Item 1. Business
Our Company
We are a blank
check company incorporated in July 2020 as a Delaware corporation whose business purpose is to effect 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.
We seek to capitalize
on the more than 50 years of combined investing experience of our founders, James C. Momtazee and Maria C. Walker (“Founders”).
We believe our Founders’ distinctive and complementary backgrounds can have a transformative impact on a target business.
Although we may pursue targets in any business industry or sector, we intend to focus our investment efforts broadly across the
entire health care industry, which encompasses among other things technology-enabled services, biopharmaceuticals, pharmaceutical
value chain, medical devices, diagnostics, providers, digital health and consumer health. Investment opportunities will be sourced
through the Founders’ proprietary and differentiated network built over decades of investing in and growing health care businesses.
The company will employ a disciplined and highly selective investment process that focuses on accessing differentiated opportunities
through deep relationships with executives, advisors, and intermediaries to enhance the growth potential and value of a target
business and provide opportunities for an attractive return to our stockholders.
Business Strategy
Our business strategy
is to identify and complete our initial Business Combination with a company that leverages and complements the experience of our
Founders. Our selection process will leverage our Founders and our Directors’ broad and deep relationship network, unique
industry experiences and deal sourcing capabilities to access a broad set of opportunities.
This network has
been developed through our Founders’ demonstrated success both investing in and creating value in businesses across the health
care value chain, resulting in a distinctive set of competitive advantages and capabilities for our platform:
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Demonstrated track record: a track record of identifying and acquiring multi-billion dollar platforms that have grown significantly in value following IPO;
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Differentiated sourcing: history of sourcing consistent with ‘partner of choice’ based on deep relationships with management teams, public and private companies, investors, intermediaries, and financing providers;
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Deep market access: differentiated insights based on extensive experience investing across the complex health care value chain, supported by bespoke access to experts and advisors within the Founders’ network;
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Value Creation: significant experience deploying a proven value creation toolkit including recruiting world-class talent, identifying value enhancements, delivering operating efficiencies and successfully integrating strategic acquisitions;
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Public market experience: understanding of public market performance and requirements, including a history of accessing the capital markets across business cycles;
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Stage flexibility: history of successfully sourcing and investing across company stages: early-stage, growth-stage, and mature private equity;
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Transaction flexibility: expertise with a full range of transactions: take-privates, secondary private equity deals, transformative add-ons, IPOs, strategic exits; and
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Partnership approach: ability to attract, enhance, and advise management teams, as they grow and transition from private to public markets.
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Following the
completion of our Initial Public Offering, we started communicating with our management’s network of deal sourcing relationships
to articulate the parameters for our search for a target company and a potential Business Combination and begin the process of
pursuing and reviewing potential opportunities.
We
believe that our management team is well positioned to identify attractive Business Combination opportunities with a compelling
industry backdrop and an opportunity for growth. We expect to favor potential target companies with certain industry and business
characteristics. Key industry characteristics include compelling long-term growth prospects, attractive competitive dynamics and
acquisition/consolidation opportunities. Key business characteristics include durability, market leadership, innovation, and focus
on strong business performance through cycles. We intend to acquire companies that serve a critical role in the health care ecosystem.
Acquisition
Criteria
Consistent with
our business strategy, we have identified the following general criteria and guidelines which we believe are important in evaluating
prospective target businesses. We will use 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. We intend
to acquire one or more businesses that we believe:
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serve a critical role in the health care ecosystem;
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are family or founder-owned, venture or investor-backed, or corporate divestitures;
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are growth-oriented companies led by outstanding teams within their sectors;
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have durable revenue or the potential to develop a durable revenue base;
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drive innovation in their product or service offering;
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would benefit from the Founders’ and Directors’ network and expertise including acquisition strategy, capital structure optimization, and/or operational enhancements to drive growth;
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would benefit from being a public company by utilizing the broader access to capital; and
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can deliver attractive risk-adjusted returns for our stockholders across business cycles.
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These criteria
and guidelines 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 criteria and guidelines as well as other considerations, factors, criteria
and guidelines that our management may deem relevant. In the event that we decide to enter into our initial Business Combination
with a target business that does not meet the above criteria and guidelines, we will disclose that the target business does not
meet the above criteria and guidelines in our stockholder communications related to our initial Business Combination, which would
be in the form of tender offer documents or proxy solicitation materials that we would file with the U.S. Securities and Exchange
Commission (the “SEC”).
In addition to
any potential business candidates we may identify on our own, we anticipate that other target business candidates will be brought
to our attention from various unaffiliated sources, including investment market participants, private equity funds and large business
enterprises seeking to divest non-core assets or divisions.
Initial Business
Combination
In
accordance with the rules of Nasdaq, our initial
Business Combination must occur with one or more target businesses that together have an aggregate fair market value of at least
80% 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 signing the agreement to enter into the initial Business Combination. If our board
of directors is not able to independently determine the fair market value of the target business or businesses or we are considering
an initial Business Combination with an affiliated entity, we will obtain an opinion with respect to the satisfaction of such criteria
from an independent investment banking firm or appraisal firm.
Our stockholders may not be provided with a copy of such opinion nor will they be able to rely on such opinion. We
do not intend to purchase multiple businesses in unrelated industries in conjunction with our initial Business Combination. Subject
to this requirement, our management will have virtually unrestricted flexibility in identifying and selecting one or more prospective
businesses, although we will not be permitted to effectuate our initial Business Combination with another blank check company or
a similar company with nominal operations.
We
anticipate structuring our initial Business Combination 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. We may, however, structure
our initial Business Combination such that the post-transaction company owns or acquires less than 100% of such interests or assets
of the target business in order to meet certain objectives of the prior owners of the target business, the target management team
or stockholders or for other reasons, but we will only complete such Business Combination if the post-transaction company owns
or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the
target sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended
(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 Business Combination may collectively own a minority interest in the post-transaction
company, depending on valuations ascribed to the target and us in the Business Combination transaction. For example, we could pursue
a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock,
shares or other equity interests 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 issued and outstanding shares subsequent to our initial Business Combination. If less than 100% of the equity interests or
assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or
businesses that is owned or acquired is what will be valued for purposes of the 80% of net assets test. If the Business Combination
involves more than one target business, the 80% of net assets test will be based on the aggregate value of all of the target businesses
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.
To the extent
we effect our initial Business Combination with a company or business that may be financially unstable or in its early stages of
development or growth, we may be affected by numerous risks inherent in such company or business. Although our management will
endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or
assess all significant risk factors.
In evaluating
a prospective target business, we expect to conduct a thorough due diligence review which will encompass, among other things, meetings
with incumbent management and employees, document reviews, inspection of facilities, as well as a review of financial, operational,
legal and other information which will be made available to us.
The time required
to select and evaluate a target business and to structure and complete our initial Business Combination, and the costs associated
with this process, are not currently ascertainable with any degree of certainty. Any costs incurred with respect to the identification
and evaluation of a prospective target business with which our initial Business Combination is not ultimately completed will result
in our incurring losses and will reduce the funds we can use to complete another Business Combination.
Our Acquisition
Process
We are not prohibited
from pursuing an initial Business Combination with a company that is affiliated with our Sponsor, Founders, officers or directors.
In the event we seek to complete our initial Business Combination with a company that is affiliated with our Sponsor, Founders,
officers or directors, we, or a committee of independent directors, will obtain an opinion that our initial Business Combination
is fair to our company from a financial point of view from either an independent investment banking firm or an independent accounting
firm.
Members
of our management team, officers, and directors may directly or indirectly, own our common stock and/or Private Placement warrants
and, accordingly, may have a conflict of interest in determining whether a particular target business is an appropriate business
with which to effectuate our initial Business Combination. Further, such officers and directors may have a conflict of interest
with respect to evaluating a particular Business Combination if the retention or resignation of any such officers and directors
was included by a target business as a condition to any agreement with respect to our initial Business Combination.
Each
of our officers and directors presently has, and any of them in the future may have additional, fiduciary or contractual obligations
to another entity pursuant to which such officer or director is or will be required to present a Business Combination opportunity
to such entity. Accordingly, if any of our officers or directors becomes aware of a Business Combination opportunity which is suitable
for an entity to which he or she has then-current fiduciary or contractual obligations, he or she will honor his or her fiduciary
or contractual obligations to present such Business Combination opportunity to such other entity, subject to their fiduciary duties
under Delaware law. We do not believe, however, that the fiduciary duties or contractual obligations 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 Business Combination opportunity offered to any director or officer unless such opportunity
is expressly offered to such person solely in his or her capacity as a director or officer of the company and it is an opportunity
that we are able to complete on a reasonable basis.
Status as a
Public Company
We believe our
structure makes us an attractive Business Combination partner to target businesses. As an existing public company, we offer a target
business an alternative to the traditional initial public offering through a merger or other Business Combination with us. In a
Business Combination transaction with us, the owners of the target business may, for example, exchange their shares of stock, shares
or other equity interests in the target business for our Class A common stock (or shares of a new holding company) or for
a combination of our Class A common stock and cash, allowing us to tailor the consideration to the specific needs of the sellers.
We believe target businesses will find this method a more expeditious and cost effective method to becoming a public company than
the typical initial public offering. The typical initial public offering process takes a significantly longer period of time than
the typical Business Combination transaction process, and there are significant expenses in the initial public offering process,
including underwriting discounts and commissions, that may not be present to the same extent in connection with a Business Combination
with us.
Furthermore, once
a proposed Business Combination is completed, the target business will have effectively become public, whereas an initial public
offering is always subject to the underwriters’ ability to complete the offering, as well as general market conditions, which
could delay or prevent the offering from occurring or could have negative valuation consequences. Once public, we believe the target
business would then have greater access to capital, an additional means of providing management incentives consistent with stockholders’
interests and the ability to use its shares as currency for acquisitions. Being a public company can offer further benefits by
augmenting a company’s profile among potential new customers and vendors and aid in attracting talented employees.
While we believe
that our structure and our management team’s backgrounds make us an attractive business partner, some potential target businesses
may view our status as a blank check company, such as our lack of an operating history and our ability to seek stockholder approval
of any proposed initial Business Combination, negatively.
Financial Position
As of
December 31, 2020, we had $410,803,411 held in the Trust Account, before the payment of $14,375,138 of deferred underwriting fees that are payable upon the consummation of a business combination. With the funds available, 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 leverage ratio. Because we are able to complete our initial Business Combination using our cash,
debt or equity securities, or a combination of the foregoing, we have the flexibility to use the most efficient combination
that will allow us to tailor the consideration to be paid to the target business to fit its needs and desires. However, we
have not taken any steps to secure third-party financing and there can be no assurance it will be available to us.
Effectuating
Our Initial Business Combination
General
We are not presently
engaged in, and we will not engage in, any operations for an indefinite period of time following our Initial Public Offering. We
intend to effectuate our initial Business Combination using cash from the proceeds of our Initial Public Offering, the Private
Placements of the Private Placement warrants, our equity, debt or a combination of these as the consideration to be paid in our
initial Business Combination. 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 need to
obtain additional financing to complete our initial Business Combination, either because the transaction requires more cash than
is available from the proceeds held in our Trust Account, or because we become obligated to redeem a significant number of our
Public Shares upon completion of the Business Combination, in which case we may issue additional securities or incur debt in connection
with such Business Combination. There are no prohibitions on our ability to issue securities or incur debt in connection with our
initial Business Combination. We are not currently a party to any arrangement or understanding with any third party with respect
to raising any additional funds through the sale of securities, the incurrence of debt 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
affect a target business.
Sources
of Target Businesses
Our process of
identifying acquisition targets will leverage our Sponsor’s and our management team’s industry experiences, proven
deal sourcing capabilities and broad and deep network of relationships in numerous industries, including executives and management
teams, private equity groups and other institutional investors, large business enterprises, lenders, investment bankers and other
investment market participants, restructuring advisors, consultants, attorneys and accountants, which we believe should provide
us with a number of Business Combination opportunities. The collective experience, capability and network of our Founders, directors,
and officers, combined with their individual and collective reputations in the investment community, helps to create prospective
Business Combination opportunities.
In addition, we
anticipate that target business candidates may be brought to our attention from various unaffiliated sources, including investment
bankers and private investment funds. 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 what types of businesses
we are targeting. Our officers and directors, as well as their affiliates, may also bring to our attention target business candidates
of which they become aware 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.
We
also expect to receive a number of proprietary deal flow opportunities that would not otherwise necessarily be available to us
as a result of the business relationships of our officers and directors. While we do not presently anticipate engaging the
services of professional firms or other individuals that specialize in business acquisitions on any formal basis, we may engage
these firms or other individuals in the future, in which event we may pay a finder’s fee, consulting fee 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 either of our Sponsor or any of our existing
officers or directors, or any entity with which they are affiliated, be paid any finder’s fee, consulting fee or other compensation
by the company prior to, or for any services they render in order to effectuate, the completion of our initial Business Combination
(regardless of the type of transaction that it is). None of our Sponsor, executive officers or directors, or any of their respective
affiliates, will be allowed to receive any compensation, finder’s fees or consulting fees from a prospective Business Combination
target in connection with a contemplated acquisition of such target by us.
We are not prohibited
from pursuing an initial Business Combination with a Business Combination target that is affiliated with our Sponsor, officers
or directors, or from making the acquisition through a joint venture or other form of shared ownership with our Sponsor, officers
or directors. In the event we seek to complete our initial Business Combination with a Business Combination target that is affiliated
with our Sponsor, executive officers or directors, we, or a committee of independent directors, would obtain an opinion from an
independent investment banking firm or an independent accounting firm, that such an initial Business Combination is fair to our
company from a financial point of view. We are not required to obtain such an opinion in any other context.
Each of our officers
and directors presently has, and any of them in the future may have additional, fiduciary or contractual obligations to other entities,
including entities that are affiliates of our Sponsor, pursuant to which such officer or director is or will be required to present
a Business Combination opportunity to such entity. Accordingly, if any of our officers or directors becomes aware of a Business
Combination opportunity which is suitable for an entity to which he or she has then-current fiduciary or contractual obligations,
he or she will honor his or her fiduciary or contractual obligations to present such Business Combination opportunity to such entity,
subject to their fiduciary duties under Delaware law.
Evaluation
of a Target Business and Structuring of Our Initial Business Combination
Our initial Business Combination must occur
with one or more target businesses that together have an aggregate fair market value of at least 80% of our assets held in the
Trust Account (excluding the deferred underwriting commissions and taxes payable on the income earned on the Trust Account) at
the time of the agreement to enter into the initial Business Combination. The fair market value of the target or targets will be
determined by our board of directors based upon one or more standards generally accepted by the financial community, such as discounted
cash flow valuation or value of comparable businesses. If our Board of Directors is not able to independently determine the fair
market value of the target business or businesses, we will obtain an opinion from an independent investment banking firm, or from
an independent accounting firm, with respect to the satisfaction of such criteria. We do not intend to purchase multiple businesses
in unrelated industries in conjunction with our initial Business Combination. Subject to this requirement, our management will
have virtually unrestricted flexibility in identifying and selecting one or more prospective target businesses, although we will
not be permitted to effectuate our initial Business Combination with another blank check company or a similar company with nominal
operations.
In any case, we
will only complete an initial Business Combination in which we own or acquire 50% or more of the outstanding voting securities
of the target or otherwise acquire a controlling interest in the target sufficient for it not to be required to register as an
investment company under the Investment Company Act. If we own or acquire less than 100% of the equity interests or assets of a
target business or businesses, the portion of such business or businesses that are owned or acquired by the post-transaction company
is what will be valued for purposes of the 80% of net assets test. There is no basis for investors to evaluate the possible merits
or risks of any target business with which we may ultimately complete our Business Combination.
To the extent
we effect our Business Combination with a company or business that may be financially unstable or in its early stages of development
or growth, we may be affected by numerous risks inherent in such company or business. Although our management will endeavor to
evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all
significant risk factors.
In evaluating
a prospective target business, we conduct a thorough due diligence review which may encompass, among other things, meetings with
incumbent management and employees, document reviews, interviews of customers and suppliers, inspection of facilities, as well
as a review of financial, operational, legal and other information which will be made available to us. If we determine to move
forward with a particular target, we will proceed to structure and negotiate the terms of the Business Combination transaction.
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, and negotiation with, 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. The
company will not pay any consulting fees to members of our management team, or any of their respective affiliates, for services
rendered to or in connection with our initial Business Combination.
Lack of
Business Diversification
For an indefinite
period of time after the completion of our initial Business Combination, the prospects for our success may depend entirely on the
future performance of a single business. Unlike other entities that have the resources to complete Business Combinations with multiple
entities in one or several industries, it is probable that we will not have the resources to diversify our operations and mitigate
the risks of being in a single line of business. By completing our initial Business Combination with only a single entity, our
lack of diversification may:
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subject us to negative economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact on the particular industry in which we operate after our initial Business Combination; and
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cause us to depend on the marketing and sale of a single product or limited number of products or services.
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Limited
Ability to Evaluate the Target’s Management Team
Although we closely
scrutinize the management of a prospective target business when evaluating the desirability of effecting our initial Business Combination
with that business, our assessment of the target business’s management may not prove to be correct. In addition, the future
management may not have the necessary skills, qualifications or abilities to manage a public company. Furthermore, the future role
of members of our management team, if any, in the target business cannot presently be stated with any certainty. The determination
as to whether any of the members of our management team will remain with the combined company will be made at the time of our initial
Business Combination. While it is possible that one or more of our directors will remain associated in some capacity with us following
our initial Business Combination, it is unlikely that any of them will devote their full efforts to our affairs subsequent to our
initial Business Combination. Moreover, we cannot assure you that members of our management team will have significant experience
or knowledge relating to the operations of the particular target business.
We cannot assure
you that any of our key personnel will remain in senior management or advisory positions with the combined company. The determination
as to whether any of our key personnel will remain with the combined company will be made at the time of our initial Business Combination.
Following a Business
Combination, we may seek to recruit additional managers to supplement the incumbent management of the target business. We cannot
assure you that we will have the ability to recruit additional managers, or that additional managers will have the requisite skills,
knowledge or experience necessary to enhance the incumbent management.
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 subject to the provisions of our amended
and restated Certificate of Incorporation. However, we will seek stockholder approval if it is required by law or applicable stock
exchange rule, or we may decide to seek stockholder approval for business or other legal reasons.
Under the Nasdaq’s
listing rules, stockholder approval would be required for our initial Business Combination if, for example:
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we issue shares of common stock that will be equal to or in excess of 20% of the number of our shares of common stock then outstanding (other than in a public offering);
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any of our directors, officers or substantial stockholders (as defined by the 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 stock or voting power of 5% or more; or
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the issuance or potential issuance of common stock will result in our undergoing a change of control.
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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:
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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;
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the expected cost of holding a stockholder vote;
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the risk that the stockholders would fail to approve the proposed Business Combination;
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other time and budget constraints of the company; and
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additional legal complexities of a proposed Business Combination that would be time-consuming and burdensome to present to stockholders.
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Permitted
Purchases of Our Securities
If we seek stockholder
approval of our initial Business Combination and we do not conduct redemptions in connection with our initial Business Combination
pursuant to the tender offer rules, our Sponsor, directors, executive officers, advisors or their affiliates may purchase shares
or public warrants in privately negotiated transactions or in the open market either prior to or following the completion of our
initial Business Combination. However, they have no current commitments, plans or intentions to engage in such transactions and
have not formulated any terms or conditions for any such transactions. None of the funds in the Trust Account will be used to purchase
shares or public warrants in such transactions. If they engage in such transactions, they will not make any such purchases when
they are in possession of any material non-public information not disclosed to the seller or if such purchases are prohibited
by Regulation M under the Exchange Act.
Such a purchase
may include a contractual acknowledgment 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.
In the event that
our Sponsor, directors, officers, advisors or their affiliates purchase shares in privately negotiated transactions from Public
Stockholders who have already elected to exercise their redemption rights, such selling stockholders would be required to revoke
their prior elections to redeem their shares. We do not currently anticipate that such purchases, if any, would constitute a tender
offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private
rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are
subject to such rules, the purchasers will comply with such rules.
The purpose of
any such purchases of shares could be (i) to vote such shares in favor of the Business Combination and thereby increase the
likelihood of obtaining stockholder approval of the Business Combination or (ii) to satisfy a closing condition in an agreement
with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial Business Combination,
where it appears that such requirement would otherwise not be met. The purpose of any such purchases of public warrants could be
to reduce the number of public warrants outstanding or to vote such warrants on any matters submitted to the warrant holders for
approval in connection with our initial Business Combination. Any such purchases of our securities may result in the completion
of our initial Business Combination that may not otherwise have been possible.
In addition, if
such purchases are made, the public “float” of our Class A common stock or public warrants may be reduced and
the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation,
listing or trading of our securities on a national securities exchange.
Our Sponsor, officers,
directors and/or their affiliates may identify the stockholders with whom our Sponsor, officers, directors or their affiliates
may pursue privately negotiated purchases by either the stockholders contacting us directly or by our receipt of redemption requests
submitted by stockholders (in the case of Class A common stock) following our mailing of proxy materials in connection with
our initial Business Combination. To the extent that our Sponsor, officers, directors, advisors or their affiliates enter into
a private purchase, they would identify and contact only potential selling stockholders who have expressed their election to redeem
their shares for a pro rata share of the Trust Account or vote against our initial Business Combination, whether or not such stockholder
has already submitted a proxy with respect to our initial Business Combination but only if such shares have not already been voted
at the stockholder meeting related to our initial Business Combination. Our Sponsor, executive officers, directors, advisors or
any of their affiliates will select which stockholders to purchase shares from based on the negotiated price and number of shares
and any other factors that they may deem relevant, and will only purchase shares if such purchases comply with Regulation M under
the Exchange Act and the other federal securities laws.
Any
purchases by our Sponsor, officers, directors and/or their affiliates who are affiliated purchasers under Rule 10b-18 under
the Exchange Act will only be made to the extent such purchases are able to be made in compliance with Rule 10b-18, which
is a safe harbor from liability for manipulation under Section 9(a)(2) and Rule 10b-5 of the Exchange Act. Rule 10b-18
has certain technical requirements that must be complied with in order for the safe harbor to be available to the purchaser. Our
Sponsor, officers, directors and/or their affiliates will not make purchases of shares if the purchases would violate Section 9(a)(2) or
Rule 10b-5 of the Exchange Act. Any such purchases will be reported pursuant to Section 13 and Section 16 of
the Exchange Act to the extent such purchasers are subject to such reporting requirements.
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 Class A common stock upon the
completion of our initial Business Combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit
in the Trust Account calculated as of two business days prior to the completion of the initial Business Combination, including
interest earned on the funds held in the Trust Account and not previously released to us to pay our taxes, if any divided by the
number of then outstanding Public Shares, subject to the limitations described herein. The amount in the Trust Account is initially
anticipated to be 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 of our Initial Public
Offering. The redemption rights will include the requirement that a beneficial holder must identify itself in order to validly
redeem its shares. There will be no redemption rights upon the completion of our initial Business Combination with respect to our
warrants. Our Sponsor, directors and each member of our management team 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 in connection
with (i) the completion of our initial Business Combination and (ii) a stockholder vote to approve an amendment to our
amended and restated Certificate of Incorporation that would affect the substance or timing of our obligation to allow redemption
in connection with our initial Business Combination or to redeem 100% of our Public Shares if we have not completed an initial
Business Combination within 24 months from the closing of our Initial Public Offering.
Limitations
on Redemptions
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 to be less than $5,000,001 (so that we are not subject to the SEC’s “penny stock”
rules). However, the proposed Business Combination may require: (i) cash consideration to be paid to the target or its owners;
(ii) cash to be transferred to the target for working capital or other general corporate purposes; or (iii) the retention
of cash to satisfy other conditions in accordance with the terms of the proposed Business Combination. In the event the aggregate
cash consideration we would be required to pay for all Class A common stock that are validly submitted for redemption plus
any amount required to satisfy cash conditions pursuant to the terms of the proposed Business Combination exceed the aggregate
amount of cash available to us, we will not complete the Business Combination or redeem any shares, and all Class A common
stock submitted for redemption will be returned to the holders thereof.
Manner of
Conducting Redemptions
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 either (i) in connection with a stockholder meeting called to approve the Business Combination
or (ii) 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 or whether we were deemed to be a foreign private issuer (which would require a tender offer
rather than seeking stockholder approval under SEC rules). Asset acquisitions and share 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
shares of outstanding common stock or seek to amend our amended and restated Certificate of Incorporation would require stockholder
approval. We currently intend to conduct redemptions in connection with 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 legal reasons. So long as we obtain and maintain a listing for our securities on Nasdaq, we will
be required to comply with the Nasdaq rules.
If we held a stockholder
vote to approve our initial Business Combination, 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.
In the event that
we seek stockholder approval of our initial Business Combination, we will distribute proxy materials and, in connection therewith,
provide our Public Stockholders with the redemption rights described above upon completion of the initial Business Combination.
If
we seek stockholder approval, we will complete our initial Business Combination only if a majority of the outstanding shares of
common stock voted are voted in favor of the initial Business Combination. A quorum for such meeting will consist of the holder
present in person or by proxy of shares of outstanding capital stock of the company representing a majority of the voting power
of all outstanding shares of capital stock of the company entitled to vote at such meeting. Our initial stockholders will count
towards this quorum and, pursuant to the terms of a letter agreement entered into with us, our Sponsor, directors and members of
our management team have agreed to vote their Founder Shares and any Public Shares purchased during or after our Initial Public
Offering, in favor of our initial Business Combination. For purposes of seeking approval of the majority of our outstanding shares
of common stock voted, non-votes will have no effect on the approval of our initial Business Combination once a quorum is obtained.
As a result, in addition to our initial stockholders’ Founder Shares, we would need 15,401,934, or 37.50%, of the
41,071,823 Public Shares sold in our Initial Public Offering to be voted in favor of an initial Business Combination in order to
have our initial Business Combination approved (assuming all issued and outstanding shares are voted). These quorum and voting
thresholds, and the voting agreements of our initial stockholders, may make it more likely that we will complete our initial Business
Combination. Each Public Stockholder may elect to redeem its Public Shares irrespective of whether they vote for or against the
proposed transaction or whether they were a stockholder on the record date for the stockholder meeting held to approve the proposed
transaction. In addition, our Sponsor, directors and each member of our management team, have entered into a letter agreement with
us, pursuant to which they have agreed to waive their redemption rights with respect to their Founder Shares and Public Shares
in connection with (i) the completion of a Business Combination and (ii) a stockholder vote to approve an amendment to
our amended and restated Certificate of Incorporation that would affect the substance or timing of our obligation to allow redemption
in connection with our initial Business Combination or to redeem 100% of our Public Shares if we have not completed an initial
Business Combination within 24 months from the closing of our Initial Public Offering.
If, however, stockholder
approval of the transaction is required by law or stock exchange listing requirement, or we decide to obtain stockholder approval
for business or other legal 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 or our Sponsor will terminate any plan established in accordance with Rule 10b5-1
to purchase 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 the number of Public Shares we are permitted to redeem. If Public Stockholders tender more shares than we have offered
to purchase, we will withdraw the tender offer and not complete the initial Business Combination.
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
will provide 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 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 management to purchase their shares at a significant premium to the
then-current market price or on other undesirable terms. Absent this provision, a Public Stockholder holding more than an aggregate
of 15% of the shares sold in our Initial Public Offering could threaten to exercise its redemption rights if such holder’s
shares are not purchased by us, our Sponsor or our management at a premium to the then-current market price or on other undesirable
terms. By limiting our stockholders’ ability to redeem no more than 15% of the shares sold in our Initial Public Offering
without our prior consent, we believe we will limit the ability of a small group of stockholders to unreasonably attempt to block
our ability to complete our initial Business Combination, particularly in connection with 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
Share Certificates in Connection with a Tender Offer or Redemption Rights
Public Stockholders
seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,”
will be required to either tender their certificates (if any) to our transfer agent prior to the date set forth in the proxy solicitation
or tender offer materials, as applicable, mailed to such holders, or to deliver their shares to the transfer agent electronically
using The Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, at the holder’s option, in each
case up to two business days prior to the initially scheduled vote to approve the Business Combination. The proxy solicitation
or tender offer materials, as applicable, that we will furnish to holders of our Public Shares in connection with our initial Business
Combination will indicate the applicable delivery requirements, which will include the requirement that a beneficial holder 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 days prior to the initial 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. Given the relatively short period in which to exercise redemption rights, it is advisable for stockholders to use electronic
delivery of their Public Shares.
There is a nominal
cost associated with the above-referenced tendering process and the act of certificating the shares or delivering them through
the DWAC System. The transfer agent will typically charge the tendering broker a fee of approximately $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.
The foregoing
is different from the procedures used by many blank check companies. In order to perfect redemption rights in connection with their
Business Combinations, many blank check companies would distribute proxy materials for the stockholders’ vote on an initial
Business Combination, and a holder could simply vote against a proposed 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 shares 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 general 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 stockholder’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 two business days prior to the vote on the proposal to approve
the Business Combination, unless otherwise agreed to by us. 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 24 months from the closing of our Initial Public Offering.
Redemption
of Public Shares and Liquidation If No Initial Business Combination
Our
Sponsor, officers and directors have agreed
that we have only 24 months from
the closing of our Initial Public Offering to complete our initial Business Combination. If we have not completed an initial Business
Combination within 24-months from the closing of our Initial Public Offering, we will: (i) cease all operations except for
the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem
the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including
interest earned on the funds held in the Trust Account and not previously released to us to pay our taxes, if any (less up to $100,000
of interest to pay dissolution expenses), divided by the number of the then outstanding Public Shares, which redemption will completely
extinguish Public Stockholders’ rights as stockholders (including the right to receive further liquidation distributions,
if any), subject to applicable law; and (iii) as promptly as reasonably possible following such redemption, subject to the
approval of our remaining stockholders and our board of directors, liquidate and dissolve, 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 do not complete an initial
Business Combination within 24 months from the closing of our Initial Public Offering.
Our Sponsor, directors
and each member of our management team have entered into a letter agreement with us, pursuant to which they have waived their rights
to liquidating distributions from the Trust Account with respect to their Founder Shares if we do not complete an initial Business
Combination within 24 months from the closing of our Initial Public Offering. However, if our Sponsor, director or members
of our management team acquire Public Shares in or after our Initial Public Offering, they will be entitled to liquidating distributions
from the Trust Account with respect to such Public Shares if we do not complete an initial Business Combination within 24 months
from the closing of our Initial Public Offering.
Our Sponsor, executive
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 that would affect the substance or timing of our obligation to allow redemption in connection
with our initial Business Combination or to redeem 100% of our Public Shares if we do not complete an initial Business Combination
within 24 months from the closing of our Initial Public Offering, unless we provide our Public Stockholders with the opportunity
to redeem their Public Shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate
amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously
released to us to pay our taxes, if any (less up to $100,000 of interest to pay dissolution expenses) divided by the number of
the then outstanding Public Shares. However, we may not redeem our Public Shares in an amount that would cause our net tangible
assets to be less than $5,000,001 (so that we are not subject to the SEC’s “penny stock” rules). If this optional
redemption right is exercised with respect to an excessive number of Public Shares such that we cannot satisfy the net tangible
asset requirement, we would not proceed with the amendment or the related redemption of our Public Shares at such time. This redemption
right shall apply in the event of the approval of any such amendment, whether proposed by our Sponsor, any executive officer, director,
or any other person.
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 $1,700,000 of
proceeds held outside the Trust Account as of December 31, 2020 plus up to $100,000 of funds from the Trust Account available
to us to pay dissolution expenses, although we cannot assure you that there will be sufficient funds for such purpose.
If we were to
expend all of the net proceeds of our Initial Public Offering and the sale of the Private Placement warrants, other than the proceeds
deposited in the Trust Account, and without taking into account interest, if any, earned on the Trust Account, the per-share redemption
amount received by 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.
We cannot assure you that the actual per-share redemption amount received by stockholders will not be substantially less than $10.00.
Under Section 281(b) of the Delaware General Corporation Law (“DGCL”), our plan of dissolution must provide
for all claims against us to be paid in full or make provision for payments to be made in full, as applicable, if there are sufficient
assets. These claims must be paid or provided for before we make any distribution of our remaining assets to our stockholders.
While we intend to pay such amounts, if any, we cannot assure you that we will have funds sufficient to pay or provide for all
creditors’ claims.
Although
we will seek to have all vendors, service providers (other than our independent auditors), prospective target businesses and other
entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to
any monies held in the Trust Account for the benefit of our Public Stockholders, there is no guarantee that they will execute such
agreements or even if they execute such agreements that they would be prevented from bringing claims against the Trust Account
including, but not limited, to fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims
challenging the enforceability of the waiver, in each case in order to gain an advantage with respect to a claim against our assets,
including the funds held in the Trust Account. If any third party refuses to execute an agreement waiving such claims to the monies
held in the Trust Account, our management will perform an analysis of the alternatives available to it and will only enter into
an agreement with a third party that has not executed a waiver if management believes that such third party’s engagement
would be significantly more beneficial to us than any alternative. Examples of possible instances where we may engage a third party
that refuses to execute a waiver include the engagement of a third-party consultant whose particular expertise or skills are believed
by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where
management is unable to find a service provider willing to execute a waiver. 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 for services rendered
or products sold to us (other than our independent registered public accounting firm), or a prospective target business with which
we have discussed entering into a transaction agreement, reduce the amounts in the Trust Account to below the lesser of (i) $10.00
per Public Share and (ii) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of
the Trust Account if less than $10.00 per share, due to reductions in the value of the trust assets, in each case net of the interest
that may be withdrawn to pay our taxes, if any, provided that such liability will not apply to any claims by a third party or prospective
target business that executed a waiver of any and all rights to seek access to the Trust Account nor will it apply to any claims
under our indemnity of the underwriters of our Initial Public Offering against
certain liabilities, including liabilities under the Securities Act. In the event that an executed waiver is deemed to be unenforceable
against a third party, our Sponsor will not be responsible to the extent of any liability for such third party claims. However,
we have not asked our Sponsor to reserve for such indemnification obligations, nor have we independently verified whether our Sponsor
has sufficient funds to satisfy its indemnity obligations and we believe that our Sponsor’s only assets are securities of
our company. Therefore, we cannot assure you that our Sponsor would be able to satisfy those obligations. 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 the lesser of (i) $10.00 per Public Share and (ii) the actual amount
per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account if less than $10.00 per share,
due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay our taxes, if
any, and our Sponsor asserts that it is unable to satisfy its indemnification obligations or that they have no indemnification
obligations related to a particular claim, our independent directors would determine whether to take legal action against our Sponsor
to enforce its indemnification obligations. While we currently expect that our independent directors would take legal action on
our behalf against our Sponsor to enforce its indemnification obligations to us, it is possible that our independent directors
in exercising their business judgment may choose not to do so in any particular instance. Accordingly, we cannot assure you that
due to claims of creditors the actual value of the per-share redemption price will not be less than $10.00 per 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 auditors), prospective target businesses or other entities with
which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to monies held in
the Trust Account. Our Sponsor will also not be liable as to any claims under our indemnity of the underwriters of our Initial
Public Offering against certain liabilities, including liabilities under the Securities Act. We will have access to up to approximately
$1,700,000 from the proceeds held outside the Trust Account as
of December 31, 2020 with which to pay any such potential claims (including costs and expenses incurred in connection with
our liquidation, currently estimated to be no more than approximately $100,000). In the event that we liquidate and it is subsequently
determined that the reserve for claims and liabilities is insufficient, stockholders who received funds from our Trust Account
could be liable for claims made by creditors, however such liability will not be greater than the amount of funds from our Trust
Account received by any such stockholder.
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 within 24 months from the closing of the initial public
offering may be considered a liquidating distribution under Delaware law. If the corporation complies with certain procedures set
forth in Section 280 of the DGCL intended to ensure that it makes reasonable provision for all claims against it, including
a 60-day notice period during which any third-party claims can be brought against the corporation, a 90-day period during which
the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating distributions are
made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such
stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder
would be barred after the third anniversary of the dissolution.
Furthermore, if
the pro rata portion of our Trust Account distributed to our Public Stockholders upon the redemption of our Public Shares in the
event we do not complete our initial Business Combination within 24 months from the closing of the Initial Public Offering,
is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful (potentially
due to the imposition of legal proceedings that a party may bring or due to other circumstances that are currently unknown), then
pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the
unlawful redemption distribution, instead of three years, as in the case of a liquidating distribution. If we do not complete our
initial Business Combination within 24 months from the closing of our Initial Public Offering, we will: (i) cease all
operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days
thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the
Trust Account including interest earned on the funds held in the Trust Account that may be released to us to pay our taxes, if
any (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which
redemption will completely extinguish Public Stockholders’ rights as stockholders (including the right to receive further
liquidating distributions, if any) and (iii) as promptly as reasonably possible following such redemption, subject to the
approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations
under Delaware law to provide for claims of creditors and the requirements of other applicable law. Accordingly, it is our intention
to redeem our Public Shares as soon as reasonably possible following our 24th month and, therefore, we do not intend to comply
with those procedures. As such, our stockholders could potentially be liable for any claims to the extent of distributions received
by them (but no more) and any liability of our stockholders may extend well beyond the third anniversary of such date.
Because we will
not be complying with Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known
to us at such time that will provide for our payment of all existing and pending claims or claims that may be potentially brought
against us within the subsequent 10 years. However, because we are a blank check company, rather than an operating company,
and our operations will be limited to searching for prospective target businesses to acquire, the only likely claims to arise would
be from our vendors (such as lawyers, investment bankers, etc.) or prospective target businesses. As described above, pursuant
to the obligation contained in our underwriting agreement, we will seek to have all vendors, service providers, prospective target
businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of
any kind in or to any monies held in the Trust Account. As a result of this obligation, the claims that could be made against us
are significantly limited and the likelihood that any claim that would result in any liability extending to the Trust Account is
remote. Further, our Sponsor may be liable only to the extent necessary to ensure that the amounts in the Trust Account are not
reduced below (i) $10.00 per Public Share or (ii) such lesser amount per Public Share held in the Trust Account as of
the date of the liquidation of the Trust Account, due to reductions in value of the trust assets, in each case net of the amount
of interest withdrawn to pay taxes and will not be liable as to any claims under our indemnity of the underwriters of our Initial
Public Offering against certain liabilities, including liabilities under the Securities Act. In the event that an executed waiver
is deemed to be unenforceable against a third party, our Sponsor will not be responsible to the extent of any liability for such
third-party claims.
If we file a
bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against us that is not dismissed,
the proceeds held in the Trust Account could be subject to applicable bankruptcy or insolvency law, and may be included in our
bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. To the extent any
bankruptcy claims deplete the Trust Account, we cannot assure you we will be able to return $10.00 per share to our Public Stockholders.
Additionally, if we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed
against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or
bankruptcy or insolvency laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result,
a bankruptcy or insolvency 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. We cannot assure you that claims will not be brought against us for these reasons.
Our Public Stockholders
will be entitled to receive funds from the Trust Account only (i) in the event of the redemption of our Public Shares if we
do not complete an initial Business Combination within 24 months from the closing of our Initial Public Offering, (ii) in
connection with a stockholder vote to amend our amended and restated Certificate of Incorporation (A) to modify the substance
or timing of our obligation to allow redemption in connection with our initial Business Combination or to redeem 100% of our Public
Shares if we do not complete an initial Business Combination within 24 months from the closing of our Initial Public Offering
or (B) with respect to any other provisions relating to the rights of holders of our Class A common stock, or (iii) if
they redeem their respective shares for cash upon the completion of the initial Business Combination. Public Stockholders who redeem
their shares of our Class A common stock in connection with a stockholder vote described in clause (ii) in the preceding
sentence shall not be entitled to funds from the Trust Account upon the subsequent completion of an initial Business Combination
or liquidation if we have not completed an initial Business Combination within 24 months from the closing of our Initial Public
Offering, with respect to such shares of our Class A common stock so redeemed. In no other circumstances will a 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 the 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 described above. These provisions of our amended and restated Certificate of Incorporation,
like all provisions of our amended and restated Certificate of Incorporation, may be amended with a stockholder vote.
Competition
In identifying,
evaluating and selecting a target business for our initial Business Combination, we may encounter intense competition from other
entities having a business objective similar to ours, including other blank check companies, private equity groups and leveraged
buyout funds, public companies and operating businesses seeking strategic acquisitions. Many of these entities are well established
and have extensive experience identifying and effecting Business Combinations directly or through affiliates. Moreover, many of
these competitors possess greater financial, technical, human and other resources than us. Our ability to acquire larger target
businesses will be limited by our available financial resources. This inherent limitation gives others an advantage in pursuing
the acquisition of a target business. Furthermore, our obligation to pay cash in connection with our Public Stockholders who exercise
their redemption rights may reduce the resources available to us for our initial Business Combination and our outstanding warrants,
and the future dilution they potentially represent, may not be viewed favorably by certain target businesses. Either of these factors
may place us at a competitive disadvantage in successfully negotiating an initial Business Combination.
Facilities
We currently
maintain our executive offices at 724 Oak Grove Ave, Suite 130, Menlo Park, CA 94025. The cost for our use of this space
is included in the $10,000 per month fee we will pay to an affiliate of our Sponsor for office space, utilities, secretarial and administrative support services. We consider our current office space adequate for our current operations.
Employees
We currently have
two executive officers. These individuals are not obligated to devote any specific number of hours to our matters but they intend
to 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 they will devote in any time period will vary based on whether a target business has been selected for our initial
Business Combination and the stage of the Business Combination process we are in. We do not intend to have any full time employees
prior to the completion of our initial Business Combination.
Periodic
Reporting and Financial Information
We registered
our units, Class A common stock and warrants under the Exchange Act and have reporting obligations, including the requirement
that we file annual, quarterly and current reports with the SEC. In accordance with the requirements of the Exchange Act, our annual
reports will contain financial statements audited and reported on by our independent registered public accountants.
We will provide
stockholders with audited financial statements of the prospective target business as part of the proxy solicitation or tender offer
materials, as applicable, sent to stockholders to assist them in assessing the target business. In all likelihood, these financial
statements may be required to be prepared in accordance with, or 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 statements in time for us to disclose such statements in accordance with federal proxy rules and complete our initial
Business Combination within the prescribed time frame. We cannot assure you that any particular target business identified by us
as a potential acquisition candidate will have financial statements prepared in accordance with the requirements outlined above,
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 acquisition candidates, we do not believe that this limitation will be material.
We will be required
to evaluate our internal control procedures for the fiscal year ending December 31, 2021 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.
On October 6,
2020, we 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 completion 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 auditor
attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation
in our periodic reports and proxy statements and exemptions from the requirements of holding a non-binding advisory vote on executive
compensation and stockholder approval of any golden parachute payments not previously approved. If some investors find our securities
less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may
be more volatile.
In addition, Section 107
of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period
provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other
words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would
otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period.
We will remain
an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary
of the completion of our Initial Public Offering, (b) in which we have total annual gross revenue of at least $1.07 billion,
or (c) in which we are deemed to be a large accelerated filer, which means the Market Value of the shares of our Class A
common stock that are held by non-affiliates equals or exceeds $700.0 million as of the prior June 30, and (2) the date
on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.
Additionally,
we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting
companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years
of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the
market value of our common stock held by non-affiliates equals or exceeds $250 million as of the prior June 30, or (2) our
annual revenues equaled or exceed $100 million during such completed fiscal year and the market value of our common stock
held by non-affiliates equals or exceeds $700 million as of the prior June 30.
Item 1A. Risk Factors
An investment
in our securities involves a high degree of risk. You should consider carefully all of the risks described below, together with
the other information contained in this Report, before making a decision to invest in our units. If any of the following events
occur, our business, financial condition and operating results may be materially adversely affected. In that event, the trading
price of our securities could decline, and you could lose all or part of your investment.
Risks Relating
to a Special Purpose Acquisition Company and Our Securities:
We are company
with no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.
We were incorporated
on July 6, 2020 under the laws of the State of Delaware and have no operating results. Because we lack an operating history,
you have no basis upon which to evaluate our ability to achieve our business objective of completing our initial Business Combination
with one or more target businesses. We have no plans, arrangements or understandings with any prospective target business concerning
a Business Combination and may be unable to complete our initial Business Combination. If we fail to complete our initial Business
Combination, we will never generate any operating revenues.
Past performance
by entities managed by our Founders, and their affiliates (including our management team), including the businesses referred to
herein, may not be indicative of future performance of an investment in us or in the future performance of any business that we
may acquire.
Information regarding
past performance of investments made by our management team is presented for informational purposes only. Any past experience and
performance of our management team or the other companies referred to herein is not a guarantee either: (1) that we will be
able to successfully identify a suitable candidate for our initial Business Combination or (2) of any results with respect
to any initial Business Combination we may complete. You should not rely on the historical record of our management team’s
performance or the performance of the other companies referred to herein as indicative of the future performance of an investment
in us or the returns we will, or are likely to, generate going forward.
Our Public
Stockholders may not be afforded an opportunity to vote on our proposed initial Business Combination, which means we may complete
our initial Business Combination even though a majority of our Public Stockholders do not support such a combination.
We may choose
not to hold a stockholder vote before we complete our initial Business Combination if the Business Combination would not require
stockholder approval under applicable law or stock exchange listing requirement. For instance, if we were seeking to acquire a
target business where the consideration we were paying in the transaction was all cash, we would not be required to seek stockholder
approval to complete such a transaction. Except as required by law or stock exchange, the decision as to whether we will seek stockholder
approval of a proposed Business Combination or will allow stockholders to sell their shares to us in a tender offer will be made
by us, solely in our discretion, and will be based on a variety of factors, such as the timing of the transaction and whether the
terms of the transaction would otherwise require us to seek stockholder approval. Accordingly, we may complete our initial Business
Combination even if a majority of our Public Stockholders do not approve of the Business Combination we complete.
Your only
opportunity to affect the investment decision regarding a potential Business Combination may be limited to the exercise of your
right to redeem your shares from us for cash.
At the time of
your investment in us, you will not be provided with an opportunity to evaluate the specific merits or risks of one or more target
businesses. Since our board of directors may complete a Business Combination without seeking stockholder approval, Public Stockholders
may not have the right or opportunity to vote on the Business Combination, unless we seek such stockholder vote. Accordingly, your
only opportunity to affect the investment decision regarding a potential Business Combination may be limited to exercising your
redemption rights within the period of time (which will be at least 20 business days) set forth in our tender offer documents mailed
to our Public Stockholders in which we describe our initial Business Combination.
If we seek
stockholder approval of our initial Business Combination, our Sponsor, directors and members of our management team have agreed
to vote in favor of such initial Business Combination, regardless of how our Public Stockholders vote.
Our Sponsor owns,
on an as-converted basis, 20% of our outstanding shares of Class A common stock immediately following the completion of our
initial public offering. Our Sponsor, directors and members of our management team also may from time to time purchase Class A
common stock prior to our initial Business Combination. Our amended and restated Certificate of Incorporation provides that, if
we seek stockholder approval of an initial Business Combination, such initial Business Combination will be approved if we receive
the affirmative vote of a majority of the shares voted at such meeting, including the Founder Shares. If we submit our initial
Business Combination to our Public Stockholders for a vote, pursuant to the terms of a letter agreement entered into with us, our
Sponsor, directors and members of our management team have agreed to vote their Founder Shares and any shares purchased during
or after the offering, in favor of our initial Business Combination. As a result, in addition to our initial stockholders’
Founder Shares, we would need 15,401,934, or 37.50%, of the 41,071,823 Public Shares sold in our Initial Public Offering to be
voted in favor of an initial Business Combination in order to have our initial Business Combination approved (assuming all issued
and outstanding shares are voted). Accordingly, if we seek stockholder approval of our initial Business Combination, the agreement
by our Sponsor, our directors and each member of our management team to vote in favor of our initial Business Combination will
increase the likelihood that we will receive the requisite stockholder approval for such initial Business Combination.
The ability
of our Public Stockholders to redeem their shares for cash may make our financial condition unattractive to potential Business
Combination targets, which may make it difficult for us to enter into a Business Combination with a target.
We may seek to
enter into a Business Combination transaction agreement with a prospective target that requires as a closing condition that we
have a minimum net worth or a certain amount of cash. If too many Public Stockholders exercise their redemption rights, we would
not be able to meet such closing condition and, as a result, would not be able to proceed with the Business Combination. Furthermore,
in no event will we redeem our Public Shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so
that we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement
which may be contained in the agreement relating to our initial Business Combination. Consequently, if accepting all properly submitted
redemption requests would cause our net tangible assets to be less than $5,000,001 or such greater amount necessary to satisfy
a closing condition as described above, we would not proceed with such redemption and the related Business Combination and may
instead search for an alternate Business Combination. Prospective targets will be aware of these risks and, thus, may be reluctant
to enter into a Business Combination transaction with us.
The ability
of our Public Stockholders to exercise redemption rights with respect to a large number of our shares may not allow us to complete
the most desirable Business Combination or optimize our capital structure.
At the time we
enter into an agreement for our initial Business Combination, we will not know how many stockholders may exercise their redemption
rights, and therefore will need to structure the transaction based on our expectations as to the number of shares that will be
submitted for redemption. If our Business Combination agreement requires us to use a portion of the cash in the Trust Account to
pay the purchase price, or requires us to have a minimum amount of cash at closing, we will need to reserve a portion of the cash
in the Trust Account to meet such requirements, or arrange for third-party financing. In addition, if a larger number of shares
are submitted for redemption than we initially expected, we may need to restructure the transaction to reserve a greater portion
of the cash in the Trust Account or arrange for additional third-party financing. Raising additional third-party financing may
involve dilutive equity issuances or the incurrence of indebtedness at higher than desirable levels. The above considerations may
limit our ability to complete the most desirable Business Combination available to us or optimize our capital structure. The amount
of the deferred underwriting commissions payable to the underwriters will not be adjusted for any shares that are redeemed in connection
with an initial Business Combination. The per-share amount we will distribute to stockholders who properly exercise their redemption
rights will not be reduced by the deferred underwriting commission and after such redemptions, the amount held in trust will continue
to reflect our obligation to pay the entire deferred underwriting commissions.
The ability
of our Public Stockholders to exercise redemption rights with respect to a large number of our shares could increase the probability
that our initial Business Combination would be unsuccessful and that you would have to wait for liquidation in order to redeem
your shares.
If our initial
Business Combination agreement requires us to use a portion of the cash in the Trust Account to pay the purchase price, or requires
us to have a minimum amount of cash at closing, the probability that our initial Business Combination would be unsuccessful is
increased. If our initial Business Combination is unsuccessful, you would not receive your pro rata portion of the Trust Account
until we liquidate the Trust Account. If you are in need of immediate liquidity, you could attempt to sell your shares in the open
market; however, at such time our shares may trade at a discount to the pro rata amount per share in the Trust Account. In either
situation, you may suffer a material loss on your investment or lose the benefit of funds expected in connection with our redemption
until we liquidate or you are able to sell your shares in the open market.
If we seek
stockholder approval of our initial Business Combination, our Sponsor, directors, executive officers, advisors and their affiliates
may elect to purchase shares or public warrants from Public Stockholders, which may influence a vote on a proposed Business Combination
and reduce the public “float” of our Class A common stock.
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 Sponsor, directors, executive officers, advisors or their affiliates may purchase shares
or public warrants in privately negotiated transactions or in the open market either prior to or following the completion of our
initial Business Combination, where otherwise permissible under applicable laws, rules and regulations, although they are
under no obligation to do so. However, other than as expressly stated herein, they have no current commitments, plans or intentions
to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds in
the Trust Account will be used to purchase shares or public warrants in such transactions.
Such a purchase
may include a contractual acknowledgment 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. In the event that our Sponsor, directors,
executive officers, advisors or their affiliates purchase shares in privately negotiated transactions from Public Stockholders
who have already elected to exercise their redemption rights, such selling stockholders would be required to revoke their prior
elections to redeem their shares. The purpose of any such purchases of shares could be to vote such shares in favor of the Business
Combination and thereby increase the likelihood of obtaining stockholder approval of the Business Combination or to satisfy a closing
condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing
of our initial Business Combination, where it appears that such requirement would otherwise not be met. The purpose of any such
purchases of public warrants could be to reduce the number of public warrants outstanding or to vote such warrants on any matters
submitted to the warrant holders for approval in connection with our initial Business Combination. Any such purchases of our securities
may result in the completion of our initial Business Combination that may not otherwise have been possible. Any such purchases
will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject
to such reporting requirements.
In addition, if
such purchases are made, the public “float” of our Class A common stock or public warrants and the number of beneficial
holders of our securities may be reduced, possibly making it difficult to maintain or obtain the quotation, listing or trading
of our securities on a national securities exchange.
If a stockholder
fails to receive notice of our offer to redeem our Public Shares in connection with our initial Business Combination, or fails
to comply with the procedures for tendering its shares, such shares may not be redeemed.
We will comply
with the proxy rules or tender offer rules, as applicable, when conducting redemptions in connection with our initial Business
Combination. Despite our compliance with these rules, if a stockholder fails to receive our proxy solicitation or tender offer
materials, as applicable, such stockholder may not become aware of the opportunity to redeem its shares. In addition, the proxy
solicitation or tender offer materials, as applicable, that we will furnish to holders of our Public Shares in connection with
our initial Business Combination will describe the various procedures that must be complied with in order to validly redeem or
tender Public Shares. For example, 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. In the event that a stockholder fails to comply with these or any other procedures,
its shares may not be redeemed.
You will
not have any rights or interests in funds from the Trust Account, except under certain limited circumstances. Therefore, to liquidate
your investment, you may be forced to sell your Public Shares or warrants, potentially at a loss.
Our Public Stockholders
are entitled to receive funds from the Trust Account only upon the earlier to occur of: (i) our completion of an initial Business
Combination, and then only in connection with those shares of our Class A common stock that such stockholder properly elected
to redeem, subject to the limitations described herein; (ii) the redemption of any Public Shares properly tendered in connection
with a stockholder vote to amend our amended and restated Certificate of Incorporation (A) to modify the substance or timing
of our obligation to allow redemption in connection with our initial Business Combination or to redeem 100% of our Public Shares
if we do not complete an initial Business Combination within 24 months from the closing of our Initial Public Offering or
(B) with respect to any other provisions relating to the rights of our Class A common stock; and (iii) the redemption
of our Public Shares if we have not completed an initial business within 24 months from the closing of our Initial Public
Offering, subject to applicable law and as further described herein. Public Stockholders who redeem their Class A common stock
in connection with a stockholder vote described in clause (ii) in the preceding sentence shall not be entitled to funds
from the Trust Account upon the subsequent completion of an initial Business Combination or liquidation if have not completed an
initial Business Combination within 24 months from the closing of our Initial Public Offering, with respect to such Class A
common stock so redeemed. In addition, if we do not complete an initial Business Combination within 24 months from the closing
of our Initial Public Offering is not completed for any reason, compliance with Delaware law may require that we submit a plan
of dissolution to our then-existing stockholders for approval prior to the distribution of the proceeds held in our Trust Account.
In that case, Public Stockholders may be forced to wait beyond 24 months from the closing of our Initial Public Offering before
they receive funds from our Trust Account. In no other circumstances does a Public Stockholder have any right or interest of any
kind in the Trust Account. Holders of warrants do not have any right to the proceeds held in the Trust Account with respect to
the warrants. Accordingly, to liquidate your investment, you may be forced to sell your Public Shares or warrants, potentially
at a loss.
Nasdaq may
delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities
and subject us to additional trading restrictions.
Our
units, our Class A common stock, and our warrants are currently listed on Nasdaq. Although after giving effect to our Initial
Public Offering we expect to continue to meet, on a pro forma basis, the minimum initial listing standards set forth in the Nasdaq
listing standards, we cannot assure you that our securities will be, or will continue to be, listed on Nasdaq in the future or
prior to our initial Business Combination. In order to continue listing our securities on Nasdaq prior to our initial Business
Combination, we must maintain certain financial, distribution and share price levels. Generally, we must maintain a minimum amount
in stockholders’ equity (generally $2,500,000) and a minimum number of holders of our securities (generally 300 public holders).
Additionally,
our units will not be traded after completion of our initial Business Combination and, in connection with our initial Business
Combination, we will be required to demonstrate compliance with the Nasdaq’s initial listing requirements, which are more
rigorous than the Nasdaq’s continued listing requirements, in order to continue to maintain the listing of our securities
on Nasdaq. For instance, our share price would generally be required to be at least $4.00 per share and our stockholders’
equity would generally be required to be at least $5.0 million and we would be required to have a minimum of 300 round lot holders
(with at least 50% of such round lot holders holding securities with a market value of at least $2,500). We cannot assure you that
we will be able to meet those initial listing requirements at that time. If Nasdaq delists our securities from trading on
its exchange and we are not able to list our securities on another national securities exchange, we expect our securities could
be quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including:
•
a limited availability of market quotations for our securities;
•
reduced liquidity for our securities;
•
a determination that our Class A common stock is a “penny stock” which will require brokers trading in our Class A
common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary
trading market for our securities;
•
a limited amount of news and analyst coverage; and
•
a decreased ability to issue additional securities or obtain additional financing in the future.
The
National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating
the sale of certain securities, which are referred to as “covered securities.” Because our units, Class A common
stock and warrants are listed on Nasdaq, our units, Class A common stock and warrants qualify as covered securities under
the statute. Although the states are preempted from regulating the sale of our securities, the federal statute does allow the states
to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can
regulate or bar the sale of covered securities in a particular case. While we are not aware of a state having used these powers
to prohibit or restrict the sale of securities issued by blank check companies, other than the State of Idaho, certain state securities
regulators view blank check companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale
of securities of blank check companies in their states. Further, if we were no longer listed on Nasdaq, our securities would not
qualify as covered securities under the statute and we would be subject to regulation in each state in which we offer our securities.
You are
not entitled to protections normally afforded to investors of many other blank check companies.
Since
the net proceeds of our Initial Public Offering and the sale of the Private Placement warrants are intended to be used to complete
an initial Business Combination with a target business that has not been selected, we may be deemed to be a “blank check”
company under the United States securities laws. However, because we have net tangible assets in excess of $5,000,000 upon the
completion of our Initial Public Offering and the sale of the Private Placement warrants and have filed a Current Report on Form 8-K, including
an audited balance sheet demonstrating this fact, we are exempt from rules promulgated by the SEC to protect investors in
blank check companies, such as Rule 419. Accordingly, investors will not be afforded the benefits or protections of those
rules. Among other things, this means that since our units were immediately tradable and we have a longer period of time to complete
our initial Business Combination than do companies subject to Rule 419. Moreover, if our Initial Public Offering were subject
to Rule 419, that rule would have prohibited the release of any interest earned on funds held in the Trust Account to
us unless and until the funds in the Trust Account were released to us in connection with our completion of an initial Business
Combination.
If we seek
stockholder approval of our initial Business Combination and we do not conduct redemptions pursuant to the tender offer rules,
and if you or a “group” of stockholders are deemed to hold in excess of 15% of our Class A common stock, you will
lose the ability to redeem all such shares in excess of 15% of our Class A common stock.
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 the Initial Public Offering without our prior consent,
which we refer to as the “Excess Shares.” 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. Your inability to redeem the Excess
Shares will reduce your influence over our ability to complete our initial Business Combination and you could suffer a material
loss on your investment in us if you sell Excess Shares in open market transactions. Additionally, you will not receive redemption
distributions with respect to the Excess Shares if we complete our initial Business Combination. And as a result, you will continue
to hold that number of shares exceeding 15% and, in order to dispose of such shares, would be required to sell your shares in open
market transactions, potentially at a loss.
Risks Relating to Our Search for, Consummation of, or Inability
to Consummate a Business Combination and Post-Business Combination Risks:
The
requirement that we complete an initial Business Combination within 24 months after the closing of our
Initial Public Offering may give potential target businesses leverage over us in negotiating a Business Combination and may limit
the time we have in which to conduct due diligence on potential Business Combination targets as we approach our dissolution deadline,
which could undermine our ability to complete our initial Business Combination on terms that would produce value for our stockholders.
Any potential
target business with which we enter into negotiations concerning a Business Combination will be aware that we must complete an
initial Business Combination within 24 months from the closing of our Initial Public Offering. Consequently, such target business
may obtain leverage over us in negotiating a Business Combination, knowing that if we do not complete our initial Business Combination
with that particular target business, we may be unable to complete our initial Business Combination with any target business. This
risk will increase as we get closer to the timeframe described above. In addition, we may have limited time to conduct due diligence
and may enter into our initial Business Combination on terms that we would have rejected upon a more comprehensive investigation.
We may not
be able to complete an initial Business Combination within 24 months after the closing of our Initial Public Offering, in
which case we would cease all operations except for the purpose of winding up and we would redeem our Public Shares and liquidate,
in which case our Public Stockholders may only receive $10.00 per share, or less than such amount in certain circumstances, and
our warrants will expire worthless.
Our Sponsor, officers
and directors have agreed that we must complete our initial Business Combination within 24 months from the closing of our
Initial Public Offering. We may not be able to find a suitable target business and complete an initial Business Combination within
24 months after the closing of our Initial Public Offering. Our ability to complete our initial Business Combination may be
negatively impacted by general market conditions, volatility in the capital and debt markets and the other risks described herein.
If we have not completed an initial Business Combination within such applicable time period, we will: (i) cease all operations
except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter,
redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account,
including interest earned on the funds held in the Trust Account and not previously released to us to pay our taxes, if any (less
up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption
will completely extinguish Public Stockholders’ rights as stockholders (including the right to receive further liquidating
distributions, if any), subject to applicable law; and (iii) as promptly as reasonably possible following such redemption,
subject to the approval of our remaining stockholders and our board of directors, liquidate and dissolve, subject in each case
to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.
The recent
coronavirus (COVID-19) pandemic and the impact on business and debt and equity markets could have a material adverse effect on
our search for a Business Combination, and any target business with which we ultimately consummate a Business Combination.
In December 2019,
a novel strain of coronavirus (COVID-19) was reported to have surfaced and is continuing to spread throughout the world, including
the United States and Europe. On January 30, 2020, the World Health Organization declared the outbreak of the coronavirus
a “Public Health Emergency of International Concern.” On January 31, 2020, U.S. Health and Human Services Secretary
Alex M. Azar II declared a public health emergency for the United States to aid the U.S. health care community in responding to
the coronavirus, and on March 11, 2020, the World Health Organization characterized the outbreak as a “pandemic.”
A significant outbreak of the coronavirus and other infectious diseases could result in a widespread health crisis that could adversely
affect the economies and financial markets worldwide, business operations and the conduct of commerce generally and could have
a material adverse effect on the business of any potential target business with which we consummate a Business Combination. Furthermore,
we may be unable to complete a Business Combination if continued concerns relating to the coronavirus restrict travel, limit the
ability to have meetings with potential investors or the target company’s personnel, vendors and services providers are unavailable
to negotiate and consummate a transaction in a timely manner. The extent to which the coronavirus impacts our search for a Business
Combination will depend on future developments, which are highly uncertain and cannot be predicted, including new information which
may emerge concerning the severity of the coronavirus pandemic and the actions to contain the coronavirus or treat its impact,
among others. If the disruptions posed by the coronavirus or other matters of global concern continue for an extensive period of
time, it could have a material adverse effect on our ability to consummate a Business Combination, or the operations of a target
business with which we ultimately consummate a Business Combination.
In addition, our
ability to consummate a transaction may be dependent on the ability to raise equity and debt financing and the coronavirus pandemic
and other related events could have a material adverse effect on our ability to raise adequate financing.
Because
of our limited resources and the significant competition for Business Combination opportunities, it may be more difficult for us
to complete our initial Business Combination. If we do not complete our initial Business Combination, our Public Stockholders may
receive only their pro rata portion of the funds in the Trust Account that are available for distribution to Public Stockholders,
and our warrants will expire worthless.
We
expect to encounter intense competition from other entities having a business objective similar to ours, including private investors
(which may be individuals or investment partnerships), other blank check companies and other entities, domestic and international,
competing for the types of businesses we intend to acquire. Many of these individuals and entities are well-established and have
extensive experience in identifying and effecting, directly or indirectly, acquisitions of companies operating in or providing
services to various industries. Many of these competitors possess greater technical, human and other resources or more local industry
knowledge than we do and our financial resources 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 will be limited by our available financial resources. This inherent competitive limitation gives others
an advantage in pursuing the acquisition of certain target businesses. Furthermore, we are obligated to offer holders of our Public
Shares the right to redeem their shares for cash at the time of our initial Business Combination in conjunction with a stockholder
vote or via a tender offer. Target companies will be aware that this may reduce the resources available to us for our initial Business
Combination. Any of these obligations may place us at a competitive disadvantage in successfully negotiating a Business
Combination. If we do not complete our initial Business Combination our Public Stockholders may receive only their pro rata portion
of the funds in the Trust Account that are available for distribution to Public Stockholders, and our warrants will expire worthless.
As the number
of special purpose acquisition companies evaluating targets increases, attractive targets may become more scarce and there may
be more competition for attractive targets. This could increase the cost of our Initial Business Combination and could even result
in our inability to find a target or to consummate an Initial Business Combination.
In recent years,
the number of special purpose acquisition companies that have been formed has increased substantially. Many potential targets for
special purpose acquisition companies have already entered into an initial business combination, and there are still many special
purpose acquisition companies seeking targets for their initial business combination, as well as many such companies currently
in registration. As a result, at times, fewer attractive targets may be available, and it may require more time, more effort and
more resources to identify a suitable target and to consummate an initial business combination. In addition, because there are
more special purpose acquisition companies seeking to enter into an initial business combination with available targets, the competition
for available targets with attractive fundamentals or business models may increase, which could cause target companies to demand
improved financial terms. Attractive deals could also become scarcer for other reasons, such as economic or industry sector downturns,
geopolitical tensions or increases in the cost of additional capital needed to close business combinations or operate targets post-business
combination. This could increase the cost of, delay or otherwise complicate or frustrate our ability to find and consummate an
initial business combination, and may result in our inability to consummate an initial business combination on terms favorable
to our investors altogether.
If the net
proceeds of our Initial Public Offering and the sale of the Private Placement warrants not being held in the Trust Account are
insufficient to allow us to operate for at least the next 24 months, it could limit the amount available to fund our search
for a target business or businesses and complete our initial Business Combination, and we will depend on loans from our Sponsor
or management team to fund our search and to complete our initial Business Combination.
As
of December 31, 2020, we had approximately $1,700,000 in cash held outside the Trust Account to fund our working capital requirements.
We believe that the funds available to us outside of the Trust Account, together with funds available from loans from our Sponsor,
will be sufficient to allow us to operate for 24 months from the closing of our Initial Public Offering; however, we cannot assure
you that our estimate is accurate. Of the funds available to us, we expect to use a portion of the funds available to us to pay
fees to consultants to assist us with our search for a target business. We could also use a portion of the funds as a down payment
or to fund a “no-shop” provision (a provision in letters of intent designed to keep target businesses from “shopping”
around for transactions with other companies or investors on terms more favorable to such target businesses) with respect to a
particular proposed Business Combination, although we do not have any current intention to do so. If we entered into a letter of
intent where we paid for the right to receive exclusivity from a target business and were subsequently required to forfeit such
funds (whether as a result of our breach or otherwise), we might not have sufficient funds to continue searching for, or conduct
due diligence with respect to, a target business. If we do not complete our initial Business Combination, our Public Stockholders
may receive only approximately $10.00 per share on the liquidation of our Trust Account and our warrants will expire worthless.
In certain circumstances, our Public Stockholders may receive less than $10.00 per share upon our liquidation. See “—If
third parties bring claims against us, the proceeds held in the Trust Account could be reduced and the per-share redemption amount
received by stockholders may be less than $10.00 per share” and other risk factors below.
If
we are required to seek additional capital, we would need to borrow funds from our Sponsor, management team or other third parties
to operate or may be forced to liquidate. Neither our Sponsor, members of our management team nor any of their affiliates is under
any obligation to advance funds to us in such circumstances. Any such advances would be repaid only from funds held outside the
Trust Account or from funds released to us upon completion of our initial Business Combination. Up to $1,500,000 of such loans
may be convertible into warrants of the post-Business Combination entity at a price of $1.00 per warrant at the option of the lender.
The warrants would be identical to the Private Placement warrants. Prior to the completion of our initial Business Combination,
we do not expect to seek loans from parties other than our Sponsor or an affiliate of our Sponsor as we do not believe third parties
will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our Trust Account.
If we are unable to obtain these loans, we may be unable to complete our initial Business Combination. If we do not complete
our initial Business Combination because we do not have sufficient funds available to us, we will be forced to cease operations
and liquidate the Trust Account. Consequently, our Public Stockholders may only receive an estimated $10.00 per share, or possibly
less, on our redemption of our Public Shares, and our warrants will expire worthless. In certain circumstances, our Public Stockholders
may receive less than $10.00 per share on the redemption of their shares. See “—If third parties bring claims against
us, the proceeds held in the Trust Account could be reduced and the per-share redemption amount received by stockholders may be
less than $10.00 per share” and other risk factors below.
Subsequent
to our completion of our initial Business Combination, we may be required to take write-downs or write-offs, restructuring and
impairment or other charges that could have a significant negative effect on our financial condition, results of operations and
our share price, which could cause you to lose some or all of your investment.
Even if we conduct
due diligence on a target business with which we combine, we cannot assure you that this diligence will surface all material issues
with a particular target business, that it would be possible to uncover all material issues through a customary amount of due diligence,
or that factors outside of the target business and outside of our control will not later arise. As a result of these factors, we
may be forced to later write-down or write-off assets, restructure our operations, or incur impairment or other charges that could
result in our reporting losses. Even if our due diligence successfully identifies certain risks, unexpected risks may arise and
previously known risks may materialize in a manner not consistent with our preliminary risk analysis. Even though these charges
may be non-cash items and not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute
to negative market perceptions about us or our securities. In addition, charges of this nature may cause us to violate net worth
or other covenants to which we may be subject as a result of assuming pre-existing debt held by a target business or by virtue
of our obtaining post-combination debt financing. Accordingly, any stockholders who choose to remain stockholders following the
Business Combination could suffer a reduction in the value of their securities. Such stockholders are unlikely to have a remedy
for such reduction in value unless they are able to successfully claim that the reduction was due to the breach by our officers
or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim
under securities laws that the proxy solicitation or tender offer materials, as applicable, relating to the Business Combination
contained an actionable material misstatement or material omission.
If third
parties bring claims against us, the proceeds held in the Trust Account could be reduced and the per-share redemption amount received
by stockholders may be less than $10.00 per share.
Our placing of
funds in the Trust Account may not protect those funds from third-party claims against us. Although we will seek to have all vendors,
service providers (other than our independent auditors), prospective target businesses and other entities with which we do business
execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the Trust Account
for the benefit of our Public Stockholders, such parties may not execute such agreements, or even if they execute such agreements,
they may not be prevented from bringing claims against the Trust Account, including, but not limited to, fraudulent inducement,
breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in
each case in order to gain advantage with respect to a claim against our assets, including the funds held in the Trust Account.
If any third party refuses to execute an agreement waiving such claims to the monies held in the Trust Account, our management
will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has
not executed a waiver if management believes that such third party’s engagement would be significantly more beneficial to
us than any alternative. Making such a request of potential target businesses may make our acquisition proposal less attractive
to them and, to the extent prospective target businesses refuse to execute such a waiver, it may limit the field of potential target
businesses that we might pursue.
Examples of possible
instances where we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant
whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that
would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver.
In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of,
or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the Trust Account for any
reason. Upon redemption of our Public Shares, if we have not completed an initial Business Combination within 24 months from
the closing of our Initial Public Offering, or upon the exercise of a redemption right in connection with our initial Business
Combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought against
us within the ten years following redemption. Accordingly, the per-share redemption amount received by Public Stockholders could
be less than the $10.00 per Public Share initially held in the Trust Account, due to claims of such creditors. Pursuant to the
letter agreement dated October 6, 2020, between the company and our Sponsor, our Sponsor has agreed that it will be liable
to us if and to the extent any claims by a third party (other than our independent auditors) for services rendered or products
sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amounts
in the Trust Account to below the lesser of (i) $10.00 per Public Share and (ii) the actual amount per 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 the interest that may be withdrawn to pay our taxes, if any, provided that such
liability will not apply to any claims by a third party or prospective target business that executed a waiver of any and all rights
to seek access to the Trust Account nor will it apply to any claims under our indemnity of the underwriters of our Initial Public
Offering against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver
is deemed to be unenforceable against a third party, our Sponsor will not be responsible to the extent of any liability for such
third-party claims.
However, we have
not asked our Sponsor to reserve for such indemnification obligations, nor have we independently verified whether our Sponsor has
sufficient funds to satisfy its indemnity obligations and believe that our Sponsor’s only assets are securities of our company.
Therefore, we cannot assure you that our Sponsor would be able to satisfy those obligations. As a result, if any such claims were
successfully made against the Trust Account, the funds available for our initial Business Combination and redemptions could be
reduced to less than $10.00 per Public Share. In such event, we may not be able to complete our initial Business Combination, and
you would receive such lesser amount per share in connection with any redemption of your Public Shares. None of our officers or
directors will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target
businesses.
Our directors
may decide not to enforce the indemnification obligations of our Sponsor, resulting in a reduction in the amount of funds in the
Trust Account available for distribution to our Public Stockholders.
In the event that
the proceeds in the Trust Account are reduced below the lesser of (i) $10.00 per share and (ii) the actual amount per
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 the interest that may be withdrawn to pay our taxes, if any, and our Sponsor
assert that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim,
our independent directors would determine whether to take legal action against our Sponsor to enforce its indemnification obligations.
While we currently expect that our independent directors would take legal action on our behalf against our Sponsor to enforce its
indemnification obligations to us, it is possible that our independent directors in exercising their business judgment and subject
to their fiduciary duties may choose not to do so in any particular instance. If our independent directors choose not to enforce
these indemnification obligations, the amount of funds in the Trust Account available for distribution to our Public Stockholders
may be reduced below $10.00 per share.
We may not
have sufficient funds to satisfy indemnification claims of our directors and executive officers.
We have agreed
to indemnify our officers and directors to the fullest extent permitted by law. However, our officers and directors have agreed
to waive any right, title, interest or claim of any kind in or to any monies in the Trust Account and to not seek recourse against
the Trust Account for any reason whatsoever (except to the extent they are entitled to funds from the Trust Account due to their
ownership of Public Shares). Accordingly, any indemnification provided will be able to be satisfied by us only if (i) we have
sufficient funds outside of the Trust Account or (ii) we complete an initial Business Combination. Our obligation to indemnify
our officers and directors may discourage stockholders from bringing a lawsuit against our officers or directors for breach of
their fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative litigation against our
officers and directors, even though such an action, if successful, might otherwise benefit us and our stockholders. Furthermore,
a stockholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage awards against
our officers and directors pursuant to these indemnification provisions.
If, after
we distribute the proceeds in the Trust Account to our Public Stockholders, we file a bankruptcy or winding-up petition or
an involuntary bankruptcy or winding-up petition is filed against us that is not dismissed, a bankruptcy or insolvency court may
seek to recover such proceeds, and the members of our board of directors may be viewed as having breached their fiduciary duties
to our creditors, thereby exposing the members of our board of directors and us to claims of punitive damages.
If, after we distribute
the proceeds in the Trust Account to our Public Stockholders, we file a bankruptcy or winding-up petition or an involuntary
bankruptcy or winding-up petition is filed against us that is not dismissed, any distributions received by stockholders could be
viewed under applicable debtor/creditor and/or bankruptcy or insolvency laws as either a “preferential transfer” or
a “fraudulent conveyance.” As a result, a bankruptcy or insolvency court could seek to recover some or all amounts
received by our stockholders. In addition, our board of directors may be viewed as having breached its fiduciary duty to our creditors
and/or having acted in bad faith, thereby exposing itself and us to claims of punitive damages, by paying Public Stockholders from
the Trust Account prior to addressing the claims of creditors.
If, before
distributing the proceeds in the Trust Account to our Public Stockholders, we file a bankruptcy or winding-up petition or
an involuntary bankruptcy or winding-up petition is filed against us that is not dismissed, the claims of creditors in such proceeding
may have priority over the claims of our stockholders and the per-share amount that would otherwise be received by our stockholders
in connection with our liquidation may be reduced.
If, before distributing
the proceeds in the Trust Account to our Public Stockholders, we file a bankruptcy or winding-up petition or an involuntary
bankruptcy or winding-up petition is filed against us that is not dismissed, the proceeds held in the Trust Account could be subject
to applicable bankruptcy or insolvency 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, the per-share
amount that would otherwise be received by our stockholders in connection with our liquidation may be reduced.
If we are
deemed to be an investment company under the Investment Company Act, we may be required to institute burdensome compliance requirements
and our activities may be restricted, which may make it difficult for us to complete our initial Business Combination.
If we are deemed
to be an investment company under the Investment Company Act, our activities may be restricted, including:
•
restrictions on the nature of our investments; and
•
restrictions on the issuance of securities, each of which may make it difficult for us to complete our initial Business Combination.
In addition, we
may have imposed upon us burdensome requirements, including:
•
registration as an investment company;
•
adoption of a specific form of corporate structure; and
•
reporting, record keeping, voting, proxy and disclosure requirements and other rules and regulations.
In order not to
be regulated as an investment company under the Investment Company Act, unless we can qualify for an exclusion, we must ensure
that we are engaged primarily in a business other than investing, reinvesting or trading of securities and that our activities
do not include investing, reinvesting, owning, holding or trading “investment securities” constituting more than 40%
of our assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. Our business is to identify
and complete a Business Combination and thereafter to operate the post-transaction business or assets for the long term. We do
not plan to buy businesses or assets with a view to resale or profit from their resale. We do not plan to buy unrelated businesses
or assets or to be a passive investor.
We do not believe
that our principal activities subject us to the Investment Company Act. To this end, the proceeds held in the Trust Account may
only be invested in United States “government securities” within the meaning of Section 2(a)(16) of the Investment
Company Act having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7
promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations. Pursuant to the
trust agreement, the trustee is not permitted to invest in other securities or assets. By restricting the investment of the proceeds
to these instruments, and by having a business plan targeted at acquiring and growing businesses for the long term (rather than
on buying and selling businesses in the manner of a merchant bank or private equity fund), we intend to avoid being deemed an “investment
company” within the meaning of the Investment Company Act. The Trust Account is intended as a holding place for funds pending
the earliest to occur of either: (a) the completion of our initial Business Combination; (b) the redemption of any Public
Shares properly tendered in connection with a stockholder vote to amend our amended and restated Certificate of Incorporation (i) to
modify the substance or timing of our obligation to allow redemption in connection with our initial Business Combination or to
redeem 100% of our Public Shares if we do not complete an initial Business Combination within 24 months from the closing of
our Initial Public Offering or (ii) with respect to any other provisions relating to the rights of holders of our Class A
common stock; or (c) absent our completing an initial Business Combination within 24 months from the closing of our Initial
Public Offering, our return of the funds held in the Trust Account to our Public Stockholders as part of our redemption of the
Public Shares. If we do not invest the proceeds as discussed above, we may be deemed to be subject to the Investment Company Act.
If we were deemed to be subject to the Investment Company Act, compliance with these additional regulatory burdens would require
additional expenses for which we have not allotted funds and may hinder our ability to complete a Business Combination. If we do
not complete our initial Business Combination, our Public Stockholders may only receive their pro rata portion of the funds in
the Trust Account that are available for distribution to Public Stockholders, and our warrants will expire worthless.
If we have
not completed an initial Business Combination within 24 months from the closing of our Initial Public Offering, our Public
Stockholders may be forced to wait beyond such 24 months before redemption from our Trust Account.
If we have not
completed an initial Business Combination within 24 months from the closing of our Initial Public Offering, the proceeds then
on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to
us to pay our taxes, if any (less up to $100,000 of the interest to pay dissolution expenses), will be used to fund the redemption
of our Public Shares, as further described herein. Any redemption of Public Stockholders from the Trust Account will be effected
automatically by function of our amended and restated Certificate of Incorporation prior to any voluntary winding up. If we are
required to wind-up, liquidate the Trust Account and distribute such amount therein, pro rata, to our Public Stockholders, as part
of any liquidation process, such winding up, liquidation and distribution must comply with the applicable provisions of the DGCL.
In that case, investors may be forced to wait beyond 24 months from the closing of our Initial Public Offering before the
redemption proceeds of our Trust Account become available to them, and they receive the return of their pro rata portion of the
proceeds from our Trust Account. We have no obligation to return funds to investors prior to the date of our redemption or liquidation
unless we complete our initial Business Combination prior thereto and only then in cases where investors have sought to redeem
their Class A common stock. Only upon our redemption or any liquidation will Public Stockholders be entitled to distributions
if we do not complete our initial Business Combination.
Our stockholders
may be held liable for claims by third parties against us to the extent of distributions received by them upon redemption of their
shares.
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 within 24 months from the closing of our Initial Public
Offering 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. However, it is our intention to redeem our Public Shares as soon
as reasonably possible following the 24th month from the closing of our Initial Public Offering in the event we do not complete
our initial Business Combination and, therefore, we do not intend to comply with the foregoing procedures.
Because we do
not 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 10 years following our 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, etc.) or prospective target businesses. 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. We cannot assure you that
we will properly assess all claims that may be potentially brought against us. 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 beyond
the third anniversary of such date. 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 within 24 months
from the closing of our Initial Public Offering is not considered a liquidating distribution under Delaware law and such redemption
distribution is deemed to be unlawful (potentially due to the imposition of legal proceedings that a party may bring or due to
other circumstances that are currently unknown), then pursuant to Section 174 of the DGCL, the statute of limitations for
claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case
of a liquidating distribution.
We may not
hold an annual meeting of stockholders until after the completion of our initial Business Combination.
In accordance
with the Nasdaq corporate governance requirements, we are not required to hold an annual meeting until no later than one year after
our first fiscal year end following our listing on Nasdaq. Under Section 211(b) of the DGCL, we are, however, required
to hold an annual meeting of stockholders for the purposes of electing directors in accordance with our amended and restated bylaws
unless such election is made by written consent in lieu of such a meeting. We may not hold an annual meeting of stockholders to
elect new directors prior to the consummation of our initial Business Combination, and thus we may not be in compliance with Section 211(b) of
the DGCL, which requires an annual meeting. Therefore, if our stockholders want us to hold an annual meeting prior to the consummation
of our initial Business Combination, they may attempt to force us to hold one by submitting an application to the Delaware Court
of Chancery in accordance with Section 211(c) of the DGCL.
Holders
of our Class A common stock are not entitled to vote on any appointment of directors we hold prior to our initial Business
Combination.
Prior to our initial
Business Combination, only holders of our Founder Shares have the right to vote on the appointment of directors. Holders of our
Public Shares are not entitled to vote on the appointment of directors during such time. In addition, prior to the completion of
an initial Business Combination, holders of a majority of our Founder Shares may remove a member of the board of directors for
any reason. Accordingly, you may not have any say in the management of our company prior to the completion of an initial Business
Combination.
We
are not registering the Class A common stock issuable upon exercise of the warrants under the Securities Act or any state
securities laws at this time, and such registration may not be in place when an investor desires to exercise warrants, thus precluding
such investor from being able to exercise its warrants and causing such
warrants to expire worthless.
We are not registering
the Class A common stock issuable upon exercise of the warrants under the Securities Act or any state securities laws at this
time. However, under the terms of the warrant agreement, we have agreed to use our commercially reasonable efforts to file a
registration statement under the Securities Act covering such shares and maintain a current prospectus relating to the Class A
common stock issuable upon exercise of the warrants until the expiration of the warrants in accordance with the provisions of the
warrant agreement. We cannot assure you that we will be able to do so if, for example, any facts or events arise which represent
a fundamental change in the information set forth in the registration statement or prospectus, the financial statements contained
or incorporated by reference therein are not current or correct or the SEC issues a stop order.
If the shares
of our Class A common stock issuable upon exercise of the warrants are not registered under the Securities Act, we will be
required to permit holders to exercise their warrants on a cashless basis, in which case the number of shares of our Class A
common stock that you will receive upon cashless exercise will be based on a formula subject to a maximum number of shares equal
to 0.361 shares of our Class A common stock per warrant (subject to adjustment).
However, no such
warrant will be exercisable for cash or on a cashless basis, and we will not be obligated to issue any shares to holders seeking
to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities
laws of the state of the exercising holder, unless an exemption from state registration is available.
Notwithstanding
the above, if the shares of our Class A common stock are at the time of any exercise of a warrant not listed on a national
securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of
the Securities Act, we may, at our option, require holders of Public Warrants who exercise their warrants to do so on a “cashless
basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required
to file or maintain in effect a registration statement, but we will be required to use our commercially reasonable efforts to register
or qualify the shares under applicable blue sky laws to the extent an exemption is not available.
In
no event will we be required to net cash settle any warrant, or issue securities or other compensation in exchange for the warrants
in the event that we are unable to register or qualify the shares underlying the warrants under the Securities Act or applicable
state securities laws and there is no exemption available. If the issuance of the shares upon exercise of the warrants is not so
registered or qualified or exempt from registration or qualification, the holder of such warrant will not be entitled to exercise
such warrant and such warrant may have no value and expire worthless. In such event, holders who acquired their warrants as part
of a purchase of units will have paid the full unit purchase price solely for the shares of our Class A common stock included
in the units. There may be a circumstance where an exemption from registration exists for holders of our Private Placement warrants
to exercise their warrants while a corresponding exemption does not exist for holders of the warrants included as part of units
sold in our Initial Public Offering. In such an instance, our Sponsor and its permitted transferees (which may include our directors
and executive officers) would be able to sell the common stock underlying their warrants while holders of our public warrants would
not be able to exercise their warrants and sell the underlying common stock. There may be a circumstance where an exemption from
registration exists for holders of our Private Placement warrants to exercise their warrants while a corresponding exemption does
not exist for holders of the warrants included as part of units sold in our Initial Public Offering. In such an instance, our Sponsor
and its permitted transferees (which may include our directors and executive officers) would be able to sell the shares of common
stock underlying their warrants while holders of our public warrants would not be able to exercise their warrants and sell the
underlying shares of common stock. If and when the warrants become redeemable by us, we may exercise our redemption right even
if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws.
Our ability
to require holders of our warrants to exercise such warrants on a cashless basis after we call the warrants for redemption or if
there is no effective registration statement covering the Class A common stock issuable upon exercise of these warrants will
cause holders to receive fewer shares of our Class A common stock upon their exercise of the warrants than they would have
received had they been able to pay the exercise price of their warrants in cash.
If we call the
warrants for redemption, we will have the option, in our sole discretion, to require all holders that wish to exercise warrants
to do so on a cashless basis in certain circumstances. If we choose to require holders to exercise their warrants on a cashless
basis or if holders elect to do so when there is no effective registration statement, the number of shares of our Class A
common stock received by a holder upon exercise will be fewer than it would have been had such holder exercised his or her warrant
for cash. For example, if the holder is exercising 875 public warrants at $11.50 per share through a cashless exercise when the
Class A common stock have a fair market value of $17.50 per share when there is no effective registration statement, then
upon the cashless exercise, the holder will receive 300 shares of our Class A common stock. The holder would have received
875 shares of our Class A common stock if the exercise price was paid in cash. This will have the effect of reducing the potential
“upside” of the holder’s investment in our company because the warrant holder will hold a smaller number of shares
of our Class A common stock upon a cashless exercise of the warrants they hold.
The warrants
may become exercisable and redeemable for a security other than the Class A common stock, and you will not have any information
regarding such other security at this time.
In certain situations,
including if we are not the surviving entity in our initial Business Combination, the warrants may become exercisable for a security
other than the Class A common stock. As a result, if the surviving company redeems your warrants for securities pursuant to
the warrant agreement, you may receive a security in a company of which you do not have information at this time. Pursuant to the
warrant agreement, the surviving company will be required to use commercially reasonable efforts to register the issuance of the
security underlying the warrants within twenty business days of the closing of an initial Business Combination.
The grant
of registration rights to our Sponsor may make it more difficult to complete our initial Business Combination, and the future exercise
of such rights may adversely affect the market price of the shares of our Class A common stock.
Pursuant
to an agreement entered into concurrently with the issuance and sale of the securities
in the Initial Public Offering, our Sponsor and its permitted transferees can demand that we register the shares of our
Class A common stock into which Founder Shares are convertible, the Private Placement warrants and the Class A common
stock issuable upon exercise of the Private Placement warrants, and warrants that may be issued upon conversion of working capital
loans and the Class A common stock issuable upon conversion of such warrants. The registration rights will be exercisable
with respect to the Founder Shares and the Private Placement warrants and the Class A common stock issuable upon exercise
of such Private Placement warrants. The registration and availability of such a significant number of securities for trading in
the public market may have an adverse effect on the market price of our Class A common stock. In addition, the existence of
the registration rights may make our initial Business Combination more costly or difficult to conclude. This is because the stockholders
of the target business may increase the equity stake they seek in the combined entity or ask for more cash consideration to offset
the negative impact on the market price of our Class A common stock that is expected when the securities owned by our Sponsor
or its permitted transferees are registered.
Because
we are neither limited to evaluating a target business in a particular industry sector nor have we selected any specific target
businesses with which to pursue our initial Business Combination, you will be unable to ascertain the merits or risks of any particular
target business’s operations.
We may pursue
Business Combination opportunities in any sector, except that we are not, under our amended and restated Certificate of Incorporation,
permitted to effectuate our initial Business Combination with another blank check company or similar company with nominal operations.
Because we have not yet selected or approached any specific target business with respect to a Business Combination, there is no
basis to evaluate the possible merits or risks of any particular target business’s operations, results of operations, cash
flows, liquidity, financial condition or prospects. To the extent we complete our initial Business Combination, we may be affected
by numerous risks inherent in the business operations with which we combine. For example, if we combine with a financially unstable
business or an entity lacking an established record of sales or earnings, we may be affected by the risks inherent in the business
and operations of a financially unstable or a development stage entity. Although our officers and directors will endeavor to evaluate
the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all of the significant
risk factors or that we will have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our
control and leave us with no ability to control or reduce the chances that those risks will adversely impact a target business.
We also cannot assure you that an investment in our units will ultimately prove to be more favorable to investors than a direct
investment, if such opportunity were available, in a Business Combination target. Accordingly, any stockholders who choose to remain
stockholders following our initial Business Combination could suffer a reduction in the value of their securities. Such stockholders
are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction was due
to the breach by our officers or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully
bring a private claim under securities laws that the proxy solicitation or tender offer materials, as applicable, relating to the
Business Combination contained an actionable material misstatement or material omission.
We may seek
acquisition opportunities in industries or sectors which may or may not be outside of our management’s area of expertise.
We will consider
a Business Combination outside of our management’s area of expertise if a Business Combination candidate is presented to
us and we determine that such candidate offers an attractive acquisition opportunity for our company. Although our management will
endeavor to evaluate the risks inherent in any particular Business Combination candidate, we cannot assure you that we will adequately
ascertain or assess all of the significant risk factors. We also cannot assure you that an investment in our units will not ultimately
prove to be less favorable to investors in our Initial Public Offering than a direct investment, if an opportunity were available,
in a Business Combination candidate. In the event we elect to pursue an acquisition outside of the areas of our management’s
expertise, our management’s expertise may not be directly applicable to its evaluation or operation, and the information
contained in this Report regarding the areas of our management’s expertise would not be relevant to an understanding of the
business that we elect to acquire. As a result, our management may not be able to adequately ascertain or assess all of the significant
risk factors. Accordingly, any stockholder who choose to remain stockholders following our Business Combination could suffer a
reduction in the value of their shares. Such stockholders are unlikely to have a remedy for such reduction in value.
Although
we have identified general criteria and guidelines that we believe are important in evaluating prospective target businesses and
our strategy is to identify, acquire and build a company in our target investment area, we may enter into our initial Business
Combination with a target that does not meet such criteria and guidelines, and as a result, the target business with which we enter
into our initial Business Combination may not have attributes entirely consistent with our general criteria and guidelines.
Although we have
identified general criteria and guidelines for evaluating prospective target businesses and our strategy is to identify, acquire
and build a company in our target investment area, it is possible that a target business with which we enter into our initial Business
Combination will not have attributes consistent with our general criteria and guidelines. If we complete our initial Business Combination
with a target that does not meet some or all of these guidelines, such combination may not be as successful as a combination with
a business that does meet all of our general criteria and guidelines. In addition, if we announce a prospective Business Combination
with a target that does not meet our general criteria and guidelines, a greater number of stockholders may exercise their redemption
rights, which may make it difficult for us to meet any closing condition with a target business that requires us to have a minimum
net worth or a certain amount of cash. In addition, if stockholder approval of the transaction is required by law, or we decide
to obtain stockholder approval for business or other legal reasons, it may be more difficult for us to attain stockholder approval
of our initial Business Combination if the target business does not meet our general criteria and guidelines. If we do not complete
our initial Business Combination, our Public Stockholders may only receive their pro rata portion of the funds in the Trust Account
that are available for distribution to Public Stockholders, and our warrants will expire worthless.
We are not required to obtain
an opinion from an independent accounting or investment banking firm, and consequently, you may have no assurance from an independent
source that the price we are paying for the business is fair to our stockholders from a financial point of view.
Unless we complete our initial Business
Combination with an affiliated entity, we are not required to obtain an opinion from an independent accounting firm or independent
investment banking firm that the price we are paying is fair to our stockholders from a financial point of view. If no opinion
is obtained, our stockholders will be relying on the judgment of our board of directors, who will determine fair market value based
on standards generally accepted by the financial community. Such standards used will be disclosed in our proxy solicitation or
tender offer materials, as applicable, related to our initial Business Combination.
We may issue additional shares
of our Class A common stock or preferred stock to complete our initial Business Combination or under an employee incentive
plan after completion of our initial Business Combination. We may also issue shares of our Class A common stock upon the conversion
of the Founder Shares at a ratio greater than one-to-one at the time of our initial Business Combination as a result of the anti-dilution
provisions contained in our amended and restated Certificate of Incorporation. Any such issuances would dilute the interest of
our stockholders and likely present other risks.
Our amended and
restated Certificate of Incorporation authorizes the issuance of up to 400,000,000 shares of our Class A common stock, par
value $0.0001 per share, 40,000,000 shares of our Class B common stock, par value $0.0001 per share, and 1,000,000 shares
of preferred stock, par value $0.0001 per share. As of December 31, 2020, there were 358,928,177 and 29,732,044 authorized
but unissued shares of our Class A common stock and Class B common stock, respectively, available for issuance, which
amount does not take into account shares reserved for issuance upon exercise of outstanding warrants or shares issuable upon conversion
of the Class B common stock, if any. The Class B common stock is automatically convertible into Class A common stock
at the time of our initial Business Combination as described herein and in our amended and restated Certificate of Incorporation.
As of December 31, 2020, there were no shares of preferred stock issued and outstanding.
We may issue a
substantial number of additional shares of our Class A common stock or shares of preferred stock to complete our initial Business
Combination or under an employee incentive plan after completion of our initial Business Combination. We may also issue Class A
common stock to redeem the warrants or upon conversion of the Class B common stock at a ratio greater than one-to-one at the
time of our initial Business Combination as a result of the anti-dilution provisions contained in our amended and restated Certificate
of Incorporation. However, our amended and restated Certificate of Incorporation provides, among other things, that prior to or
in connection with our initial Business Combination, we may not issue additional shares that would entitle the holders thereof
to (i) receive funds from the Trust Account or (ii) vote on any initial Business Combination or on any other proposal
presented to stockholders prior to or in connection with the completion of an initial Business Combination. These provisions of
our amended and restated Certificate of Incorporation, like all provisions of our amended and restated Certificate of Incorporation,
may be amended with a stockholder vote. The issuance of additional shares of common stock or shares of preferred stock:
•
may significantly dilute the equity interest of investors in our Initial Public Offering;
•
may subordinate the rights of holders of our Class A common stock if share of preferred stock are issued with rights senior
to those afforded our Class A common stock;
•
could cause a change in control if a substantial number of shares of our Class A common stock is issued, which may affect,
among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal
of our present officers and directors;
•
may adversely affect prevailing market prices for our units, Class A common stock and/or warrants; and
•
will not result in adjustment to the exercise price of our warrants.
Unlike most
other similarly structured blank check companies, our initial stockholders will receive additional shares of our Class A common
stock if we issue shares to complete an initial Business Combination.
The Founder Shares
will automatically convert into shares of our Class A common stock on the first business day following the completion of our
initial Business Combination at a ratio such that the number of shares of our Class A common stock issuable upon conversion
of all Founder Shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of (i) the total number of shares
of our Class A common stock issued and outstanding upon completion of our Initial Public Offering, plus (ii) the total
number of shares of our Class A common stock issued or deemed issued or issuable upon conversion or exercise of any equity-linked
securities or rights issued or deemed issued, by the company in connection with or in relation to the completion of the initial
Business Combination, excluding any shares of our Class A common stock or equity-linked securities exercisable for or convertible
into shares of our Class A common stock issued, or to be issued, to any seller in the initial Business Combination and any
Private Placement warrants issued to our Sponsor upon conversion of working capital loans. In no event will the shares of our Class B
common stock convert into shares of our Class A common stock at a rate of less than one to one. This is different than most
other similarly structured blank check companies in which our Sponsor will only be issued an aggregate of 20% of the total number
of shares to be outstanding prior to the initial Business Combination.
Resources
could be wasted in researching acquisitions that are not completed, which could materially adversely affect subsequent attempts
to locate and acquire or merge with another business. If we do not complete our initial Business Combination, our Public Stockholders
may only receive their pro rata portion of the funds in the Trust Account that are available for distribution to Public Stockholders,
and our warrants will expire worthless.
We anticipate
that the investigation of each specific target business and the negotiation, drafting and execution of relevant agreements, disclosure
documents and other instruments will require substantial management time and attention and substantial costs for accountants, attorneys
and others. If we decide not to complete a specific initial Business Combination, the costs incurred up to that point for the proposed
transaction likely would not be recoverable. Furthermore, if we reach an agreement relating to a specific target business, we may
fail to complete our initial Business Combination for any number of reasons including those beyond our control. Any such event
will result in a loss to us of the related costs incurred which could materially adversely affect subsequent attempts to locate
and acquire or merge with another business. If we do not complete our initial Business Combination, our Public Stockholders may
only receive their pro rata portion of the funds in the Trust Account that are available for distribution to Public Stockholders,
and our warrants will expire worthless.
We may issue
notes or other debt securities, or otherwise incur substantial debt, to complete a Business Combination, which may adversely affect
our leverage and financial condition and thus negatively impact the value of our stockholders’ investment in us.
Although we have
no commitments as of the date of this Report to issue any notes or other debt securities, or to otherwise incur outstanding debt
following our Initial Public Offering, we may choose to incur substantial debt to complete our initial Business Combination. We
and our officers have agreed that we will not incur any indebtedness unless we have obtained from the lender a waiver of any right,
title, interest or claim of any kind in or to the monies held in the Trust Account. As such, no issuance of debt will affect the
per-share amount available for redemption from the Trust Account. Nevertheless, the incurrence of debt could have a variety of
negative effects, including:
•
default and foreclosure on our assets if our operating revenues after an initial Business Combination are insufficient to repay
our debt obligations;
•
acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach
certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that
covenant;
•
our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand;
•
our inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain
such financing while the debt security is outstanding;
•
our inability to pay dividends on our Class A common stock;
•
using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for
dividends on our Class A common stock if declared, our ability to pay expenses, make capital expenditures and acquisitions
and fund other general corporate purposes;
•
limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;
•
increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government
regulation; and
•
limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements
and execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt.
We may only
be able to complete one Business Combination with the proceeds of our Initial Public Offering and the sale of the Private Placement
warrants, which will cause us to be solely dependent on a single business which may have a limited number of products or services.
This lack of diversification may negatively impact our operations and profitability.
Of
the net proceeds from our Initial Public Offering the sale of the Private Placement warrants, and the exercise in part of the
underwriters’ overallotment, $396,428,273 is available to complete our Business Combination and pay related fees and
expenses after taking into account the $14,375,138 of deferred underwriting commissions being held in the Trust
Account.
We may effectuate
our initial Business Combination with a single target business or multiple target businesses simultaneously or within a short period
of time. However, we may not be able to effectuate our initial Business Combination with more than one target business because
of various factors, including the existence of complex accounting issues and the requirement that we prepare and file pro forma
financial statements with the SEC that present operating results and the financial condition of several target businesses as if
they had been operated on a combined basis. By completing our initial Business Combination with only a single entity, our lack
of diversification may subject us to numerous economic, competitive and regulatory developments. Further, we would not be able
to diversify our operations or benefit from the possible spreading of risks or offsetting of losses, unlike other entities which
may have the resources to complete several Business Combinations in different industries or different areas of a single industry.
Accordingly, the prospects for our success may be:
•
solely dependent upon the performance of a single business, property or asset; or
•
dependent upon the development or market acceptance of a single or limited number of products, processes or services.
This lack of diversification
may subject us to numerous economic, competitive and regulatory risks, any or all of which may have a substantial adverse impact
upon the particular industry in which we may operate subsequent to our initial Business Combination.
We may attempt
to simultaneously complete Business Combinations with multiple prospective targets, which may hinder our ability to complete our
initial Business Combination and give rise to increased costs and risks that could negatively impact our operations and profitability.
If we determine
to simultaneously acquire several businesses that are owned by different sellers, we will need for each of such sellers to agree
that our purchase of its business is contingent on the simultaneous closings of the other Business Combinations, which may make
it more difficult for us, and delay our ability, to complete our initial Business Combination. With multiple Business Combinations,
we could also face additional risks, including additional burdens and costs with respect to possible multiple negotiations and
due diligence (if there are multiple sellers) and the additional risks associated with the subsequent assimilation of the operations
and services or products of the acquired companies in a single operating business. If we are unable to adequately address these
risks, it could negatively impact our profitability and results of operations.
We may attempt
to complete our initial Business Combination with a private company about which little information is available, which may result
in a Business Combination with a company that is not as profitable as we suspected, if at all.
In pursuing our
acquisition strategy, we may seek to effectuate our initial Business Combination with a privately held company. By definition,
very little public information generally exists about private companies, and we could be required to make our decision on whether
to pursue a potential initial Business Combination on the basis of limited information, which may result in a Business Combination
with a company that is not as profitable as we suspected, if at all.
Our management
may not be able to maintain control of a target business after our initial Business Combination. Upon the loss of control of a
target business, new management may not possess the skills, qualifications or abilities necessary to profitably operate such business.
We may structure
our initial Business Combination so that the post-transaction company in which our Public Stockholders own shares will own less
than 100% of the equity interests or assets of a target business, but we will only complete such Business Combination if the post-transaction
company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest
in the target sufficient for us not to be required to register as an investment company under the Investment Company Act. We will
not consider any transaction that does not meet such criteria. Even if the post-transaction company owns 50% or more of the voting
securities of the target, our stockholders prior to our initial Business Combination may collectively own a minority interest in
the post Business Combination company, depending on valuations ascribed to the target and us in the Business Combination. For example,
we could pursue a transaction in which we issue a substantial number of new shares of our Class A common stock in exchange
for all of the outstanding capital stock, shares or other equity interests of a target. In this case, we would acquire a 100% interest
in the target. However, as a result of the issuance of a substantial number of new shares of our Class A common stock, our
stockholders immediately prior to such transaction could own less than a majority of our issued and outstanding Class A common
stock subsequent to such transaction. In addition, other minority stockholders may subsequently combine their holdings resulting
in a single person or group obtaining a larger share of the company’s shares than we initially acquired. Accordingly, this
may make it more likely that our management will not be able to maintain control of the target business.
We may seek
Business Combination opportunities with a high degree of complexity that require significant operational improvements, which could
delay or prevent us from achieving our desired results.
We may seek Business
Combination opportunities with large, highly complex companies that we believe would benefit from operational improvements. While
we intend to implement such improvements, to the extent that our efforts are delayed or we are unable to achieve the desired improvements,
the Business Combination may not be as successful as we anticipate.
To the extent
we complete our initial Business Combination with a large complex business or entity with a complex operating structure, we may
also be affected by numerous risks inherent in the operations of the business with which we combine, which could delay or prevent
us from implementing our strategy. Although our management team will endeavor to evaluate the risks inherent in a particular target
business and its operations, we may not be able to properly ascertain or assess all of the significant risk factors until we complete
our Business Combination. If we are not able to achieve our desired operational improvements, or the improvements take longer to
implement than anticipated, we may not achieve the gains that we anticipate. Furthermore, some of these risks and complexities
may be outside of our control and leave us with no ability to control or reduce the chances that those risks and complexities will
adversely impact a target business. Such combination may not be as successful as a combination with a smaller, less complex organization.
We do not
have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for us to complete
our initial Business Combination with which a substantial majority of our stockholders do not agree.
Our amended and
restated Certificate of Incorporation does not provide a specified maximum redemption threshold, except that in no event will we
redeem our Public Shares in an amount that would cause our net tangible assets to be less than $5,000,001 (such that we are not
subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which may be
contained in the agreement relating to our initial Business Combination. As a result, we may be able to complete our initial Business
Combination even though a substantial majority of our Public Stockholders do not agree with the transaction and have redeemed their
shares or, if we seek stockholder approval of our initial Business Combination and do not conduct redemptions in connection with
our Business Combination pursuant to the tender offer rules, have entered into privately negotiated agreements to sell their shares
to our Sponsor, officers, directors, advisors or any of their affiliates. In the event the aggregate cash consideration we would
be required to pay for all shares of our 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 Business Combination exceed the aggregate amount of cash available
to us, we will not complete the Business Combination or redeem any shares, all shares of our Class A common stock submitted
for redemption will be returned to the holders thereof, and we instead may search for an alternate Business Combination.
In order
to effectuate an initial Business Combination, blank check companies have, in the recent past, amended various provisions of their
charters and other governing instruments, including their warrant agreements. We cannot assure you that we will not seek to amend
our amended and restated Certificate of Incorporation or governing instruments in a manner that will make it easier for us to complete
our initial Business Combination that our stockholders may not support.
In order to effectuate
a Business Combination, blank check companies have, in the recent past, amended various provisions of their charters and governing
instruments, including their warrant agreements. For example, blank check companies have amended the definition of Business Combination,
increased redemption thresholds, changed industry focus and, with respect to their warrants, amended their warrant agreements to
require the warrants to be exchanged for cash and/or other securities. Amending our amended and restated Certificate of Incorporation
will require the approval of holders of 60% of our common stock, and amending our warrant agreement will require a vote of holders
of at least 50% of the Public Warrants. In addition, our amended and restated Certificate of Incorporation will require us to provide
our Public Stockholders with the opportunity to redeem their Public Shares for cash if we propose an amendment to our amended and
restated Certificate of Incorporation that would affect the substance or timing of our obligation to allow redemption in connection
with our initial Business Combination or to redeem 100% of our Public Shares if we do not complete an initial Business Combination
within 24 months from the closing of our Initial Public Offering or with respect to any other provisions relating to stockholders’
rights or pre-initial Business Combination activity. To the extent any of such amendments would be deemed to fundamentally change
the nature of any of the securities, we would register, or seek an exemption from registration for, the affected securities. We
cannot assure you that we will not seek to amend our charter or governing instruments or extend the time to consummate an initial
Business Combination in order to effectuate our initial Business Combination.
The provisions
of our amended and restated Certificate of Incorporation that relate to our pre-Business Combination activity (and corresponding
provisions of the agreement governing the release of funds from our Trust Account) may be amended with the approval of holders
of at least 60% of our common stock, which is a lower amendment threshold than that of some other blank check companies. It may
be easier for us, therefore, to amend our amended and restated Certificate of Incorporation to facilitate the completion of an
initial Business Combination that some of our stockholders may not support.
Some other blank
check companies have a provision in their charter which prohibits the amendment of certain of its provisions, including those which
relate to a company’s pre-Business Combination activity, without approval by a certain percentage of the company’s
stockholders. In those companies, amendment of these provisions typically requires approval by 90% of the company’s stockholders
attending and voting at an annual meeting. Our amended and restated Certificate of Incorporation provides that any of its provisions
related to pre-Business Combination activity (including the requirement to deposit proceeds of our Initial Public Offering and
the Private Placement of warrants into the Trust Account and not release such amounts except in specified circumstances, and to
provide redemption rights to Public Stockholders as described herein) may be amended if approved by holders of 60% of our common
stock entitled to vote thereon and corresponding provisions of the trust agreement governing the release of funds from our Trust
Account may be amended if approved by holders of at least 60% of our common stock entitled to vote thereon. In all other instances,
our amended and restated Certificate of Incorporation may be amended by holders of a majority of our outstanding shares of common
stock entitled to vote thereon, subject to applicable provisions of the DGCL or applicable stock exchange rules. Our Sponsor and
its permitted transferees, if any, who collectively beneficially own, on an as converted basis, 20% of our Class A common
stock upon the closing of our Initial Public Offering (assuming they do not purchase any units in our Initial Public Offering),
will participate in any vote to amend our amended and restated Certificate of Incorporation and/or trust agreement and have the
discretion to vote in any manner they choose. As a result, we may be able to amend the provisions of our amended and restated Certificate
of Incorporation which govern our pre-Business Combination behavior more easily than some other blank check companies, and this
may increase our ability to complete a Business Combination with which you do not agree. Our stockholders may pursue remedies against
us for any breach of our amended and restated Certificate of Incorporation.
Our Sponsor, executive
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 that would affect the substance or timing of our obligation to allow redemption in connection
with our initial Business Combination or to redeem 100% of our Public Shares if we do not complete an initial Business Combination
within 24 months from the closing of our Initial Public Offering, unless we provide our Public Stockholders with the opportunity
to redeem their Class A common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the
aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not
previously released to us to pay our taxes, if any (less up to $100,000 of interest to pay dissolution expenses) divided by the
number of then outstanding Public Shares. These agreements are contained in letter agreements that we have entered into with our
Sponsor, directors and each member of our management team. Our stockholders are not parties to, or third-party beneficiaries of,
these agreements and, as a result, do not have the ability to pursue remedies against our Sponsor, executive officers or directors
for any breach of these agreements. As a result, in the event of a breach, our stockholders would need to pursue a stockholder
derivative action, subject to applicable law.
We may be
unable to obtain additional financing to complete our initial Business Combination or to fund the operations and growth of a target
business, which could compel us to restructure or abandon a particular Business Combination. If we do not complete our initial
Business Combination, our Public Stockholders may only receive their pro rata portion of the funds in the Trust Account that are
available for distribution to Public Stockholders, and our warrants will expire worthless.
Although
we believe that the net proceeds of our Initial Public Offering and the sale of the Private Placement warrants will be sufficient
to allow us to complete our initial Business Combination, because we have not yet selected any prospective target business we cannot
ascertain the capital requirements for any particular transaction. If the net proceeds of our Initial Public Offering and the sale
of the Private Placement warrants prove to be insufficient, either because of the size of our initial Business Combination, the
depletion of the available net proceeds in search of a target business, the obligation to redeem for cash a significant number
of shares from stockholders who elect redemption in connection with our initial Business Combination or the terms of negotiated
transactions to purchase shares in connection with our initial Business Combination, we may be required to seek additional financing
or to abandon the proposed Business Combination. We cannot assure you that such financing will be available on acceptable terms,
if at all. The current economic environment may make it difficult for companies to obtain acquisition financing. To the
extent that additional financing proves to be unavailable when needed to complete our initial Business Combination, we would be
compelled to either restructure the transaction or abandon that particular Business Combination and seek an alternative target
business candidate. If we do not complete our initial Business Combination, our Public Stockholders may only receive their pro
rata portion of the funds in the Trust Account that are available for distribution to Public Stockholders and not previously released
to us to pay our taxes on the liquidation of our Trust Account, and our warrants will expire worthless. In addition, even if we
do not need additional financing to complete our initial Business Combination, we may require such financing to fund the operations
or growth of the target business. The failure to secure additional financing could have a material adverse effect on the continued
development or growth of the target business. None of our officers, directors or stockholders is required to provide any financing
to us in connection with or after our initial Business Combination. If we do not complete our initial Business Combination, our
Public Stockholders may only receive approximately $10.00 per share on the liquidation of our Trust Account, and our warrants will
expire worthless.
We may amend
the terms of the warrants in a manner that may be adverse to holders of Public Warrants with the approval by the holders of at
least 50% of the then outstanding Public Warrants. As a result, the exercise price of your warrants could be increased, the exercise
period could be shortened and the number of shares of our Class A common stock purchasable upon exercise of a warrant could
be decreased, all without your approval.
Our warrants were
issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent,
and us.
The warrant agreement
provides that the terms of the warrants may be amended without the consent of any holder for the purpose of (i) curing any
ambiguity or correct any mistake or defective provision (ii) amending the provisions relating to cash dividends on common
stock as contemplated by and in accordance with the warrant agreement or (iii) adding or changing any provisions with respect
to matters or questions arising under the warrant agreement as the parties to the warrant agreement may deem necessary or desirable
and that the parties deem to not adversely affect the rights of the registered holders of the warrants, provided that the approval
by the holders of at least 50% of the then-outstanding Public Warrants is required to make any change that adversely affects the
interests of the registered holders of Public Warrants. Accordingly, we may amend the terms of the Public Warrants in a manner
adverse to a holder if holders of at least 50% of the then outstanding Public Warrants approve of such amendment. Although our
ability to amend the terms of the Public Warrants with the consent of at least 50% of the then outstanding Public Warrants is unlimited,
examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, convert the
warrants into cash, shorten the exercise period or decrease the number of shares of our Class A common stock purchasable upon
exercise of a warrant.
We may redeem
your unexpired warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless.
We have the ability
to redeem the outstanding warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01
per warrant, if, among other things, the Reference Value equals or exceeds $18.00 per share (as adjusted for stock splits, stock
capitalizations, reorganizations, recapitalizations and the like). If and when the warrants become redeemable by us, we may exercise
our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state
securities laws. Redemption of the outstanding warrants as described above could force you to (i) exercise your warrants and
pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) sell your warrants at the
then-current market price when you might otherwise wish to hold your warrants, or (iii) accept the nominal redemption price
which, at the time the outstanding warrants are called for redemption, we expect would be substantially less than the Market Value
of your warrants. None of the Private Placement warrants are redeemable by us so long as they are held by our Sponsor or its permitted
transferees.
In addition, we
have the ability to redeem the outstanding warrants at any time after they become exercisable and prior to their expiration, at
a price of $0.10 per warrant if, among other things, the Reference Value equals or exceeds $10.00 per share (as adjusted for stock
splits, stock dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like). In such a case, the
holders are able to exercise their warrants prior to redemption for a number of shares of our Class A common stock determined
based on the redemption date and the fair market value of our Class A common stock. The value received upon exercise of the
warrants (1) may be less than the value the holders would have received if they had exercised their warrants at a later time
where the underlying share price is higher and (2) may not compensate the holders for the value of the warrants, including
because the number of common stock received is capped at 0.361 shares of our Class A common stock per warrant (subject to
adjustment) irrespective of the remaining life of the warrants.
Our
warrants and Founder Shares may have an adverse effect on the market price of the shares of our Class A common stock and make
it more difficult to effectuate our initial Business Combination.
We
issued warrants to purchase 20,535,911 units of our Class A common stock as part of the units offered by our Initial Public
Offering and, simultaneously with the closing of our Initial Public Offering, we issued in a Private Placement with our Sponsor
an aggregate of 10,214,365 Private Placement warrants, each exercisable to purchase one share of our Class A common stock
at $11.50 per share. Our Sponsor currently owns an aggregate of 10,267,956 Founder Shares. The
Founder Shares are convertible into Class A common stock on a one-for-one basis, subject to adjustment as set forth herein.
In addition, if our Sponsor makes any working capital loans, up to $1,500,000 of such loans may be converted into warrants, at
the price of $1.00 per warrant at the option of the lender. Such warrants would be identical to the Private Placement warrants,
including as to exercise price, exercisability and exercise period. Our Public Warrants are also redeemable by us for shares of
our Class A common stock.
To the extent
we issue Class A common stock for any reason, including to effectuate a Business Combination, the potential for the issuance
of a substantial number of additional shares of our Class A common stock upon exercise of these warrants and conversion rights
could make us a less attractive acquisition vehicle to a target business. Such warrants when exercised will increase the number
of issued and outstanding shares of our Class A common stock and reduce the value of the Class A common stock issued
to complete the business transaction. Therefore, our warrants and Founder Shares may make it more difficult to effectuate a business
transaction or increase the cost of acquiring the target business.
The
Private Placement warrants are identical to the warrants sold as part of the units in our Initial Public Offering except
that, so long as they are held by our Sponsor or its permitted transferees, (i) they will not be redeemable by us except in
certain circumstances, (ii) they (including the shares of our Class A common stock issuable upon exercise of these warrants)
may not, subject to certain limited exceptions, be transferred, assigned or sold by our Sponsor until 30 days after the completion
of our initial Business Combination, (iii) they may be exercised by the holders on a cashless basis and (iv) are subject
to registration rights.
Because
each unit contains one-half of one warrant and only a whole warrant may be exercised, the units may be worth less than units of
other blank check companies.
Each
unit contains one-half of one warrant. Pursuant to the warrant agreement, no fractional warrants will be issued upon separation
of the units, and only whole units will trade. If, upon exercise of the warrants, a holder would be entitled to receive a fractional
interest in a share, we will, upon exercise, round down to the nearest whole number the number of shares of our Class A common
stock to be issued to the warrant holder. This is different from other offerings similar to ours whose units include one common
share and one warrant to purchase one whole share. We have established the components of the units in this way in order to reduce
the dilutive effect of the warrants upon completion of a Business Combination since the warrants will be exercisable in the aggregate
for one third of the number of shares compared to units that each contain a whole warrant to purchase one share, thus making us,
we believe, a more attractive merger partner for target businesses. Nevertheless, this unit structure may cause our units to be
worth less than if it included a warrant to purchase one whole share.
A provision of our warrant agreement may make it more difficult
for us to complete an initial Business Combination.
Unlike most blank
check companies, if (i) we issue additional common stock or equity-linked securities for capital raising purposes in connection
with the closing of our initial Business Combination at a Newly Issued Price of less than $9.20 per common stock, (ii) the
aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available
for the funding of our initial Business Combination on the date of the completion of our initial Business Combination (net of redemptions),
and (iii) the Market Value is below $9.20 per share, then the exercise price of the warrants will be adjusted to be equal
to 115% of the higher of the Market Value and the Newly Issued Price, and the $10.00 and $18.00 per share redemption trigger prices
will be adjusted (to the nearest cent) to be equal to 100% and 180% of the higher of the Market Value and the Newly Issued Price,
respectively. This may make it more difficult for us to complete an initial Business Combination with a target business.
A market
for our securities may not develop, which would adversely affect the liquidity and price of our securities.
The
price of our securities may vary significantly due to one or more potential Business Combinations and general market or economic
conditions. Furthermore, an active trading market for our securities may never develop or, if developed, it may not be sustained.
You may be unable to sell your securities unless a market can be established and sustained.
Because
we must furnish our stockholders with target business financial statements, we may lose the ability to complete an otherwise advantageous
initial Business Combination with some prospective target businesses.
The federal proxy
rules require that a proxy statement with respect to a vote on a Business Combination meeting certain financial significance
tests include historical and/or pro forma financial statement disclosure in periodic reports. We will include the same financial
statement disclosure in connection with our tender offer documents, whether or not they are required under the tender offer rules.
These financial statements may be required to be prepared in accordance with, or be reconciled to, GAAP, or IFRS, depending on
the circumstances and the historical financial statements may be required to be audited in accordance with the standards of PCAOB.
These financial statement requirements may limit the pool of potential target businesses we may acquire because some targets may
be unable to provide such statements in time for us to disclose such statements in accordance with federal proxy rules and
complete our initial Business Combination within the prescribed time frame.
Compliance
obligations under the Sarbanes-Oxley Act may make it more difficult for us to effectuate a Business Combination, require substantial
financial and management resources, and increase the time and costs of completing an acquisition.
Section 404
of the Sarbanes-Oxley Act requires that we evaluate and report on our system of internal controls beginning with our Annual Report
on Form 10-K for the year ending December 31, 2021. Only in the event we are deemed to be a large accelerated filer or
an accelerated filer, and no longer qualify as an emerging growth company, will we be required to comply with the independent registered
public accounting firm attestation requirement on our internal control over financial reporting. Further, for as long as we remain
an emerging growth company, we will not be required to comply with the independent registered public accounting firm attestation
requirement on our internal control over financial reporting. The fact that we are a blank check company makes compliance with
the requirements of the Sarbanes-Oxley Act particularly burdensome on us as compared to other public companies because a target
business with which we seek to complete our initial Business Combination may not be in compliance with the provisions of the Sarbanes-Oxley
Act regarding adequacy of its internal controls. The development of the internal control of any such entity to achieve compliance
with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition.
Provisions
in our amended and restated Certificate of Incorporation and Delaware law may inhibit a takeover of us, which could limit the price
investors might be willing to pay in the future for shares of our Class A common stock and could entrench management.
Our amended and
restated Certificate of Incorporation contains provisions that may discourage unsolicited takeover proposals that stockholders
may consider to be in their best interests. These provisions include a staggered board of directors and the ability of the board
of directors to designate the terms of and issue new series of preferred stock, and the fact that prior to the completion of our
initial Business Combination only holders of shares of our Class B common stock, which have been issued to our Sponsor, are
entitled to vote on the appointment of directors, which may make more difficult the removal of management and may discourage transactions
that otherwise could involve payment of a premium over prevailing market prices for our securities.
We are also subject
to anti-takeover provisions under Delaware law, which could delay or prevent a change of control. Together these provisions may
make the removal of management more difficult and may discourage transactions that otherwise could involve payment of a premium
over prevailing market prices for our securities.
Provisions
in our amended and restated Certificate of Incorporation and Delaware law may have the effect of discouraging lawsuits against
our directors and officers.
Our amended and
restated Certificate of Incorporation requires, unless we consent in writing to the selection of an alternative forum, that (i) any
derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed
by any director, officer or other employee to us or our stockholders, (iii) any action asserting a claim against us, our directors,
officers or employees arising pursuant to any provision of the DGCL or our amended and restated Certificate of Incorporation or
amended and restated bylaws, or (iv) any action asserting a claim against us, our directors, officers or employees governed
by the internal affairs doctrine may be brought only in the Court of Chancery in the State of Delaware, except any claim (A) as
to which the Court of Chancery of the State of Delaware determines that there is an indispensable party not subject to the jurisdiction
of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within
ten days following such determination), (B) which is vested in the exclusive jurisdiction of a court or forum other than the
Court of Chancery, (C) for which the Court of Chancery does not have subject matter jurisdiction, or (D) any action arising
under the Securities Act, as to which the Court of Chancery and the federal district court for the District of Delaware shall have
concurrent jurisdiction. If an action is brought outside of Delaware, the stockholder bringing the suit will be deemed to have
consented to service of process on such stockholder’s counsel. Although we believe this provision benefits us by providing
increased consistency in the application of Delaware law in the types of lawsuits to which it applies, a court may determine that
this provision is unenforceable, and to the extent it is enforceable, the provision may have the effect of discouraging lawsuits
against our directors and officers, although our stockholders will not be deemed to have waived our compliance with federal securities
laws and the rules and regulations thereunder.
Notwithstanding
the foregoing, our amended and restated Certificate of Incorporation provides that the exclusive forum provision will not apply
to suits brought to enforce a duty or liability created by the Exchange Act or any other claim for which the federal courts have
exclusive jurisdiction. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce
any duty or liability created by the Exchange Act or the rules and regulations thereunder. Although we believe this provision
benefits us by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies,
the provision may have the effect of discouraging lawsuits against our directors and officers.
Our warrant
agreement designates the courts of the State of New York or the United States District Court for the Southern District of New York
as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by holders of our warrants,
which could limit the ability of warrant holders to obtain a favorable judicial forum for disputes with our company.
Our warrant agreement
provides that, subject to applicable law, (i) any action, proceeding or claim against us arising out of or relating in any
way to the warrant agreement, including under the Securities Act, will be brought and enforced in the courts of the State of New
York or the United States District Court for the Southern District of New York, and (ii) that we irrevocably submit to such
jurisdiction, which jurisdiction shall be the exclusive forum for any such action, proceeding or claim. We waive any objection
to such exclusive jurisdiction and that such courts represent an inconvenient forum.
Notwithstanding
the foregoing, these provisions of the warrant agreement do not apply to suits brought to enforce any liability or duty created
by the Exchange Act or any other claim for which the federal district courts of the United States of America are the sole and exclusive
forum. Any person or entity purchasing or otherwise acquiring any interest in any of our warrants shall be deemed to have notice
of and to have consented to the forum provisions in our warrant agreement. If any action, the subject matter of which is within
the scope the forum provisions of the warrant agreement, is filed in a court other than a court of the State of New York or the
United States District Court for the Southern District of New York (a “foreign action”) in the name of any holder of
our warrants, such holder shall be deemed to have consented to: (x) the personal jurisdiction of the state and federal courts
located in the State of New York in connection with any action brought in any such court to enforce the forum provisions (an “enforcement
action”) and (y) having service of process made upon such warrant holder in any such enforcement action by service upon
such warrant holder’s counsel in the foreign action as agent for such warrant holder.
This choice-of-forum
provision may limit a warrant holder’s ability to bring a claim in a judicial forum that it finds favorable for disputes
with our company, which may discourage such lawsuits. Alternatively, if a court were to find this provision of our warrant agreement
inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional
costs associated with resolving such matters in other jurisdictions, which could materially and adversely affect our business,
financial condition and results of operations and result in a diversion of the time and resources of our management and board of
directors.
Since only
holders of our Founder Shares have the right to vote on the appointment of directors, upon the listing of our shares on Nasdaq,
Nasdaq may consider us to be a ‘controlled company’ within the meaning of the Nasdaq rules and, as a result, we
may qualify for exemptions from certain corporate governance requirements.
Only holders of
our Founder Shares have the right to vote on the appointment of directors. As a result, Nasdaq may consider us to be a “controlled
company” within the meaning of the Nasdaq corporate governance standards. Under the Nasdaq corporate governance standards,
a company of which more than 50% of the voting power is held by an individual, group or another company is a ‘controlled
company’ and may elect not to comply with certain corporate governance requirements, including the requirements that:
•
we have a board that includes a majority of ‘independent directors,’ as defined under the rules of Nasdaq and
subject to applicable phase-in rules;
•
we have a compensation committee of our board that is comprised entirely of independent directors with a written charter addressing
the committee’s purpose and responsibilities; and
•
we have a nominating and corporate governance committee of our board that is comprised entirely of independent directors with a
written charter addressing the committee’s purpose and responsibilities.
We do not intend
to utilize these exemptions and intend to comply with the corporate governance requirements of Nasdaq, subject to applicable phase-in
rules. However, if we determine in the future to utilize some or all of these exemptions, you do not have the same protections
afforded to stockholders of companies that are subject to all of the Nasdaq corporate governance requirements.
We would
be subject to a second level of U.S. federal income tax on a portion of our income if we are determined to be a personal holding
company (a “PHC”), for U.S. federal income tax purposes.
A U.S. corporation
generally will be classified as a PHC for U.S. federal income tax purposes in a given taxable year if (i) at any time during
the last half of such taxable year, five or fewer individuals (without regard to their citizenship or residency and including as
individuals for this purpose certain entities such as certain tax exempt organizations, pension funds and charitable trusts) own
or are deemed to own (pursuant to certain constructive ownership rules) more than 50% of the stock of the corporation by value
and (ii) at least 60% of the corporation’s adjusted ordinary gross income, as determined for U.S. federal income tax
purposes, for such taxable year consists of PHC income (which includes, among other things, dividends, interest, certain royalties,
annuities and, under certain circumstances, rents).
Depending on the
date and size of our initial Business Combination, it is possible that at least 60% of our adjusted ordinary gross income may consist
of PHC income as discussed above. In addition, depending on the concentration of our stock in the hands of individuals, including
the members of our Sponsor and certain tax exempt organizations, pension funds and charitable trusts, it is possible that more
than 50% of our stock may be owned or deemed owned (pursuant to the constructive ownership rules) by such persons during the last
half of a taxable year. Thus, no assurance can be given that we will not become a PHC following our Initial Public Offering or
in the future. If we are or were to become a PHC in a given taxable year, we would be subject to an additional PHC tax, currently
20%, on our undistributed PHC income, which generally includes our taxable income, subject to certain adjustments.
If we pursue
a target company with operations or opportunities outside of the United States for our initial Business Combination, we may face
additional burdens in connection with investigating, agreeing to and completing such initial Business Combination, and if we effect
such initial Business Combination, we would be subject to a variety of additional risks that may negatively impact our operations.
If we pursue a
target a company with operations or opportunities outside of the United States for our initial Business Combination, we would be
subject to risks associated with cross-border Business Combinations, including in connection with investigating, agreeing to and
completing our initial Business Combination, conducting due diligence in a foreign jurisdiction, having such transaction approved
by any local governments, regulators or agencies and changes in the purchase price based on fluctuations in foreign-exchange rates.
If we effect our
initial Business Combination with such a company, we would be subject to any special considerations or risks associated with companies
operating in an international setting, including any of the following:
•
costs and difficulties inherent in managing cross-border business operations and complying with different commercial and legal
requirements of overseas markets;
•
rules and regulations regarding currency redemption;
•
complex corporate withholding taxes on individuals;
•
laws governing the manner in which future Business Combinations may be effected;
•
exchange listing and/or delisting requirements;
•
tariffs and trade barriers;
•
regulations related to customs and import/export matters;
•
local or regional economic policies and market conditions;
•
unexpected changes in regulatory requirements;
•
longer payment cycles;
•
tax issues, such as tax law changes and variations in tax laws as compared to the United States;
•
currency fluctuations and exchange controls;
•
rates of inflation;
•
challenges in collecting accounts receivable;
•
cultural and language differences;
•
employment regulations;
•
underdeveloped or unpredictable legal or regulatory systems;
•
corruption;
•
protection of intellectual property;
•
social unrest, crime, strikes, riots and civil disturbances;
•
regime changes and political upheaval;
•
terrorist attacks, natural disasters and wars;
•
deterioration of political relations with the United States; and
•
government appropriation of assets.
We may not be
able to adequately address these additional risks. If we were unable to do so, we may be unable to complete such initial Business
Combination, or, if we complete such combination, our operations might suffer, either of which may adversely impact our business,
financial condition and results of operations.
Risks Relating
to Our Sponsor and Management Team:
We are dependent
upon our executive officers and directors and their loss could adversely affect our ability to operate.
Our operations
are dependent upon a relatively small group of individuals and, in particular, our executive officers and directors. We believe
that our success depends on the continued service of our officers and directors, at least until we have completed our initial Business
Combination. In addition, our executive officers and directors are not required to commit any specified amount of time to our affairs
and, accordingly, will have conflicts of interest in allocating their time among various business activities, including identifying
potential Business Combinations and monitoring the related due diligence. We do not have an employment agreement with, or key-man
insurance on the life of, any of our directors or executive officers. The unexpected loss of the services of one or more of our
directors or executive officers could have a detrimental effect on us.
Our ability
to successfully effect our initial Business Combination and to be successful thereafter will be totally dependent upon the efforts
of our key personnel, some of whom may join us following our initial Business Combination. The loss of key personnel could negatively
impact the operations and profitability of our post-combination business.
Our ability to
successfully effect our initial Business Combination is dependent upon the efforts of our key personnel. The role of our key personnel
in the target business, however, cannot presently be ascertained. Although some of our key personnel may remain with the target
business in senior management, director or advisory positions following our initial Business Combination, it is likely that some
or all of the management of the target business will remain in place. While we intend to closely scrutinize any individuals we
engage after our initial Business Combination, we cannot assure you that our assessment of these individuals will prove to be correct.
These individuals may be unfamiliar with the requirements of operating a company regulated by the SEC, which could cause us to
have to expend time and resources helping them become familiar with such requirements.
Our key
personnel may negotiate employment or consulting agreements with a target business in connection with a particular Business Combination,
and a particular Business Combination may be conditioned on the retention or resignation of such key personnel. These agreements
may provide for them to receive compensation following our initial Business Combination and as a result, may cause them to have
conflicts of interest in determining whether a particular Business Combination is the most advantageous.
Our
key personnel may be able to remain with our company after the completion of our initial Business Combination only if they are
able to negotiate employment or consulting agreements in connection with the Business Combination. Such negotiations would take
place simultaneously with the negotiation of the Business Combination and could provide for such individuals to receive compensation
in the form of cash payments and/or our securities for services they would render to us after the completion of the Business Combination.
Such negotiations also could make such key personnel’s retention or resignation a condition to any such agreement. The personal
and financial interests of such individuals may influence their motivation in identifying and selecting a target business. In addition,
pursuant to a registration and stockholder rights agreement, our Sponsor, upon consummation of an initial Business Combination,
will be entitled to nominate three individuals for election to our board of directors, as long as the Sponsor holds any securities
covered by the registration and stockholder rights agreement.
We may have
a limited ability to assess the management of a prospective target business and, as a result, may affect our initial Business Combination
with a target business whose management may not have the skills, qualifications or abilities to manage a public company.
When evaluating
the desirability of effecting our initial Business Combination with a prospective target business, our ability to assess the target
business’s management may be limited due to a lack of time, resources or information. Our assessment of the capabilities
of the target business’s management, therefore, may prove to be incorrect and such management may lack the skills, qualifications
or abilities we suspected. Should the target business’s management not possess the skills, qualifications or abilities necessary
to manage a public company, the operations and profitability of the post-combination business may be negatively impacted. Accordingly,
any stockholders who choose to remain stockholders following the Business Combination could suffer a reduction in the value of
their shares. Such stockholders are unlikely to have a remedy for such reduction in value unless they are able to successfully
claim that the reduction was due to the breach by our officers or directors of a duty of care or other fiduciary duty owed to them,
or if they are able to successfully bring a private claim under securities laws that the proxy solicitation or tender offer materials,
as applicable, relating to the Business Combination contained an actionable material misstatement or material omission.
The officers
and directors of an acquisition candidate may resign upon completion of our initial Business Combination. The loss of a Business
Combination target’s key personnel could negatively impact the operations and profitability of our post-combination business.
The role of an
acquisition candidate’s key personnel upon the completion of our initial Business Combination cannot be ascertained at this
time. Although we contemplate that certain members of an acquisition candidate’s management team will remain associated with
the acquisition candidate following our initial Business Combination, it is possible that members of the management of an acquisition
candidate will not wish to remain in place.
Our executive
officers and directors allocate their time to other businesses thereby causing conflicts of interest in their determination as
to how much time to devote to our affairs. This conflict of interest could have a negative impact on our ability to complete our
initial Business Combination.
Our executive
officers and directors are not required to, and do not, commit their full time to our affairs, which may result in a conflict of
interest in allocating their time between our operations and our search for a Business Combination and their other businesses.
We do not intend to have any full-time employees prior to the completion of our initial Business Combination. Each of our executive
officers and directors is engaged in several other business endeavors for which he may be entitled to substantial compensation,
and our executive officers and directors are not obligated to contribute any specific number of hours per week to our affairs.
Our independent directors also serve as officers and board members for other entities. If our executive officers’ and directors’
other business affairs require them to devote substantial amounts of time to such affairs in excess of their current commitment
levels, it could limit their ability to devote time to our affairs which may have a negative impact on our ability to complete
our initial Business Combination.
Our officers
and directors presently have, and any of them in the future may have additional, fiduciary or contractual obligations to other
entities, including another blank check company, and, accordingly, may have conflicts of interest in determining to which entity
a particular business opportunity should be presented.
Until
we consummate our initial Business Combination, we intend to engage in the business of identifying and combining with one or more
businesses. Each of our officers and directors presently has, and any of them in the future may have, additional fiduciary or contractual
obligations to other entities pursuant to which such officer or director is or will be required to present a Business Combination
opportunity to such entity, subject to his or her fiduciary duties under Delaware
law. Accordingly, they may have conflicts of interest in determining to which entity
a particular business opportunity should be presented. These conflicts may not be resolved in our favor and a potential target
business may be presented to another entity prior to its presentation to us, subject to their fiduciary duties under Delaware law.
In
addition, our Founders and our directors and officers may in the future become affiliated with other blank check companies that
may have acquisition objectives that are similar to ours. Accordingly, they may have conflicts of interest in determining to which
entity a particular business opportunity should be presented. These conflicts may not be resolved in our favor and a potential
target business may be presented to such other blank check companies prior to its presentation to us, subject to our officers’
and directors’ fiduciary duties under Delaware law. Our amended and restated memorandum and articles of association provide
that we renounce our interest in any Business Combination opportunity offered to any director or officer unless such opportunity
is expressly offered to such person solely in his or her capacity as a director or officer of the company and it is an opportunity
that we are able to complete on a reasonable basis.
Our executive
officers, directors, security holders and their respective affiliates may have competitive pecuniary interests that conflict with
our interests.
We have not adopted
a policy that expressly prohibits our directors, executive officers, security holders or affiliates from having a direct or indirect
pecuniary or financial interest in any investment to be acquired or disposed of by us or in any transaction to which we are a party
or have an interest. In fact, we may enter into a Business Combination with a target business that is affiliated with our Sponsor,
our directors or executive officers, although we do not intend to do so. Nor do we have a policy that expressly prohibits any such
persons from engaging for their own account in business activities of the types conducted by us, including the formation or participation
in one or more other blank check companies. Accordingly, such persons or entities may have a conflict between their interests and
ours.
The personal and
financial interests of our directors and officers may influence their motivation in timely identifying and selecting a target business
and completing a Business Combination. Consequently, our directors’ and officers’; discretion in identifying and selecting
a suitable target business may result in a conflict of interest when determining whether the terms, conditions and timing of a
particular Business Combination are appropriate and in our stockholders’ best interest. If this were the case, it would be
a breach of their fiduciary duties to us as a matter of Delaware law and we or our stockholders might have a claim against such
individuals for infringing on our stockholders’ rights. However, we might not ultimately be successful in any claim we may
make against them for such reason.
We may engage
in a Business Combination with one or more target businesses that have relationships with entities that may be affiliated with
our Sponsor, executive officers, directors or existing holders which may raise potential conflicts of interest.
In light of the
involvement of our Sponsor, executive officers and directors with other entities, we may decide to acquire one or more businesses
affiliated with our Sponsor, executive officers, directors or existing holders. Our directors also serve as officers and board
members for other entities. Our directors and officers, form or participate in other blank check companies similar to ours during
the period in which we are seeking an initial Business Combination. Such entities may compete with us for Business Combination
opportunities. Our Sponsor, officers and directors are not currently aware of any specific opportunities for us to complete our
initial Business Combination with any entities with which they are affiliated, and there have been no substantive discussions concerning
a Business Combination with any such entity or entities. Although we do not specifically focus on, or target, any transaction with
any affiliated entities, we would pursue such a transaction if we determined that such affiliated entity met our criteria for a
Business Combination and such transaction was approved by a majority of our independent and disinterested directors. Despite our
agreement to obtain an opinion from an independent investment banking firm, or from an independent accounting firm, regarding the
fairness to our company from a financial point of view of a Business Combination with one or more domestic or international businesses
affiliated with our Sponsor, executive officers, directors or existing holders, potential conflicts of interest still may exist
and, as a result, the terms of the Business Combination may not be as advantageous to our Public Stockholders as they would be
absent any conflicts of interest.
Since our
Sponsor, executive officers and directors will lose their entire investment in us if our initial Business Combination is not completed
(other than with respect to Public Shares they may acquire during or after our Initial Public Offering), a conflict of interest
may arise in determining whether a particular Business Combination target is appropriate for our initial Business Combination.
On
July 23, 2020, an affiliate of our Sponsor paid an aggregate of $25,000, or approximately $0.002 per share, to cover certain
of our offering costs in consideration of 14,375,000 shares of our Class B common stock, par value $0.0001. Such shares were
subsequently transferred to our Sponsor. Prior to the initial investment in the company of $25,000 by our Sponsor, the company
had no assets, tangible or intangible. On October 6, 2020, our Sponsor surrendered 2,875,000 shares of our Class B common
stock, which decreased the outstanding Founder Shares from 14,375,000 shares to 11,500,000 shares. On November 20, 2020, 1,232,044
shares of our Class B common stock were forfeited, which decreased the outstanding Founder Shares from 11,500,000 to 10,267,956.
The number of Founder Shares issued was determined based on the expectation that such Founder Shares would represent 20% of the
outstanding shares after our Initial Public Offering. The Founder Shares will be worthless
if we do not complete an initial Business Combination. In addition, our Sponsor has purchased an aggregate of 10,214,365
Private Placement warrants, each exercisable to purchase one share of our Class A common stock at $11.50 per share, for an
aggregate purchase price of $10,214,365, or $1.00 per whole warrant, that will also be worthless if we do not complete a Business
Combination. Holders of Founder Shares have agreed (A) to vote any shares owned by them in favor of any proposed Business
Combination and (B) not to redeem any Founder Shares in connection with a stockholder vote to approve a proposed initial Business
Combination. In addition, we may obtain loans from our Sponsor, affiliates of our Sponsor or an officer or director, and we may
pay our Sponsor, officers, directors and any of their respective affiliates fees and expenses in connection with identifying, investigating
and completing an initial Business Combination. The personal and financial interests of our executive officers and directors may
influence their motivation in identifying and selecting a target Business Combination, completing an initial Business Combination
and influencing the operation of the business following the initial Business Combination. This risk may become more acute as the
24-month anniversary of the closing of our Initial Public Offering nears, which is the deadline for our completion of an initial
Business Combination.
Our Sponsor
controls a substantial interest in us and thus may exert a substantial influence on actions requiring a stockholder vote, potentially
in a manner that you do not support.
Our Sponsor owns,
on an as-converted basis, 20% of our issued and outstanding Class A common stock. Accordingly, they may exert a substantial
influence on actions requiring a stockholder vote, potentially in a manner that you do not support, including amendments to our
amended and restated Certificate of Incorporation. If our Sponsor purchases any additional shares of our Class A common stock
in the market or in privately negotiated transactions, this would increase their control. Neither our Sponsor nor, to our knowledge,
any of our officers or directors, have any current intention to purchase additional securities. Factors that would be considered
in making such additional purchases would include consideration of the current trading price of our Class A common stock.
In addition, our board of directors, whose members were elected by our Sponsor, is and will be divided into three classes, each
of which will generally serve for a terms for three years with only one class of directors being elected in each year. We may not
hold an annual meeting of stockholders to elect new directors prior to the completion of our initial Business Combination, in which
case all of the current directors will continue in office until at least the completion of the Business Combination. If there is
an annual meeting, as a consequence of our “staggered” board of directors, only a minority of the board of directors
will be considered for election and our Sponsor, because of its ownership position, will have considerable influence regarding
the outcome. In addition, prior to the completion of an initial Business Combination, holders of a majority of our Founder Shares
may remove a member of the board of directors for any reason. Accordingly, our Sponsor will continue to exert control at least
until the completion of our initial Business Combination.
General Risks:
We identified
a material weakness in our internal control over financial reporting. This material weakness could continue to adversely affect our ability
to report our results of operations and financial condition accurately and in a timely manner.
Our management is responsible for establishing and maintaining adequate internal control over financial reporting designed to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes
in accordance with GAAP. Our management also evaluates the effectiveness of our internal controls and we will disclose any changes and
material weaknesses identified through such evaluation in those internal controls. A material weakness is a deficiency, or a combination
of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement
of our annual or interim financial statements will not be prevented or detected on a timely basis.
As described elsewhere in this Report, we identified a material weakness in our internal control over financial reporting related to the
classification of our warrants as equity instead of liabilities. On May 11, 2021, our audit committee authorized management to restate
our audited financial statements for the year ended December 31, 2020, and, accordingly, management concluded that the control deficiency
that resulted in the incorrect classification of our warrants constituted a material weakness as of December 31, 2020. This material weakness
resulted in a material misstatement of our warrant liabilities, change in fair value of warrant liabilities, additional paid-in capital,
accumulated deficit and related financial disclosures for the Affected Periods.
We have implemented a remediation plan, described under Item 9A, Evaluation of Disclosure Controls and Procedures, to remediate the material
weakness surrounding our historical presentation of our warrants but can give no assurance that the measures we have taken will prevent
any future material weaknesses or deficiencies in internal control over financial reporting. Even though we have strengthened our controls
and procedures, in the future those controls and procedures may not be adequate to prevent or identify irregularities or errors or to
facilitate the fair presentation of our financial statements.
Our warrants are accounted for as derivative liabilities with
changes in fair value each period included in earnings, which may have an adverse effect on the market price of our Class A Common Stock
or may make it more difficult for us to consummate an initial business combination.
We account for our Warrants as derivative warrant liabilities. At each
reporting period (1) the accounting treatment of the Warrants will be re-evaluated for proper accounting treatment as a liability or equity
and (2) the fair value of the liability of the Public Warrants and Private Placement Warrants will be remeasured and the change in the
fair value of the liability will be recorded as other income (expense) in our income statement. The impact of changes in fair value on
earnings may have an adverse effect on the market price of our Class A Common Stock. In addition, it could make us less attractive to
potential targets.
Cyber incidents
or attacks directed at us could result in information theft, data corruption, operational disruption and/or financial loss.
We depend on digital
technologies, including information systems, infrastructure and cloud applications and services, including those of third parties
with which we may deal. Sophisticated and deliberate attacks on, or security breaches in, our systems or infrastructure, or the
systems or infrastructure of third parties or the cloud, could lead to corruption or misappropriation of our assets, proprietary
information and sensitive or confidential data. As an early stage company without significant investments in data security protection,
we may not be sufficiently protected against such occurrences. We may not have sufficient resources to adequately protect against,
or to investigate and remediate any vulnerability to, cyber incidents. It is possible that any of these occurrences, or a combination
of them, could have adverse consequences on our business and lead to financial loss.
Changes
in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, including our
ability to negotiate and complete our initial Business Combination and results of operations.
We are subject
to laws and regulations enacted by national, regional and local governments. In particular, we are required to comply with certain
SEC and other legal requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming
and costly. Those laws and regulations and their interpretation and application may also change from time to time and those changes
could have a material adverse effect on our business, investments and results of operations. In addition, a failure to comply with
applicable laws or regulations, as interpreted and applied, could have a material adverse effect on our business, including our
ability to negotiate and complete our initial Business Combination, and results of operations.
We are an
emerging growth company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure
requirements available to emerging growth companies, this could make our securities less attractive to investors and may make it
more difficult to compare our performance with other public companies.
We are an “emerging
growth company” within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain
exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies
including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the
Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements,
and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of
any golden parachute payments not previously approved. As a result, our stockholders may not have access to certain information
they may deem important. We could be an emerging growth company for up to five years, although circumstances could cause us to
lose that status earlier, including if the Market Value of our Class A common stock held by non-affiliates equals or exceeds
$700.0 million as of any June 30 before that time, in which case we would no longer be an emerging growth company as
of the following December 31. We cannot predict whether investors will find our securities less attractive because we will
rely on these exemptions. If some investors find our securities less attractive as a result of our reliance on these exemptions,
the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our
securities and the trading prices of our securities may be more volatile.
Further, Section 102(b)(1) of
the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards
until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not
have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting
standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements
that apply to non-emerging growth companies but any such an election to opt out is irrevocable. We have elected not to opt out
of such extended transition period which means that when a standard is issued or revised and it has different application dates
for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies
adopt the new or revised standard. This may make comparison of our financial statements with another public company which is neither
an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult
or impossible because of the potential differences in accountant standards used.