Item 1. Business
Overview
We are a blank check company formed as a Delaware corporation in 2020
for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination
with one or more businesses, which we refer to throughout this Report as our initial business combination. We seek to acquire and operate
a business in the consumer industry and we believe that our management team is well-suited to identify opportunities which have the potential
to generate attractive risk-adjusted returns for our stockholders. However, we are not limited to this industry, and we may pursue a business
combination opportunity in any business or industry we choose, including one outside of the United States.
Our management team has previously engaged in discussions with potential
business combination targets in their capacity as officers of New Providence Acquisition Corp. (“NPA I”), and our management
team may in the future engage in discussions with business combination targets in their capacity as officers of New Providence Acquisition
Corp. III (“NPA III”). We may pursue business combination targets that had previously been in discussions with NPA I’s
management team prior to NPA I’s entry into a business combination agreement with AST & Science LLC (“AST”). While
NPA III intends to pursue a potential business combination with a business in the technology industry, it is not limited to pursuing an
initial business combination in that industry, and we are not limited to pursuing an initial business combination in the consumer industry,
therefore we may pursue business combination targets that NPA III’s management team may enter into discussions with following its
initial public offering. In addition, we raised $250 million in gross proceeds) as compared to the $300 million in gross proceeds (or
$345 million if the underwriter’s over-allotment option is exercised in full) that NPA III is seeking to raise. As a result of the
difference in the proposed size of the respective offerings, we are expecting to pursue a business combination target with a smaller enterprise
value than we expect NPA III would pursue. Given the different industry focus and proposed offering size of NPA III, we do not currently
expect to be in discussions with any potential business combination target concurrently with NPA III.
Our executives have proven track records in identifying undervalued
companies and cultivating strategies to maximize their operating results and market potential, thereby generating value for stockholders.
Our management team is led by our Chairman, Alexander Coleman, our Chief Executive Officer, Gary P. Smith, and our Chief Financial Officer,
James Bradley. Our executives have worked together for more than a decade, including most recently with NPA I in the same capacities they
will service the company. NPA I went public in September 2019 and completed a business combination with AST on April 6, 2021. Our executives
will also be serving in the same roles for NPA III, which is in the process of engaging in an initial public offering.
Corporate Information
Facilities
Our executive offices are located at 10900 Research Blvd., Suite 160C,
PMB 1081, Austin, TX 78759 and our telephone number is (561) 231-7070. We maintain a corporate website at https://npa-corp.com/npa-ii/.
Our executive offices are provided to us by our sponsor. Commencing on November 4, 2021, we have agreed to pay our sponsor a total of
$20,000 per month for, among other things, the provision of the services of one or more investment professionals, who may be related parties
of our sponsor or of one of our executive officers. An affiliate of our sponsor makes certain payments to James Bradley, our chief financial
officer, in consideration for, among other things, transaction management and negotiation services, which include, but are not limited
to, his services to our sponsor. For more information, see the section of this Report entitled “Item 13—Certain Relationships
and Related Transactions, and Director Independence”. We consider our current office space adequate for our current operations.
Employees
We currently have three 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 initial business combination process we
are in. We do not intend to have any full-time employees prior to the completion of our initial business combination.
Experience with a Special Purpose Acquisition Vehicle
Our management team has previous experience in the execution of a public
acquisition vehicle. Mr. Coleman has served as Chairman, Mr. Smith served as Chief Executive Officer and Mr. Bradley served as Chief Financial
Officer of New Providence Acquisition Corp., a special purpose acquisition company formed for substantially similar purposes as our company
and that completed its initial public offering in September 2019 and completed a business combination with AST on April 6, 2021. AST is
building the first, and only, space-based global broadband cellular network to operate directly with standard, unmodified mobile devices
based on its extensive IP and patent portfolio. Its team of engineers and space scientists are on a mission to eliminate the connectivity
gaps faced by today’s five billion mobile subscribers and finally bring broadband to the billions who remain unconnected.
Business Strategy & Competitive Strengths
Our acquisition and value creation strategy will be to identify, acquire
and, after the initial business combination, build a company in the consumer sector, which complements the experience of our management
team and which can benefit from their management and operating expertise. In addition to leveraging our management team’s network
of proprietary and public transaction sources, where we believe the combination of our relationships, knowledge and experience could effect
a positive transformation or augmentation of an existing business to improve its value proposition, we also plan to use the following
competitive strengths to our advantage in the search and combination process:
Business Strategy
Our focus is to identify and acquire a company that generates long
term shareholder value in the public markets. We intend to target a company that provides critical resources and/or services to the technologies
powering the 21st century industrial economy. Additionally, we intend to leverage our management’s deep knowledge
of natural resources, real assets and innovative technologies as well as our extensive network of relationships with management of public
and private companies, investment bankers, and attorneys to identify and evaluate a number of business combination opportunities. We intend
to deploy a pro-active, thematic sourcing strategy focused on companies where we believe the combination of our investment track record,
operating experience, and strong relationship networks can be catalysts to transform companies and can help accelerate the target business’s
growth and performance.
| ● | extensive experience in both investing in and operating across the consumer sector; |
| ● | experience in sourcing, structuring, acquiring, operating, developing, growing, financing and selling businesses; |
| ● | relationships with sellers, financing providers and target management teams; and |
| ● | experience in executing transactions in the consumer sector under varying economic and financial market conditions. |
We expect these networks will provide our management team with a robust
flow of business combination opportunities. In addition, we anticipate that target business candidates will be brought to our attention
from various unaffiliated sources, which may include investment market participants, private equity groups, investment banking firms,
consultants, accounting firms and large business enterprises. Upon completion of our initial public offering, members of our management
team will communicate with their networks of 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 potentially interesting leads.
Past performance of our management team or New Providence Acquisition
Corp. is not a guarantee either (i) of success with respect to any business combination we may consummate or (ii) that we will be able
to identify a suitable candidate for our initial business combination. You should not rely on the historical performance record of such
parties as indicative of our future performance. Such parties have not had experience with blank check companies or special purpose acquisition
companies in the past. In addition, such parties may have conflicts of interest with other entities to which they owe fiduciary or contractual
obligations with respect to initial business combination opportunities. For a list of our executive officers, directors and entities for
which a conflict of interest may or does exist between such persons and the company, as well as the priority and preference that such
entity has with respect to performance of obligations and presentation of business opportunities to us, please refer to the table and
subsequent explanatory paragraph under “Item 10—Directors, Executive Officers and Corporate Governance—Conflicts of
Interest”.
Acquisition Criteria
We have identified the following general criteria and guidelines which
we believe are important in evaluating prospective target businesses. We seek to acquire a company which:
| ● | Has a market and/or cost leadership position and would benefit from our management expertise and extensive relationships (i.e., “rewards
stellar management”); |
| ● | Occupies relatively fast-growing markets (i.e., “top line growth”); |
| ● | Has strong drivers of revenue and earnings growth and exhibits “barriers to competition”; |
| ● | Has the potential to generate strong and stable free cash flow; |
| ● | Is underperforming its operating potential and underutilizing its balance sheet; and |
| ● | By “creating strategic value” offers an attractive risk-adjusted return for our stockholders. |
These criteria are not intended to be exhaustive. Any evaluation relating
to the merits of a particular initial business combination may be based, to the extent relevant, on these general guidelines as well as
other considerations, factors and criteria that our management team may deem relevant. In the event that we decide to enter into our initial
business combination with a target business that, in our judgement, does not meet the above criteria and guidelines, we will disclose
that the target business does not meet the above criteria in our stockholder communications related to our initial business combination,
which, as discussed in this Report, would be in the form of proxy solicitation materials or tender offer documents that we would file
with the U.S. Securities and Exchange Commission.
Our Business Combination Process
In evaluating prospective business combinations, we expect to conduct
a thorough due diligence review process that may encompass, among other things, a review of historical and projected financial and operating
data, meetings with management and their advisors (if applicable), on-site inspection of facilities and assets, discussion with customers
and suppliers, legal reviews and other reviews as we deem appropriate.
We will also leverage our operational and capital allocation experience
in order to:
| ● | Assemble a team of industry and financial experts: For each potential transaction, we intend to assemble a team of industry
and financial experts to supplement our management’s efforts to identify and resolve key issues facing the company. We intend to
construct an operating and financial plan which optimizes the potential to grow stockholder value. With extensive experience investing
in both healthy and underperforming businesses, we expect that our management will be able to demonstrate to the target business and its
stakeholders that we have the resources and expertise to lead the combined company through complex and often turbulent market conditions
and provide the strategic and operational direction necessary to grow the business in order to maximize cash flows and improve the overall
strategic prospects for the business; |
| ● | Conduct rigorous research and analysis: Performing disciplined, bottom-up fundamental research and analysis is core to our
strategy, and we intend to conduct extensive due diligence to evaluate the impact that a transaction may have on the target business; |
| ● | Acquire the target company at an attractive price relative to our view of its intrinsic value: Combining rigorous bottom-up
analysis as well as input from industry and financial experts, the management team intends to develop its view of the intrinsic value
of the potential business combination. In doing so, the management team will evaluate future cash flow potential, relative industry valuation
metrics and precedent transactions to inform its view of intrinsic value, with the intention of creating a business combination at an
attractive price relative to such view; |
| ● | Implement operating and financial structuring opportunities: We believe our management team has the ability to structure and
execute a business combination which will provide the combined business with a capital structure that will support growth in stockholder
value and give the combined company the flexibility needed to grow organically and/or through strategic acquisitions or divestitures.
We intend to also develop and implement strategies and initiatives to improve the business’s operating and financial performance
and create a platform for growth; and |
| ● | Seek follow-on strategic acquisitions and divestitures to further grow stockholder value: The management team intends to analyze
the strategic direction of the company and evaluate non-core asset sales to create financial and/or operating flexibility needed for the
company to engage in organic or inorganic growth. Specifically, the management team intends to evaluate opportunities for industry consolidation
in the company’s core lines of business as well as opportunities to vertically or horizontally integrate with other industry participants. |
Following our initial business combination, we intend to evaluate opportunities
to enhance stockholder value, including developing and implementing corporate strategies and initiatives to provide financial and operating
runway such that the company can improve its profitability and long-term value. In doing so, the management team anticipates evaluating
corporate governance, opportunistically accessing capital markets and other opportunities to enhance liquidity, identifying acquisition
and divestiture opportunities, and properly aligning management and board incentives with growing stockholder value.
We are not prohibited from pursuing an initial business combination
with a company that is affiliated with our sponsor, officers or directors. In the event we seek to complete our initial business combination
with a company that is affiliated with our sponsor, officers or directors, we, or a committee of independent directors, will obtain an
opinion from independent investment banking firm or another independent entity that commonly renders valuation opinions that our initial
business combination is fair to our company and our stockholders from a financial point of view.
Members of our management team may directly or indirectly own our founders
shares, Class A common stock and/or private placement warrants following our initial public offering, 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. In particular, because the founder shares were purchased at approximately $0.004 per share, the holders of our founder shares
(including members of our management team that directly or indirectly own founder shares) could make a substantial profit after our initial
business combination even if our public stockholders lose money on their investment as a result of a decrease in the post-combination
value of their shares of common stock (after accounting for any adjustments in connection with an exchange or other transaction contemplated
by the business combination). Further, each of our officers and directors may have a conflict of interest with respect to evaluating a
particular business combination if the retention or resignation of any such officers and directors were to be included by a target business
as a condition to any agreement with respect to our initial business combination.
Each of our officers and certain of our directors presently has, and
any of them in the future may have additional, fiduciary, contractual or other obligations or duties to one or more other entities, including
NPA III, pursuant to which such officer or director is or will be required to present a business combination opportunity to such entities.
Accordingly, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for one or more
entities to which he or she has fiduciary, contractual or other obligations or duties, he or she may honor these obligations and duties
to present such business combination opportunity to such entities first, and only present it to us if such entities reject the opportunity
and he or she determines to present the opportunity to us. These conflicts may not be resolved in our favor and a potential target business
may be presented to another entity prior to its presentation to us.
We do not believe, however, that the fiduciary, contractual or other
obligations or duties of our officers or directors will materially affect our ability to complete our initial business combination. Our
amended and restated certificate of incorporation provides that we renounce our interest in any corporate opportunity offered to any director
or officer unless (i) such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our
company, (ii) such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us
to pursue and (iii) the director or officer is permitted to refer the opportunity to us without violating another legal obligation.
In addition, our sponsor, officers and directors may participate in
the formation of, or become an officer or director of, any other blank check company prior to completion of our initial business combination.
As a result, our sponsor, officers or directors could have conflicts of interest in determining whether to present business combination
opportunities to us or to any other blank check company with which they may become involved. For example, each of Messrs. Coleman and
Smith are currently officers and directors of, and Mr. Bradley is currently an officer of, NPA III and owes fiduciary duties to NPA III.
Although we have no formal policy in place for vetting potential conflicts of interest, our board of directors will review any potential
conflicts of interest on a case-by-case basis. In particular, affiliates of our sponsor are currently sponsoring one other blank check
company, NPA III. Any such companies, including NPA III, may present additional conflicts of interest in pursuing an acquisition target.
Lastly, our sponsor, 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 management time among various
business activities, including identifying potential business combinations and monitoring the related due diligence.
Value Creation Philosophy Post-Merger
After the initial business combination, our management team intends
to apply a rigorous approach to enhancing stockholder value, including evaluating the experience and expertise of incumbent management
and making changes when appropriate, examining opportunities for revenue enhancement, cost savings, operating efficiencies and strategic
acquisitions and divestitures, and accessing the financial markets to optimize the company’s capital structure. Our management team
intends to pursue post-merger initiatives through participation on the board of directors, through direct involvement with company operations
and/or calling upon former managers and advisors when necessary. We currently expect these initiatives to include the following:
| ● | Corporate governance and oversight: Actively participating as board members can include many activities: (i) monthly or quarterly
board meetings; (ii) chairing standing (compensation, audit or investment committees) or special committees; (iii) replacing or supplementing
company management teams when necessary; (iv) adding outside directors with industry expertise which may or may not include members of
our own board of directors; (v) providing guidance on strategic and operational issues including revenue enhancement opportunities, cost
savings, operating efficiencies, reviewing and testing annual budgets, reviewing acquisitions and divestitures; and (vi) assisting in
accessing capital markets to further optimize financing costs and fund expansion. As active members on the board of directors of the company,
our management team members also intend to evaluate the suitability of the incumbent organization leaders; |
| ● | Direct operations involvement: The management team members, through ongoing board service or direct leadership within the business
combination, intend to actively engage with company management to effect positive changes in the organization. These activities may include:
(i) establishing an agenda for management and instilling a sense of accountability and urgency; (ii) aligning the interests of management
with growing stockholder value; (iii) providing strategic planning and management consulting assistance, particularly as regards re-invested
capital and growth capital in order to grow revenues, achieve more optimal operating scale, and eliminate unnecessary costs; and (iv)
establishing measurable key performance metrics and accretive internal processes; |
| ● | M&A expertise and add-on acquisitions: Our management team has expertise in identifying, acquiring and integrating both
synergistic and margin-enhancing businesses. We intend to, wherever possible, utilize M&A as a strategic tool to strengthen both the
financial profile of the business we acquire and its competitive positioning. We would only enter into accretive business combinations
where our management team or the acquired company’s management team can seamlessly transition to working together as one organization
and team; and |
| ● | Access to portfolio company managers and advisors: Over their collective history of investing in and controlling businesses,
our management team members have developed strong professional relationships with former successful company managers and advisors. When
appropriate, we intend to bring in outside directors, managers and consultants to assist in corporate governance and operating turnaround
activities. |
Status as a Public Company
We believe our structure will make us an attractive business combination
partner to target businesses. As a public company, we offer a target business an alternative to the traditional initial public offering
through a merger or other business combination with us. Following an initial business combination, we believe the target business would
have greater access to capital and additional means of creating management incentives that are better aligned with stockholders’
interests than it would as a private company. A target business can further benefit by augmenting its profile among potential new customers
and vendors and aid in attracting talented employees. In a business combination transaction with us, the owners of the target business
may, for example, exchange their shares of stock in the target business for our shares of Class A common stock (or shares of a new holding
company) or for a combination of our shares of Class A common stock and cash, allowing us to tailor the consideration to the specific
needs of the sellers.
Although there are various costs and obligations associated with being
a public company, we believe target businesses will find this method a more expeditious and cost-effective method to becoming a public
company than the typical initial public offering. The typical initial public offering process takes a significantly longer period of time
than the typical business combination transaction process, and there are significant expenses in the initial public offering process,
including underwriting discounts and commissions, marketing and road show efforts that may not be present to the same extent in connection
with an initial business combination with us.
Furthermore, once a proposed initial business combination is completed,
the target business will have effectively become public, whereas an initial public offering is always subject to the underwriter’s
ability to complete the offering, as well as general market conditions, which could delay or prevent the offering from occurring or could
have negative valuation consequences. Following an initial business combination, we believe the target business would then have greater
access to capital and an additional means of providing management incentives consistent with stockholders’ interests and the ability
to use its shares as currency for acquisitions. Being a public company can offer further benefits by augmenting a company’s profile
among potential new customers and vendors and aid in attracting talented employees.
While we believe that our structure and our management team’s
backgrounds will 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
With funds available for an initial business combination initially
in the amount of $246,250,000, after payment of the estimated expenses of our initial public offering and $8,750,000 of deferred underwriting
fees, in each case before fees and expenses associated with our initial business combination, we offer a target business a variety of
options such as creating a liquidity event for its owners, providing capital for the potential growth and expansion of its operations
or strengthening its balance sheet by reducing its debt or leverage ratio. Because we are able to complete our initial business combination
using our cash, debt or equity securities, or a combination of the foregoing, we have the flexibility to use the most efficient combination
that will allow us to tailor the consideration to be paid to the target business to fit its needs and desires. However, we have not taken
any steps to secure third party financing and there can be no assurance it will be available to us.
Effecting Our Initial Business Combination
We are not presently engaged in, and we will not engage in, any operations
for an indefinite period of time following our initial public offering. We intend to effectuate our initial business combination using
cash from the proceeds of our initial public offering and the private placement of the private placement warrants, the proceeds of the
sale of our shares in connection with our initial business combination (pursuant to forward purchase agreements or backstop agreements
entered into following the consummation of our initial public offering or otherwise), shares issued to the owners of the target, debt
issued to bank or other lenders or the owners of the target, or a combination of the foregoing. We may seek to complete our initial business
combination with a company or business that may be financially unstable or in its early stages of development or growth, which would subject
us to the numerous risks inherent in such companies and businesses.
If our initial business combination is paid for using equity or debt
securities, or not all of the funds released from the trust account are used for payment of the consideration in connection with our initial
business combination or used for redemptions of our Class A common stock, we may apply the balance of the cash released to us from the
trust account for general corporate purposes, including for maintenance or expansion of operations of the post-transaction company, the
payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of
other companies or for working capital.
We may seek to raise additional funds through a private offering of
debt or equity securities in connection with the completion of our initial business combination, and we may effectuate our initial business
combination using the proceeds of such offering rather than using the amounts held in the trust account. In addition, we intend to target
businesses larger than we could acquire with the net proceeds of our initial public offering and the sale of the private placement warrants,
and may as a result be required to seek additional financing to complete such proposed initial business combination. Subject to compliance
with applicable securities laws, we would expect to complete such financing only simultaneously with the completion of our initial business
combination. In the case of an initial business combination funded with assets other than the trust account assets, our proxy materials
or tender offer documents disclosing the initial business combination would disclose the terms of the financing and, only if required
by law, we would seek stockholder approval of such financing. There are no prohibitions on our ability to raise funds privately or through
loans in connection with our initial business combination. At this time, we are not a party to any arrangement or understanding with any
third party with respect to raising any additional funds through the sale of securities or otherwise.
Sources of Target Businesses
We anticipate that target business candidates will be brought to our
attention from various unaffiliated sources, including investment bankers and investment professionals. Target businesses may be brought
to our attention by such unaffiliated sources as a result of being solicited by us by 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 our
final prospectus relating to our initial public offering and our subsequent filings under the Exchange Act, and know what types of businesses
we are targeting. Our officers and directors, as well as our sponsor and their affiliates, may also bring to our attention target business
candidates that they become aware of through their business contacts as a result of formal or informal inquiries or discussions they may
have, as well as attending trade shows or conventions. In addition, we expect to receive a number of proprietary deal flow opportunities
that would not otherwise necessarily be available to us as a result of the business relationships of our officers and directors and our
sponsor and their respective industry and business contacts as well as their affiliates. 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, advisory fee or other compensation
to be determined in an arm’s length negotiation based on the terms of the transaction. We will engage a finder only to the extent
our management determines that the use of a finder may bring opportunities to us that may not otherwise be available to us or if finders
approach us on an unsolicited basis with a potential transaction that our management determines is in our best interest to pursue. Payment
of finder’s fees is customarily tied to completion of a transaction, in which case any such fee will be paid out of the funds held
in the trust account. In no event will our sponsor or any of our existing officers or directors, or any entity with which our sponsor
or officers are affiliated, be paid any finder’s fee, reimbursement, consulting fee, monies in respect of any payment of a loan
or other compensation by the company prior to, or in connection with any services rendered 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). Although 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 initial business combination, we do not have a policy
that prohibits our sponsor, executive officers or directors, or any of their respective affiliates, from negotiating for the reimbursement
of out-of-pocket expenses by a target business. We have agreed to pay our sponsor a total of $20,000 per month for, among other things,
the provision of the services of one or more investment professionals, who may be related parties of our sponsor or of one of our executive
officers. An affiliate of our sponsor makes certain payments to James Bradley, our chief financial officer, in consideration for, among
other things, transaction management and negotiation services, which include, but are not limited to, his services to our sponsor. For
more information, see “Item 13—Certain Relationships and Related Transactions, and Director Independence”. We have also
agreed to reimburse our sponsor for any out-of-pocket expenses related to identifying, investigating and completing an initial business
combination. Some of our officers and directors may enter into employment or consulting agreements with the post-transaction company following
our initial business combination. The presence or absence of any such fees or arrangements will not be used as a criterion in our selection
process of an initial business combination candidate.
We are not prohibited from pursuing an initial business combination
with a company that is affiliated with our sponsor, officers or directors, or their respective affiliates. In the event we seek to complete
our initial business combination with a company that is affiliated with our sponsor, officers or directors, or their respective affiliates,
we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm or another independent
entity that commonly renders valuation opinions that our initial business combination is fair to our company and our stockholders from
a financial point of view. We are not required to obtain such an opinion in any other context.
As more fully discussed in “Item 10—Directors, Executive
Officers and Corporate Governance—Conflicts of Interest,” if any of our officers or directors becomes aware of an initial
business combination opportunity that falls within the line of business of any entity to which he or she has pre-existing fiduciary or
contractual obligations, he or she may be required to present such business combination opportunity to such entity prior to presenting
such business combination opportunity to us. Our officers and directors currently have certain relevant fiduciary duties or contractual
obligations that may take priority over their duties to us.
Selection of a Target Business and Structuring of our Initial Business
Combination
As required by NASDAQ rules, our initial business combination will
be approved by a majority of our independent directors. NASDAQ rules also require that we must complete one or more business combinations
having an aggregate fair market value of at least 80% of the value of the assets held in the trust account (excluding the deferred underwriting
commissions and taxes payable) at the time of our signing a definitive agreement in connection with our initial business combination.
The fair market value of our initial business combination will be determined by our board of directors based upon one or more standards
generally accepted by the financial community, such as discounted cash flow valuation, a valuation based on trading multiples of comparable
public businesses or a valuation based on the financial metrics of M&A transactions of comparable businesses. If our board of directors
is not able to independently determine the fair market value of our initial business combination, we will obtain an opinion from an independent
investment banking firm or another independent entity that commonly renders valuation opinions with respect to the satisfaction of such
criteria. While we consider it unlikely that our board of directors will not be able to make an independent determination of the fair
market value of our initial business combination, it may be unable to do so if it is less familiar or experienced with the business of
a particular target or if there is a significant amount of uncertainty as to the value of a target’s assets or prospects. We do
not intend to purchase multiple businesses in unrelated industries in conjunction with our initial business combination. Subject to this
requirement, our management will have virtually unrestricted flexibility in identifying and selecting one or more prospective target businesses,
although we will not be permitted to effectuate our initial business combination with another blank check company or a similar company
with nominal operations.
We anticipate structuring our initial business combination either (i)
in such a way so that the post-transaction company in which our public stockholders own shares will own or acquire 100% of the equity
interests or assets of the target business or businesses, or (ii) in such a way so that the post-transaction company owns or acquires
less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management team or
stockholders, or for other reasons. However, we will only complete an initial business combination if the post-transaction company owns
or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target
sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended, or the
“Investment Company Act”. Even if the post-transaction company owns or acquires 50% or more of the voting securities of the
target, our stockholders prior to the initial business combination may collectively own a minority interest in the post-transaction company,
depending on valuations ascribed to the target and us in the initial business combination. For example, we could pursue a transaction
in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock of a target. In this case, we
would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our
stockholders immediately prior to our initial business combination could own less than a majority of our outstanding shares subsequent
to our initial business combination. If less than 100% of the equity interests or assets of a target business or businesses are owned
or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be taken
into account for purposes of NASDAQ’s 80% of fair market value test. If the initial business combination involves more than one
target business, the 80% of fair market value test will be based on the aggregate value of all of the transactions and we will treat the
target businesses together as the initial business combination for purposes of a tender offer or for seeking stockholder approval, as
applicable.
There is no basis for investors in our initial public offering to evaluate
the possible merits or risks of any target business with which we may ultimately complete our initial business combination. To the extent
we effect our initial business combination with a company or business that may be financially unstable or in its early stages of development
or growth we may be affected by numerous risks inherent in such company or business. Although our management will endeavor to evaluate
the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all significant risk
factors.
In evaluating a prospective business target, we expect to 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 and other information that 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.
In addition, we have agreed not to enter into a definitive agreement
regarding an initial business combination without the prior consent of our sponsor.
Lack of Business Diversification
For an indefinite period of time after the completion of our initial
business combination, the prospects for our success may depend entirely on the future performance of a single business. Unlike other entities
that have the resources to complete business combinations with multiple entities in one or several industries, it is probable that we
will not have the resources to diversify our operations and mitigate the risks of being in a single line of business. In addition, we
intend to focus our search for an initial business combination in a single industry. By completing our initial business combination with
only a single entity, our lack of diversification may:
| ● | subject us to negative economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact
on the particular industry in which we operate after our initial business combination, and |
| ● | cause us to depend on the marketing and sale of a single product or limited number of products or services. |
Limited Ability to Evaluate the Target’s Management Team
Although we intend to 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’ 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 an initial 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. 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. Presented in the table below is a graphic explanation
of the types of initial business combinations we may consider and whether stockholder approval is currently required under Delaware law
for each such transaction.
| Type of Transaction | |
Whether Stockholder Approval is Required |
| Purchase of assets | |
No |
| Purchase of stock of target not involving a merger with the company | |
No |
| Merger of target into a subsidiary of the company | |
No |
| Merger of the company with a target | |
Yes |
Under NASDAQ’s listing rules, stockholder approval would be required
for our initial business combination if, for example:
| ● | we issue shares of Class A common stock that will be equal to or in excess of 20% of the number of shares of our Class A common stock
then outstanding; |
| ● | any of our directors, officers or substantial security holders (as defined by NASDAQ rules) has a 5% or greater interest, directly
or indirectly, in the target business or assets to be acquired and if the number of shares of common stock to be issued, or if the number
of shares of common stock into which the securities may be convertible or exercisable, exceeds either (a) 1% of the number of shares of
common stock or 1% of the voting power outstanding before the issuance in the case of any of our directors and officers or (b) 5% of the
number of shares of common stock or 5% of the voting power outstanding before the issuance in the case of any substantial security holders;
or |
| ● | the issuance or potential issuance of common stock will result in our undergoing a change of control. |
Permitted Purchases of our Securities
If we seek stockholder approval of our initial business combination
and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor,
initial stockholders, directors, officers, advisors or their affiliates may purchase shares or public warrants in privately negotiated
transactions or in the open market either prior to or following the completion of our initial business combination. There is no limit
on the number of shares our initial stockholders, directors, officers, advisors or their affiliates may purchase in such transactions,
subject to compliance with applicable law and NASDAQ rules. However, they have no current commitments, plans or intentions to engage in
such transactions and have not formulated any terms or conditions for any such transactions. If they engage in such transactions, they
will not make any such purchases when they are in possession of any material nonpublic information not disclosed to the seller or if such
purchases are prohibited by Regulation M under the Exchange Act. We do not currently anticipate that such purchases, if any, would constitute
a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules
under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such
rules, the purchasers will comply with such rules. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange
Act to the extent such purchasers are subject to such reporting requirements. None of the funds held in the trust account will be used
to purchase shares or public warrants in such transactions prior to completion of our initial business combination.
The purpose of any such purchases of shares could be to vote such shares
in favor of the initial business combination and thereby increase the likelihood of obtaining stockholder approval of the initial business
combination or to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain
amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met.
The purpose of any such purchases of public warrants could be to reduce the number of public warrants outstanding or to vote such warrants
on any matters submitted to the warrant holders for approval in connection with our initial business combination. Any such purchases of
our securities may result in the completion of our initial business combination that may not otherwise have been possible. In addition,
if such purchases are made, the public “float” of our shares of Class A common stock or warrants may be reduced and the number
of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading
of our securities on a national securities exchange.
Our sponsor, officers, directors and/or their affiliates anticipate
that they 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 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. Our sponsor, officers,
directors, advisors or their affiliates 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 common
stock if the purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act. Any such purchases will be reported pursuant to
Section 13 and Section 16 of the Exchange Act to the extent such purchases are subject to such reporting requirements.
Redemption Rights for Public Stockholders upon Completion of our
Initial Business Combination
We will provide our public stockholders with the opportunity to redeem
all or a portion of their shares of Class A common stock upon the completion of our initial business combination at a per-share price,
payable in cash, equal to the aggregate amount then on deposit in the trust account as of two business days prior to the consummation
of the initial business combination including interest earned on the funds held in the trust account and not previously released to us
to pay our franchise and income taxes, divided by the number of then outstanding public shares, subject to the limitations described herein.
The amount initially in the trust account is approximately $10.20 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 underwriter. The redemption
rights will include the requirement that a beneficial holder must identify itself in order to validly redeem its shares. Our sponsor,
officers and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights
with respect to any founder shares and any public shares held by them in connection with the completion of our initial business combination.
Manner of Conducting Redemptions
We will provide our public stockholders with the opportunity to redeem
all or a portion of their shares of Class A common stock upon the completion of our initial business combination either (i) in connection
with a stockholder meeting called to approve the initial business combination or (ii) by means of a tender offer. The decision as to whether
we will seek stockholder approval of a proposed initial business combination or conduct a tender offer will be made by us, solely in our
discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would
require us to seek stockholder approval under the law or stock exchange listing requirement. Under NASDAQ rules, asset acquisitions and
stock purchases would not typically require stockholder approval while direct mergers with our company where we do not survive and any
transactions where we issue more than 20% of our outstanding common stock or seek to amend our amended and restated certificate of incorporation
would require stockholder approval. If we structure an initial business combination with a target company in a manner that requires stockholder
approval, we will not have discretion as to whether to seek a stockholder vote to approve the proposed initial business combination. We
may conduct redemptions without a stockholder vote pursuant to the tender offer rules of the SEC unless stockholder approval is required
by law or stock exchange listing requirements or we choose to seek stockholder approval for business or other legal reasons. So long as
we obtain and maintain a listing for our securities on NASDAQ, we will be required to comply with such rules.
If a stockholder vote is not required and we do not
decide to hold a stockholder vote for business or other legal reasons, we will, pursuant to 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 shares of our Class A common stock in the
open market if we elect to redeem our public shares through a tender offer, to comply with Rule 14e-5 under the Exchange Act.
In the event we conduct redemptions pursuant to the tender offer rules,
our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a) under the Exchange Act, and we will
not be permitted to complete our initial business combination until the expiration of the tender offer period. In addition, the tender
offer will be conditioned on public stockholders not tendering more than a specified number of public shares which are not purchased by
our sponsor, which number will be based on the requirement that we may not redeem public shares in an amount that would cause our net
tangible assets to be less than $5,000,001 upon consummation of our initial business combination and after payment of underwriter’s
fees and commissions (so that we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset
or cash requirement which may be contained in the agreement relating to our initial business combination. If public stockholders tender
more shares than we have offered to purchase, we will withdraw the tender offer and not complete the initial business combination.
If, however, stockholder approval of the transaction
is required by 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 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 holders present in person or by proxy of shares of outstanding capital stock of the company
representing a majority of the voting power of all outstanding shares of capital stock of the company entitled to vote at such meeting.
Our initial stockholders will count toward this quorum and pursuant to the letter agreement, our sponsor, officers and directors have
agreed to vote their founder shares and any public shares purchased during or after our initial public offering (including in open market
and privately negotiated transactions) in favor of our initial business combination. For purposes of seeking approval of the majority
of our outstanding shares of common stock voted, non-votes will have no effect on the approval of our initial business combination once
a quorum is obtained. As a result, in addition to our initial stockholders’ founder shares, we would need only 9,375,001, or 37.5%,
of the 25,000,000 public shares sold in our initial public offering to be voted in favor of an initial business combination (assuming
all outstanding shares are voted) in order to have our initial business combination approved. We intend to give approximately 30 days
(but not less than 10 days nor more than 60 days) prior written notice of any such meeting, if required, at which a vote shall be taken
to approve our initial business combination. These quorum and voting thresholds, and the voting agreements of our initial stockholders,
may make it more likely that we will consummate our initial business combination. Each public stockholder may elect to redeem its public
shares irrespective of whether they vote for or against the proposed transaction.
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 upon consummation
of our initial business combination and after payment of underwriter’s fees and commissions (so that we are not subject to the SEC’s
“penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating
to our initial business combination. For example, the proposed initial business combination may require: (i) cash consideration to be
paid to the target or its owners, (ii) cash to be transferred to the target for working capital or other general corporate purposes or
(iii) the retention of cash to satisfy other conditions in accordance with the terms of the proposed initial business combination. In
the event the aggregate cash consideration we would be required to pay for all shares of Class A common stock that are validly submitted
for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed initial business combination
exceed the aggregate amount of cash available to us, we will not complete the initial business combination or redeem any shares, and all
shares of Class A common stock submitted for redemption will be returned to the holders thereof.
Limitation on Redemption upon Completion of our Initial Business
Combination if we Seek Stockholder Approval
Notwithstanding the foregoing, if
we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business
combination pursuant to the tender offer rules, our amended and restated certificate of incorporation provides that a public stockholder,
together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group”
(as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate
of 15% of the shares sold in our initial public offering, which we refer to as the “Excess Shares.” Such restriction shall
also be applicable to our affiliates. We believe this restriction will discourage stockholders from accumulating large blocks of shares,
and subsequent attempts by such holders to use their ability to exercise their redemption rights against a proposed initial business combination
as a means to force us or our management to purchase their shares at a significant premium to the then-current market price or on other
undesirable terms. Absent this provision, a public stockholder holding more than an aggregate of 15% of the shares sold in our initial
public offering could threaten to exercise its redemption rights if such holder’s shares are not purchased by us or our management
at a premium to the then-current market price or on other undesirable terms. By limiting our stockholders’ ability to redeem no
more than 15% of the shares sold in our initial public offering without our prior consent, we believe we will limit the ability of a small
group of stockholders to unreasonably attempt to block our ability to complete our initial business combination, particularly in connection
with an initial business combination with a target that requires as a closing condition that we have a minimum net worth or a certain
amount of cash. However, we would not be restricting our stockholders’ ability to vote all of their shares (including Excess Shares)
for or against our initial business combination.
Tendering Stock Certificates in Connection with a Tender Offer
or Redemption Rights
We may require our public stockholders seeking to exercise their redemption
rights, whether they are record holders or hold their shares in “street name,” to either tender their certificates to our
transfer agent prior to the date set forth in the tender offer documents or proxy materials mailed to such holders, or up to two business
days prior to the initial vote on the proposal to approve the initial business combination in the event we distribute proxy materials,
or to deliver their shares to the transfer agent electronically using the Depository Trust Company’s DWAC (Deposit/Withdrawal At
Custodian) System, at the holder’s option. The tender offer or proxy materials, as applicable, that we will furnish to holders of
our public shares in connection with our initial business combination will indicate whether we are requiring public stockholders to satisfy
such delivery requirements, which will include the requirement that 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 vote on the initial 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 exercise period, it is advisable
for stockholders to use electronic delivery of their public shares.
There is a nominal cost associated with the above-referenced tendering
process and the act of certificating the shares or delivering them through the DWAC System. The transfer agent will typically charge the
tendering broker $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
initial business combination and check a box on the proxy card indicating such holder was seeking to exercise his or her redemption rights.
After the initial business combination was approved, the company would contact such stockholder to arrange for him or her to deliver his
or her certificate to verify ownership. As a result, the stockholder then had an “option window” after the completion of the
initial business combination during which he or she could monitor the price of the company’s stock in the market. If the price rose
above the redemption price, he or she could sell his or her shares in the open market before actually delivering his or her shares to
the company for cancellation. As a result, the redemption rights, to which stockholders were aware they needed to commit before the stockholder
meeting, would become “option” rights surviving past the completion of the initial business combination until the redeeming
holder delivered its certificate. The requirement for physical or electronic delivery prior to the meeting ensures that a redeeming holder’s
election to redeem is irrevocable once the initial business combination is approved.
Any request to redeem such shares, once made, may be withdrawn at any
time up to the date set forth in the tender offer materials or the date of the stockholder meeting set forth in our proxy materials, as
applicable. Furthermore, if a holder of a public share delivered its certificate in connection with an election of redemption rights and
subsequently decides prior to the applicable date not to elect to exercise such rights, such holder may simply request that the transfer
agent return the certificate (physically or electronically). It is anticipated that the funds to be distributed to holders of our public
shares electing to redeem their shares will be distributed promptly after the completion of our initial business combination.
If our initial business combination is not approved or completed for
any reason, then our public stockholders who elected to exercise their redemption rights would not be entitled to redeem their shares
for the applicable pro rata share of the trust account. In such case, we will promptly return any certificates delivered by public holders
who elected to redeem their shares.
If our initial proposed initial business combination is not completed,
we may continue to try to complete an initial business combination with a different target until 18 months from the closing of our initial
public offering.
Redemption of Public Shares and Liquidation if no Initial Business
Combination
Our amended and restated certificate of incorporation provides that
we will have only 18 months from the closing of our initial public offering to complete our initial business combination. If we are unable
to complete our initial business combination within the 18-month 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 franchise and income taxes (less up to $100,000 of interest
to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public
stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable
law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and
our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors
and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants,
which will expire worthless if we fail to complete our initial business combination within the 18-month time period.
Our sponsor, officers and directors have entered into a letter agreement
with us, pursuant to which they have waived their rights to liquidating distributions from the trust account with respect to any founder
shares held by them if we fail to complete our initial business combination within 18 months from the closing of our initial public offering.
However, if our sponsor, officers or directors acquire public shares in or after our initial public offering, they will be entitled to
liquidating distributions from the trust account with respect to such public shares if we fail to complete our initial business combination
within the allotted 18-month time period.
Our sponsor, officers and directors have agreed, pursuant to a written
agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation (i) to modify the
substance or timing of the ability of our public stockholders to seek redemption in connection with our initial business combination or
our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 18 months from the closing
of our initial public offering or (ii) with respect to any other provision relating to stockholders’ rights or pre-initial business
combination activity, unless we provide our public stockholders with the opportunity to redeem their shares of Class A common stock upon
approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account
including interest earned on the funds held in the trust account and not previously released to us to pay our franchise and income taxes
divided by the number of then outstanding public shares. However, we may not redeem our public shares in an amount that would cause our
net tangible assets to be less than $5,000,001 upon consummation of our initial business combination and after payment of underwriter’s
fees and commissions (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 (described
above), we would not proceed with the amendment or the related redemption of our public shares at such time.
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 $1,081,525
of proceeds held outside the trust account as of December 31, 2021, although we cannot assure you that there will be sufficient funds
for such purpose. We will depend on sufficient interest being earned on the proceeds held in the trust account to pay any tax obligations
we may owe. However, if those funds are not sufficient to cover the costs and expenses associated with implementing our plan of dissolution,
to the extent that there is any interest accrued in the trust account not required to pay taxes on interest income earned on the trust
account balance, we may request the trustee to release to us an additional amount of up to $100,000 of such accrued interest to pay those
costs and expenses.
If we were to expend all of the net proceeds of our initial public
offering and the sale of the private placement 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 $10.20. 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 $10.20. Under Section 281(b) of the DGCL, our plan of dissolution must provide
for all claims against us to be paid in full or make provision for payments to be made in full, as applicable, if there are sufficient
assets. These claims must be paid or provided for before we make any distribution of our remaining assets to our stockholders. While we
intend to pay such amounts, if any, we cannot assure you that we will have funds sufficient to pay or provide for all creditors’
claims.
Although we 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 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. Marcum LLP, our independent registered public accounting firm, and the underwriter of our initial public
offering have not executed agreements with us waiving such claims to the monies held in the trust account.
In addition, there is no guarantee that such entities will agree to waive
any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not
seek recourse against the trust account for any reason. Our sponsor has agreed that it will be liable to us if and to the extent any claims
by a third party for services rendered or products sold to us, or a prospective target business with which we have entered into a written
letter of intent, confidentiality or similar agreement or business combination agreement, reduce the amount of funds in the trust account
to below the lesser of (i) $10.20 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 $10.20 per share due to reductions in the value of the trust assets, in each case,
less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed
a waiver of any and all rights to the monies held in the trust account (whether or not such waiver is enforceable) nor will it apply to
any claims under our indemnity of the underwriter of our initial public offering against certain liabilities, including liabilities under
the Securities Act. However, we have not asked our sponsor to reserve for such indemnification obligations, nor have we independently
verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and 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, directors or members of our sponsor will indemnify us for claims by third parties including, without limitation, claims by vendors
and prospective target businesses.
In the event that the proceeds in the trust account are reduced below
(i) $10.20 per public share or (ii) such lesser amount per public share held in the trust account as of the date of the liquidation of
the trust account, due to reductions in value of the trust assets, in each case net of the amount of interest which may be withdrawn to
pay taxes, and our sponsor asserts that it is unable to satisfy its indemnification obligations or that it has no indemnification obligations
related to a particular claim, our independent directors would determine whether to take legal action against our sponsor to enforce its
indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against our
sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment
may choose not to do so if, for example, the cost of such legal action is deemed by the independent directors to be too high relative
to the amount recoverable or if the independent directors determine that a favorable outcome is not likely. We have not asked our sponsor
to reserve for such indemnification obligations and we cannot assure you that our sponsor would be able to satisfy those obligations.
Accordingly, we cannot assure you that due to claims of creditors the actual value of the per-share redemption price will not be less
than $10.20 per public share.
We will seek to reduce the possibility that our sponsor will have to
indemnify the trust account due to claims of creditors by endeavoring to have all vendors, service providers, 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 underwriter of our initial
public offering against certain liabilities, including liabilities under the Securities Act. We have access to up to approximately $1,081,525,
as of December 31, 2021, from the proceeds of our initial public offering with which to pay any such potential claims (including costs
and expenses incurred in connection with our liquidation, currently estimated to be no more than approximately $100,000). In the event
that we liquidate and it is subsequently determined that the reserve for claims and liabilities is insufficient, stockholders who received
funds from our trust account could be liable for claims made by creditors.
Under the DGCL, stockholders may be held liable for claims by third
parties against a corporation to the extent of distributions received by them in a dissolution. The pro rata portion of our trust account
distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination
within 18 months from the closing of our 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
18 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. If we are
unable to complete our initial business combination within 18 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 franchise and income taxes (less up
to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely
extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any),
subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining
stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide
for claims of creditors and the requirements of other applicable law. Accordingly, it is our intention to redeem our public shares as
soon as reasonably possible following our 18th 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 ten years following our dissolution. If our plan of distribution
complies with Section 281(b) of the DGCL, any liability of stockholders with respect to a liquidating distribution is limited to the lesser
of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder
would likely be barred after the third anniversary of the dissolution. However, because we are a blank check company, rather than an operating
company, and our operations 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, consultants, 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. 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.
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) $10.20 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 underwriter
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 petition or an involuntary bankruptcy petition
is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may
be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. To
the extent any bankruptcy claims deplete the trust account, we cannot assure you we will be able to return $10.20 per share to our public
stockholders. Additionally, if we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed,
any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential
transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover some or all amounts received
by our stockholders. Furthermore, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or may
have acted in bad faith, thereby exposing itself and our company to claims of punitive damages, by paying public stockholders from the
trust account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons.
Our public stockholders will be entitled to receive funds from the
trust account only upon the earlier to occur of: (i) the completion of our initial business combination, (ii) the redemption of any public
shares properly tendered in connection with a stockholder vote to amend any provisions of our amended and restated certificate of incorporation
(A) to modify the substance or timing of the ability of our public stockholders to seek redemption in connection with our initial business
combination or our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 18 months
from the closing of our initial public offering or (B) with respect to any other provision relating to stockholders’ rights or pre-initial
business combination activity, and (iii) the redemption of all of our public shares if we are unable to complete our business combination
within 18 months from the closing of our initial public offering, subject to applicable law. In no other circumstances will a stockholder
have any right or interest of any kind to or in the trust account. In the event we seek stockholder approval in connection with our initial
business combination, a stockholder’s voting in connection with the initial business combination alone will not result in a stockholder’s
redeeming its shares to us for an applicable pro rata share of the trust account. Such stockholder must have also exercised its redemption
rights as described above. 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 competition from other entities having a business objective similar to ours, including
other blank check companies, private equity groups and leveraged buyout funds, and operating businesses seeking strategic business combinations.
Many of these entities are well established and have extensive experience identifying and effecting business combinations directly or
through affiliates. Moreover, many of these competitors possess greater financial, technical, human and other resources than we do. Our
ability to acquire larger target businesses will be limited by our available financial resources. This inherent limitation gives others
an advantage in pursuing the initial business combination of a target business. Furthermore, our obligation to pay cash in connection
with our public stockholders who exercise their redemption rights may reduce the resources available to us for our initial business combination
and our outstanding warrants, and the future dilution they potentially represent, may not be viewed favorably by certain target businesses.
Either of these factors may place us at a competitive disadvantage in successfully negotiating an initial business combination.
Periodic Reporting and Financial Information
We have 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 financials statements audited and reported
on by our independent registered public accounting firm. We have no current intention of filing a Form 15 to suspend our reporting or
other obligations under the Exchange Act prior or subsequent to the consummation of our initial business combination.
We will provide stockholders with audited financial statements of the
prospective target business as part of the tender offer materials or proxy solicitation materials sent to stockholders to assist them
in assessing the target business. In all likelihood, these financial statements will need to be prepared in accordance with, or reconciled
to, 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 targets we may conduct an initial
business combination with 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 business combination candidate will have financial statements prepared
in accordance with GAAP or that the potential target business will be able to prepare its financial statements in accordance with the
requirements outlined above. To the extent that these requirements cannot be met, we may not be able to acquire the proposed target business.
While this may limit the pool of potential business combination candidates, we do not believe that this limitation will be material.
We will be required to evaluate our internal control procedures for
the fiscal year ending December 31, 2022 as required by the Sarbanes-Oxley Act. Only in the event we are deemed to be a large accelerated
filer or an accelerated filer, and no longer qualify as an emerging growth company, will we be required to have our internal control procedures
audited. A target company may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of their internal
controls. The development of the internal controls of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the
time and costs necessary to complete any such business combination.
We are an “emerging growth company,” as defined in Section
2(a) of the Securities Act, as modified by the JOBS Act. As such, we are eligible to take advantage of certain exemptions from various
reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but
not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section
404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements,
and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any
golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may be a less
active trading market for our securities and the prices of our securities may be more volatile.
In addition, Section 107 of the JOBS Act also provides that an “emerging
growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying
with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting
standards until those standards would otherwise apply to private companies. We 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 our Class A common stock that is held by non-affiliates exceeds $700 million as of the prior June 30th,
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 exceeds $250 million as of the prior June
30, and (2) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our common stock held
by non-affiliates exceeds $700 million as of the prior June 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 securities. If any of the following events occur, our business, financial condition and operating results
may be materially adversely affected. In that event, the trading price of our securities could decline, and you could lose all or part
of your investment.
We have no operating history and no revenues, and you have no basis
on which to evaluate our ability to achieve our business objective.
We were formed in November 16, 2020 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 an initial 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 our management team or New Providence Acquisition
Corp., may not be indicative of future performance of an investment in the company.
Information regarding performance by, or businesses associated with
our management team and their affiliates is presented for informational purposes only. Past performance by our management team or New
Providence Acquisition Corp. is not a guarantee either (i) of success with respect to any business combination we may consummate or (ii)
that we will be able to locate a suitable candidate for our initial business combination. You should not rely on the historical record
of our management team’s or their affiliates’ performance as indicative of the future performance of an investment in the
company or the returns the company will, or is likely to, generate going forward. Our officers and directors have not had experience with
blank check companies or special purpose acquisition companies in the past.
Our independent registered public accounting firm’s report
contains an explanatory paragraph that expresses substantial doubt about our ability to continue as a “going concern.”
As of December 31, 2021, we had approximately $1,081,525 in cash held
outside of the trust account. Further, we have incurred and expect to continue to incur significant costs in pursuit of our financing
and acquisition plans. Management’s plans to address this need for capital are discussed in the section of this Report titled “Management’s
Discussion and Analysis of Financial Condition and Results of Operations.” We cannot assure you that our plans to raise capital
or to consummate an initial business combination will be successful. These factors, among others, raise substantial doubt about our ability
to continue as a going concern. The financial statements contained elsewhere in this prospectus do not include any adjustments that might
result from our inability to consummate this offering or our inability to continue as a going concern.
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 to approve our initial
business combination unless the initial business combination would require stockholder approval under applicable law or stock exchange
listing requirements or if we decide to hold a stockholder vote for business or other legal reasons. Except as required by law, the decision
as to whether we will seek stockholder approval of a proposed initial 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 holders of a majority of our public shares do not approve of the initial business combination
we complete.
Please see the section of this Report entitled “Item 1—Stockholders
May Not Have the Ability to Approve Our Initial Business Combination” for additional information.
If we seek stockholder approval of our initial business combination,
our initial stockholders have agreed to vote in favor of such initial business combination, regardless of how our public stockholders
vote.
Pursuant to a letter agreement, our sponsor, officers and directors
have agreed to vote their founder shares, as well as any public shares purchased during or after our initial public offering (including
in open market and privately negotiated transactions), in favor of our initial business combination. As a result, in addition to our initial
stockholders’ founder shares, we would need only 9,375,001, or 37.5%, of the 25,000,000 public shares sold in our initial public
offering to be voted in favor of an initial business combination (assuming all outstanding shares are voted) in order to have our initial
business combination approved. Our initial stockholders owned shares representing 20% of our outstanding shares of common stock. Accordingly,
if we seek stockholder approval of our initial business combination, the agreement by our initial stockholders 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.
Your only opportunity to affect the investment decision regarding
a potential business combination will be limited to the exercise of your right to redeem your shares from us for cash, unless we seek
stockholder approval of the initial business combination.
At the time of your investment in us, you will not be provided with
an opportunity to evaluate the specific merits or risks of our initial business combination. Since our board of directors may complete
an initial business combination without seeking stockholder approval, public stockholders may not have the right or opportunity to vote
on the initial business combination, unless we seek such stockholder vote.
Accordingly, if we do not seek stockholder approval, 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.
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 an initial business combination with a target.
We may seek to enter into an initial business combination 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 initial 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 upon consummation of our initial business combination and after payment
of underwriter’s fees and commissions (so that we are not subject to the SEC’s “penny stock” rules) or any greater
net tangible asset or cash requirement which may be contained in the agreement relating to our initial business combination. Consequently,
if accepting all properly submitted redemption requests would cause our net tangible assets to be less than $5,000,001 upon consummation
of our initial business combination and after payment of underwriter’s fees and commissions 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 an initial business combination 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 initial business combination agreement requires
us to use a portion of the cash in the trust account to pay the purchase price, or requires us to have a minimum amount of cash at closing,
we will need to reserve a portion of the cash in the trust account to meet such requirements, or arrange for third party financing. In
addition, if a larger number of shares are submitted for redemption than we initially expected, we may need to restructure the transaction
to reserve a greater portion of the cash in the trust account or arrange for third party financing. Raising additional third party financing
may involve dilutive equity issuances or the incurrence of indebtedness at higher than desirable levels. Furthermore, this dilution would
increase to the extent that the anti-dilution provisions of the Class B common stock result in the issuance of Class A shares on a greater
than one-to-one basis upon conversion of the Class B common stock at the time of our business combination. 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 underwriter 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 per-share value of shares held by non-redeeming
stockholders will reflect our obligation to pay the 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 stock.
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 stock in the open market; however,
at such time our stock 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 stock in the open market.
The
requirement that we complete our initial business combination within the prescribed time frame may give potential target businesses leverage
over us in negotiating an initial business combination and may decrease our ability 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 an initial business combination will be aware that we must
complete our initial business combination within 18 months from the closing of our initial public offering. Consequently, such target
business may obtain leverage over us in negotiating an initial business combination, knowing that if we do not complete our initial business
combination with that particular target business, we may be unable to complete our initial business combination with any target business.
This risk will increase as we get closer to the timeframe described above. In addition, we may have limited time to conduct due diligence
and may enter into our initial business combination on terms that we would have rejected upon a more comprehensive investigation.
Our
search for a business combination, and any target business with which we ultimately consummate a business combination, may be materially
adversely affected by the recent coronavirus (COVID-19) outbreak and the status of debt and equity markets.
In
December 2019, a novel strain of coronavirus was reported to have surfaced, which has and is continuing to spread throughout parts of
the world, including the United States. On January 30, 2020, the World Health Organization declared the outbreak of the coronavirus disease
(COVID-19) a “Public Health Emergency of International Concern.” On January 31, 2020, U.S. Health and Human Services Secretary
Alex M. Azar II declared a public health emergency for the United States to aid the U.S. healthcare community in responding to COVID-19,
and on March 11, 2020, the World Health Organization characterized the outbreak as a “pandemic.” The COVID-19 outbreak has
and a significant outbreak of other infectious diseases could result in a widespread health crisis that could adversely affect the economies
and financial markets worldwide, and the business of any potential target business with which we consummate a business combination could
be materially and adversely affected. Furthermore, we may be unable to complete a business combination if continued concerns relating
to COVID-19 continue to restrict travel, limit the ability to have meetings with potential investors or the target company’s personnel,
vendors and services providers are unavailable to negotiate and consummate a transaction in a timely manner. The extent to which COVID-19
impacts our search for a business combination will depend on future developments, which are highly uncertain and cannot be predicted,
including new information which may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact,
among others. If the disruptions posed by COVID-19 or other matters of global concern continue for an extensive period of time, our ability
to consummate a business combination, or the operations of a target business with which we ultimately consummate a business combination,
may be materially adversely affected.
In
addition, our ability to consummate a transaction may be dependent on the ability to raise equity and debt financing which may be impacted
by COVID-19 and other events, including as a result of increased market volatility, decreased market liquidity and third-party financing
being unavailable on terms acceptable to us or at all.
Finally,
the outbreak of COVID-19 may also have the effect of heightening many of the other risks described in this “Risk Factors”
section, such as those related to the market for our securities and cross-border transactions.
We
may not be able to complete our initial business combination within the prescribed time frame, 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 $10.20 per share, or less than such amount in certain circumstances, and our warrants will expire worthless.
Our
amended and restated certificate of incorporation provides that we must complete our initial business combination within 18 months from
the closing of our initial public offering. We may not be able to find a suitable target business and complete our initial business combination
within such time period. If we have not completed our initial business combination within such time period, we will: (i) cease all operations
except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem
the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account including
interest earned on the funds held in the trust account and not previously released to us to pay our franchise and income taxes (less
up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will
completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions,
if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of
our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware
law to provide for claims of creditors and the requirements of other applicable law. In such case, our public stockholders may only receive
$10.20 per share, and our warrants will expire worthless. In certain circumstances, our public stockholders may receive less than $10.20
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 $10.20 per share” and other risk
factors below.
If
we seek stockholder approval of our initial business combination, our sponsor, directors, officers, advisors and their affiliates may
elect to purchase shares or warrants from public stockholders, which may influence a vote on a proposed initial 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, officers, advisors or their affiliates may purchase shares or
public warrants or a combination thereof in privately negotiated transactions or in the open market either prior to or following the
completion of our initial business combination, although they are under no obligation to do so. However, they have no current commitments,
plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of
the funds in the trust account will be used to purchase shares or public warrants in such transactions.
Such
a purchase may include a contractual acknowledgement that such stockholder, although still the record holder of our shares is no longer
the beneficial owner thereof and therefore agrees not to exercise its redemption rights. 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.
The purpose of such purchases could be to vote such shares in favor of the initial business combination and thereby increase the likelihood
of obtaining stockholder approval of the initial business combination, or to satisfy a closing condition in an agreement with a target
that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it
appears that such requirement would otherwise not be met. The purpose of any such purchases of public warrants could be to reduce the
number of public warrants outstanding or to vote such warrants on any matters submitted to the warrant holders for approval in connection
with our initial business combination. Any such purchases of our securities may result in the completion of our initial business combination
that may not otherwise have been possible. 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 obtain or maintain 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 tender offer rules or proxy 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 tender offer or proxy materials, as applicable,
such stockholder may not become aware of the opportunity to redeem its shares. In addition, proxy materials or tender offer documents,
as applicable, that we will furnish to holders of our public shares in connection with our initial business combination will describe
the various procedures that must be complied with in order to validly tender or redeem public shares, which will include the requirement
that a beneficial holder must identify itself. 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 mailed to such holders, or up to two business days prior to
the initial vote on the proposal to approve the initial business combination in the event we distribute proxy materials, or to deliver
their shares to the transfer agent electronically. In the event that a stockholder fails to comply with these or any other procedures,
its shares may not be redeemed. See the section of this Report entitled “Item 1—Proposed Business - Redemption Rights
for Public Stockholders upon Completion of our Initial Business Combination - Tendering Stock Certificates in Connection with a Tender
Offer or Redemption Rights.”
You
will not have any rights or interests in funds from the trust account, except under certain limited circumstances. To liquidate your
investment, therefore, 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 earliest to occur of: (i) our completion of an
initial business combination, and then only in connection with those shares of 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 submitted in connection with
a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of the ability
of our public stockholders to seek redemption in connection with our initial business combination or our obligation to redeem 100% of
our public shares if we do not complete our initial business combination within 18 months from the closing of our initial public offering
or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity and (iii)
the redemption of our public shares if we are unable to complete an initial business combination within 18 months from the closing of
our initial public offering, subject to applicable law and as further described herein. In no other circumstances will a public stockholder
have any right or interest of any kind in the trust account. Holders of warrants will not have any right to the proceeds held in the
trust account with respect to the warrants.
Accordingly,
to liquidate your investment, you may be forced to sell your public shares or warrants, potentially at a loss.
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, Class A common stock and 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 NASDAQ listing standards, our
securities may not be, or may not 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 stock price levels. Generally, based on NASDAQ’s current listing standards, we must maintain a minimum market value of listed
securities of $50,000,000 and a minimum of 400 holders of our listed securities. Additionally, in connection with our initial business
combination, we will be required to demonstrate compliance with NASDAQ’s initial listing requirements, which are more rigorous
than NASDAQ’s continued listing requirements, in order to continue to maintain the listing of our securities on NASDAQ. For instance,
based on NASDAQ’s current listing standards, our stock price would be required to be at least $4.00 per share, the market value
of listed securities would be required to be at least $75 million (or we would need to satisfy certain stockholders’ equity or
total assets and total revenue requirements) and we would be required to have a minimum of 400 round lot holders of our securities (with
at least 50% of such round lot holders holding securities with a market value of at least $2,500). We may not 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 are covered securities. 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 be covered securities and we would be subject to regulation in each state in which we offer
our securities, including in connection with our initial business combination.
You
will not be 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 identified, 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 successful
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 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.
We
may engage our underwriter or its affiliates to provide additional services to us after our initial public offering, including, for example,
identifying potential targets, providing financial advisory services, acting as a placement agent in a private offering or arranging
debt financing. We may pay our underwriter or its affiliates fair and reasonable fees or other compensation that would be determined
at that time in an arm’s length negotiation. The underwriter is also entitled to receive deferred commissions that are conditioned
on the completion of an initial business combination. The underwriter’s or its affiliates’ financial interests tied to the
consummation of a business combination transaction may give rise to potential conflicts of interest in providing any such additional
services to us, including potential conflicts of interest in connection with the sourcing and consummation 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 our 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 stock in open market transactions, potentially at a loss.
Because
of our limited resources and the significant competition for business combination opportunities, it may be more difficult for us to complete
our initial business combination. If we are unable to complete our initial business combination, our public stockholders may receive
only approximately $10.20 per share on our redemption of our public shares, or less than such amount in certain circumstances, and our
warrants will expire worthless.
We
expect to encounter competition from other entities having a business objective similar to ours, including private investors (which may
be individuals or investment partnerships), other blank check companies and other entities competing for the types of businesses we intend
to acquire. Many of these individuals and entities are well-established and have extensive experience in identifying and effecting, directly
or indirectly, acquisitions of companies operating in or providing services to various industries. Many of these competitors possess
similar technical, human and other resources to ours, and our financial resources will be relatively limited when contrasted with those
of many of these competitors. While we believe there are numerous target businesses we could potentially acquire with the net proceeds
of 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, because we are obligated to pay cash
for the shares of Class A common stock which our public stockholders redeem in connection with our initial business combination, target
companies will be aware that this may reduce the resources available to us for our initial business combination. This may place us at
a competitive disadvantage in successfully negotiating an initial business combination. If we are unable to complete our initial business
combination, our public stockholders may receive only approximately $10.20 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 $10.20 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 $10.20 per share” and other risk factors below.
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 18 months from the closing of our initial public offering, we may be unable to complete our initial
business combination, in which case our public stockholders may only receive $10.20 per share, or less than such amount in certain circumstances,
and our warrants will expire worthless.
As of December 31, 2021, we had approximately $1,081,525 in cash held
outside of the trust account may not be sufficient to allow us to operate for the 18 months from the closing of our initial public offering,
assuming that our initial business combination is not completed during that time. We believe that, upon the closing of our initial public
offering, the funds available to us outside of the trust account will be sufficient to allow us to operate for the 18 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
could use a portion of the funds available to us to pay fees to consultants to assist us with our search for a target business. We could
also use a portion of the funds as a down payment or to fund a “no-shop” provision (a provision in letters of intent or merger
agreements designed to keep target businesses from “shopping” around for transactions with other companies on terms more favorable
to such target businesses) with respect to a particular proposed initial business combination, although we do not have any current intention
to do so. If we entered into a letter of intent or merger agreement where we paid for the right to receive exclusivity from a target business
and were subsequently required to forfeit such funds (whether as a result of our breach or otherwise), we might not have sufficient funds
to continue searching for, or conduct due diligence with respect to, a target business. If we are unable to complete our initial business
combination, our public stockholders may receive only approximately $10.20 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 $10.20 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 $10.20 per share” and other risk factors below.
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, 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 for an initial business combination, to
pay our franchise and income taxes and to complete our initial business combination. If we are unable to obtain these loans, we may be
unable to complete our initial business combination.
Of the net proceeds of our initial public offering and the sale of
the private placement warrants, only approximately $1,081,525, as of December 31, 2021, is available to us outside the trust account to
fund our working capital requirements. 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. None of our sponsor, members of our management team nor
any of their affiliates is under any obligation to advance funds to us in such circumstances. Any such advances would be repaid only from
funds held outside the trust account or from funds released to us upon completion of our initial business combination. Up to $1,500,000
of such loans may be convertible into private placement-equivalent warrants at a price of $1.50 per warrant at the option of the lender.
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 are unable to complete our initial business combination because we do not have sufficient funds available
to us, we will be forced to cease operations and liquidate the trust account. Consequently, our public stockholders may only receive approximately
$10.20 per share on our redemption of our public shares, and our warrants will expire worthless. In certain circumstances, our public
stockholders may receive less than $10.20 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
$10.20 per share” and other risk factors below.
Subsequent
to the 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 stock price,
which could cause you to lose some or all of your investment.
Even
if we conduct extensive due diligence on a target business with which we combine, we cannot assure you that this diligence will surface
all material issues that may be present inside a particular target business, that it would be possible to uncover all material issues
through a customary amount of due diligence, or that factors outside of the target business and outside of our control will not later
arise. As a result of these factors, we may be forced to later write-down or write-off assets, restructure our operations, or incur impairment
or other charges that could result in our reporting losses. Even if our due diligence successfully identifies certain risks, unexpected
risks may arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis. Even though
these charges may be non-cash items and not have an immediate impact on our liquidity, the fact that we report charges of this nature
could contribute to negative market perceptions about us or our securities. In addition, charges of this nature may cause us to violate
net worth or other covenants to which we may be subject as a result of assuming pre-existing debt held by a target business or by virtue
of our obtaining debt financing to partially finance the initial business combination. Accordingly, any stockholders who choose to remain
stockholders following the initial 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 initial business combination
constituted an actionable material misstatement or 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 $10.20 per share.
Our
placing of funds in the trust account may not protect those funds from third-party claims against us. Although we will seek to have all
vendors, service providers, prospective target businesses and other entities with which we do business execute agreements with us waiving
any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public 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. Marcum LLP, our independent registered public accounting firm, and the underwriter
of our initial public offering, have not executed agreements with us waiving such claims to the monies held in the trust account.
Examples
of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant
whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would
agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. In addition,
there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of,
any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason. Upon redemption
of our public shares, if we are unable to complete our initial business combination within the prescribed timeframe, or upon the exercise
of a redemption right in connection with our initial business combination, we will be required to provide for payment of claims of creditors
that were not waived that may be brought against us within the 10 years following redemption. Accordingly, the per-share redemption amount
received by public stockholders could be less than the $10.20 per share initially held in the trust account, due to claims of such creditors.
Pursuant to a letter agreement, our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party
for services rendered or products sold to us, or a prospective target business with which we have entered into a written letter of intent,
confidentiality or similar agreement or business combination agreement, reduce the amount of funds in the trust account to below the
lesser of (i) $10.20 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 $10.20 per share due to reductions in the value of the trust assets, less taxes payable, provided
that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all
rights to the monies held in the trust account (whether or not such waiver is enforceable) nor will it apply to any claims under our
indemnity of the underwriter of our initial public offering against certain liabilities, including liabilities under the Securities Act.
However, we have not asked our sponsor to reserve for such indemnification obligations, nor have we independently verified whether our
sponsor has sufficient funds to satisfy its indemnity obligations and 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, directors
or members of our sponsor 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) $10.20 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 $10.20 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 taxes, and our sponsor asserts that
it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, our independent
directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations.
While
we currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification
obligations to us, it is possible that our independent directors in exercising their business judgment and subject to their fiduciary
duties may choose not to do so in any particular instance if, for example, the cost of such legal action is deemed by the independent
directors to be too high relative to the amount recoverable or if the independent directors determine that a favorable outcome is not
likely. If our independent directors choose not to enforce these indemnification obligations, the amount of funds in the trust account
available for distribution to our public stockholders may be reduced below $10.20 per share.
The
securities in which we invest the funds held in the trust account could bear a negative rate of interest, which could reduce the value
of the assets held in trust such that the per-share redemption amount received by public stockholders may be less than $10.20 per share.
The
proceeds held in the trust account are invested only in U.S. government treasury obligations with a maturity of 185 days or less or in
money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act, which invest only in direct U.S. government
treasury obligations. While short-term U.S. government treasury obligations currently yield a positive rate of interest, they have briefly
yielded negative interest rates in recent years. Central banks in Europe and Japan pursued interest rates below zero in recent years,
and the Open Market Committee of the Federal Reserve has not ruled out the possibility that it may in the future adopt similar policies
in the United States. In the event that we are unable to complete our initial business combination or make certain amendments to our
amended and restated certificate of incorporation, our public stockholders are entitled to receive their pro-rata share of the proceeds
held in the trust account, plus any interest income, net of taxes paid or payable (less, in the case we are unable to complete our initial
business combination, $100,000 of interest). Negative interest rates could reduce the value of the assets held in trust such that the
per-share redemption amount received by public stockholders may be less than $10.20 per share.
If,
after we distribute the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy
petition is filed against us that is not dismissed, a bankruptcy court may seek to recover such proceeds, and we and our board may be
exposed to claims of punitive damages.
If,
after we distribute the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy
petition is filed against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor
and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy
court could seek to recover 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 petition or an involuntary bankruptcy
petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our
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 petition or an involuntary bankruptcy
petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy
law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders.
To the extent any bankruptcy claims deplete the trust account, 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 in securities and that our activities
do not include investing, reinvesting, owning, holding or trading “investment securities” constituting more than 40% of our
total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. Our business will be to identify and
complete an initial 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 will subject us to the Investment Company Act. To this end, the proceeds held in the trust
account may only be invested in United States “government securities” within the meaning of Section 2(a)(16) of the Investment
Company Act having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under
the Investment Company Act 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. An investment in our securities is not intended for persons who are seeking a return on investments
in government securities or investment securities. The trust account is intended as a holding place for funds pending the earliest to
occur of: (i) the completion of our initial business combination; (ii) the redemption of any public shares properly submitted in connection
with a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of the ability
of our public stockholders to seek redemption in connection with our initial business combination or our obligation to redeem 100% of
our public shares if we do not complete our initial business combination within 18 months from the closing of our initial public offering
or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity; or (iii)
absent an initial business combination within 18 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 an initial business combination or may result in our liquidation. If we are unable to complete our initial business combination,
our public stockholders may receive only approximately $10.20 per share on the liquidation of our trust account and our warrants will
expire worthless.
Changes
in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, including our ability
to negotiate and complete our initial business combination and results of operations.
We
are subject to laws and regulations enacted by national, regional and local governments. In particular, we are required to comply with
certain SEC and other legal requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time
consuming and costly.
Those
laws and regulations and their interpretation and application may also change from time to time and those changes could have a material
adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable laws or regulations,
as interpreted and applied, could have a material adverse effect on our business, including our ability to negotiate and complete our
initial business combination and results of operations.
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 18 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 18th 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 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 10 years following our dissolution. 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. 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 18 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 consummation of our initial business combination, which could delay the
opportunity for our stockholders to elect directors.
We
may not hold an annual meeting of stockholders until after we consummate a business combination (unless required by NASDAQ), and thus
may not be in compliance with Section 211(b) of the DGCL, which requires an annual meeting of stockholders be held for the purposes of
electing directors in accordance with a company’s bylaws unless such election is made by written consent in lieu of such a meeting.
Therefore, if our stockholders want us to hold an annual meeting prior to our consummation of a 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 Class A common stock will not be entitled to vote on any election of directors we hold prior to our initial business combination.
Prior
to our initial business combination, only holders of our founder shares will have the right to vote on the election of directors. Holders
of our public shares will not be entitled to vote on the election 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 consummation of an initial business combination.
We
are not registering the shares of 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 except on a cashless basis. If the issuance of the shares upon exercise of warrants is not registered,
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.
We
are not registering the shares of Class A common stock issuable upon exercise of the warrants at this time. However, we have agreed that
as soon as practicable, but in no event later than 20 business days after the closing of our initial business combination, we will use
our commercially reasonable efforts to file with the SEC a registration statement covering the shares of Class A common stock issuable
upon exercise of the warrants, and thereafter will use our commercially reasonable efforts to cause such registration statement to become
effective and to maintain a current prospectus relating to those shares of Class A common stock until the warrants expire or are redeemed,
as specified in 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 relating to our initial
public offering, the financial statements contained or incorporated by reference therein are not current or correct or the SEC issues
a stop order. If a registration statement covering the shares of Class A common stock issuable upon exercise of the warrants is not effective
by the 60th business day after the closing of our initial business combination, warrantholders may, until such time as there is an effective
registration statement and during any period when we will have failed to maintain an effective registration statement, exercise warrants
on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption by surrendering such
warrants for that number of shares of Class A common stock equal to the quotient obtained by dividing (x) the product of the number of
shares of Class A common stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and the
“fair market value” by (y) the fair market value; provided, however, that no cashless exercise shall be permitted unless
the fair market value is equal to or higher than the exercise price. The “fair market value” shall mean the average reported
last sale price of the shares of Class A common stock for the ten trading days ending on the trading date prior to the date on which
the notice of exercise is received by the warrant agent.
No
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, or an exemption from registration is available. If an exemption, is not available, holders will not be able
to exercise their warrants on a cashless basis. 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 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 Class A common stock included in the units. If
and when the warrants become redeemable by us, we may not exercise our redemption right if the issuance of shares of Class A common stock
upon exercise of the warrants is not exempt from registration or qualification under applicable state blue sky laws or we are unable
to effect such registration or qualification.
If
you exercise your public warrants on a “cashless basis,” you will receive fewer shares of Class A common stock from such
exercise than if you were to exercise such warrants for cash.
There
are circumstances in which the exercise of the public warrants may be required or permitted to be made on a cashless basis. First, if
a registration statement covering the shares of Class A common stock issuable upon exercise of the warrants is not effective by the 60th
business day after the closing of our initial business combination, warrant holders may, until such time as there is an effective registration
statement and during any period when we shall have failed to maintain an effective registration statement, exercise warrants on a cashless
basis in accordance with Section 3(a)(9) of the Securities Act or another exemption by surrendering such warrants for that number of
shares of Class A common stock equal to the quotient obtained by dividing (x) the product of the number of shares of Class A common stock
underlying the public warrants, multiplied by the difference between the exercise price of the public warrants and the “fair market
value” by (y) the fair market value; provided, however, that no cashless exercise shall be permitted unless the fair market value
is equal to or higher than the exercise price. The “fair market value” shall mean the average reported last sale price of
the Class A common stock for the ten (10) trading days ending on the trading day prior to the date on which the notice of exercise is
received by the warrant agent. If that exemption, or another exemption, is not available, holders will not be able to exercise their
warrants on a cashless basis.
Second,
if we elect to redeem the warrants, our management will have the option to require all holders that wish to exercise warrants to do so
on a “cashless basis.” In such event, each holder would pay the exercise price by surrendering the warrants for that number
of shares of Class A common stock equal to the quotient obtained by dividing (x) the product of the number of shares of Class A common
stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value”
(defined below) by (y) the fair market value. The “fair market value” shall mean the average reported last sale price of
the shares of Class A common stock for the ten trading days ending on the third day prior to the date on which the notice of redemption
is sent to the holders of warrants.
In
either case, 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
grant of registration rights to our initial stockholders may make it more difficult to complete our initial business combination, and
the future exercise of such rights may adversely affect the market price of our Class A common stock.
Pursuant
to a registration and shareholder rights agreement, our initial stockholders and their permitted transferees can demand that we register
the private placement warrants, the shares of Class A common stock issuable upon exercise of the founder shares and the private placement
warrants held, or to be held, by them and holders of warrants that may be issued upon conversion of working capital loans may demand
that we register such warrants or the Class A common stock issuable upon exercise of such warrants. We will bear the cost of registering
these securities. The registration and availability of such a significant number of securities for trading in the public market may have
an adverse effect on the market price of our Class A 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 initial stockholders or holders of working capital loans
or their respective 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
will seek to complete an initial business combination with companies in the consumer sector but may also pursue other business combination
opportunities, 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 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 securities 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 business combination opportunities in industries or sectors which may or may not be outside of our management’s area of
expertise.
Although
we intend to focus on identifying companies in the consumer sector, we will consider an initial business combination outside of our management’s
area of expertise if an initial business combination candidate is presented to us and we determine that such candidate offers an attractive
business combination opportunity for our company or we are unable to identify a suitable candidate in this sector after having expanded
a reasonable amount of time and effort in an attempt to do so. 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 securities will not ultimately prove to be less favorable to investors
in our securities than a direct investment, if an opportunity were available, in an initial business combination candidate. In the event
we elect to pursue a business combination outside of the areas of our management’s expertise, our management’s expertise
may not be directly applicable to its evaluation or operation, and the information contained in this 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 stockholders who choose to remain
stockholders following our initial 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, we may
enter into our initial business combination with a target that does not meet such criteria and guidelines, and as a result, the target
business with which we enter into our initial business combination may not have attributes entirely consistent with our general criteria
and guidelines.
Although
we have identified general criteria and guidelines for evaluating prospective target businesses, it is possible that a target business
with which we enter into our initial business combination will not have all of these positive attributes. If we complete our initial
business combination with a target that does not meet some or all of these guidelines, such combination may not be as successful as a
combination with a business that does meet all of our general criteria and guidelines. In addition, if we announce a prospective business
combination with a target that does not meet our general criteria and guidelines, a greater number of 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 are unable to complete
our initial business combination, our public stockholders may receive only approximately $10.20 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 $10.20 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 $10.20 per share” and other risk factors
below.
As
the number of special purpose acquisition companies evaluating targets increases, attractive targets may become scarcer 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 preparing for an initial public offering, as well as many such companies currently in registration. As
a result, at times, fewer attractive targets may be available 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 targets companies to demand improved financial terms. Attractive deals could also become
scarcer for other reasons, such as economic or industry sector downturns, geopolitical tensions including between the U.S. and China and
between Russia and Ukraine, 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.
We
may seek business combination opportunities with a financially unstable business or an entity lacking an established record of revenue,
cash flow or earnings, which could subject us to volatile revenues, cash flows or earnings or difficulty in retaining key personnel.
To
the extent we complete our initial business combination with a financially unstable business or an entity lacking an established record
of revenues or earnings, we may be affected by numerous risks inherent in the operations of the business with which we combine. These
risks include volatile revenues or earnings and difficulties in obtaining and retaining key personnel. Although our officers and directors
will endeavor to evaluate the risks inherent in a particular target business, we may not be able to properly ascertain or assess all
of the significant risk factors and we may not 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
are not required to obtain an opinion from an independent investment banking firm or from an independent accounting 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 company or the stockholders
from a financial point of view.
Unless
we complete our initial business combination with an affiliated entity or our board cannot independently determine the fair market value
of the target business or businesses, we are not required to obtain an opinion from an independent investment banking firm or another
independent entity that commonly renders valuation opinions that the price we are paying is fair to our company 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 materials
or tender offer documents, as applicable, related to our initial business combination.
We
may issue additional 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 Class A common stock upon the 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. 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 Class A common stock, par value
$0.0001 per share, 10,000,000 shares of Class B common stock, par value $0.0001 per share, and 1,000,000 shares of preferred stock, par
value $0.0001 per share. Immediately after our initial public offering, there will be 375,000,000 and 3,750,000 authorized but unissued
shares of Class A common stock and Class B common stock, respectively, available for issuance, which amount does not take into account
the shares of Class A common stock reserved for issuance upon exercise of outstanding warrants or the shares of Class A common stock
issuable upon conversion of Class B common stock. There are no shares of preferred stock issued and outstanding. Shares of Class B common
stock are convertible into shares of our Class A common stock initially at a one-for-one ratio but subject to adjustment as set forth
herein, including in certain circumstances in which we issue Class A common stock or equity-linked securities related to our initial
business combination. Shares of Class B common stock are also convertible at the option of the holder at any time.
We
may issue a substantial number of additional shares of common or preferred stock to complete our initial business combination or under
an employee incentive plan after completion of our initial business combination (although our amended and restated certificate of incorporation
provides that we may not issue securities that can vote with common stockholders on matters related to our pre-initial business combination
activity). We may also issue shares of Class A common stock 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 our initial
business combination, we may not issue additional shares of capital stock that would entitle the holders thereof to (i) receive funds
from the trust account or (ii) vote on any initial business combination. These provisions of our amended and restated certificate of
incorporation, like all provisions of our amended and restated certificate of incorporation, may be amended with the approval of our
stockholders. However, our 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 (A) to modify the substance or timing of the ability of
our public stockholders to seek redemption in connection with our initial business combination or our obligation to redeem 100% of our
public shares if we do not complete our initial business combination within 18 months from the closing of our initial public offering
or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity, unless
we provide our public stockholders with the opportunity to redeem their shares of 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 (which interest
shall be net of taxes payable), divided by the number of then outstanding public shares.
The
issuance of additional shares of common or preferred stock:
| ● | may
significantly dilute the equity interest of our investors; |
| ● | may
subordinate the rights of holders of common stock if preferred stock is issued with rights
senior to those afforded our common stock; |
| ● | could
cause a change of control if a substantial number of shares of our common stock are issued,
which may affect, among other things, our ability to use our net operating loss carry forwards,
if any, and could result in the resignation or removal of our present officers and directors;
and |
| ● | may
adversely affect prevailing market prices for our units, Class A common stock and/or warrants. |
Resources could be wasted in researching business combinations that
are not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If
we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.20 per share, or
less than such amount in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless.
We anticipate that the investigation of each specific target business
and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require substantial
management time and attention and substantial costs for accountants, attorneys, consultants and others. If we decide not to complete a
specific initial business combination, the costs incurred up to that point for the proposed transaction likely would not be recoverable.
Furthermore, if we reach an agreement relating to a specific target business, we may fail to complete our initial business combination
for any number of reasons including those beyond our control. Any such event will result in a loss to us of the related costs incurred
which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we are unable to
complete our initial business combination, our public stockholders may receive only approximately $10.20 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 $10.20
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 $10.20 per share” and other risk
factors below.
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 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
closely scrutinize any individuals we employ 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. In addition, the officers
and directors of an initial business combination candidate may resign upon completion of our initial business combination. The departure
of an initial business combination target’s key personnel could negatively impact the operations and profitability of our post-combination
business. The role of an initial business combination 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 initial business combination candidate’s
management team will remain associated with the initial business combination candidate following our initial business combination, it
is possible that members of the management of an initial business combination candidate will not wish to remain in place. The loss of
key personnel could negatively impact the operations and profitability of our post-combination business.
We are dependent upon our executive officers and directors and their
departure 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 executive
officers and directors, at least until we have completed our initial business combination. 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 key personnel may negotiate employment or consulting agreements
as well as reimbursement of out-of-pocket expenses, if any, with a target business in connection with a particular business combination.
These agreements may provide for them to receive compensation or reimbursement for out-of-pocket expenses, if any, 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 the company after the
completion of our initial business combination only if they are able to negotiate employment or consulting agreements in connection with
the initial business combination. Additionally, they may negotiate reimbursement of any out-of-pocket expenses incurred on our behalf
prior to the consummation of our initial business combination, should they choose to do so. Such negotiations would take place simultaneously
with the negotiation of the initial 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 initial business combination, or
as reimbursement for such out-of-pocket expenses. The personal and financial interests of such individuals may influence their motivation
in identifying and selecting a target business. However, we believe the ability of such individuals to remain with us after the completion
of our initial business combination will not be the determining factor in our decision as to whether or not we will proceed with any potential
business combination. There is no certainty, however, that any of our key personnel will remain with us after the completion of our initial
business combination. We cannot assure you that any of our key personnel will remain in senior management or advisory positions with us.
The determination as to whether any of our key personnel will remain with us will be made at the time of our initial business combination.
In addition, pursuant to a registration and shareholder 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.
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, which could, in turn, negatively impact the value of our stockholders’
investment in us.
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’s management, therefore, may prove to be incorrect
and such management may lack the skills, qualifications or abilities we suspected. Should the target’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 initial 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.
Our officers and directors will allocate their time to other businesses
thereby causing conflicts of interest in their determination as to how much time to devote to our affairs. This conflict of interest could
have a negative impact on our ability to complete our initial business combination.
Our officers and directors are not required to, and will not, commit
their full time to our affairs, which may result in a conflict of interest in allocating their time between our operations and our search
for an initial business combination and their other businesses. We do not intend to have any full-time employees prior to the completion
of our initial business combination. Each of our officers is engaged in other business endeavors for which he may be entitled to substantial
compensation and our officers are not obligated to contribute any specific number of hours per week to our affairs. In particular, certain
of our officers and directors serve as an officer or director of NPA III, a blank check company sponsored by affiliates of our sponsor,
and NPA III has not yet announced an initial business combination. Our independent directors also serve as officers or board members for
other entities. If our officers’ and directors’ other business affairs require them to devote substantial amounts of time
to such affairs in excess of their current commitment levels, it could limit their ability to devote time to our affairs which may have
a negative impact on our ability to complete our initial business combination.
Certain of our officers and directors are now, and all of them may
in the future become, affiliated with entities engaged in business activities similar to those intended to be conducted by us and, accordingly,
may have conflicts of interest in allocating their time and 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. Our officers and directors are, and may in the future
become, affiliated with entities (such as operating companies or investment vehicles) that are engaged in a similar business. In addition,
our sponsor, officers and directors may participate in the formation of, or become an officer or director of, any other blank check company
prior to completion of our initial business combination. As a result, our sponsor, officers or directors could have conflicts of interest
in determining whether to present business combination opportunities to us or to any other blank check company with which they may become
involved. Although we have no formal policy in place for vetting potential conflicts of interest, our board of directors will review any
potential conflicts of interest on a case-by-case basis.
In particular, affiliates of our sponsor are currently sponsoring one
other blank check company, NPA III. We may seek to complete a business combination in any location and, although we are focusing on completing
a business combination with a business combination target in the consumer industry, we may complete a business combination in any industry.
NPA III may seek to complete a business combination in any location and, like us, NPA III may complete a business combination in any industry.
Further, each of Messrs. Coleman and Smith are currently officers and directors of, and Mr. Bradley is currently an officer of, NPA III
and owes fiduciary duties to NPA III. NPA III, which has not yet announced an initial business combination, may seek to complete a business
combination in any location and, like us, may complete a business combination in any industry. Any such companies, NPA III, may present
additional conflicts of interest in pursuing an acquisition target.
Our officers and directors also may become aware of business opportunities
which may be appropriate for presentation to us and the other entities to which they owe certain fiduciary or contractual duties.
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. Our amended and restated certificate of incorporation provides
that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered
to such person solely in his or her capacity as a director or officer of our company and such opportunity is one we are legally and contractually
permitted to undertake and would otherwise be reasonable for us to pursue, and to the extent the director or officer is permitted to refer
that opportunity to us without violating another legal obligation.
Our officers, directors, security holders and their respective affiliates
may have competitive pecuniary interests that conflict with our interests.
We have not adopted a policy that expressly prohibits our directors,
officers, security holders or affiliates from having a direct or indirect pecuniary or financial interest in any investment to be acquired
or disposed of by us or in any transaction to which we are a party or have an interest. In fact, we may enter into an initial business
combination with a target business that is affiliated with our sponsor, our directors or officers, although we do not intend to do so.
We do not have a policy that expressly prohibits any such persons from engaging for their own account in business activities of the types
conducted by us. Accordingly, such persons or entities may have a conflict between their interests and ours.
We may engage in an initial business combination with one or more
target businesses that have relationships with entities that may be affiliated with our sponsor, officers, directors or existing holders
which may raise potential conflicts of interest.
In light of the involvement of our sponsor, officers and directors
with other entities, we may decide to acquire one or more businesses affiliated with our sponsor, officers or directors. 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 preliminary discussions concerning an initial business combination with any such entity or entities. Although we will not be specifically
focusing on, or targeting, any transaction with any affiliated entities, we would pursue such a transaction if we determined that such
affiliated entity met our criteria for an initial business combination as set forth in the section of this Report entitled “Item
1. Business - Selection of a Target Business and Structuring of our Initial Business Combination” and such transaction was approved
by a majority of our disinterested directors. Despite our agreement to obtain an opinion from an independent investment banking firm or
another independent entity that commonly renders valuation opinions, regarding the fairness to our stockholders from a financial point
of view of an initial business combination with one or more domestic or international businesses affiliated with our officers, directors
or existing holders, potential conflicts of interest still may exist and, as a result, the terms of the initial business combination may
not be as advantageous to our public stockholders as they would be absent any conflicts of interest.
Since our sponsor, officers and directors will lose their entire
investment in us if our initial business combination is not completed, and because our sponsor, officers and directors who have an interest
in founder shares may profit substantially from a business combination even under circumstances where our public stockholders would experience
losses in connection with their investment, a conflict of interest may arise in determining whether a particular business combination
target is appropriate for our initial business combination.
On January 15, 2021, our sponsor purchased an aggregate of 5,750,000
founder shares for an aggregate purchase price of $25,000, or approximately $0.004 per share. In February 2021, our sponsor transferred
10,000 founder shares to each of Rick Mazer, Dan Ginsberg, Tim Gannon, Terry Wilson and Greg Stevens. On November 4, 2021, we effected
a stock capitalization resulting in our initial stockholders holding 6,468,750 shares of our Class B common stock. On December 19, 2021,
our sponsor automatically surrendered 218,750 of our Class B common stock upon the expiration of the underwriter’s over-allotment
option. The number of founder shares issued (including as a result of our stock capitalization) 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 purchased an aggregate of 8,000,000 warrants at a price
of $1.50 per warrant , that will also be worthless if we do not complete an initial business combination. Holders of founder shares have
agreed (A) to vote any shares owned by them in favor of any proposed initial 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.
The personal and financial interests of the holders of our founder
shares and our officers and directors may influence their motivation in identifying and selecting a target business combination, completing
an initial business combination and influencing the operation of the business following the initial business combination and may result
in a misalignment of interests between the holders of our founder shares and our officers and directors, on the one hand, and our public
stockholders, on the other. In particular, because the founder shares were purchased at approximately $0.004 per share, the holders of
our founder shares (including members of our management team that directly or indirectly own founder shares) could make a substantial
profit after our initial business combination even if our public stockholders lose money on their investment as a result of a decrease
in the post-combination value of their shares of Class A common stock (after accounting for any adjustments in connection with an exchange
or other transaction contemplated by the business combination). For example, a holder of 1,000 founder shares would have paid approximately
$4.00 to obtain such shares. At the time of an initial business combination, such holder would be able to convert such founder shares
into 1,000 shares of our Class A common stock, and would receive the same consideration in connection with our initial business combination
as a public stockholder for the same number of shares of our Class A common stock. If the value of the shares of our Class A common stock
on a post-combination basis (after accounting for any adjustments in connection with an exchange or other transaction contemplated by
the business combination) were to decrease to $5.00 per share of our Class A common stock, the holder of our founder shares would obtain
a profit of approximately $4,996 on account of the 1,000 founder shares that the holder had converted into shares of Class A common stock
in connection with the initial business combination. By contrast, a public stockholder holding 1,000 shares of Class A common stock would
lose approximately $5,000.00 in connection with the same transaction.
Further, each of our officers and directors may have a conflict of
interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors
were to be included by a target business as a condition to any agreement with respect to our initial business combination.
We may issue notes or other debt securities, or otherwise incur
substantial debt, to complete an initial 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 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 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 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; |
| ● | limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements,
and execution of our strategy; 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 services and limited operating activities. This lack of diversification may negatively
impact our operating results and profitability.
Of the net proceeds from our initial public offering and the sale of
the private placement warrants, $255,000,000 is available to complete our initial business combination and pay related fees and expenses
(which includes up to $8,750,000 for the payment of deferred underwriting commissions).
We may effectuate our initial business combination with a single target
business or multiple target businesses simultaneously or within a short period of time. However, we may not be able to effectuate our
initial business combination with more than one target business because of various factors, including the existence of complex accounting
issues and the requirement that we prepare and file pro forma financial statements with the SEC that present operating results and the
financial condition of several target businesses as if they had been operated on a combined basis. By completing our initial business
combination with only a single entity, our lack of diversification may subject us to numerous economic, competitive and regulatory developments.
Further, we would not be able to diversify our operations or benefit from the possible spreading of risks or offsetting of losses, unlike
other entities which may have the resources to complete several business combinations in different industries or different areas of a
single industry. In addition, we intend to focus our search for an initial business combination in 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. We do not, however, intend to purchase multiple businesses in unrelated industries in conjunction with our initial business
combination. With multiple business combinations, we could also face additional risks, including additional burdens and costs with respect
to possible multiple negotiations and due diligence investigations (if there are multiple sellers) and the additional risks associated
with the subsequent assimilation of the operations and services or products of the acquired companies in a single operating business.
If we are unable to adequately address these risks, it could negatively impact our profitability and results of operations.
We may attempt to complete our initial business combination with
a private company about which little information is available, which may result in an initial business combination with a company that
is not as profitable as we suspected, if at all.
In pursuing our initial business combination strategy, we may seek
to effectuate our initial business combination with a privately held company. Very little public information generally exists about private
companies, and we could be required to make our decision on whether to pursue a potential initial business combination on the basis of
limited information, which may result in an initial business combination with a company that is not as profitable as we suspected, if
at all.
Our management may not be able to maintain control of a target business
after our initial business combination.
We may structure an 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 the 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 initial business combination. For example, we could pursue a transaction in which we issue a substantial number of new shares
of Class A common stock in exchange for all of the outstanding capital stock 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 common stock, our stockholders immediately
prior to such transaction could own less than a majority of our outstanding shares of 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 stock than we initially acquired. Accordingly, this may make it more likely that our management will not
be able to maintain our control of the target business. We cannot provide assurance that, upon loss of control of a target business, new
management will possess the skills, qualifications or abilities necessary to profitably operate such business.
We do not have a specified maximum redemption threshold. The absence
of such a redemption threshold may make it possible for us to complete an 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 upon consummation of our initial business combination and after payment of underwriter’s
fees and commissions (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 initial business combination pursuant to the tender offer rules, have entered into privately negotiated agreements
to sell their shares to our sponsor, officers, directors, advisors or their affiliates. In the event the aggregate cash consideration
we would be required to pay for all shares of Class A common stock that are validly submitted for redemption plus any amount required
to satisfy cash conditions pursuant to the terms of the proposed initial business combination exceed the aggregate amount of cash available
to us, we will not complete the initial business combination or redeem any shares, all shares of 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 an initial business combination, blank check
companies have, in the recent past, amended various provisions of their charters and modified governing instruments, including their warrant
agreements. For example, blank check companies have amended the definition of business combination, increased redemption thresholds and
extended the time to consummate an initial business combination and, with respect to their warrants, amended their warrant agreements
to require the warrants to be exchanged for cash and/or other securities. Amending our amended and restated certificate of incorporation
requires the approval of holders of greater than 50% of our common stock, and amending our warrant agreement requires a vote of holders
of greater than 50% of the public warrants and, solely with respect to any amendment to the terms of the private placement warrants or
any provision of the warrant agreement with respect to the private placement warrants, greater than 50% of the number of the then outstanding
private placement warrants. In addition, our amended and restated certificate of incorporation requires 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
(A) to modify the substance or timing of the ability of our public stockholders to seek redemption in connection with our initial business
combination or our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 18 months
from the closing of our initial public offering or (B) with respect to any other provision relating to stockholders’ rights or pre-initial
business combination activity. To the extent any such amendments would be deemed to fundamentally change the nature of any securities
offered through our initial public offering, 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), including an amendment to permit us to withdraw funds from the trust account such that the per share amount investors
will receive upon any redemption or liquidation is substantially reduced or eliminated, may be amended with the approval of holders of
greater than 50% 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 and the trust agreement to facilitate the completion
of an initial business combination that some of our stockholders may not support.
Our amended and restated certificate of incorporation provides that
any of its provisions related to pre-initial 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 and including to permit us to withdraw funds from the trust
account such that the per share amount investors will receive upon any redemption or liquidation is substantially reduced or eliminated)
may be amended if approved by holders of greater than 50% 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 greater than 50% 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 common stock entitled to vote thereon, subject to applicable provisions of the DGCL or applicable
stock exchange rules. We may not issue additional securities that can vote on amendments to our amended and restated certificate of incorporation.
Our initial stockholders, who collectively beneficially owned up to 20% of our common stock upon the closing of our initial public offering,
will participate in any vote to amend our amended and restated certificate of incorporation and/or trust agreement and will have the discretion
to vote in any manner they choose. As a result, we may be able to amend the provisions of our amended and restated certificate of incorporation
which govern our pre-initial business combination behavior more easily than some other blank check companies, and this may increase our
ability to complete an initial 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, 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 (i) to modify the
substance or timing of the ability of our public stockholders to seek redemption in connection with our initial business combination or
our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 18 months from the closing
of our initial public offering or (ii) with respect to any other provision relating to stockholders’ rights or pre-initial business
combination activity, unless we provide our public stockholders with the opportunity to redeem their shares of Class A common stock upon
approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account,
divided by the number of then outstanding public shares. These agreements are contained in a letter agreement that we have entered into
with our sponsor, officers and directors. Our stockholders are not parties to, or third-party beneficiaries of, these agreements and,
as a result, will not have the ability to pursue remedies against our sponsor, officers 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.
We have not yet negotiated the acquisition of any specific business
combination target but intend to target businesses larger than we could acquire with the net proceeds of our initial public offering and
the sale of the private placement warrants. As a result, we may be required to seek additional financing to complete such proposed initial
business combination. We cannot assure you that such financing will be available on acceptable terms, if at all. To the extent that additional
financing proves to be unavailable when needed to complete our initial business combination, we would be compelled to either restructure
the transaction or abandon that particular business combination and seek an alternative target business candidate. Further, the amount
of additional financing we may be required to obtain could increase as a result of future growth capital needs for any particular transaction,
the depletion of the available net proceeds in search of a target business, the obligation to repurchase for cash a significant number
of shares from stockholders who elect redemption in connection with our initial business combination and/or the terms of negotiated transactions
to purchase shares in connection with our initial business combination. If we are unable to complete our initial business combination,
our public stockholders may receive only approximately $10.20 per share plus any pro rata interest earned on the funds held in the trust
account and not previously released to us to pay our franchise and income 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 are unable to complete our initial
business combination, our public stockholders may only receive approximately $10.20 per share on the liquidation of our trust account,
and our warrants will expire worthless. Furthermore, as described in the risk factor entitled “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
$10.20 per share,” under certain circumstances our public stockholders may receive less than $10.20 per share upon the liquidation
of the trust account.
Our initial stockholders may exert a substantial influence on actions
requiring a stockholder vote, potentially in a manner that you do not support.
Upon the closing of our initial public offering, our initial stockholders
owns shares representing 20% of our issued and outstanding shares of 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 and approval of major corporate transactions. If our initial stockholders purchase any units in of our securities
in the aftermarket or in privately negotiated transactions, this would increase their control. 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 initial stockholders, is divided into three classes, each of which will generally serve
for a term of 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 initial business combination. If there is an annual meeting, as a consequence of our “staggered”
board of directors, only a minority of the board of directors will be considered for election and our initial stockholders and only holders
of our founder shares will have the right to vote on the election of directors prior to our initial business combination. In addition,
we have agreed not to enter into a definitive agreement regarding an initial business combination without the prior consent of our sponsor.
Accordingly, our initial stockholders will continue to exert control at least until the completion of our initial business combination.
Unlike many other similarly structured blank check companies, our
initial stockholders will receive additional shares of Class A common stock if we issue shares to consummate an initial business combination.
The founder shares will automatically convert into Class A common stock
at the time of our initial business combination, or earlier at the option of the holders, on a one-for-one basis, subject to adjustment
as provided herein. In the case that additional shares of Class A common stock, or equity-linked securities convertible or exercisable
for Class A common stock, are issued or deemed issued in excess of the amounts offered in this Report and related to the closing of the
initial business combination, the ratio at which founder shares shall convert into Class A common stock will be adjusted so that the number
of Class A common stock issuable upon conversion of all founder shares will equal, in the aggregate, on an as-converted basis, 20% of
the total number of all outstanding shares of common stock upon completion of the initial business combination, excluding any shares or
equity-linked securities issued, or to be issued, to any seller in the business combination and any private placement-equivalent warrants
issued to our sponsor or its affiliates upon conversion of loans made to us. This is different from most other similarly structured blank
check companies in which the initial stockholder will only be issued an aggregate of 20% of the total number of shares to be outstanding
prior to the initial business combination. Additionally, the aforementioned adjustment will not take into account any shares of Class
A common stock redeemed in connection with the business combination. Accordingly, the holders of the founder shares could receive additional
shares of Class A common stock even if the additional shares of Class A common stock, or equity-linked securities convertible or exercisable
for Class A common stock, are issued or deemed issued solely to replace those shares that were redeemed in connection with the business
combination. The foregoing may make it more difficult and expensive for us to consummate an initial business combination.
We may amend the terms of the warrants in a manner that may be adverse
to holders of public warrants with the approval by the holders of at least 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 be issued in registered form under a warrant agreement
between Continental Stock Transfer & Trust Company, as warrant agent, and us. The warrant agreement provides that the terms of the
warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, but requires the approval
by the holders of at least 50% of the then outstanding public warrants to make any change that adversely affects the interests of the
registered holders of public warrants. Accordingly, we may amend the terms of the public warrants in a manner adverse to a holder if holders
of at least 50% of the then outstanding public warrants approve of such amendment. Although our ability to amend the terms of the public
warrants with the consent of at least 50% of the then outstanding public warrants is unlimited, examples of such amendments could be amendments
to, among other things, increase the exercise price of the warrants, convert the warrants into cash or stock, shorten the exercise period
or decrease the number of shares of our Class A common stock purchasable upon exercise of a warrant.
A provision of our warrant agreement may make it more difficult
for us to consummate an initial business combination.
Unlike most blank check companies, if
(i) we issue additional shares of 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 share;
(ii) the aggregate gross proceeds from such issuances represent more
than 60% of the total equity proceeds, and interest thereon, available for the funding of our initial business combination on the date
of the consummation of our initial business combination (net of redemptions), and (iii) the Market Value is below $9.20 per share, then
the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the
Newly Issued Price, and the $18.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 180% of the
higher of the Market Value and the Newly Issued Price. This may make it more difficult for us to consummate an initial business combination
with a target business.
Our warrant agreement will designate the courts of the State of
New York or the United States District Court for the Southern District of New York as the sole and exclusive forum for certain types of
actions and proceedings that may be initiated by holders of our warrants, which could limit the ability of warrant holders to obtain a
favorable judicial forum for disputes with our company.
Our warrant agreement provides that, subject to applicable law, (i)
any action, proceeding or claim against us arising out of or relating in any way to the warrant agreement, including under the Securities
Act, will be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District
of New York, and (ii) that we irrevocably submit to such jurisdiction, which jurisdiction shall be the exclusive forum for any such action,
proceeding or claim. We will waive any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum.
Notwithstanding the foregoing, these provisions of the warrant agreement
will not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal
district courts of the United States of America are the sole and exclusive forum. Any person or entity purchasing or otherwise acquiring
any interest in any of our warrants shall be deemed to have notice of and to have consented to the forum provisions in our warrant agreement.
If any action, the subject matter of which is within the scope the forum provisions of the warrant agreement, is filed in a court other
than a court of the State of New York or the United States District Court for the Southern District of New York (a “foreign action”)
in the name of any holder of our warrants, such holder shall be deemed to have consented to: (x) the personal jurisdiction of the state
and federal courts located in the State of New York in connection with any action brought in any such court to enforce the forum provisions
(an “enforcement action”), and (y) having service of process made upon such warrant holder in any such enforcement action
by service upon such warrant holder’s counsel in the foreign action as agent for such warrant holder.
This choice-of-forum provision may limit a warrant holder’s ability
to bring a claim in a judicial forum that it finds favorable for disputes with our company, which may discourage such lawsuits. Alternatively,
if a court were to find this provision of our warrant agreement inapplicable or unenforceable with respect to one or more of the specified
types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could
materially and adversely affect our business, financial condition and results of operations and result in a diversion of the time and
resources of our management and board of directors.
We may redeem your unexpired warrants prior to their exercise at
a time that is disadvantageous to you, thereby making your warrants worthless.
We have the ability to redeem outstanding warrants at any time after
they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the last reported sales price of
our Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations
and the like) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to the date on which we give
proper notice of such redemption and provided certain other conditions are met. If and when the warrants become redeemable by us, we may
not exercise our redemption right if the issuance of shares of Class A common stock upon exercise of the warrants is not exempt from registration
or qualification under applicable state blue sky laws or we are unable to effect such registration or qualification. Redemption of the
outstanding warrants could force you (i) to exercise your warrants and pay the exercise price therefor at a time when it may be disadvantageous
for you to do so, (ii) to sell your warrants at the then-current market price when you might otherwise wish to hold your warrants or (iii)
to accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, is likely to be substantially
less than the market value of your warrants. None of the private placement warrants are redeemable by us.
Our warrants and founder shares may have an adverse effect on the
market price of our Class A common stock and make it more difficult to effectuate our initial business combination.
We issued warrants to purchase 8,333,333 shares of our Class A common
stock as part of the units offered in our initial public offering, and simultaneously with the closing of our initial public offering,
we issued in a private placement warrants to purchase an aggregate of 8,000,000 shares of Class A common stock at $11.50 per share. Our
initial stockholders currently own an aggregate of 6,250,000 founder shares. The founder shares are convertible into shares of 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 $1.50 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.
To the extent we issue shares of Class A common stock to effectuate
an initial business combination, the potential for the issuance of a substantial number of additional shares of Class A common stock upon
exercise of these warrants and conversion rights could make us a less attractive business combination vehicle to a target business. Any
such issuance will increase the number of issued and outstanding shares of our Class A common stock and reduce the value of the shares
of Class A common stock issued to complete the initial business combination. Therefore, our warrants and founder shares may make it more
difficult to effectuate an initial business combination 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 they are not be redeemable by us and they may be exercised by the holders
on a cashless basis.
Because each unit contains one-third of one redeemable 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-third of one redeemable warrant. No fractional
warrants will be issued upon separation of the units and only whole warrants will trade. Accordingly, unless you purchase at least three
units, you will not be able to receive or trade a whole warrant. This is different from other offerings similar to ours whose units include
one share of common stock 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 an initial 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 warrant to purchase one whole 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 they included a warrant to purchase one whole share.
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, including as a result of the COVID-19 outbreak. 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 an initial business combination meeting certain financial significance tests include historical and/or pro forma financial
statements 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, accounting principles generally accepted in the United States of America, or GAAP, or international
financial reporting standards as issued by the International Accounting Standards Board, or IFRS, depending on the circumstances and the
historical financial statements may be required to be audited in accordance with the standards of the Public Company Accounting Oversight
Board (United States), or PCAOB. These financial statement requirements may limit the pool of potential target businesses we may acquire
because some targets may be unable to provide such financial statements in time for us to disclose such statements in accordance with
federal proxy rules and complete our initial business combination within the prescribed time frame.
We are an emerging growth company and a smaller reporting company
within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to emerging
growth companies or smaller reporting companies, this could make our securities less attractive to investors and may make it more difficult
to compare our performance with other public companies.
We are an “emerging growth company” within the meaning
of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements
that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required
to comply with the auditor 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
exceeds $700 million as of any June 30 before that time, in which case we would no longer be an emerging growth company as of the following
December 31. We cannot predict whether investors will find our securities less attractive because we will rely on these exemptions. If
some investors find our securities less attractive as a result of our reliance on these exemptions, the trading prices of our securities
may be lower than they otherwise would be, there may be a less active trading market for our securities and the trading prices of our
securities may be more volatile.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth
companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that
have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange
Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to
opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an
election to opt out is irrevocable. We have elected not to opt out of such extended transition period, which means that when a standard
is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt
the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our financial
statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out
of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Additionally, we are a “smaller reporting company” as defined
in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including,
among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last
day of the fiscal year in which (1) the market value of our common stock held by non-affiliates exceeds $250 million as of the prior June
30, and (2) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our common stock held
by non-affiliates exceeds $700 million as of the prior June 30. To the extent we take advantage of such reduced disclosure obligations,
it may also make comparison of our financial statements with other public companies difficult or impossible.
Compliance obligations under the Sarbanes-Oxley Act may make it
more difficult for us to effectuate our initial business combination, require substantial financial and management resources, and increase
the time and costs of completing an initial business combination.
Section 404 of the Sarbanes-Oxley Act requires that we evaluate and
report on our system of internal controls beginning with our Annual Report on Form 10-K for the year ending December 31, 2022. 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 company with which we seek to complete our initial business combination may not be in compliance with the provisions
of the Sarbanes-Oxley Act regarding adequacy of its internal controls. The development of the internal control of any such entity to achieve
compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such business combination.
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 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 shares,
which may make the removal of management more difficult and may discourage transactions that otherwise could involve payment of a premium
over prevailing market prices for our securities.
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.
Our amended and restated certificate of incorporation requires,
to the fullest extent permitted by law, that derivative actions brought in our name, actions against our directors, officers, other employees
or stockholders for breach of fiduciary duty and other similar actions may be brought only in the Court of Chancery in the State of Delaware
and, if brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process on such
stockholder’s counsel, which may have the effect of discouraging lawsuits against our directors, officers, other employees or stockholders.
Our amended and restated certificate of incorporation requires, to
the fullest extent permitted by law, that derivative actions brought in our name, actions against our directors, officers, other employees
or stockholders for breach of fiduciary duty and other similar actions may be brought only in the Court of Chancery in the State of Delaware
and, if brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process on such
stockholder’s counsel except any action (A) as to which the Court of Chancery in 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. Any person or entity purchasing or otherwise acquiring any interest in shares of our capital
stock shall be deemed to have notice of and consented to the forum provisions in our amended and restated certificate of incorporation.
This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for
disputes with us or any of our directors, officers, other employees or stockholders, which may discourage lawsuits with respect to such
claims, although our stockholders will not be deemed to have waived our compliance with federal securities laws and the rules and regulations
thereunder. Alternatively, if a court were to find the choice of forum provision contained in our amended and restated certificate of
incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in
other jurisdictions, which could harm our business, operating results and financial condition.
Our amended and restated certificate of incorporation provides that
the exclusive forum provision will be applicable to the fullest extent permitted by applicable law. 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. As a result, the exclusive forum provision will not apply to suits brought to enforce any duty or liability created by the
Exchange Act or any other claim for which the federal courts have exclusive jurisdiction.
Cyber incidents or attacks directed at us could result in information
theft, data corruption, operational disruption and/or financial loss.
We depend on digital technologies, including information systems, infrastructure
and cloud applications and services, including those of third parties with which we may deal. Sophisticated and deliberate attacks on,
or security breaches in, our systems or infrastructure, or the systems or infrastructure of third parties or the cloud, could lead to
corruption or misappropriation of our assets, proprietary information and sensitive or confidential data. As an early stage company without
significant investments in data security protection, we may not be sufficiently protected against such occurrences. We may not have sufficient
resources to adequately protect against, or to investigate and remediate any vulnerability to, cyber incidents. It is possible that any
of these occurrences, or a combination of them, could have adverse consequences on our business and lead to financial loss.
If we effect our initial business combination with a company with
operations or opportunities outside of the United States, we would be subject to a variety of additional risks that may negatively impact
our operations.
If we effect our initial business combination with
a company with operations or opportunities outside of the United States, we would be subject to any special considerations or risks associated
with companies operating in an international setting, including any of the following:
| ● | higher 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; |
| ● | tariffs and trade barriers; |
| ● | regulations related to customs and import/export matters; |
| ● | longer payment cycles and challenges in collecting accounts receivable; |
| ● | tax issues, including but not limited to tax law changes and variations in tax laws as compared to the United States; |
| ● | currency fluctuations and exchange controls; |
| ● | cultural and language differences; |
| ● | changes in industry, regulatory or environmental standards within the jurisdictions where we operate; |
| ● | crime, strikes, riots, civil disturbances, terrorist attacks, natural disasters and wars; |
| ● | deterioration of political relations with the United States; and |
| ● | government appropriations of assets. |
We may not be able to adequately address these additional risks. If
we were unable to do so, our operations might suffer, which may adversely impact our results of operations and financial condition.
We may face risks related to consumer sector companies.
Business combinations with companies in the consumer sector entail
special considerations and risks. If we are successful in completing a business combination with such a target business, we may be subject
to, and possibly adversely affected by, the following risks:
| ● | An inability to compete effectively in a highly competitive environment with many incumbents having substantially greater resources; |
| ● | An inability to manage rapid change, increasing consumer expectations and growth; |
| ● | Limitations on a target business’ ability to protect its intellectual property rights, including its trade secrets, that could
cause a loss in revenue and any competitive advantage; |
| ● | The high cost or unavailability of materials, equipment, supplies and personnel that could adversely affect our ability to execute
our operations on a timely basis; |
| ● | An inability to attract and retain customers; |
| ● | An inability to license or enforce intellectual property rights on which our business may depend; |
| ● | Seasonality and weather conditions that may cause our operating results to vary from quarter to quarter; |
| ● | An inability by us to successfully anticipate changing consumer preferences and buying trends and manage our product line and inventory
commensurate with customer demand; |
| ● | Potential liability for negligence, copyright, or trademark infringement
or other claims based on the nature and content of materials that we may distribute; |
| ● | Dependence of our operations upon third-party suppliers whose
failure to perform adequately could disrupt our business; |
| ● | Our operating results may be adversely affected by changes in
the cost or availability of raw materials and energy; |
| ● | We may be subject to production-related risks which could jeopardize
our ability to realize anticipated sales and profits; |
| ● | Changes in the retail industry and markets for consumer products
affecting our customers or retailing practices could negatively impact customer relationships
and our results of operations; and |
| ● | Our business could involve the potential for product recalls,
product liability and other claims against us, which could affect our earnings and financial
condition. |
Any of the foregoing could have an adverse impact on our operations
following a business combination. However, our efforts in identifying prospective target businesses will not be limited to the consumer
sector. Accordingly, if we acquire a target business in another industry, we will be subject to other risks attendant with the specific
industry in which we operate or target business which we acquire, none of which can be presently ascertained.