
On
October 21, 2021 we announced that we closed the sale of an additional 4,092,954 units pursuant to the underwriters’ over-allotment
option granted in connection with our initial public offering. Such over-allotment units were sold at an offering price of $10.00 per
unit, generating additional gross proceeds to us of approximately $40.9 million and bringing the total gross proceeds of the initial
public offering to approximately $340.9 million, and incurring additional offering costs of approximately $2.2 million, inclusive of
approximately $1.4 million in deferred underwriting commissions. An additional $40.9 million were placed into our trust account, resulting
in a total of approximately $340.9 million in our trust account. Simultaneously with the closing of the sale of the over-allotment units,
we completed the private placement and sale of an additional 545,727 private placement warrants at a purchase price of $1.50 per private
placement warrant, generating additional gross proceeds to us of approximately $0.8 million.
On
November 18, 2021 we announced that, commencing November 19, 2021, holders of the 34,092,954 units sold in our initial public offering
may elect to separately trade the shares of Class A common stock and the public warrants included in the units. Those units not separated
continued to trade on the Nasdaq Global Market under the symbol “HCVIU” and the shares of Class A common stock and the public
warrants that were separated trade under the symbols “HCVI” and “HCVIW,” respectively.
While we may pursue an acquisition opportunity
in any business, industry, sector or geographical location, we are focusing on industries that complement our management team’s
background and capitalizing on the ability of our management team to identify and acquire a business focusing on industrial technology
sectors in the United States (which may include a business based in the United States which has operations or opportunities outside of
the United States). We are seeking to acquire one or more businesses with an aggregate enterprise value of $1 billion or greater.
Since
2015, our management team has completed four business combinations with early- to late-stage industrial and industrial technology companies.
Our track record of bringing growth companies to the public markets is summarized below — including initial public offering (“IPO”)
year, SPAC size, and business combination target:
| ● | Hennessy
I (2014): $115mm SPAC IPO; merged with Blue Bird (NASDAQ: BLBD) in 2015, a leading school
bus original equipment manufacturer (“OEM”) in North America, including the leader
for alternative fuels vehicles, which now represent approximately 50% of Blue Bird’s
unit volumes and which is the fastest-growing segment of the market, and the leader in electric
bus sales among all major OEMs; |
| ● | Hennessy
II (2015): $200mm SPAC IPO; merged with Daseke (NASDAQ: DSKE) in 2017, the largest owner/operator
of flatbed and specialized transportation equipment in North America, pursuing a consolidation
strategy having made 10 strategic acquisitions since 2017; |
| ● | Hennessy
III (2017): $257mm SPAC IPO; merged with NRC Group in 2018, a global provider of environmental,
compliance and waste management services, helping customers meet critical, non-discretionary
needs to ensure compliance with environmental, health and safety laws; NRC Group subsequently
merged into US Ecology (NASDAQ: ECOL); |
| ● | Hennessy
IV (2019): $300mm SPAC IPO; merged with Canoo (NASDAQ: GOEV) in 2020, which developed
a breakthrough electric vehicle (“EV”) platform that is highly modular and facilitates
the rapid development of multiple EV programs in both business-to-business and business-to-consumer
markets; and |
| ● | Hennessy
V (2021): $345mm SPAC IPO; pursuing acquisition targets in the sustainable industrial
technology and infrastructure industries. |
Catalyst
for Growth
As
a continuous independent SPAC sponsor, Hennessy Capital believes it has demonstrated that a partnership through one of its SPAC vehicles
is a catalyst for growth. Hennessy Capital is focusing on opportunities that will deliver outsized growth to its investors. It believes
its prior business combinations have enabled its business combination targets to accelerate their growth through more efficient access
to capital. We believe our sponsor’s history of providing access to growth capital via an accelerated public listing supports our
investment thesis and strategy and has helped our sponsor’s partner companies deliver operational and financial growth and create
value for stockholders. We have strong support from our anchor investors, which we believe will be attractive to potential target businesses.
Our anchor investors purchased an aggregate of $321.1 million of the units in the initial public offering at the offering price.
Additionally,
our anchor investors will only be able to purchase the maximum number of founder shares from our sponsor if they make equity investments
in support of our initial business combination that in the aggregate total to $167.3 million.
Competitive
Strengths
Experienced
SPAC Management Team with Business Combination Success
Our
team is led by Daniel J. Hennessy, our Chairman and CEO, who is one of the longest tenured and most experienced SPAC sponsor executives.
In September 2013, Mr. Hennessy became Chairman of the Board and Chief Executive Officer of Hennessy Capital Acquisition Corp., or Hennessy
I, which merged with School Bus Holdings Inc., or SBH, in February 2015 and is now known as Blue Bird Corporation (NASDAQ: BLBD), and
previously served as its Vice Chairman from September 2013 to April 2019. From April 2015 to February 2017, Mr. Hennessy served as Chairman
of the Board and Chief Executive Officer of Hennessy Capital Acquisition Corp. II, or Hennessy II, which merged with Daseke in February
2017 and is now known as Daseke, Inc. (NASDAQ: DSKE), and previously served as its Vice Chairman from February 2017 to June 2021. From
January 2017 to October 2018, Mr. Hennessy served as Chairman of the Board and Chief Executive Officer of Hennessy Capital Acquisition
Corp. III, or Hennessy III, which merged with NRC Group Holdings, LLC, a global provider of comprehensive environmental, compliance and
waste management services in October 2018. In November 2019, NRC Group Holdings Corp. merged with U.S. Ecology, Inc. (NASDAQ: ECOL) at
an attractive premium to the then current stock price. From March 2019 to December 2020, Mr. Hennessy served as Chairman and CEO of Hennessy
Capital Acquisition Corp. IV, or Hennessy IV, which in August 2020 entered into a definitive agreement for an initial business combination
with Canoo Holdings Ltd that closed in December 2020 and is now known as Canoo Inc. (NASDAQ: GOEV). In October 2020, Mr. Hennessy founded
Hennessy Capital Investment Corp. V (NASDAQ: HCIC), or Hennessy V, a blank check company incorporated for similar purposes as our company,
with a particular focus on sustainable industrial technology and infrastructure targets. Mr. Hennessy serves as Chairman and CEO of Hennessy
V.
In
addition, Gregory D. Ethridge, our President and Chief Operating Officer, currently serves as President and Chief Operating Officer of
Hennessy V, and served as President, Chief Operating Officer and director of Hennessy IV from March 2019 until its business combination
with Canoo Holdings Ltd, which closed on December 21, 2020, and continues to serve as a director of the surviving company, Canoo Inc.
(NASDAQ: GOEV). He previously served as President of Matlin & Partners Acquisition Corporation, a SPAC which merged with U.S. Well
Services, Inc. (NASDAQ: USWS) in November 2018, a growth- and technology oriented oilfield service company focused exclusively on hydraulic
fracturing using its patented Clean Fleet technology as the first fully electric, mobile well stimulation system reducing harmful emissions
by 99% and generating operational cost savings on fuel of up to 80%.
Furthermore,
Nicholas A. Petruska, our Executive Vice President, Chief Financial Officer and Secretary since our formation, currently serves as Executive
Vice President, Chief Financial Officer, and Secretary of Hennessy V, and served as the Executive Vice President, Chief Financial Officer
and Secretary of Hennessy IV from March 2019 to December 2020. Mr. Petruska held the same positions with Hennessy II and III, and a similar
position with Hennessy I. Prior to working with Hennessy I, Mr. Petruska was an investment professional with CHS Capital, a middle-market
private equity firm. We believe potential sellers of target businesses will favorably view our management team’s credentialed experience
of closing five business combinations with vehicles similar to our company in considering whether or not to enter into a business combination
with us. However, past performance by members of our management team is not a guarantee either (i) of success with respect to any business
combination we may consummate or (ii) that we will be able to identify a suitable candidate for our initial business combination. You
should not rely on the historical record of our management’s performance as indicative of our future performance.
We
believe our management team is well positioned to take advantage of the growing set of acquisition opportunities focused on industrial
technology solutions in the United States, to create value for our stockholders, and that our contacts and relationships, including owners
of private and public companies, private equity funds, investment bankers, attorneys, accountants and business brokers, will allow us
to generate attractive acquisition opportunities. Our management team is led by Daniel J. Hennessy, who has over 30 years of experience
in the private equity investment business having co-founded Code Hennessy & Simmons LLC (n/k/a CHS Capital or “CHS”),
a middle-market private equity investment firm, in 1988.
Seasoned
Board of Directors with Relevant Industry Experience
We
have recruited and organized a group of five highly accomplished and engaged directors who have brought to us public company governance,
executive leadership, operations oversight and capital markets expertise. Our board members have served as directors, chief executive
officers, chief financial officers or in other executive and advisory capacities for numerous publicly-listed and privately-owned companies.
Our directors have extensive experience with acquisitions, divestitures and corporate strategy and possess relevant domain expertise
in the sectors where we expect to source business combination targets including, but not limited to, power management, industrial automation,
advanced mobility, industrial digitization as well as advanced manufacturing. We believe their collective expertise, contacts and relationships
make us a highly competitive and desirable merger partner. The backgrounds of our highly-qualified board of directors are highlighted
below:
| ● | Richard
H. Fearon is our lead independent director. Mr. Fearon served as Chief Financial and Planning
Officer of Eaton Corporation from 2002 until March 2021 and as Vice Chairman from 2009 until
March 2021. He also served as a director of Eaton Corporation plc (NYSE: ETN) from 2015 until
March 2021. Mr. Fearon was instrumental in growing and reshaping Eaton Corporation’s
business portfolio over the almost 20 years of his tenure, during which he managed 75 acquisitions
and 50 divestitures. Mr. Fearon is also the lead director for Avient Corporation (formerly
known as PolyOne Corporation) and a director of Crown Holdings, Inc. (NYSE: CCK) and CRH
plc (LSE: CRH). Mr. Fearon has worked at several large diversified companies prior to Eaton
Corporation, including Transamerica Corporation, NatSteel Limited and The Walt Disney Company
(NYSE: DIS). He also serves on the board of The Cleveland Museum of Art. |
| ● | Anna
Brunelle is one of our independent directors. Since August 2020, Ms. Brunelle has served
as Chief Financial Officer of Ouster Inc. (NYSE: “OUST” and “OUST.WS”),
which entered into a business combination agreement with a SPAC in December 2020 that was
completed in March 2021. We believe that having a member of our board of directors with experience
as an executive officer of a SPAC business combination target is unique and will make us
an attractive business combination partner to target businesses. Ms. Brunelle has over 20
years of experience in finance, accounting, investor relations, corporate and business development,
as well as business operations and analytics. She previously served as Chief Financial Officer
of Kinestral Technologies from April 2018 through May 2020 and Chief Financial Officer and
Interim Chief Operating Officer of Soylent from March 2016 through October 2017. She has
also served as Chief Financial Officer of GlobalLogic, Chief Financial Officer of Tivo, Inc.,
and Senior Consultant for Deloitte & Touche, LLP. Ms. Brunelle currently serves as a
director of Bolt Threads, Inc. and previously served as a director of Halio International
from March 2019 through May 2020. During her tenure in leadership positions, she has worked
on successful IPOs of technology companies and completed multiple private and public acquisitions
and divestitures. |
|
● |
Sidney Dillard is one of our independent directors. Since August 2002, Ms. Dillard has served as Partner and Head of Corporate Investment Banking at Loop Capital Markets, where she is responsible for setting and executing the firm’s growth strategy with corporations and advising her firm’s corporate clients on their capital raising and advisory needs. She also serves on the firm’s Management Committee, Risk Committee, and Fairness & Valuation Committee. Prior to Loop Capital Markets, Ms. Dillard served in multiple roles at Northern Trust Bank, including as Senior Vice President and Division Manager. Ms. Dillard was appointed to the board of directors of Cresco Labs Inc. (CSE: CL) (OTCQX: CRLBF) in May 2021. Ms. Dillard serves as Board Chair for Girl Scouts of Greater Chicago and Northwest Indiana and Board Member for The Chicago Network, Window to the World Communications, Inc. (Chicago PBS Station WTTW; WFMT radio station) and IFF (f/k/a/ Illinois Facilities Fund). |
| ● | Walter
Roloson is one of our independent directors. Mr. Roloson currently serves as a Managing Vice
President at Capital One Financial Corporation and as Co-head of its Capital One Shopping
business, leading its sales, marketing, strategy, and finance functions. Previously, he co-founded
Wikibuy in 2013 and served as Co-CEO through its sale to Capital One in November 2018. Mr.
Roloson previously served in various investment and operational positions at LinkedIn Corporation,
Tiger Global Management, LLC, Greenhill & Co Inc., and Jefferies Financial Group Inc. |
| ● | John
Zimmerman is one of our independent directors. He was appointed as a Partner at Oak Hill
Capital Partners in July 2021, having previously served as Senior Advisor to Oak Hill Capital
Partners from June 2015 through June 2020. From January 2018 through January 2022, Mr. Zimmerman
also served as President of Gates Capital Partners and President and Chief Investment Officer
of Crosscreek Capital Group. From 1999 through 2014, Mr. Zimmerman served in a variety of
positions, including as Main Board Director and Chief Financial Officer, of Tomkins plc,
which was publicly traded on the London Stock Exchange until it was taken private in 2010. |
Directors
Anna Brunelle, Sidney Dillard, Richard H. Fearon, Walter Roloson, and John Zimmerman received founders’ equity prior to the initial
public offering of Hennessy VI, in line with equity received by outside directors for similar entities. All of our directors and officers
are individual investors in Hennessy Capital Partners VI LLC, our sponsor.
Capital
Markets Experience
The
Hennessy Capital team believes it has substantial capital markets expertise which makes us an attractive business combination partner
to target businesses. As examples of this, the Hennessy Capital team has completed SPAC business combinations with a combined total enterprise
value of $4.4 billion (at the time of the business combination), completed seven SPAC IPOs for a total of about $1.8 billion and raised
over $850 million of PIPE and backstop capital to support its business combinations.
In
August 2020, Hennessy IV announced its business combination with Canoo Holdings Ltd., or Canoo, which closed in December 2020. The transaction
valued Canoo at approximately $1.8 billion and provided over $600 million in gross proceeds to support the rapid growth of the company.
Hennessy IV’s management secured all financing required to close the transaction prior to announcement including a common stock
PIPE of approximately $325 million, which was meaningfully oversubscribed and subsequently upsized from its initial $200 million target,
and is supported by investments from multiple institutional investors, including investments from funds and accounts managed by BlackRock
and D. E. Shaw.
The
Hennessy Capital team completed the IPO of Hennessy V on January 20, 2021. Strong investor demand for Hennessy V resulted in an upsized
IPO and the exercise of the underwriters’ over-allotment option in full, with Hennessy V raising $345 million of gross proceeds
from the sale of its public units in its IPO.
Our
Established Network of Third Party Advisors
We
have utilized what our management team believes is an accomplished and proven network of third-party advisors and relationships to assist
with target company origination and evaluation, due diligence and implementation of value creation programs and activities following
our initial business combination. With respect to target identification, the Hennessy Capital team has identified, in total, over 700
potential targets since 2014 for Hennessy I, Hennessy II, Hennessy III, Hennessy IV, Hennessy V and Hennessy VI. Over 150 of these target
identifications resulted in meaningful engagement with the owners and management teams. Our origination activities are a core competency
that we believe allow us to select value-maximizing opportunities for our stockholders, consistent with our investment strategy. Once
a letter of intent is signed with a target, our team of advisors and consultants is activated and comprehensive and significant due diligence
activities are undertaken and overseen by us, including a review of the target’s financial statements and model, IPO readiness,
commercial and competitive analysis, operations and performance improvement, strategic growth opportunities as well as customary legal
and accounting due diligence. This network of advisors has supported Hennessy Capital since 2013 and is now highly familiar with the
SPAC vehicle and our comprehensive due diligence process. We believe that our network of established third party advisors and relationships
represents an attractive and differentiated value proposition for investors, sellers, target companies and their management teams.
Initial
Business Combination
Nasdaq
rules require that 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 the deferred underwriting commissions and 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 that is a member of FINRA or an independent accounting firm 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.
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. 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 of 1940, as amended, or the “Investment Company Act”. Even if the post-transaction company
owns or acquires 50% or more of the voting securities of the target, our 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% of net assets test. If the initial business
combination involves more than one target business, the 80% of net assets test will be based on the aggregate value of all of the 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.
We
have identified the following general criteria and guidelines that we believe are important in evaluating prospective target businesses.
We have used these criteria and guidelines in evaluating acquisition opportunities, but we may decide to enter into our initial business
combination with a target business that does not meet these criteria and guidelines.
| ● | $1
Billion+ Target Business Size. We will seek to acquire one or more businesses with an
aggregate enterprise value of $1 billion or greater, determined in the sole discretion of
our officers and directors according to reasonably accepted valuation standards and methodologies. |
| ● | Large
Addressable Market. We will target companies that operate in large addressable markets
within industrial technology sectors. We believe our management team and our board are skilled
in analyzing and evaluating companies in these markets based on their significant past SPAC
execution, investing, and operating experience. |
| ● | Scalable
and Sustainable Growth Platform. We intend to focus on segments and businesses within
our target sectors that are poised for scalable, sustainable growth due to shifting customer
preferences in favor of products and technologies that enable improvements in automation,
efficiency, and customer experience. |
| ● | Strong
Competitive Positioning and Differentiated Technology. We plan to focus on attractive
companies with distinct intellectual property and highly defensible, differentiated technology
aimed at solving critical challenges in their areas of focus. Companies with unique and disruptive
platforms and product offerings, including technology innovators, will be at the forefront
of our evaluation process. Our management team and our board have extensive operational,
commercial and transactional experience with technology-driven companies in our target sectors,
and we intend to use these skills to identify market leaders. |
| ● | Experienced
Management Team. We will seek to acquire one or more businesses with a complete, experienced
management team that provides a platform for us to further develop the acquired business’s
management capabilities. We will seek to partner with a potential target’s management
team and expect that the operating and financial abilities of our executive team and board
will complement management’s capabilities. |
| ● | Partnership
Approach. We will pursue a partnership approach to working with a management team that
shares our strategic vision and believes we can help them achieve the full potential of their
business. Our management team and our board have a long history of starting and growing businesses,
and we will use our collective experience to help guide management teams of target businesses. |
| ● | Benefit
from Being a Public Company. We intend to acquire one or more businesses that will benefit
from being publicly traded and can effectively utilize the broader access to capital and
public profile that are associated with being a publicly traded company. |
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.
Our
Business Combination Process
In
evaluating prospective business combinations, we conduct a thorough due diligence review process 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, discussion with customers and suppliers, legal reviews and other reviews as we deem appropriate.
We have utilized our expertise analyzing companies in industrial technology sectors in evaluating operating projections, financial projections
and determining the appropriate return expectations given the risk profile of the target business.
We
are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor, officers or directors.
In the event we seek to complete our initial business combination with a company that is affiliated with our sponsor, officers or directors,
we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm that is a member of FINRA
or an independent accounting firm that our initial business combination is fair to our company from a financial point of view.
Our
officers and directors currently own, either directly or indirectly, founder shares and/or private placement warrants. Because of this
ownership, 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.
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, including Hennessy V, pursuant to which such officer or director is or will be required to present
a business combination opportunity. 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 may
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.
We
do not believe, however, that the fiduciary, contractual or other obligations or duties of our officers or directors will materially
affect our ability to complete our initial business combination. Our amended and restated certificate of incorporation 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.
Our
sponsor, officers and directors 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. As a result, our sponsor, 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. For example, each of Mr. Hennessy, Mr. Ethridge and Mr. Petruska is currently an officer of Hennessy V and owes fiduciary duties
to Hennessy V, which may compete with us for acquisition opportunities. Although we have no formal policy in place for vetting potential
conflicts of interest, our board of directors will review any potential conflicts of interest on a case-by-case basis. In particular,
affiliates of our sponsor are currently sponsoring one other blank check company, Hennessy V. Any such companies, including Hennessy
V, may present additional conflicts of interest in pursuing an acquisition target. However, we do not believe that any potential conflicts
with Hennessy V would materially affect our ability to complete our initial business combination, because our management team has significant
experience in identifying and executing multiple acquisition opportunities simultaneously, we are not limited by industry or geography
in terms of the acquisition opportunities we can pursue, even though we expect that Hennessy V will have priority over us with respect
to acquisition opportunities until it completes an initial business combination. In addition, all of our independent directors that will
serve on our board are not directors of Hennessy V, and all of the independent directors of Hennessy V will not serve on our board of
directors.
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 may vary based on whether a target business has been selected for our initial business
combination and the current stage of the business combination process.
We
believe our management team’s operating and transaction experience and relationships with companies 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 in connection with industrial technology investing. 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.
This
network has provided our management team with a flow of referrals that have resulted in numerous transactions. We believe that the network
of contacts and relationships of our management team will provide us with an important source of acquisition opportunities. In addition,
we anticipate that target business candidates will also be brought to our attention from various unaffiliated sources, including investment
bankers, private investment funds and other intermediaries. Target businesses may be brought to our attention by such unaffiliated sources
as a result of being solicited by us through calls or mailings. These sources may also 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 this Report and know the types of businesses
we are targeting. Our officers and directors, as well as their affiliates, may also 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, as
well as attending trade shows or conventions. In addition, we expect to receive a number of proprietary opportunities that would not
otherwise necessarily be available to us as a result of the track record and business relationships of our officers and directors, and
the success of Hennessy I, Hennessy II, Hennessy III, and Hennessy IV, which are well-known to many market participants. In connection
with their duties with Hennessy I, Hennessy II, Hennessy III, Hennessy IV, Hennessy V and Hennessey VI, our executive officers have reviewed
over 700 potential targets over the course of Hennessy I, Hennessy II, Hennessy III, Hennessy IV, Hennessy V and Hennessey VI.
Financial
Position
With
funds available for a business combination in the amount of $328,997,000 (as of December 31, 2021) assuming no redemptions and after
payment of $11,933,000 of deferred underwriting fees we offer a target business a variety of options such as creating a liquidity event
for its owners, providing capital for the potential growth and expansion of its operations or strengthening its balance sheet by reducing
its debt ratio. Because we are able to complete our initial business combination using our cash, debt or equity securities, or a combination
of the foregoing, we have the flexibility to use the most efficient combination that will allow us to tailor the consideration to be
paid to the target business to fit its needs and desires. However, we have not taken any steps to secure third party financing and there
can be no assurance it will be available to us.
Effecting
Our Initial Business Combination
We
are not presently engaged in, and we will not engage in, any operations for an indefinite period of time. We intend to effectuate our
initial business combination using cash from the proceeds of our initial public offering and the private placement of the private placement
warrants, the proceeds of the sale of our shares in connection with our initial business combination (pursuant to backstop agreements
we may enter into), shares issued to the owners of the target, debt issued to bank or other lenders or the owners of the target, or 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 for general corporate purposes,
including for maintenance or expansion of operations of the post-transaction company, the payment of principal or interest due on indebtedness
incurred in completing our initial business combination, to fund the purchase of other companies or for working capital. We may seek
to raise additional funds through a private offering of debt or equity securities in connection with the completion of our initial business
combination, and we may effectuate our initial business combination using the proceeds of such offering rather than using the amounts
held in the trust account. In addition, we intend to target businesses larger than we could acquire with the net proceeds of our initial
public offering and the sale of the private placement warrants, 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 or through loans in connection with our initial business combination. At this
time, 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.
Although
our management will assess the risks inherent in a particular target business with which we may combine, we cannot assure you that this
assessment will result in our identifying all risks that a target business may encounter. Furthermore, some of those risks may be outside
of our control, meaning that we can do nothing to control or reduce the chances that those risks will adversely impact a target business.
The
time required to select and evaluate a target business and to structure and complete our initial business combination, and the costs
associated with this process, are not currently ascertainable with any degree of certainty. Any costs incurred with respect to the identification
and evaluation of a prospective target business with which our initial business combination is not ultimately completed will result in
our incurring losses and will reduce the funds we can use to complete another business combination.
Sourcing
of Target Businesses
We
may engage the services of professional firms or other individuals that specialize in business acquisitions 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 our sponsor
or any of our existing officers or directors, or any entity with which our 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 in order to effectuate, the completion of our initial business combination (regardless of the type of transaction
that it is). None of our sponsor, executive officers or directors, or any of their respective affiliates, are allowed to receive any
compensation, finder’s fees or consulting fees from a prospective business combination target in connection with a contemplated
initial business combination. We pay an affiliate of our sponsor a total of $15,000 per month for office space, utilities and secretarial
and administrative support, and we reimburse our sponsor for any out-of-pocket expenses related to identifying, investigating and completing
an initial business combination. 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 will pay each of Mr. Ethridge, our President and Chief Operating
Officer, and Mr. Petruska, our Chief Financial Officer, $29,000 per month for their services prior to the consummation of our initial
business combination, of which $14,000 per month is payable upon the successful completion of our initial business combination.
We
are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor, executive officers
or directors, or making the acquisition through a joint venture or other form of shared ownership with our sponsor, executive officers
or directors. In the event we seek to complete our initial business combination with a company that is affiliated with our sponsor, officers
or directors, we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm that is
a member of FINRA or an independent accounting firm that our initial business combination is fair to our company from a financial point
of view. We are not required to obtain such an opinion in any other context.
If
any of our officers or directors becomes aware of an initial business combination opportunity that falls within the line of business
of any entity to which he or she has pre-existing fiduciary or contractual obligations, he or she may be required to present such business
combination opportunity to such entity prior to presenting such business combination opportunity to us. Our officers and directors currently
have certain relevant fiduciary duties or contractual obligations that may take priority over their duties to us, including Hennessy
V.
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 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 |
Under
Nasdaq’s listing rules, 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; |
| ● | 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 common shares
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. |
The
decision as to whether we will seek stockholder approval of a proposed business combination in those instances in which stockholder approval
is not required by law will be made by us, solely in our discretion, and will be based on business and legal reasons, which include a
variety of factors, including, but not limited to:
| ● | the
timing of the transaction, including in the event we determine stockholder approval would
require additional time and there is either not enough time to seek stockholder approval
or doing so would place the company at a disadvantage in the transaction or result in other
additional burdens on the company; |
| ● | the
expected cost of holding a stockholder vote; |
| ● | the
risk that the stockholders would fail to approve the proposed business combination; |
| ● | other
time and budget constraints of the company; and |
| ● | additional
legal complexities of a proposed business combination that would be time-consuming and burdensome
to present to stockholders. |
Permitted
Purchases of Our Securities
In
the event 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 sponsor, directors, officers, advisors or any of their respective affiliates
may purchase public shares or public warrants or a combination thereof 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 their affiliates may purchase in such transactions, subject to compliance with applicable law and Nasdaq
rules. However, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms
or conditions for any such transactions. 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. None of the funds in the trust account
will be used to purchase public shares in such transactions. 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 have an insider trading policy which will require insiders to (1) refrain from purchasing securities when they are in possession
of any material non-public information and (2) to clear all trades with our compliance personnel or legal counsel prior to execution.
We cannot currently determine whether our insiders will make such purchases pursuant to a Rule 10b5-1 plan, as it will be dependent upon
several factors, including but not limited to, the timing and size of such purchases. Depending on such circumstances, our insiders may
either make such purchases pursuant to a Rule 10b5-1 plan or determine that such a plan is not necessary.
In
the event that our sponsor, directors, officers, advisors or any of their respective affiliates purchase public shares in privately negotiated
transactions from public stockholders who have already elected to exercise their redemption rights or submitted a proxy to vote against
our initial business combination, such selling stockholders would be required to revoke their prior elections to redeem their shares
and any proxy to vote against our initial business combination. We do not currently anticipate that such purchases, if any, would constitute
a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules
under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such
rules, the purchasers will comply with such rules.
The
purpose of such purchases could be to vote such shares in favor of the business combination and thereby increase the likelihood of obtaining
stockholder approval of our 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. This may result in the completion of our initial business combination that may not otherwise
have been possible. In addition, if such purchases are made, the public “float” of our common stock may be reduced and the
number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing
or trading of our securities on a national securities exchange.
Our
sponsor, officers, directors, advisors and/or any of their respective affiliates anticipate that they may identify the stockholders with
whom our sponsor, 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 our sponsor, 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.
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. Our sponsor, 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 our sponsor, officers, directors, advisors 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 made in compliance with Rule 10b-18, which is a
safe harbor from liability for manipulation under Section 9(a)(2) and Rule 10b-5 of the Exchange Act. Rule 10b-18 has certain technical
requirements that must be complied with in order for the safe harbor to be available to the purchaser. Our sponsor, officers, directors
and/or any of their respective affiliates will be restricted from making purchases of common stock if such purchases would violate Section
9(a)(2) or Rule 10b-5 of the Exchange Act.
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 public shares upon the completion of our
initial business combination at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account
as of two business days prior to the consummation of our initial business combination, including interest (net of taxes payable), divided
by the number of then outstanding public shares, subject to the limitations described herein. The amount in the trust account as of December
31, 2021 is approximately $10.00 per public share. The per share amount we will distribute to investors who properly redeem their shares
will not be reduced by the deferred underwriting commissions we will pay to the underwriters. The redemption right will include the requirement
that any beneficial owner on whose behalf a redemption right is being exercised must identify itself in order to validly redeem its shares.
Each public stockholder may elect to redeem its public shares without voting, and if they do vote, irrespective of whether they vote
for or against the proposed transaction. There will be no redemption rights upon the completion of our initial business combination with
respect to our warrants. Our sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have
agreed to waive their redemption rights with respect to 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: (1) in connection with a stockholder meeting called to approve the business combination
or (2) by means of a tender offer. The decision as to whether we will seek stockholder approval of a proposed business combination or
conduct a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of
the transaction and whether the terms of the transaction would require us to seek 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 our amended and restated certificate of incorporation would require stockholder approval. If we structure a business
combination transaction 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 business combination. We currently intend to conduct redemptions pursuant to a stockholder
vote unless stockholder approval is not required by applicable law or stock exchange listing requirement and we choose to conduct redemptions
pursuant to the tender offer rules of the SEC for business or other reasons. So long as we maintain a listing for our securities on Nasdaq,
we are 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 reasons, we will, pursuant to
our amended and restated certificate of incorporation:
| ● | 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. |
Upon
the public announcement of our initial business combination, we and our sponsor will terminate any plan established in accordance with
Rule 10b5-1 to purchase shares of our Class A common stock in the open market if we elect to redeem our public shares through a tender
offer, to comply with Rule 14e-5 under the Exchange Act.
In
the event we conduct redemptions pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days,
in accordance with Rule 14e-1(a) under the Exchange Act, and we will not be permitted to complete our initial business combination until
the expiration of the tender offer period. In addition, the tender offer will be conditioned on public stockholders not tendering more
than a specified number of public shares, which number will be based on the requirement that we may not redeem public shares in an amount
that would cause our net tangible assets, after payment of the deferred underwriting commissions, to be less than $5,000,001 (so that
we do not then become 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 such initial business combination. If public stockholders tender more shares than
we have offered to purchase, we will withdraw the tender offer and not complete such 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 reasons, we will, pursuant to our amended and restated certificate of incorporation:
| ● | 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. |
We
expect that a final proxy statement would be mailed to public stockholders at least 10 days prior to the stockholder vote. However, we
expect that a draft proxy statement would be made available to such stockholders well in advance of such time, providing additional notice
of redemption if we conduct redemptions in conjunction with a proxy solicitation. Although we are not required to do so, we currently
intend to comply with the substantive and procedural requirements of Regulation 14A in connection with any stockholder vote even if we
are not able to maintain our Nasdaq listing or Exchange Act registration.
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, unless otherwise required by applicable law, regulation or stock exchange rules, we will complete our initial
business combination only if a majority of the outstanding shares of common stock voted are voted in favor of the 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, officers and directors will count toward this quorum and have agreed to vote any founder shares and any public
shares held by them in favor of our initial business combination. These quorum and voting thresholds, and agreements, may make it more
likely that we will consummate our initial business combination. Each public stockholder may elect to redeem its public shares without
voting, and if they do vote irrespective of whether they vote for or against the proposed transaction. In addition, our sponsor, officers
and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with
respect to any founder shares and any public shares held by them in connection with the completion of a business combination.
Our
amended and restated certificate of incorporation provides that in no event will we redeem our public shares in an amount that would
cause our net tangible assets, after payment of the deferred underwriting commissions, to be less than $5,000,001 (so that we do not
then become subject to the SEC’s “penny stock” rules). Redemptions of our public shares may also be subject to a higher
net tangible asset test or cash requirement pursuant to an agreement relating to our initial business combination. For example, the proposed
business combination may require: (1) cash consideration to be paid to the target or its owners, (2) cash to be transferred to the target
for working capital or other general corporate purposes or (3) the retention of cash to satisfy other conditions in accordance with the
terms of the proposed business combination. In the event the aggregate cash consideration we would be required to pay for all 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 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, our amended and restated certificate of incorporation 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, without our prior consent, which we refer
to as 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 business combination
as a means to force us or our affiliates to purchase their shares at a significant premium to the then-current market price or on other
undesirable terms. Absent this provision, a public 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 affiliates
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 ,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 a business
combination with a target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. However,
we would not be restricting our stockholders’ ability to vote all of their shares (including Excess Shares) for or against our
initial business combination.
Tendering
Stock Certificates in Connection with a Tender Offer or 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
documents or proxy materials mailed to such holders, or up to two business days prior to the vote on the proposal to approve the business
combination in the event we distribute proxy materials, or to deliver their shares to the transfer agent electronically using The Depository
Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, rather than simply voting against the initial business combination,
at the holder’s option. The tender offer or proxy materials, as applicable, that we will furnish to holders of our public shares
in connection with our initial business combination will indicate whether we are requiring public stockholders to satisfy such delivery
requirements, which will include the requirement that any beneficial owner on whose behalf a redemption right is being exercised must
identify itself in order to validly redeem its shares. Accordingly, a public stockholder would have from the time we send out our tender
offer materials until the close of the tender offer period, or up to two business days prior to the vote on the business combination
if we distribute proxy materials, as applicable, to tender its shares if it wishes to seek to exercise its redemption rights. Pursuant
to the tender offer rules, the tender offer period will be not less than 20 business days and, in the case of a stockholder vote, a final
proxy statement would be mailed to public stockholders at least 10 days prior to the stockholder vote. However, we expect that a draft
proxy statement would be made available to such stockholders well in advance of such time, providing additional notice of redemption
if we conduct redemptions in conjunction with a proxy solicitation. Given the relatively short exercise period, it is advisable for 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 Depository Trust Company’s DWAC (Deposit/Withdrawal-At-Custodian) System. The transfer agent will typically charge the tendering
broker $80.00 and it would be up to the broker whether or not to pass this cost on to the redeeming holder. However, this fee would be
incurred regardless of whether or not we require holders seeking to exercise redemption rights to tender their shares. The need to deliver
shares is a requirement of exercising redemption rights regardless of the timing of when such delivery must be effectuated. 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 business combination
and check a box on the proxy card indicating such holder was seeking to exercise his or her redemption rights. After the 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 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 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 business combination is approved.
Any
request to redeem such shares, once made, may be withdrawn at any time up to the date set forth in the tender offer materials or the
date of the stockholder meeting set forth in our proxy materials, as applicable. Furthermore, if a holder of a public share delivered
its certificate in connection with an election of redemption rights and subsequently decides prior to the applicable date not to elect
to exercise such rights, such holder may simply request that the transfer agent return the certificate (physically or electronically).
It is anticipated that the funds to be distributed to holders of our public shares electing to redeem their shares will be distributed
promptly after the completion of our initial business combination.
If
our initial business combination is not approved or completed for any reason, then our public 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 business combination is not completed, we may continue to try to complete a business combination with a different
target until October 1, 2023.
Redemption
of Public Shares and Liquidation if no Initial Business Combination
Our
amended and restated certificate of incorporation provides that we will have only 24 months from the closing of our initial public offering,
or until October 1, 2023, to complete our initial business combination. If we are unable to complete our initial business combination
by October 1, 2023, we will: (1) cease all operations except for the purpose of winding up, (2) 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 (net of taxes payable and up to $100,000 of interest to pay dissolution expenses),
divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights
as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (3) 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 by October 1, 2023.
Our
initial stockholders, 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 held by them if we fail to complete our initial
business combination by October 1, 2023. However, if our sponsor or any of our officers and directors acquires public shares after our
initial public offering, they will be entitled to liquidating distributions from the trust account with respect to such public shares
if we fail to complete our initial business combination by October 1, 2023.
Our
sponsor, officers and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our
amended and restated certificate of incorporation to modify the substance or timing of our obligation to provide for the redemption of
our public shares in connection with an initial business combination or to redeem 100% of our public shares if we do not complete our
initial business combination by October 1, 2023, 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 (net of taxes payable), divided by the number of then outstanding public shares.
However, we may not redeem our public shares in an amount that would cause our net tangible assets after payment of the deferred underwriting
commissions to be less than $5,000,001 (so that we do not then become subject to the SEC’s “penny stock” rules).
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 amounts remaining out of the approximately $1,966,000 of proceeds held outside the trust account (as of December 31, 2021),
although there is no assurance that there will be sufficient funds for such purpose. However, if those funds are not sufficient to cover
the costs and expenses associated with implementing our plan of dissolution, to the extent that there is any interest accrued in the
trust account not required to pay taxes, we may request the trustee to release to us an additional amount of up to $100,000 of such accrued
interest to pay those costs and expenses.
If
we were to expend all of the net proceeds of our initial public offering and the sale of the private placement warrants, other than the
proceeds deposited in the trust account, and without taking into account interest, if any, earned on the trust account and any tax payments
or expenses for the dissolution of the trust, the per-share redemption amount received by stockholders upon our dissolution would be
approximately $10.00. 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. There is no assurance that the actual per share redemption amount
received by stockholders will not be substantially less than $10.00. 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, there is no assurance that we will have funds sufficient to pay or provide for all creditors’
claims.
Although
we have sought and will continue to seek to have all vendors, service providers (other than our independent registered public accounting
firm), 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 we are unable to find
a service provider willing to execute a waiver.
In
addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising
out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason. In order
to protect the amounts held in the trust account, our sponsor has agreed that it will be liable to us if and to the extent any claims
by a third party (other than our independent registered public accounting firm) for services rendered or products sold to us, or a prospective
target business with which we have entered into a transaction agreement, reduce the amount of funds in the trust account to below (1)
$10.00 per public share or (2) the actual amount per public share held in the trust account as of the date of the liquidation of the
trust account, if less than $10.00 per share due to reductions in the value of the trust assets in each case net of taxes payable, except
as to any claims by a third party that executed a waiver of any and all rights to the monies held in the trust account (whether any such
waiver is enforceable) and except as to any claims under our indemnity of the underwriters of our initial public offering against certain
liabilities, including liabilities under the Securities Act. We have not independently verified whether our sponsor has sufficient funds
to satisfy its indemnity obligations and believe that our sponsor’s only assets are securities of our company and, therefore, our
sponsor may not be able to satisfy these obligations. We have not asked our sponsor to reserve for such obligations. Therefore, there
is no assurance that our sponsor would be able to satisfy those obligations. As a result, if any such claims were successfully made against
the trust account, the funds available for our initial business combination and redemptions could be reduced to less than $10.00 per
public share. In such event, we may not be able to complete our initial business combination, and you would receive such lesser amount
per share in connection with any redemption of your public shares. None of our officers or directors will indemnify us for claims by
third parties including, without limitation, claims by vendors and prospective target businesses.
In
the event that the proceeds in the trust account are reduced below: (1) $10.00 per public share; or (2) the actual amount per public
share held in the trust account as of the date of the liquidation of the trust account, if less than $10.00 per share due to reductions
in the value of the trust assets, in each case net of taxes payable, and our sponsor asserts that it is unable to satisfy its indemnification
obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether
to take legal action against our sponsor to enforce its indemnification obligations. While we currently expect that our independent directors
would take legal action on our behalf against our sponsor to enforce its indemnification obligations to us, it is possible that our independent
directors in exercising their business judgment may choose not to do so in certain instances. For example, the cost of such legal action
may be deemed by the independent directors to be too high relative to the amount recoverable or the independent directors may determine
that a favorable outcome is not likely. Accordingly, there is no assurance that due to claims of creditors the actual value of the per
share redemption price will not be substantially less than $10.00 per public share.
We
will seek to reduce the possibility that our sponsor will have to indemnify the trust account due to claims of creditors by endeavoring
to have all vendors, service providers (other than our independent registered public accounting firm), prospective target businesses
or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or
to monies held in the trust account. Our sponsor will also not be liable as to any claims under our indemnity of the underwriters of
our initial public offering against certain liabilities, including liabilities under the Securities Act. 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 October 1, 2023 may be considered a liquidating distribution
under Delaware law. If a 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 October 1, 2023, is not considered a liquidating distribution under Delaware law
and such redemption distribution is deemed to be unlawful, 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 October 1, 2023, we will: (1) cease all operations except
for the purpose of winding up; (2) 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
(net of taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares,
which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further
liquidating distributions, if any), subject to applicable law; and (3) 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 October 1, 2023 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 do not intend to comply with Section 280, 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 ten years following our dissolution. If our plan of distribution complies with Section 281(b) of the DGCL, 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 likely be barred after the third anniversary of the dissolution.
However, because we are a blank check company, rather than an operating company, and our operations are 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, consultants,
etc.) or prospective target businesses. As described above, pursuant to the obligation contained in our underwriting agreement, we have
sought and will continue to seek to have all vendors, service providers (other than our independent registered public accounting firm),
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,
our sponsor may be liable only to the extent necessary to ensure that the amounts in the trust account are not reduced below: (1) $10.00
per public share or (2) 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 value of the trust assets, in each case net of taxes payable, and will not be liable
as to any claims under our indemnity of the underwriters of our initial public offering against certain liabilities, including liabilities
under the Securities Act.
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, there
is no assurance that 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 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, and 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. There is no assurance that claims will not be brought against us for these reasons.
A
public stockholder will be entitled to receive funds from the trust account only upon the earlier to occur of: (1) the completion of
our initial business combination, and then, only in connection with those public shares that such stockholder has properly elected to
redeem, subject to the limitations described in this Report; (2) the redemption of any public shares properly submitted in connection
with a stockholder vote to amend our amended and restated certificate of incorporation to modify the substance or timing of our obligation
to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public
shares if we do not complete our initial business combination by October 1, 2023, and (3) the redemption of all of our public shares
if we are unable to complete our initial business combination by October 1, 2023, subject to applicable law. In no other circumstances
will a public stockholder have any right or interest of any kind to or in the trust account. In the event we seek stockholder approval
in connection with our initial business combination, a stockholder’s voting in connection with our initial business combination
alone will not result in a stockholder’s redeeming its shares to us for an applicable pro rata share of the trust account. Such
stockholder must have also exercised its redemption rights as described above.
Amended
and Restated Certificate of Incorporation
Our
amended and restated certificate of incorporation contains certain requirements and restrictions relating to our initial public offering
that will apply to us until the consummation of our initial business combination. If we seek to amend any provisions of our amended and
restated certificate of incorporation to modify the substance or timing of our obligation to provide for the redemption of our public
shares in connection with an initial business combination or to redeem 100% of our public shares if we do not complete our initial business
combination within the completion window or with respect to any other material provisions relating to the rights of holders of our Class
A Common Stock or pre-initial business combination business activity, we will provide public stockholders with the opportunity to redeem
their public shares in connection with any such vote. Our initial stockholders, officers and directors have agreed to waive any 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. Specifically, our amended and restated certificate of incorporation provides, among other things, that:
| ● | prior
to the consummation of our initial business combination, we shall either: (1) seek stockholder
approval of our initial business combination at a meeting called for such purpose at which
stockholders may seek to redeem their shares, regardless of whether they vote for or against,
or abstain from voting on, the proposed business combination, into their pro rata share of
the aggregate amount on deposit in the trust account as of two business days prior to the
consummation of our initial business combination, including interest (net of taxes payable);
or (2) provide our public stockholders with the opportunity to tender their shares to us
by means of a tender offer (and thereby avoid the need for a stockholder vote) for an amount
equal to their pro rata share of the aggregate amount on deposit in the trust account as
of two business days prior to the consummation of our initial business combination, including
interest (net of taxes payable), in each case subject to the limitations described herein; |
| ● | we
will consummate our initial business combination only if we have net tangible assets of at
least $5,000,001 upon such consummation and, solely if we seek stockholder approval, a majority
of the outstanding shares of common stock voted are voted in favor of the business combination
at a duly held stockholders meeting; |
| ● | if
our initial business combination is not consummated within the completion window, then our
existence will terminate and we will distribute all amounts in the trust account; and |
| ● | prior
to our initial business combination, we may not issue additional shares of capital stock
that would entitle the holders thereof to (1) receive funds from the trust account or (2)
vote on any initial business combination. |
These
provisions cannot be amended without the approval of holders of 65% of our common stock. In the event we seek stockholder approval in
connection with our initial business combination, our amended and restated certificate of incorporation provides that, unless otherwise
required by applicable law or stock exchange rules, we may consummate our initial business combination only if approved by a majority
of the shares of common stock voted by our stockholders at a duly held stockholders meeting.
Competition
In
identifying, evaluating and selecting a target business for our initial business combination, we have encountered, and expect to continue
to encounter, intense competition from other entities having a business objective similar to ours, including private investors (which
may be individuals or investment partnerships), other blank check companies, private equity groups and leveraged buyout funds, public
companies, operating businesses and other entities, domestic and international, competing for the types of businesses we intend to acquire.
Many of these individuals and entities are well-established and have extensive experience in identifying and effecting business combinations
or acquisitions, directly or through affiliates. Many of these competitors possess greater technical, human and other resources or more
local industry knowledge than we do and our financial resources are relatively limited when contrasted with those of many of these competitors.
While we believe there are numerous target businesses we could potentially acquire with the net proceeds of our initial public offering
and the sale of the private placement warrants, our ability to compete with respect to the acquisition of certain target businesses that
are sizable is limited by our available financial resources. This inherent competitive limitation gives others an advantage in pursuing
the acquisition of certain target businesses. 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. Any of these obligations
may place us at a competitive disadvantage in successfully negotiating and completing a business combination.
Sponsor
Indemnity
Our
sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (other than our independent registered
public accounting firm) for services rendered or products sold to us, or a prospective target business with which we have discussed entering
into a transaction agreement, reduce the amount of funds in the trust account to below: (1) $10.00 per public share; or (2) the
actual amount per public share held in the trust account as of the date of the liquidation of the trust account, if less than $10.00
per share due to reductions in the value of the trust assets, in each case, net of taxes payable, except as to any claims by a third
party that executed a waiver of any and all rights to the monies held in the trust account (whether any such waiver is enforceable) and
except as to any claims under our indemnity of the underwriters of our initial public offering against certain liabilities, including
liabilities under the Securities Act. We have not independently verified whether our sponsor has sufficient funds to satisfy its indemnity
obligations and believe that our sponsor’s only assets are securities of our company and, therefore, our sponsor may not be able
to satisfy those obligations. We have not asked our sponsor to reserve for such obligations. Therefore, we cannot assure you that our
sponsor would be able to satisfy those obligations. We believe the likelihood of our sponsor having to indemnify the trust account is
limited because we will endeavor to have all vendors and prospective target businesses as well as other entities execute agreements with
us waiving any right, title, interest or claim of any kind in or to monies held in the trust account.
Employees
We
currently have three officers (including our President and Chief Operating Officer). 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 and intend to continue
doing so until we have completed our initial business combination. The amount of time they devote in any time period may vary based on
whether a target business has been selected for our initial business combination and 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
Our
units, Class A common stock and warrants are registered under the Exchange Act and we 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, this Report
contains financial statements audited and reported on by our independent registered public accounting firm.
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. These financial statements may
be required to be prepared in accordance with, or be reconciled to, GAAP or IFRS, 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 target businesses we may acquire 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 completion window. There is no assurance that any particular target business identified by us as a potential business combination
candidate will have financial statements prepared in accordance with 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
will be 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, and no longer qualify as an emerging growth
company, will we be required to have our internal control procedures audited. A target business may not be in compliance with the provisions
of the Sarbanes-Oxley Act regarding adequacy of their internal controls. The development of the internal controls of any such entity
to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition. We 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
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 independent
registered public accounting firm 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 have taken 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 October 1, 2026, (b) in
which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which
means the market value of our common stock that is held by non-affiliates exceeds $700 million as of the end of the prior fiscal year’s
second fiscal quarter; and (2) the date on which we have issued more than $1.00 billion in non-convertible debt during the prior three-year
period.
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 end of the prior June 30th, or (2) our annual revenues exceeded $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
30th.