Overview
We are a blank check company incorporated as a
Delaware corporation and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization
or similar business combination with one or more businesses, which we refer to throughout this Report as our initial business combination.
We are an early stage and emerging growth company and, as such, we are subject to all of the risk associated with early stage and emerging
growth companies.
On September 9, 2020, we consummated an initial
public offering of 33,421,570 units, including the 3,421,570 units as a result of the underwriter’s partial exercise of its over-allotment
option, at an offering price of $10.00 per unit and a private placement with our Sponsor of 9,700,000 private placement warrants at a
price of $1.00 per warrant. The gross proceeds from our initial public offering, together with certain of the proceeds from the private
placement, totaled $343,915,700 in the aggregate.
We are seeking to capitalize on the multiple decades
of combined investment experience of our management team, board of directors and Advisors who are both technology entrepreneurs as well
as technology-oriented investors with a shared vision of identifying and investing in technology companies. We are also deeply experienced
in identifying omni-channel trends that we believe are even more important in a COVID and post-COVID world. We believe that our management
team’s, board of directors’ and Advisors’ relationships with leading technology company founders, executives of private
and public companies, venture capitalists and growth equity fund managers and their ability to identify and implement value creation initiatives,
in particular via marketing optimization, give us a competitive advantage. Our team has been immersed in the same ecosystem as the current
founders of private companies who are making decisions on how to build currency for future growth and monetization.
While we may pursue an initial business combination
target in any business, industry or geographical location, we intend to focus our search within the consumer internet, digital media and
marketing technology sectors. We intend to capitalize on the ability of our management team to identify, acquire and operate a business
or businesses that can benefit from our management team’s, board of directors’ and Advisors’ established relationships
and operating experience. Our management team has extensive experience in identifying and executing strategic investments and has done
so successfully in a number of sectors, particularly in digital consumer-facing businesses.
Accordingly, on March 1, 2021, we entered
into a Business Combination Agreement (as it may be amended, supplemented or otherwise modified from time to time, the “Business
Combination Agreement”), with Compass Merger Sub, Inc., a Delaware corporation (“Merger Sub”), QOMPLX and Rationem,
LLC, a Delaware limited liability company, in its capacity as the representative of the stockholders of QOMPLX (“QOMPLX Stockholder
Representative”).
QOMPLX is a cloud-native leader in risk analytics
that provides technology solutions in the cybersecurity, risk transfer, and finance spaces. QOMPLX’s customers rapidly ingest, transform,
and contextualize large, complex, and disparate data sources using our platform and solutions in order to better quantify, model, and
predict risks and make critical operational decisions. QOMPLX’s technology platform delivers valuable operational services that
are enhanced by QOMPLX’s domain expertise to help organizations develop more informed risk strategies and make quality decisions
in demanding areas, such as cybersecurity, insurance, finance and government.
The Business Combination Agreement provides for,
among other things, the following transactions: (i) QOMPLX will change its name to “QOMPLX Operations, Inc.”; (ii) our
certificate of incorporation and bylaws will be amended and restated; and (iii) Merger Sub will merge with and into QOMPLX, with
QOMPLX as the surviving company in the merger, and after giving effect to such merger, continuing as our wholly owned subsidiary (the “Merger”).
In addition, in connection with the transactions contemplated by the Business Combination Agreement, we are expected to change our name
to “QOMPLX, Inc.” (“New QOMPLX”) and QOMPLX is expected to consummate each of the acquisitions of Sentar, Inc.,
an Alabama corporation (“Sentar”), and substantially all assets of RPC Tyche LLP, a limited liability partnership incorporated
under the laws of England and Wales (“Tyche”) (such acquisitions, collectively, the “Pipeline Acquisitions” and,
together with the other transactions contemplated by the Business Combination Agreement, including the PIPE Financing and the Bridge Financing
(each as defined below), the “Business Combination”).
Immediately prior to the effective time of the
Business Combination, in accordance with the terms and subject to the conditions of the Business Combination Agreement, outstanding shares
of QOMPLX (other than treasury shares and shares with respect to which appraisal rights under the Delaware General Corporation Law are
properly exercised and not withdrawn) will be exchanged for shares of Class A common stock, par value $0.0001 per share, of New QOMPLX
(the “New QOMPLX Common Stock”) and outstanding QOMPLX vested options to purchase shares of QOMPLX will be exchanged for comparable
options to purchase New QOMPLX Common Stock, in each case, based on an implied QOMPLX equity value of $850,000,000. This implied equity
value of $850,000,000 is increased by the aggregate exercise price of vested options used to purchase shares of QOMPLX and is reduced
by the accrued and unpaid interest under the Notes (as defined below) issued pursuant to the Bridge Financing Agreement (each as defined
below). Unvested and unexercised QOMPLX options will also be exchanged for comparable options to purchase New QOMPLX Common Stock based
on the same exchange ratio that is used for the exchange of the vested options to purchase shares of QOMPLX.
Concurrently with the execution of the Business
Combination Agreement, we entered into (i) subscription agreements (the “Subscription Agreements”) with certain investors,
including, among others, Cannae Holdings, LLC (“Cannae”) and additional third party investors and (ii) a bridge financing
agreement (the “Bridge Financing Agreement”, and together with the Subscription Agreements, collectively, the “Financing
Agreements”) with QOMPLX, Cannae and certain other stockholders of QOMPLX. Pursuant to the Subscription Agreements, (A) each
investor agreed to subscribe for and purchase, and we agreed to issue and sell to such investors, on the closing date of the Business
Combination substantially concurrently with the closing of the Business Combination, an aggregate of 16,000,000 shares of New QOMPLX Common
Stock for a purchase price of $10.00 per share, for aggregate gross proceeds of $160,000,000 (the “PIPE Financing”) and (B) we
agreed to issue an additional 835,539 shares of New QOMPLX Common Stock to Cannae in exchange for its agreement to act as the lead investor
in the PIPE Financing with a $50,000,000 commitment. Pursuant to the Bridge Financing Agreement, QOMPLX has agreed to issue convertible
notes (the “Notes”) to the investors party thereto in an aggregate principal amount of $20,000,000 and hawse have agreed to,
subject to, and conditioned upon the occurrence of, and effective as of immediately prior to, the closing of the Business Combination,
assume the Notes and satisfy and discharge the principal amount and accrued and unpaid interest under each Note as of such time by way
of issuance of one share of New QOMPLX Common Stock for every $10.00 of principal amount and accrued and unpaid interest payable on a
Note as of such time.
Consummation of the transactions contemplated by
the Business Combination Agreement are subject to customary conditions of the respective parties, including receipt of approval from stockholders
of each of Tailwind and QOMPLX for consummation of the transactions and certain other actions related thereto by our stockholders.
Other than as specifically discussed, this Report
does not assume the closing of the transactions contemplated by the Business Combination Agreement.
Our Management Team, Board of Directors and Advisory Board
Philip Krim, our Chairman, has served as Casper
Sleep Inc.’s Chief Executive Officer and as a member of its board of directors since October 2013. Since founding the Company
in 2013, Mr. Krim has led Casper through tremendous growth, growing revenue from $15 million in 2014 to over $440 million
in 2019, and successfully took the company public in February 2020. Prior to that, Mr. Krim was the Chief Executive Officer
of Vocalize Mobile, a mobile search advertising platform for small businesses, from January 2010 until July 2013, and the Chief
Executive Officer of The Merrick Group from January 2003 until December 2009.
In addition to Mr. Krim, our board of directors
includes private equity and venture capital veterans Chris Hollod, our Chief Executive Officer (Founder and Managing Partner of Hollod
Holdings), Matt Eby, our Chief Financial Officer (Co-Founder and former Managing Partner of Tengram Capital Partners), and Alan Sheriff
(Co-Founder and former Chief Executive Officer of Solebury Capital). Additionally, our board of directors also benefits from the rich
expertise of Wisdom Lu (Founding Partner of Stibel & Co. and Bryant Stibel), Neha Parikh (former President of Hotwire), and Will
Quist (Partner at Slow Ventures).
In addition to our management team and board of
directors, we have assembled a highly differentiated Advisory Board of accomplished founders and operators that will help position us
as the value-add partner of choice for today’s leading entrepreneurs. The Advisory Board provides us significant advantages via
their operational expertise and deep networks. Additionally, they provides deep domain expertise across our target sub-verticals which
will be instrumental during our diligence processes. Our Advisory Board also provides us access to unique sourcing opportunities via their
direct networks. Given the extensive operational experiences across our Advisory Board, our Advisors are able to provide guidance to our
eventual target on how to best position the company for long term success.
Our Advisory Board is comprised of Jeff Stibel
(Founding Partner of Stibel & Co. and Bryant Stibel and former President & CEO of Web.com), Michael Kim (Founder and
Managing Partner of Cendana Capital), Dan Teran (Co-Founder and former CEO of Managed by Q), Eli Broverman (Co-Founder of Betterment),
Carter Reum (Co-Founder and General Partner at M13), Courtney Reum (Co-Founder and General Partner at M13), Jesse Pujji (Co-Founder and
Executive Chairman of Ampush), Colin Walsh (Ouai Haircare), and Jeff Hunter (Founder of Talentism LLC).
With respect to the above, past performance of
our management team or our Advisors is not a guarantee of either (i) success with respect to a business combination that may be consummated
or (ii) the ability to successfully identify and execute a transaction. You should not rely on the historical record of management
and its affiliates as indicative of future performance. Our management has no prior experience in operating blank check companies or special
purpose acquisition companies.
Our management team, sponsor, officers, directors
and Advisors may sponsor, form or participate in other blank check companies similar to ours during the period in which we are seeking
an initial business combination. Any such companies may present additional conflicts of interest in pursuing an acquisition target, particularly
in the event there is overlap among investment mandates. However, we do not currently expect that any such other blank check company would
materially affect our ability to complete our initial business combination. In addition, our officers, directors and Advisors 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.
Our Mission
Our mission is to provide growth capital, strategic
expertise and a preferred path to a public listing for disruptive high-growth technology and direct-to-consumer companies. We believe
companies, at a certain stage in their development, will see material benefits from being publicly traded, including increasing brand
and company awareness, developing a more liquid acquisition currency and diversifying funding sources and access to capital. An acquisition
by a blank check company with a team that is well-known to, and respected by, technology and vertically focused company founders, their
current third-party investors and their management teams, we believe, can provide a more transparent and efficient mechanism to bring
a private technology company to the public markets.
Our Strategy and Target Industries
We believe that we are well positioned to identify
attractive initial business combination opportunities across the technology and direct-to-consumer sectors. Our goal is to acquire a target
that we can help achieve significant organic growth and could serve as a platform for future add on acquisitions with the goal of becoming
an integrated provider offering a broad range of products or services across the technology ecosystem.
High-growth technology and direct-to-consumer companies
that are successful at creating data-driven direct to consumer business models and addressing the significant consumer demand for more
personalized experiences will reach significant financial scale and create shareholder value. With consumers spending more time online,
brands can more easily control the entire customer journey from discovery to payment, often driving higher lifetime values. With transactions
occurring online, there has been an explosion of data generated by consumers such as frequency of webpage visits, transaction size,
viewed and saved items, checkout cart items, etc. As all this new data provides an opportunity for better targeting and marketing,
many private companies have been raising significant private capital to deploy via marketing with the hopes of supercharging growth. However,
many companies lack the marketing sophistication required to build a sustainable competitive moat with positive long-term unit economics.
As our management team, board of directors and Advisors have seen, the best companies in these categories are able to efficiently acquire
new customers and deliver a personalized experience which increases engagement and drives higher long-term retention.
Key sub-sectors within the technology ecosystem
that we believe are poised to experience rapid growth and could benefit from the experiences of our management team, board of directors
and Advisors include, but are not limited to, telehealth, eSports and digital gaming/betting, digital health and wellness, agriculture
and food technology, education technology, financial and insurance technology, real estate technology, space technology and enterprise
software companies, among others. The success or failure of companies that operate in these markets is largely driven by their ability
to harness the power of data-driven marketing in an efficient manner.
Tremendous market value has been created by these
types of businesses over the last decade as entrepreneurs and investors have raced to build the next-generation of technology and direct-to-consumer
internet brands.
Despite the significant growth of the sector, many
companies remain private with no clear timetable to become public. We believe there exists a set of companies that with the right guidance
and leadership could and should be public companies. Within our target universe there have been over 1,000 companies that raised $50 million
or more from 2015 to June 2020, representing approximately $200 billion plus of private capital raised in aggregate. In the
same time period only approximately 100 companies in our target universe went public raising approximately $45 billion in aggregate
capital (Source: Pitchbook, Thompson One and Capital IQ). This significant imbalance in the number of private companies and capital raised
vs public companies is emblematic of a broken IPO market. With so much capital tied up in illiquid private markets, we believe there will
be significant interest from founders and investors in these categories to engage with our team to achieve a public listing.
The coronavirus (“COVID-19”) outbreak
has proven to be a catalyst for growth for our potential target universe, pulling forward digital consumer trends and adoption across
several consumer categories. There are a number of businesses who have seen massive growth due in part to COVID-19 and they will need
capital to effectively address the increased demand for their products and services. We will likely represent an attractive option to
many of these companies as an efficient and strategic way to raise capital and reach the public markets quickly.
Our management team, board of directors and Advisors
have extensive experience building, advising and investing in companies operating in the same ecosystem as many of the companies in our
target categories. We will leverage our embedded relationships and network of peers in the space to quickly engage with founders in our
target universe. Our unique set of experiences building omni-channel business models and operations will be viewed as a strategic asset
to founders in our target categories. For example, in February 2020 our Chairman, Mr. Krim, successfully led the public debut
of an omni-channel digital first brand, (Casper Sleep (NYSE:CSPR)), putting him in a unique position to advise other founders in the category
looking to reach the public markets.
Additionally, our management team, board of directors
and Advisors have an extensive track record of building data-driven marketing organizations, which has resulted in significant growth
in both revenue and shareholder value. Our experience building sustaining consumer internet brands and leading marketing teams uniquely
positions us to help companies in the category achieve their long-term vision and outperform the competition.
We aim to leverage our extensive expertise driving
marketing innovation and revenue growth within leading public technology companies to help founders achieve long-term success and overcome
any deterrents to becoming a public company. By leveraging our extensive operational experience and network, we believe we can provide
significant benefits to potential targets and public market investors that can potentially lead to attractive long-term risk-adjusted
returns in the public markets.
We believe there are significant opportunities
in these industries to drive value creation, and the below themes will be general areas of focus:
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Traditional late-stage growth equity targets looking for a liquidity event and valuable operating and marketing expertise;
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Business combinations (e.g. two competitors in similar segments) to achieve synergies from enhanced scale, liquidity and increased marketing efficiency;
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Verticalization of the target company through acquisitions (e.g. within downstream infrastructure and supply chain) to improve margins and IP defensibility;
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Global consolidation (e.g. two companies in similar segments but different geographies) to achieve synergies from enhanced scale, liquidity and increased marketing efficiency;
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Special situations (e.g., spin outs, divestitures) with strong brands that have potential for operational improvement and future growth;
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Rapidly growing companies with opportunity to change large categories.
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Our Value Proposition And Differentiation
Our management team, board of directors and Advisors
bring a unique set of operational skills and transaction experience that will be highly relevant for today’s entrepreneur. In addition,
the collective team’s capital markets, M&A and capital raising experience will be invaluable to a potential target as they look
to ready themselves for a public debut.
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Extensive Operating Experience With Rare Skillsets: Our management team, board of directors and Advisors have extensive experience serving in leadership positions for high-growth public and private companies. The team boasts significant operational experience driving growth through innovative marketing techniques with Mr. Krim introducing innovative quantitative marketing approaches at Casper Sleep (NYSE:CSPR), with key areas of expertise including: (i) identifying superior brands and products using (a) data science to optimize audiences, (b) optimization of media mix of advertising (often purchased programmatically through real-time auctions), and (c) driving the ‘lifetime value’ of customers (via behavioral signals to drive promotions and engagement); and (ii) capturing and architecting the right customer data elements, using predictive modeling to drive propensity models that understand a customer’s wants and needs, and putting in place optimal marketing technologies to deploy experiences in real time. This expertise will be highly valuable for identifying categories and companies with under-optimized marketing practices and rapidly scaling customer acquisition and lifetime value, as well as for potential targets to understand their own customers and acquiring them efficiently to unlock growth.
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Significant Public Equity Capital Markets Experience: Our management team, board of directors and Advisors brings decades of “best-practice” know-how to ensure the target company’s success as a public company, providing guidance around (i) investor relations (ii) equity research (iii) introductions to long-only funds, among others. Recently, Solebury Capital advised Casper Sleep (NYSE:CSPR) on its IPO. Mr. Eby has significant experience navigating the public markets leading Starwood Property Trust’s (NYSE:STWD) $930 million IPO in 2009. Additionally, Mr. Krim successfully took Casper Sleep (NYSE:CSPR) public in February 2020.
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Attractive Industry Dynamics For SPAC Success: In the current environment, there is growing investor demand for companies with (i) a direct relationship with their customers, (ii) ability to efficiently market to and grow their customer base and (iii) high-growth and clear path to profitability. Our target verticals are ripe for consolidation with few large-cap companies and thousands of sub-scale companies.
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Founder Friendly Platform For Growth: The team will bring to bear operational expertise and capital to accelerate the targets organic growth initiatives such as (i) optimization of marketing strategies (ii) operational improvements and (iii) new product development, among others. Our management team, board of directors and Advisors have the experience and track record to successfully integrate add-on acquisitions, bringing PE Sponsor-like support, without running / controlling the business.
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Transaction Expertise With Access To Proprietary Deal Flow: Having operated and invested in high-growth technology and direct-to-consumer companies across their corporate life cycles, our management team, board of directors and Advisors have developed deep relationships with key large multi-national organizations and leading private & public equity investors including leading venture and growth investors in Silicon Valley and across the globe. Our team has a strong track record of building proprietary deal flow and identifying and executing successful M&A transactions during tenures across A-Grade Investments, Tengram Capital Partners, Solebury Capital, Casper Sleep (NYSE:CSPR), and Credit Suisse. Our reputation and relevant experience will likely make Tailwind a preferred partner for potential targets. Mr. Eby, in particular, brings significant experience managing and executing complex transactions across a variety of deal structures.
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Business Combination Criteria and Sourcing Process
We intend to leverage what we believe is a competitive
advantage in sourcing potential targets that will materially benefit from our unique expertise and where we are best situated to augment
the value of the business following the completion of the initial business combination.
We believe our management team is well positioned
to identify unique opportunities across the technology private company landscape. Our selection process will leverage our relationships
with leading technology company founders, executives of private and public companies, venture capitalists and growth equity funds, in
addition to the extensive industry and geographical reach of the management team, board of directors and Advisors which we believe should
provide us with a key competitive advantage in sourcing potential business combination targets.
We also believe that our management team’s,
the board of directors’ and Advisors’ reputation, experience and track record of making investments in the technology industry
will make us a preferred partner for these potential targets. Given our profile and thematic approach, we anticipate that target business
candidates may be brought to our attention from various unaffiliated sources, in particular founders of, and investors in, other private
and public technology companies in our networks.
We intend to focus our target sourcing efforts
on assessing companies that we believe would benefit significantly from being publicly traded. Further, we believe that we are providing
an interesting alternative investment opportunity that capitalizes on key trends impacting the capital markets for technology companies.
Consistent with our strategy, we have identified
the following general criteria and guidelines that we believe are important in evaluating prospective target businesses. We expect to
conduct a comprehensive due diligence review which will include, among other things, management and employee meetings, review of financial
information, facility inspection, and an extensive review of all other material target company information. We intend to use these criteria
as guidelines in evaluating potential acquisition opportunities, but an acquisition may be executed even if it does not meet our guidelines.
Acquisition Criteria
When candidate companies are being evaluated, we
expect to use the following, non-exclusive criteria for determining opportunities.
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Size: We intend to target entities whose enterprise value is between approximately $750 million to $2 billion, with a focus on founder-led, late stage growth equity opportunities in the high-growth technology and direct-to-consumer ecosystems with defensible market positions. We believe these companies offer long term risk-adjusted return potential.
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Founder-Led Businesses Where We Have Strong Relationships: Strong, experienced management team that could benefit from our extensive networks and insights with a track record of driving growth and profitability. Founders that have a long-term vision for the future of their business and want to build a lasting company. Companies where we have a unique relationship and can engage directly with the founder(s), potentially without participating in an auction.
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Large Addressable Markets Being Disrupted by Technology: We plan to identify high quality businesses run by exceptional teams pursuing large market opportunities. Target companies positioned in industries that are ripe for disruption and technological advancements. Sectors at an inflection point, where technology and disruptors will be uniquely advantaged to capture market share and future growth. Scalable platform in a market ripe for horizontal and / or vertical consolidation.
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Strong Growth And Attractive Margin Profile: Consistent organic revenue growth with scalable unit economics. Potential for future top line and margin expansion. Ability to generate attractive returns on capital and has a compelling use for capital to achieve their growth strategy.
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Opportunities Where Our Team Can Add Value: Sector where management can benefit from our extensive networks and insights. Taking advantage of our connections in both the public and private markets in order to generate firm value and future growth. Leverage industry experience, financial acumen and network of management team to identify additional operational and marketing improvement opportunities.
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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 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 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, or the SEC.
Our Acquisition Process
In evaluating a prospective target business, we
expect to conduct a thorough due diligence review that will encompass, among other things, meetings with incumbent management and employees,
document reviews, inspection of facilities, as well as a review of financial and other information that will be made available to us.
We will also utilize our operational and capital allocation experience.
We are not prohibited from pursuing an initial
business combination with a company that is affiliated with our sponsor, officers or directors. In the event we seek to complete our initial
business combination with a company that is affiliated with our sponsor, officers or directors, we, or a committee of independent directors,
will obtain an opinion from an independent investment banking firm or an independent accounting firm that our initial business combination
is fair to our company from a financial point of view. We are not required to obtain such an opinion in any other context.
Members of our management team indirectly own founder
shares 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. 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 was included by a target business as a condition to any agreement with respect to our
initial business combination.
Each of our officers and directors presently has,
and any of them in the future may have, additional, fiduciary or contractual obligations to other entities pursuant to which such officer
or director is or will be required to present a business combination opportunity. Accordingly, if any of our officers or directors becomes
aware of a business combination opportunity which is suitable for an entity to which he or she has then-current fiduciary or contractual
obligations, he or she has honored his or her fiduciary or contractual obligations to present such opportunity to such entity. We do not
believe, however, that the fiduciary duties or contractual obligations of our officers or directors materially affect our ability to complete
our 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 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.
Initial Business Combination
So long as our securities are then listed on the
NYSE, our initial business combination must occur with one or more target businesses that together have an aggregate fair market value
of at least 80% of the assets held in the trust account (excluding the deferred underwriting commissions and taxes payable on the income
earned on the trust account) at the time of the agreement to enter into the initial business combination. If our board is not able to
independently determine the fair market value of the target business or businesses, we will obtain an opinion from an independent investment
banking firm or an independent accounting firm with respect to the satisfaction of such criteria.
We anticipate structuring our initial business
combination so that the post-transaction company in which our public stockholders own shares will own or acquire 100% of the equity interests
or assets of the target business or businesses. We may, however, structure our initial business combination such that the post-transaction
company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the
target management team or stockholders or for other reasons. However, we will only complete such business combination if the post-transaction
company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in
the target sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended,
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 business combination may collectively own a minority interest in the post-transaction company, depending
on valuations ascribed to the target and us in the business combination transaction. For example, we could pursue a transaction in which
we issue a substantial number of new shares in exchange for all of the outstanding capital stock 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 valued for purposes
of the 80% of net assets test. If the business combination involves more than one target business, the 80% of net assets test will be
based on the aggregate value of all of the target businesses and we will treat the target businesses together as the initial business
combination for purposes of a tender offer or for seeking stockholder approval, as applicable. In addition, as long as our sponsor is
controlled by Philip Krim, we have agreed not to enter into a definitive agreement regarding an initial business combination without the
prior consent of our sponsor. If our securities are not then listed on the NYSE for whatever reason, we would no longer be required to
meet the foregoing 80% of net asset test.
Our Management Team
Members of our management team 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 that any member of our management team will devote in any
time period will vary based on whether a target business has been selected for our initial business combination and the current stage
of the business combination process.
We believe our management team’s operating
and transaction experience and network of relationships with investment banks, private equity firms, professional advisors and senior
industrial executives provide us with a substantial number of potential business combination targets. Over the course of their careers,
the members of our management team have developed a broad network of contacts and corporate relationships around the world. This network
has grown through the activities of our management team sourcing, acquiring and financing businesses, our management team’s relationships
with sellers, financing sources and target management teams. Our management team is also highly experienced in executing transactions
under varying economic and financial market conditions.
Status as a Public Company
We believe our structure will make us an attractive
business combination partner to target businesses, including QOMPLX. As an existing public company, we offer a target business an alternative
to the traditional initial public offering through a merger or other business combination. In this situation, the owners of the target
business would exchange their shares of stock in the target business for shares of our stock or for a combination of shares of our 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 certain target businesses will find this method a more certain and cost effective method
to becoming a public company than the typical initial public offering. In a typical initial public offering, there are additional expenses
incurred in marketing, road show and public reporting efforts that may not be present to the same extent in connection with a business
combination with us.
Furthermore, once a proposed business combination
is completed, the target business will have effectively become public, whereas an initial public offering is always subject to the 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. Once public, we believe the target business would then have greater access to capital and an additional
means of providing management incentives consistent with stockholders’ interests. It can offer further benefits by augmenting a
company’s profile among potential new customers and vendors and aid in attracting talented employees.
We are an “emerging growth company,”
as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As such, we are eligible to take advantage of
certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies
including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley
Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from
the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments
not previously approved. If some investors find our securities less attractive as a result, there may be a less active trading market
for our securities and the prices of our securities may be more volatile.
In addition, Section 107 of the JOBS Act also
provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of
the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption
of certain accounting standards until those standards would otherwise apply to private companies. We intend to take advantage of the benefits
of this extended transition period.
We will remain an emerging growth company until
the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of our initial public
offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be
a large accelerated filer, which means the market value of our Class A common stock that is held by non-affiliates exceeds $700 million
as of the end of the prior fiscal year’s second fiscal quarter, and (2) the date on which we have issued more than $1.0 billion
in non-convertible debt securities during the prior three-year period.
Financial Position
As
of December 31, 2020, we had $334,321,131 held in the trust account, before payment
of $11,697,550 in deferred underwriting fees. With the funds available, we offer a target business
a variety of options such as creating a liquidity event for its owners, providing access to the expertise of our management team, 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 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.
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 will effectuate our initial business
combination using cash from the proceeds of our initial public offering and the private placement of the private placement warrants, our
capital stock, debt or a combination of these as the consideration to be paid in our initial business combination. We may seek to complete
our initial business combination with a company or business that may be financially unstable or in its early stages of development or
growth, which would subject us to the numerous risks inherent in such companies and businesses.
If our initial business combination is paid for
using equity or debt securities, or not all of the funds released from the trust account are used for payment of the consideration in
connection with our business combination or used for redemptions of purchases 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. Subject
to compliance with applicable securities laws, we would expect to complete such financing only simultaneously with the completion of our
business combination. In the case of an initial business combination funded with assets other than the trust account assets, our tender
offer documents or proxy materials disclosing the 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.
Sources of Target Businesses
We anticipate that target business candidates will
be brought to our attention from various unaffiliated sources, including investment market participants, private equity groups, investment
banking firms, consultants, accounting firms and large business enterprises. Target businesses may be brought to our attention by such
unaffiliated sources as a result of being solicited by us through calls or mailings. These sources may also introduce us to target businesses
in which they think we may be interested on an unsolicited basis, since many of these sources will have read this report and know what
types of businesses we are targeting. Our officers and directors, as well as their affiliates, may also bring to our attention target
business candidates 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. While
we do not presently anticipate engaging the services of professional firms or other individuals that specialize in business acquisitions
on any formal basis, we may engage these firms or other individuals in the future, in which event we may pay a finder’s fee, consulting
fee or other compensation to be determined in an arm’s length negotiation based on the terms of the transaction. We will engage
a finder only to the extent our management determines that the use of a finder may bring opportunities to us that may not otherwise be
available to us or if finders approach us on an unsolicited basis with a potential transaction that our management determines is in our
best interest to pursue. Payment of finder’s fees is customarily tied to completion of a transaction, in which case any such fee
will be paid out of the funds held in the trust account. In no event, however, will our sponsor or any of our existing officers or directors,
or any entity with which they are affiliated, be paid any finder’s fee, consulting fee or other compensation prior to, or for any
services they render in order to effectuate, the completion of our initial business combination (regardless of the type of transaction
that it is). We have agreed to pay an affiliate of our sponsor a total of $10,000 per month for office space, utilities and secretarial
and administrative support and 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 acquisition candidate.
We are not prohibited from pursuing an initial
business combination with a business combination target that is affiliated with our sponsor, officers or directors or making the acquisition
through a joint venture or other form of shared ownership with our sponsor, officers or directors. In the event we seek to complete our
initial business combination with a business combination target that is affiliated with our sponsor, officers or directors, we, or a committee
of independent directors, would obtain an opinion from an independent investment banking firm or an independent accounting firm that such
an initial business combination is fair to our company from a financial point of view. We are not required to obtain such an opinion in
any other context.
If any of our officers or directors becomes aware
of a 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
Our initial business combination must occur with
one or more target businesses that together have an aggregate fair market value of at least 80% of our assets held in the trust account
(excluding the deferred underwriting commissions and taxes payable on the income earned on the trust account) at the time of the agreement
to enter into the initial business combination. The fair market value of the target or targets will be determined by our board of directors
based upon one or more standards generally accepted by the financial community, such as discounted cash flow valuation or value of comparable
businesses. If our board is not able to independently determine the fair market value of the target business or businesses, we will obtain
an opinion from an independent investment banking firm or from an independent accounting firm, with respect to the satisfaction of such
criteria. We do not intend to purchase multiple businesses in unrelated industries in conjunction with our initial business combination.
Subject to this requirement, our management will have virtually unrestricted flexibility in identifying and selecting one or more prospective
target businesses, although we will not be permitted to effectuate our initial business combination with another blank check company or
a similar company with nominal operations.
In any case, we will only complete an initial business
combination in which we own or acquire 50% or more of the outstanding voting securities of the target or otherwise acquire a controlling
interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act. If
we own or acquire less than 100% of the equity interests or assets of a target business or businesses, the portion of such business or
businesses that are owned or acquired by the post-transaction company is what will be valued for purposes of the 80% of net assets test.
There is no basis for investors in our initial public offering to evaluate the possible merits or risks of any target business with which
we may ultimately complete our business combination.
To the extent we effect our business combination
with a company or business that may be financially unstable or in its early stages of development or growth we may be affected by numerous
risks inherent in such company or business. Although our management will endeavor to evaluate the risks inherent in a particular target
business, we cannot assure you that we will properly ascertain or assess all significant risk factors.
In evaluating a prospective target business, we
expect to conduct a thorough due diligence review, which will 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.
Lack of Business Diversification
For an indefinite period of time after the completion
of our initial business combination, the prospects for our success may depend entirely on the future performance of a single business.
Unlike other entities that have the resources to complete business combinations with multiple entities in one or several industries, it
is probable that we will not have the resources to diversify our operations and mitigate the risks of being in a single line of business.
By completing our business combination with only a single business, our lack of diversification may:
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subject us to negative economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact on the particular industry in which we operate after our initial business combination; and
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cause us to depend on the marketing and sale of a single product or limited number of products or services.
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Limited Ability to Evaluate the Target’s Management Team
Although we intend to closely scrutinize the management
of a prospective target business when evaluating the desirability of effecting our 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 or may otherwise be subject to change. While it is possible that one or
more of our directors will remain associated in some capacity with us following our business combination, it is unlikely that any of them
will devote their full efforts to our affairs subsequent to our 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. With respect to the proposed Business
Combination with QOMPLX, such matters are specified in the Business Combination Agreement.
Following a business combination, we may seek to
recruit additional managers to supplement the incumbent management of the target business. We cannot assure you that we will have the
ability to recruit additional managers, or that those additional managers will have the requisite skills, knowledge or experience necessary
to enhance the incumbent management.
Stockholders May Not Have the Ability to Approve Our Initial
Business Combination
We may conduct redemptions without a stockholder
vote pursuant to the tender offer rules of the SEC, subject to the provisions of our amended and restated certificate of incorporation
and bylaws. 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
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Whether
Stockholder Approval is Required
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Purchase
of assets
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No
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Purchase
of stock of target not involving a merger
with the company
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No
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Merger
of target into a subsidiary of the company
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No
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Merger
of the company with a target
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Yes
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Under the NYSE’s listing rules, stockholder
approval would be required for our initial business combination if, for example:
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we issue (other than in a public offering) shares of Class A common stock that will either (a) be equal to or in excess of 20% of the number of shares of our Class A common stock then outstanding or (b) have voting power equal to or in excess of 20% of the voting power then outstanding;
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any of our directors, officers or substantial stockholders (as defined by the NYSE 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 Class A common stock to be issued, or if the number of shares of Class A common stock into which the securities may be convertible or exercisable, exceeds either (a) 1% of the number of shares of Class A 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 stockholders; or
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the issuance or potential issuance of common stock will result in our undergoing a change of control.
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The decision as to whether we will seek stockholder
approval of a proposed business combination in those instances in which stockholder approval is not required by law or applicable stock
exchange rules will be made by us, solely in our discretion, and will be based on business and legal reasons, which include a variety
of factors, including, but not limited to:
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the timing of the transaction, including in the event we determine stockholder approval would require additional time and there is either not enough time to seek stockholder approval or doing so would place the company at a disadvantage in the transaction or result in other additional burdens on the company;
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the expected cost of holding a stockholder vote;
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the risk that the stockholders would fail to approve the proposed business combination;
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other time and budget constraints of the company; and
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additional legal complexities of a proposed business combination that would be time-consuming and burdensome to present to stockholders.
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Permitted Purchases of Our Securities
In the event we seek stockholder approval of our
business combination and we do not conduct redemptions in connection with our business combination pursuant to the tender offer rules,
our sponsor, directors, officers, Advisors or their affiliates may purchase shares in privately negotiated transactions or in the open
market either prior to or following the completion of our initial business combination. However, they have no current commitments, plans
or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds
in the trust account will be used to purchase shares in such transactions. They will be restricted from making any such purchases when
they are in possession of any material non-public information not disclosed to the seller or if such purchases are prohibited by Regulation M
under the Exchange Act. Such a purchase may include a contractual acknowledgement that such stockholder, although still the record holder
of our shares is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. Subsequent to the
consummation of our initial public offering, we will adopt an insider trading policy which will require insiders to refrain from purchasing
shares during certain blackout periods and when they are in possession of any material non-public information and to clear all trades
with our legal counsel prior to execution. We cannot currently determine whether our insiders will make such purchases pursuant to a Rule 10b5-1
plan, as such purchases will be dependent upon several factors, including but not limited to, the timing and size of such purchases. Depending
on such circumstances, our insiders may either make such purchases pursuant to a Rule 10b5-1 plan or determine that such a plan is
not necessary.
In the event that our sponsor, directors, officers,
Advisors or their affiliates purchase shares in privately negotiated transactions from public stockholders who have already elected to
exercise their redemption rights, such selling stockholders would be required to revoke their prior elections to redeem their shares.
We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under
the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers
determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will comply with such rules.
The purpose of such purchases would be to (i) vote
such shares in favor of the business combination and thereby increase the likelihood of obtaining stockholder approval of the business
combination or (ii) to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or
a certain amount of cash at the closing of our business combination, where it appears that such requirement would otherwise not be met.
This may result in the completion of our business combination that may not otherwise have been possible.
In addition, if such purchases are made, the public
“float” of our common stock may be reduced and the number of beneficial holders of our securities may be reduced, which may
make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.
Our sponsor, officers, directors 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 the 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.
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 in the trust account is initially anticipated to be approximately $10.00 per public share. The per-share
amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions we
will pay to the 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 (i) to waive their redemption rights with respect to any founder shares and public shares held by them in connection
with the completion of our initial business combination and a stockholder vote to approve an amendment to our amended and restated certificate
of incorporation (A) that would modify the substance or timing of our obligation to provide holders of shares of Class A common
stock the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares
if we do not complete our initial business combination within 24 months from the closing of our initial public offering or (B) with
respect to any other provision relating to the rights of holders of our Class A commons stock and (ii) to waive their rights
to liquidating distributions from the trust account with respect to any founder shares they hold if we fail to consummate an initial business
combination within 24 months from the closing of our initial public offering (although they will be entitled to liquidating distributions
from the trust account with respect to any public shares they hold if we fail to complete our initial business combination within the
prescribed time frame).
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 business combination or (ii) by means of a tender
offer. The decision as to whether we will seek stockholder approval of a proposed business combination or conduct a tender offer will
be made by us, solely in our discretion, and will be based on a variety of factors described in the section “— Stockholders
May Not Have the Ability to Approve Our Initial Business Combination,” 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. Asset acquisitions
and stock purchases would not typically require stockholder approval while direct mergers with our company where we do not survive and
any transactions where we issue more than 20% of our outstanding common stock or seek to amend our amended and restated certificate of
incorporation would require stockholder approval. If we structure a business combination transaction with a target company in a manner
that requires stockholder approval, we will not have discretion as to whether to seek a stockholder vote to approve the proposed business
combination. We intend to 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.
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:
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conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers; and
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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.
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Upon the public announcement of our 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 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:
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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
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file proxy materials with the SEC.
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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 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 have agreed to vote their founder shares and any public shares
purchased during or after our initial public offering in favor of our initial business combination. For purposes of seeking approval of
the majority of our outstanding shares of common stock voted, non-votes will have no effect on the approval of our initial business combination
once a quorum is obtained. As a result, in addition to our initial stockholders’ founder shares, we would need 12,533,089, or 37.5%,
of the 33,421,570 public shares sold in our initial public offering to be voted in favor of a transaction (assuming all outstanding shares
are voted) in order to have our initial business combination approved. We will give at least 10 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
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 business combination may require: (i) cash consideration to be paid to the target or its owners; (ii) cash
to be transferred to the target for working capital or other general corporate purposes; or (iii) the retention of cash to satisfy
other conditions in accordance with the terms of the proposed business combination. In the event the aggregate cash consideration we would
be required to pay for all 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 business combination exceed the aggregate amount of cash available to us, we will
not complete the business combination or redeem any shares, and all shares of Class A common stock submitted for redemption will
be returned to the holders thereof.
Limitation on Redemption Upon Completion of Our Initial Business
Combination if We Seek Stockholder Approval
Notwithstanding the foregoing, if we seek stockholder
approval of our initial business combination and we do not conduct redemptions in connection with our 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,” without our prior consent. We
believe this restriction will discourage stockholders from accumulating large blocks of shares, and subsequent attempts by such holders
to use their ability to exercise their redemption rights against a proposed business combination as a means to force us or our management
to purchase their shares at a significant premium to the then-current market price or on other undesirable terms. Absent this provision,
a public stockholder holding more than an aggregate of 15% of the shares sold in our initial public offering could threaten to exercise
its redemption rights if such holder’s shares are not purchased by us 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, we believe we will limit the ability of a small group of stockholders to unreasonably attempt to block our ability
to complete our business combination, particularly in connection with a business combination with a target that requires as a closing
condition that we have a minimum net worth or a certain amount of cash. However, we would not be restricting our stockholders’ ability
to vote all of their shares (including Excess Shares) for or against our business combination.
Tendering Stock Certificates in Connection with a Tender Offer
or Redemption Rights
As described above, we intend to require our public
stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,”
to, at the holder’s option, either deliver their stock certificates to our transfer agent or deliver their shares to our transfer
agent electronically using The Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) system, prior to the date set forth
in the proxy materials or tender offer documents, as applicable. In the case of proxy materials, this date may be up to two business days
prior to the date on which the vote on the proposal to approve the initial business combination is initially to be held. In addition,
if we conduct redemptions in connection with a stockholder vote, we intend to require a public stockholder seeking redemption of its public
shares to also submit a written request for redemption to our transfer agent two business days prior to the initially scheduled vote in
which the name and other identifying information of the beneficial owner of such shares is included. The 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
indicate whether we are requiring public stockholders to satisfy such delivery requirements. Accordingly, a public stockholder would have
up to two business days prior to the initially scheduled vote on the initial business combination if we distribute proxy materials, or
from the time we send out our tender offer materials until the close of the tender offer period, as applicable, to submit or tender its
shares if it wishes to seek to exercise its redemption rights. In the event that a stockholder fails to comply with these or any other
procedures disclosed in the proxy or tender offer materials, as applicable, its shares may not be redeemed. 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
process and the act of certificating the shares or delivering them through the DWAC system. The transfer agent will typically charge the
broker submitting or tendering shares a fee of approximately $80.00 and it would be up to the broker whether or not to pass this cost
on to the redeeming holder. However, this fee would be incurred regardless of whether or not we require holders seeking to exercise redemption
rights to submit or 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.
Any request to redeem such shares, once made, may
be withdrawn at any time up to the date set forth in the proxy materials or tender offer documents, 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 24 months from
the closing of our initial public offering.
Redemption of Public Shares and Liquidation if no Initial Business
Combination
Our sponsor, executive officers and directors have
agreed that we will have only 24 months from the closing of our initial public offering to complete our initial business combination.
If we are unable to complete our business combination within such 24-month 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 business combination within the 24-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 24 months from the closing
of our initial public offering. However, if our initial stockholders 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 24-month time period.
Our sponsor, executive officers and directors have
agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation
that would modify the substance or timing of our obligation to provide holders of our Class A common stock the right to have their
shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial
business combination within 24 months from the closing of our initial public offering or with respect to any other provision relating
to the rights of holders of our Class A common stock 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 (which interest shall be net of taxes payable) divided by the number of
the then outstanding public shares. However, we may not redeem our public shares in an amount that would cause our net tangible assets
to be less than $5,000,001 upon consummation of our initial business combination.
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 $2,245,798
held outside the trust account as of December 31, 2020, although we cannot assure you that there will be sufficient funds for such
purpose. However, if those funds are not sufficient to cover the costs and expenses associated with implementing our plan of dissolution,
to the extent that there is any interest accrued in the trust account not required to pay our franchise and income 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 $10.00.
The proceeds deposited in the trust account could, however, become
subject to the claims of our creditors which would have higher priority than the claims of our public stockholders. We cannot assure you
that the actual per-share redemption amount received by stockholders will not be substantially less than $10.00. Under Section 281(b) of
the DGCL, our plan of dissolution must provide for all claims against us to be paid in full or make provision for payments to be made
in full, as applicable, if there are sufficient assets. These claims must be paid or provided for before we make any distribution of our
remaining assets to our stockholders. While we intend to pay such amounts, if any, we cannot assure you that we will have funds sufficient
to pay or provide for all creditors’ claims.
Although we will seek to have all vendors, service
providers (other than our independent registered public accounting firm), prospective target businesses or other entities with which we
do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account
for the benefit of our public stockholders, there is no guarantee that they will execute such agreements or even if they execute such
agreements that they would be prevented from bringing claims against the trust account including but not limited to fraudulent inducement,
breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case
in order to gain an advantage with respect to a claim against our assets, including the funds held in the trust account. If any third
party refuses to execute an agreement waiving such claims to the monies held in the trust account, our management will perform an analysis
of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if management
believes that such third party’s engagement would be significantly more beneficial to us than any alternative. Examples of possible
instances where we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose
particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree
to execute a waiver or in cases where 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. Our sponsor has agreed that it will be liable to us if and
to the extent any claims by a vendor for services rendered or products sold to us, or a prospective target business with which we have
discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below (i) $10.00 per public share
or (ii) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account, due
to reductions in value of the trust assets, in each case net of the interest that may be withdrawn to pay our tax obligations, except
as to any claims by a third party who executed a waiver of any and all rights to seek access to the trust account and except 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, then our sponsor will not
be responsible to the extent of any liability for such third party claims. We have not independently verified whether our sponsor has
sufficient funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are securities of our company.
We have not asked our sponsor to reserve for such indemnification obligations. Therefore, we cannot assure you that our sponsor would
be able to satisfy those obligations. As a result, if any such claims were successfully made against the trust account, the funds available
for our initial business combination and redemptions could be reduced to less than $10.00 per public share. In such event, we may not
be able to complete our initial business combination, and you would receive such lesser amount per share in connection with any redemption
of your public shares. None of our officers will indemnify us for claims by third parties including, without limitation, claims by vendors
and prospective target businesses.
In the event that the proceeds in the trust account
are reduced below (i) $10.00 per public share or (ii) such lesser amount per public share held in the trust account as of the
date of the liquidation of the trust account, due to reductions in value of the trust assets, in each case net of the amount of interest
which may be withdrawn to pay our tax obligations, 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 $10.00 per public share.
We will seek to reduce the possibility that our
sponsor will have to indemnify the trust account due to claims of creditors by endeavoring to have all vendors, service providers (other
than our independent registered public accounting firm), prospective target businesses or other entities with which we do business execute
agreements with us waiving any right, title, interest or claim of any kind in or to monies held in the trust account. Our sponsor will
also not be liable as to any claims under our indemnity of the underwriter of our initial public offering against certain liabilities,
including liabilities under the Securities Act. We have access to up to $2,245,798 from the proceeds of our initial public offering and
sale of our private placement warrants 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 business combination within 24 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 business
combination within 24 months from the closing of our initial public offering, is not considered a liquidating distribution under
Delaware law and such redemption distribution is deemed to be unlawful, 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 business combination within 24 months from the closing
of our initial public offering, we will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as
reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal
to the aggregate amount then on deposit in the trust account including interest earned on the funds held in the trust account and not
previously released to us to pay our 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 24th month and, therefore,
we do not intend to comply with those procedures. As such, our stockholders could potentially be liable for any claims to the extent of
distributions received by them (but no more) and any liability of our stockholders may extend well beyond the third anniversary of such
date.
Because we will not be complying with Section 280,
Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that will provide for our payment
of all existing and pending claims or claims that may be potentially brought against us within the subsequent 10 years. However,
because we are a blank check company, rather than an operating company, and our operations will be limited to searching for prospective
target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment bankers, etc.)
or prospective target businesses. As described above, pursuant to the obligation contained in our underwriting agreement, we will seek
to have all vendors, service providers (other than our independent registered public accounting firm), prospective target businesses or
other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any
monies held in the trust account. As a result of this obligation, the claims that could be made against us are significantly limited and
the likelihood that any claim that would result in any liability extending to the trust account is remote. Further, our sponsor may be
liable only to the extent necessary to ensure that the amounts in the trust account are not reduced below (i) $10.00 per public share
or (ii) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account, due
to reductions in value of the trust assets, in each case net of the amount of interest withdrawn to pay our franchise and income 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 $10.00 per share to our
public stockholders. Additionally, if we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is
not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either
a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover
all amounts received by our stockholders. Furthermore, our board may be viewed as having breached its fiduciary duty to our creditors
and/or may have acted in bad faith, and thereby exposing itself and our company to claims of punitive damages, by paying public stockholders
from the trust account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us for
these reasons.
Our public stockholders will be entitled receive
funds from the trust account only upon the earliest to occur of: (a) the completion of our initial business combination, (b) the
redemption of any public shares properly tendered in connection with a stockholder vote to amend our amended and restated certificate
of incorporation (i) to modify the substance or timing of our obligation to provide holders of our Class A common stock the
right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do
not complete our initial business combination within 24 months from the closing of our initial public offering or (ii) with
respect to any other provisions relating to the rights of holders of our Class A common stock, and (c) the redemption of our
public shares if we have not consummated our business combination within 24 months from the closing of our initial public offering,
subject to applicable law. 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 business combination, we may encounter intense competition from other entities having a business objective similar to
ours, including other blank check companies, private equity groups and leveraged buyout funds, and operating businesses seeking strategic
acquisitions. Many of these entities are well established and have extensive experience identifying and effecting business combinations
directly or through affiliates. Moreover, many of these competitors possess greater financial, technical, human and other resources than
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 acquisition of a target business. Furthermore, our obligation to pay cash in connection with
our public stockholders who exercise their redemption rights may reduce the resources available to us for our initial business combination
and our outstanding warrants, and the future dilution they potentially represent, may not be viewed favorably by certain target businesses.
Either of these factors may place us at a competitive disadvantage in successfully negotiating an initial business combination.
Facilities
Our executive offices are located at 1545 Courtney
Ave, Los Angeles, California 90046, and our telephone number is (646) 432-0610. Our executive offices are provided to us by an affiliate
of our sponsor. Commencing on September 3, 2020, we have agreed to pay an affiliate of our sponsor a total of $10,000 per month for
office space, utilities and secretarial and administrative support. We consider our current office space adequate for our current operations.
Employees
We currently have two officers. Members of our
management team 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 that any such person will devote
in any time period will vary based on whether a target business has been selected for our initial business combination and the current
stage of the business combination process.
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 financial statements
audited and reported on by our independent registered public accounting firm.
We will provide stockholders with audited financial
statements of the prospective target business as part of the tender offer materials or proxy solicitation materials sent to stockholders
to assist them in assessing the target business. In all likelihood, these financial statements will need to be prepared in accordance
with GAAP or IFRS, depending on the circumstances and the historical financial statements may be required to be audited in accordance
with the standards of the PCAOB. These financial statement requirements may limit the pool of potential target businesses we may conduct
an initial business combination with because some targets may be unable to provide such financial statements in time for us to disclose
such financial statements in accordance with federal proxy rules and complete our initial business combination within the prescribed
time frame. We cannot assure you that any particular target business identified by us as a potential acquisition candidate will have financial
statements prepared in accordance with such requirements or that the potential target business will be able to prepare its financial statements
in accordance with such requirements. To the extent that this requirement cannot be met, we may not be able to acquire the proposed target
business. While this may limit the pool of potential acquisition candidates, we do not believe that this limitation will be material.
We will be required to evaluate our internal controls
over financial reporting procedures for the fiscal year ending December 31, 2021 as required by the Sarbanes-Oxley Act. Only in the
event we are deemed to be a large accelerated filer or an accelerated filer, and no longer qualify as an emerging growth company, will
we be required to have our internal control over financial reporting procedures audited. A target company may not be in compliance with
the provisions of the Sarbanes-Oxley Act regarding adequacy of their internal controls over financial reporting. The development of the
internal controls of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete
any such acquisition.
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 and the prospectus associated with our initial public offering, before making a decision to invest in our securities. If any of
the following events occur, our business, financial condition and operating results may be materially adversely affected. In that event,
the trading price of our securities could decline, and you could lose all or part of your investment. For risk factors related to
the Business Combination, please refer to the registration statement on Form S-4 initially filed with the SEC on March 25, 2021.
Risks Relating to our Search for, and Consummation of or Inability
to Consummate, a Business Combination
We are a newly formed company with no operating
history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.
We are a newly formed company with no operating
results. Because we lack an operating history, you have no basis upon which to evaluate our ability to achieve our business objective
of completing our initial business combination with one or more target businesses. We have no plans, arrangements or understandings with
any prospective target business concerning a business combination and may be unable to complete our business combination. If we fail to
complete our business combination, we will never generate any operating revenues.
Past performance by our management team or our
Advisors is not indicative of future performance of an investment in us.
Information regarding performance by, or businesses
associated with, our management team or our Advisors, is presented for informational purposes only. Any past experience and performance
of our management team or our Advisors is not a guarantee either: (1) that we will be able to successfully identify a suitable candidate
for our initial business combination; or (2) of any results with respect to any initial business combination we may consummate. You
should not rely on the historical record of the performance of our management team or our Advisors as being indicative of the future performance
of an investment in us or the returns we will, or are likely to, generate going forward.
Our public stockholders may not be afforded an
opportunity to vote on our proposed 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 not hold a stockholder vote to approve our
initial business combination unless the 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 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 is 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 business combination we complete.
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.
Our initial stockholders have agreed to vote their
founder shares, as well as any public shares purchased during or after our initial public offering, in favor of our initial business combination.
As a result, in addition to our initial stockholders’ founder shares, we would need 12,533,089, or 37.5%, of the 33,421,570 public
shares sold in our initial public offering to be voted in favor of a transaction (assuming all outstanding shares are voted) in order
to have our initial business combination approved. Our initial stockholders own shares representing 20% of our outstanding shares of common
stock immediately following the completion of our initial public offering. Accordingly, if we seek stockholder approval of our initial
business combination, it is more likely that the necessary stockholder approval will be received than would be the case if our initial
stockholders agreed to vote their founder shares in accordance with the majority of the votes cast by our public stockholders.
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 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 one or more target businesses. Since our board of directors
may complete a business combination without seeking stockholder approval, public stockholders may not have the right or opportunity to
vote on the business combination, unless we seek such stockholder vote. Accordingly, 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 a business combination with a target.
We may seek to enter into a business combination
transaction agreement with a prospective target that requires as a closing condition that we have a minimum net worth or a certain amount
of cash. If too many public stockholders exercise their redemption rights, we would not be able to meet such closing condition and, as
a result, would not be able to proceed with the business combination. Furthermore, in no event will we redeem our public shares in an
amount that would cause our net tangible assets to be less than $5,000,001. 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 or such
greater amount necessary to satisfy a closing condition as described above, we would not proceed with such redemption and the related
business combination and may instead search for an alternate business combination. Prospective targets will be aware of these risks and,
thus, may be reluctant to enter into a business combination transaction with us.
The ability of our public stockholders to exercise
redemption rights with respect to a large number of our shares may not allow us to complete the most desirable business combination or
optimize our capital structure.
At the time we enter into an agreement for our
initial business combination, we will not know how many stockholders may exercise their redemption rights, and therefore will need to
structure the transaction based on our expectations as to the number of shares that will be submitted for redemption. If our business
combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price, or requires us to have
a minimum amount of cash at closing, we will need to reserve a portion of the cash in the trust account to meet such requirements, or
arrange for third party financing. In addition, if a larger number of shares are submitted for redemption than we initially expected,
we may need to restructure the transaction to reserve a greater portion of the cash in the trust account or arrange for third party financing.
Raising additional third party financing may involve dilutive equity issuances or the incurrence of indebtedness at higher than desirable
levels. The above considerations may limit our ability to complete the most desirable business combination available to us or optimize
our capital structure. The amount of the deferred underwriting commissions payable to the underwriter will not be adjusted for any shares
that are redeemed in connection with a 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
not be consummated and that you would have to wait for liquidation in order to redeem your stock.
If our business combination agreement requires
us to use a portion of the cash in the trust account to pay the purchase price, or requires us to have a minimum amount of cash at closing,
the probability that our initial business combination would not be consummated 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 a 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 business combination on terms that would produce value for our stockholders.
Any potential target business with which we enter
into negotiations concerning a business combination will be aware that we must complete our initial business combination within 24 months
from the closing of our initial public offering. Consequently, such target business may obtain leverage over us in negotiating a business
combination, knowing that if we do not complete our initial business combination with that particular target business, we may be unable
to complete our initial business combination with any target business. This risk will increase as we get closer to the timeframe described
above. In addition, we may have limited time to conduct due diligence and may enter into our initial business combination on terms that
we would have rejected upon a more comprehensive investigation.
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 in Wuhan, China, which has and is continuing to spread throughout the world, including the United States.
On January 30, 2020, the World Health Organization declared the outbreak of 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.
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 $10.00 per share, or less than such
amount in certain circumstances, and our warrants will expire worthless.
Our sponsor, executive officers and directors have
agreed that we must complete our initial business combination within 24 months from the closing of our initial public offering. We
may not be able to find a suitable target business and complete 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 $10.00 per share, and our warrants will expire worthless.
In certain circumstances, our public stockholders may receive less than $10.00 per share on the redemption of their shares.
If we are unable to complete an initial business
combination within the 24-month period from the closing of our initial public offering, we may seek an amendment to our amended and restated
certificate of incorporation to extend the period of time we have to complete an initial business combination beyond 24 months. Our
amended and restated certificate of incorporation requires that such an amendment be approved by holders of 65% of our outstanding common
stock.
If we seek stockholder approval of our initial
business combination, our sponsor, directors, officers, advisors and their affiliates may elect to purchase shares from public stockholders,
which may influence a vote on a proposed business combination and reduce the public “float” of our Class A common stock.
If we seek stockholder approval of our initial
business combination and we do not conduct redemptions in connection with our business combination pursuant to the tender offer rules,
our sponsor, directors, officers, advisors or their affiliates may purchase shares 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.
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 business combination and thereby increase the likelihood
of obtaining stockholder approval of the business combination, or to satisfy a closing condition in an agreement with a target that requires
us to have a minimum net worth or a certain amount of cash at the closing of our business combination, where it appears that such requirement
would otherwise not be met. This may result in the completion of our business combination that may not otherwise have been possible.
In addition, if such purchases are made, the public
“float” of our Class A common stock 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 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 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, the proxy solicitation or tender offer materials, as applicable, that we will furnish
to holders of our public shares in connection with our initial business combination will indicate the applicable delivery requirements,
which will include the requirement that a beneficial holder must identify itself in order to validly redeem its shares. For example, we
may require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares
in “street name,” to either tender their certificates to our transfer agent prior to the date set forth in the tender offer
documents or proxy materials mailed to such holders, or up to two business days prior to the initially scheduled vote on the proposal
to approve the business combination in the event we distribute proxy materials, or to deliver their shares to the transfer agent electronically.
In the event that a stockholder fails to comply with these or any other procedures, its shares may not be redeemed.
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 seeking targets
for their initial business combination, as well as many such companies currently in registration. As a result, at times, fewer attractive
targets may be available, and it may require more time, more effort and more resources to identify a suitable target and to consummate
an initial business combination. In addition, because there are more special purpose acquisition companies seeking to enter into an initial
business combination with available targets, the competition for available targets with attractive fundamentals or business models may
increase, which could cause target companies to demand improved financial terms. Attractive deals could also become scarcer for other
reasons, such as economic or industry sector downturns, geopolitical tensions or increases in the cost of additional capital needed to
close business combinations or operate targets post-business combination. This could increase the cost of, delay or otherwise complicate
or frustrate our ability to find and consummate an initial business combination, and may result in our inability to consummate an initial
business combination on terms favorable to our investors altogether.
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 will be entitled to receive
funds from the trust account only upon the earliest to occur of: (a) the completion of our initial business combination, (b) the
redemption of any public shares properly tendered in connection with a stockholder vote to amend our amended and restated certificate
of incorporation (i) to modify the substance or timing of our obligation to provide holders of our Class A common stock the
right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do
not complete our initial business combination within 24 months from the closing of our initial public offering or (ii) with
respect to any other provisions relating to the rights of holders of our Class A common stock, and (c) the redemption of our
public shares if we have not consummated our business combination within 24 months from the closing of our initial public offering,
subject to applicable law. In addition, if we are unable to complete an initial business combination within 24 months from the closing
of our initial public offering for any reason, compliance with Delaware law may require that we submit a plan of dissolution to our then-existing
stockholders for approval prior to the distribution of the proceeds held in our trust account. In that case, public stockholders may be
forced to wait beyond 24 months from the closing of our initial public offering before they receive funds from our trust account.
In no other circumstances will a public stockholder have any right or interest of any kind in the trust account. Accordingly, to liquidate
your investment, you may be forced to sell your public shares or warrants, 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 $10.00 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 intense competition from
other entities having a business objective similar to ours, including private investors (which may be individuals or investment partnerships),
other blank check companies and other entities, domestic and international, competing for the types of businesses we intend to acquire.
Many of these individuals and entities are well-established and have extensive experience in identifying and effecting, directly or indirectly,
acquisitions of companies operating in or providing services to various industries. Many of these competitors possess greater technical,
human and other resources or more local industry knowledge than we do and our financial resources 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 a business combination. If we are unable to complete our initial business combination, our public stockholders
may receive only approximately $10.00 per share on the liquidation of our trust account and our warrants will expire worthless. In certain
circumstances, our public stockholders may receive less than $10.00 per share upon our liquidation.
If the net proceeds of our initial public offering
and the sale of the private placement warrants not being held in the trust account are insufficient to allow us to operate for at least
the next 24 months, we may be unable to complete our initial business combination, in which case our public stockholders may only
receive $10.00 per share, or less than such amount in certain circumstances, and our warrants will expire worthless.
The funds available to us outside of the trust
account may not be sufficient to allow us to operate for at least the 24 months from the closing of our initial public offering,
assuming that our initial business combination is not completed during that time. We believe that the funds available to us outside of
the trust account will be sufficient to allow us to operate for the 24 months following 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 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
business combination. If we are unable to complete our initial business combination, our public stockholders may receive only approximately
$10.00 per share on the liquidation of our trust account and our warrants will expire worthless. In certain circumstances, our public
stockholders may receive less than $10.00 per share upon our liquidation.
If third parties bring claims against us, the
proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00
per share.
Our placing of funds in the trust account may not
protect those funds from third-party claims against us. Although we will seek to have all vendors, service providers (other than our independent
registered public accounting firm), prospective target businesses or other entities with which we do business execute agreements with
us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public
stockholders, 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. The underwriter of our initial public offering will not execute an agreement
with us waiving such claims to the monies 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 business combination within the prescribed timeframe, or upon the exercise of a redemption right in connection with our 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 $10.00 per share initially held in the trust account, due to claims of such creditors. Our sponsor has agreed that it will be liable
to us if and to the extent any claims by a vendor for services rendered or products sold to us, or a prospective target business with
which we have discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below (i) $10.00
per public share or (ii) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust
account due to reductions in the value of the trust assets, in each case net of the interest that may be withdrawn to pay our franchise
and income taxes. This liability will not apply with respect to any claims by a third party who executed a waiver of any and all rights
to seek access to the trust account and except as to any claims under our indemnity of the underwriter of our initial public offering
against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed
to be unenforceable against a third party, then our sponsor will not be responsible to the extent of any liability for such third party
claims. We have not independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and believe that
our sponsor’s only assets are securities of our company. We have not asked our sponsor to reserve for such indemnification obligations.
Therefore, our sponsor may not be able to satisfy those obligations. As a result, if any such claims were successfully made against the
trust account, the funds available for our initial business combination and redemptions could be reduced to less than $10.00 per public
share. In such event, we may not be able to complete our initial business combination, and you would receive such lesser amount per share
in connection with any redemption of your public shares. None of our officers will indemnify us for claims by third parties including,
without limitation, claims by vendors and prospective target businesses.
Our stockholders may be held liable for claims
by third parties against us to the extent of distributions received by them upon redemption of their shares.
Under the DGCL, stockholders may be held liable
for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. The pro rata
portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete
our initial business combination within 24 months from the closing of our initial public offering may be considered a liquidating
distribution under Delaware law. If a corporation complies with certain procedures set forth in Section 280 of the DGCL intended
to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during which any third-party
claims can be brought against the corporation, a 90-day period during which the corporation may reject any claims brought, and an additional
150-day waiting period before any liquidating distributions are made to stockholders, any liability of stockholders with respect to a
liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed
to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution. However, it is
our intention to redeem our public shares as soon as reasonably possible following the 24th month from the closing of our initial public
offering in the event we do not complete our 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 24 months
from the closing of our initial public offering is not considered a liquidating distribution under Delaware law and such redemption distribution
is deemed to be unlawful, 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.
In accordance with the NYSE corporate governance
requirements, we are not required to hold an annual meeting until one year after our first fiscal year end following our listing on the
NYSE. Under Section 211(b) of the DGCL, we are, however, required to hold an annual meeting of stockholders for the purposes
of electing directors in accordance with our bylaws unless such election is made by written consent in lieu of such a meeting. We may
not hold an annual meeting of stockholders to elect new directors prior to the consummation of our initial business combination, and thus
we may not be in compliance with Section 211(b) of the DGCL, which requires an annual meeting. Therefore, if our stockholders
want us to hold an annual meeting prior to the consummation of our initial business combination, they may attempt to force us to hold
one by submitting an application to the Delaware Court of Chancery in accordance with Section 211(c) of the DGCL.
Because we are not limited to a particular industry,
sector or 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’ operations.
Although we expect to focus our search for a target
business in the industrial sector, we may seek to complete a business combination with an operating company in any industry or sector.
However, we are not, under our amended and restated certificate of incorporation, permitted to effectuate our business combination with
another blank check company or similar company with nominal operations. To the extent we complete our 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 revenues or earnings, we may be affected by the risks inherent in the business
and operations of a financially unstable or a development stage entity. Although our officers and directors will endeavor to evaluate
the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all of the significant
risk factors or that we will have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our control
and leave us with no ability to control or reduce the chances that those risks will adversely impact a target business. We also cannot
assure you that an investment in our units will ultimately prove to be more favorable to investors than a direct investment, if such
opportunity were available, in a business combination target. Accordingly, any stockholders who choose to remain stockholders following
the business combination could suffer a reduction in the value of their shares. Such stockholders are unlikely to have a remedy for such
reduction in value.
We may seek acquisition opportunities in industries
or sectors which may or may not be outside of our management’s area of expertise.
We may consider a business combination outside
of our management’s area of expertise if a business combination candidate is presented to us and we determine that such candidate
offers an attractive acquisition opportunity for our company. Although our management will endeavor to evaluate the risks inherent in
any particular business combination candidate, we cannot assure you that we will adequately ascertain or assess all of the significant
risk factors. We also cannot assure you that an investment in our units will not ultimately prove to be less favorable to investors
in our initial public offering than a direct investment, if an opportunity were available, in a business combination candidate. In the
event we elect to pursue an acquisition outside of the areas of our management’s expertise, our management’s expertise may
not be directly applicable to its evaluation or operation, and the information contained in our initial prospectus 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 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.
We do not have a specified maximum redemption
threshold. The absence of such a redemption threshold may make it possible for us to complete a 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 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 business combination even though
a substantial majority of our public stockholders do not agree with the transaction and have redeemed their shares or, if we seek stockholder
approval of our initial business combination and do not conduct redemptions in connection with our business combination pursuant to the
tender offer rules, have entered into privately negotiated agreements to sell their shares to our sponsor, officers, directors, Advisors
or 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 business
combination exceed the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares, all
shares of 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 our initial business combination,
we may 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 but that our stockholders may not support.
In order to effectuate a business combination,
blank check companies have, in the recent past, amended various provisions of their charters and 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. 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.
Our initial stockholders may exert a substantial
influence on actions requiring a stockholder vote, potentially in a manner that you do not support.
Our initial stockholders own 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 additional shares of common stock 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 and will be 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 business combination, in which case all of the current directors will continue in
office until at least the completion of the business combination. If there is an annual meeting, as a consequence of our “staggered”
board of directors, only a minority of the board of directors will be considered for election and our initial stockholders, because of
their ownership position, will have considerable influence regarding the outcome. In addition, prior to the completion of an initial business
combination, holders of a majority of our founder shares may remove a member of the board of directors for any reason. In addition, as
long as our sponsor is controlled by our founders, 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 business combination.
You are not entitled to protections normally
afforded to investors of many other blank check companies.
Since the net proceeds of our initial public offering
and the sale of the private placement warrants are intended to be used to complete an initial business combination with a target business,
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 are not be afforded the benefits
or protections of those rules. Among other things, this means our units are tradable and we have a longer period of time to complete
our business combination than do companies subject to Rule 419. Moreover, if our initial public offering were subject to Rule 419,
that rule would prohibit 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 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 post-combination debt financing. Accordingly, any
stockholders who choose to remain stockholders following the business combination could suffer a reduction in the value of their 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 such stockholders, or if they are
able to successfully bring a private claim under securities laws that the tender offer materials or proxy statement related to our initial
business combination contained an actionable material misstatement or material omission.
Our directors may decide not to enforce the indemnification
obligations of our sponsor, resulting in a reduction in the amount of funds in the trust account available for distribution to our public
stockholders.
In the event that the proceeds in the trust account
are reduced below the lesser of (i) $10.00 per public share or (ii) such lesser amount per share held in the trust account as
of the date of the liquidation of the trust account due to reductions in the value of the trust assets, in each case net of the interest
which may be withdrawn to pay our franchise and income 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 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. If our independent directors choose not to enforce these indemnification obligations, the amount of
funds in the trust account available for distribution to our public stockholders may be reduced below $10.00 per share.
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 business combination.
If we are deemed to be an investment company under
the Investment Company Act, our activities may be restricted, including:
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restrictions on the nature of our investments; and
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restrictions on the issuance of securities, each of which may make it difficult for us to complete our business combination.
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In addition, we may have imposed upon us burdensome requirements, including:
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registration as an investment company;
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adoption of a specific form of corporate structure; and
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reporting, record keeping, voting, proxy and disclosure requirements and other rules and regulations.
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In order not to be regulated as an investment company
under the Investment Company Act, unless we can qualify for an exclusion, we must ensure that we are engaged primarily in a business other
than investing, reinvesting or trading 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 is to identify and complete a business combination and thereafter to operate the
post-transaction business or assets for the long term. We do not plan to buy businesses or assets with a view to resale or profit from
their resale. We do not plan to buy unrelated businesses or assets or to be a passive investor.
We do not believe that our anticipated 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. Our initial public offering was 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: (a) the completion
of our initial business combination, (b) the redemption of any public shares properly tendered in connection with a stockholder vote
to amend our amended and restated certificate of incorporation (i) to modify the substance or timing of our obligation to provide
holders of our Class A common stock the right to have their shares redeemed in connection with our initial business combination or
to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of our
initial public offering or (ii) with respect to any other provisions relating to the rights of holders of our Class A common
stock, and (c) the redemption of our public shares if we have not consummated our business combination within 24 months from
the closing of our initial public offering, subject to applicable law. If we do not invest the proceeds as discussed above, we may be
deemed to be subject to the Investment Company Act. If we were deemed to be subject to the Investment Company Act, compliance with these
additional regulatory burdens would require additional expenses for which we have not allotted funds and may hinder our ability to complete
a business combination. If we are unable to complete our initial business combination, our public stockholders may receive only approximately
$10.00 per share on the liquidation of our trust account and our warrants will expire worthless.
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’ 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 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.
We may issue notes or other debt securities,
or otherwise incur substantial debt, to complete a business combination, which may adversely affect our leverage and financial condition
and thus negatively impact the value of our stockholders’ investment in us.
We may choose to incur substantial debt to complete
our 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:
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default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations;
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acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;
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our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand;
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our inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain such financing while the debt security is outstanding;
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our inability to pay dividends on our common stock;
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using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our common stock if declared, our ability to pay expenses, make capital expenditures and acquisitions, and fund other general corporate purposes;
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limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;
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increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation;
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limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, and execution of our strategy; and
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other disadvantages compared to our competitors who have less debt.
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We may only be able to complete one business
combination with the proceeds of our initial public offering and the sale of the private placement warrants, which will cause us to be
solely dependent on a single business which may have a limited number of products or services. This lack of diversification may negatively
impact our operations and profitability.
The net proceeds from our initial public offering
and the sale of the private placement warrants initially provided us with $325,533,836 that we may use to complete our initial business
combination (after taking into account the $11,697,550 of deferred underwriting commissions being held in the trust account and the expenses
of our initial public offering).
We may effectuate our 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 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 business, our lack of diversification may subject us to numerous economic, competitive and regulatory
developments. Further, we would not be able to diversify our operations or benefit from the possible spreading of risks or offsetting
of losses, unlike other entities which may have the resources to complete several business combinations in different industries or different
areas of a single industry. Accordingly, the prospects for our success may be:
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solely dependent upon the performance of a single business, property or asset; or
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dependent upon the development or market acceptance of a single or limited number of products, processes or services.
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This lack of diversification may subject us to
numerous economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact upon the particular
industry in which we may operate subsequent to our business combination.
We may attempt to simultaneously complete business
combinations with multiple prospective targets, which may hinder our ability to complete our business combination and give rise to increased
costs and risks that could negatively impact our operations and profitability.
If we determine to simultaneously acquire several
businesses that are owned by different sellers, we will need for each of such sellers to agree that our purchase of its business is contingent
on the simultaneous closings of the other business combinations, which may make it more difficult for us, and delay our ability, to complete
our initial business combination. With multiple business combinations, we could also face additional risks, including additional burdens
and costs with respect to possible multiple negotiations and due diligence investigations (if there are multiple sellers) and the additional
risks associated with the subsequent assimilation of the operations and services or products of the acquired companies in a single operating
business. If we are unable to adequately address these risks, it could negatively impact our profitability and results of operations.
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 the proxy
statement with respect to the vote on an initial business combination include historical and pro forma financial statement disclosure.
We will include the same financial statement disclosure in connection with our tender offer documents, whether or not they are required
under the tender offer rules. These financial statements may be required to be prepared in accordance with, or be reconciled to, accounting
principles generally accepted in the United States of America, or GAAP, or international financial reporting standards, 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.
The provisions of our amended and restated certificate
of incorporation that relate to our pre-business combination activity (and corresponding provisions of the agreement governing the release
of funds from our trust account) may be amended with the approval of holders of 65% 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-business combination activity (including the requirement to deposit proceeds of our
initial public offering and the private placement of warrants into the trust account and not release such amounts except in specified
circumstances, and to provide redemption rights to public stockholders as described herein) may be amended if approved by holders of 65%
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 65% 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. Our initial stockholders, who collectively
beneficially own 20% of our common stock, 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-business combination behavior more easily than some other
blank check companies, and this may increase our ability to complete a business combination with which you do not agree. Our stockholders
may pursue remedies against us for any breach of our amended and restated certificate of incorporation.
Our sponsor, executive officers and directors have
agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation
that would modify the substance or timing of our obligation to provide holders of our Class A common stock the right to have their
shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial
business combination within 24 months from the closing of our initial public offering or with respect to any other provision relating
to the rights of holders of our Class A common stock 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 (which interest shall be net of taxes payable) divided by the number of
the 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.
If the net proceeds of our initial public offering
and the sale of the private placement warrants prove to be insufficient to allow us to complete our initial business combination, either
because of the size of our initial business combination, the depletion of the available net proceeds in search of a target business, the
obligation to repurchase for cash a significant number of shares from stockholders who elect redemption in connection with our initial
business combination or the terms of negotiated transactions to purchase shares in connection with our initial business combination, we
may be required to seek additional financing or to abandon the proposed business combination. We cannot assure you that such financing
will be available on acceptable terms, if at all. To the extent that additional financing proves to be unavailable when needed to complete
our initial business combination, we would be compelled to either restructure the transaction or abandon that particular business combination
and seek an alternative target business candidate. If we are unable to complete our initial business combination, our public stockholders
may receive only approximately $10.00 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 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 $10.00 per share on the liquidation of our trust account, and our warrants will expire worthless.
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 $10.00 per share on the liquidation of our trust account and our warrants will expire worthless.
We may seek acquisition opportunities with a
financially unstable business or an entity lacking an established record of revenue or earnings, which could subject us to volatile revenues
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 from a financial point of view.
Unless we complete our 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 from an independent accounting firm 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 tender offer documents or proxy solicitation materials, 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 500,000,000 shares of Class A common stock, par value $0.0001 per share, 50,000,000 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. There are 466,578,430
and 41,644,607 authorized but unissued shares of Class A common stock and Class B common stock, respectively, available for
issuance, excluding shares of Class A common stock reserved for issuance upon exercise of outstanding warrants and currently 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
in the prospectus for our initial public offering, 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.
We may also issue shares of Class A common
stock to redeem the warrants or upon conversion of the Class B common stock at a ratio greater than one-to-one at the time of our
initial business combination as a result of the anti-dilution provisions contained in our amended and restated certificate of incorporation.
However, our amended and restated certificate of incorporation provides, among other things, that prior to 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 as a class with our public shares (a) on our initial business combination or on any other proposal presented to
stockholders prior to or in connection with the completion of an initial business combination or (b) to approve an amendment to our
amended and restated certificate of incorporation to (x) extend the time we have to consummate a business combination beyond 24 months
from the closing of our initial public offering or (y) amend the foregoing provisions. These provisions of our amended and restated
certificate of incorporation, like all provisions of our amended and restated certificate of incorporation, may be amended with a stockholder
vote. The issuance of additional shares of common or preferred stock:
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may significantly dilute the equity interest of investors in our initial public offering;
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may subordinate the rights of holders of common stock if preferred stock is issued with rights senior to those afforded our common stock;
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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
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may adversely affect prevailing market prices for our units, Class A common stock and/or warrants.
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Resources could be wasted in researching acquisitions
that are not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge with another business.
If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.00 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 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,, 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 $10.00 per share on the liquidation of our trust account and our warrants will expire worthless.
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 business combination.
We issued warrants to purchase 16,710,785 shares
of our Class A common stock in our initial public offering and, simultaneously with the closing of our initial public offering, we
also issued in a private placement warrants to purchase 9,700,000 shares of Class A common stock at $11.50 per share. Prior to our
initial public offering, our sponsor purchased 8,625,000 founder shares in a private placement (269,607 of which were subsequently forfeited
due to the expiration of the underwriter’s over-allotment option). 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 $1.00 per warrant at the option of the lender. Such
warrants would be identical to the private placement warrants, including as to exercise price, exercisability and exercise period. Our
public warrants are also redeemable by us for Class A common stock as described in “Description of Securities — Warrants — Public
Stockholders’ Warrants — Redemption of Warrants for Class A Common Stock” Contained in the final
prospectus related to our initial public offering.
To the extent we issue shares of Class A common
stock to effectuate a 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 acquisition 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 business combination. Therefore, our warrants and founder shares may make it
more difficult to effectuate a 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, so long as they are held by our sponsor or its
permitted transferees, (i) they will not be redeemable by us, except as otherwise set forth herein, (ii) they (including the
Class A common stock issuable upon exercise of these warrants) may not, subject to certain limited exceptions, be transferred, assigned
or sold by our sponsor until 30 days after the completion of our initial business combination and (iii) they may be exercised
by the holders on a cashless basis.
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 Class A common stock or equity-linked securities for capital raising purposes in connection with the closing
of our initial business combination at an issue price or effective issue price of less than $9.20 per share of Class A common stock
(with such issue price or effective issue price to be determined in good faith by our board of directors and, in the case of any such
issuance to our sponsor or its affiliates, without taking into account any founder shares held by our sponsor or such affiliates, as applicable,
prior to such issuance) (the “Newly Issued Price”) (ii) the aggregate gross proceeds from such issuances represent more
than 60% of the total equity proceeds, and interest thereon, available for the funding of our initial business combination on the date
of the consummation of our initial business combination (net of redemptions), and (iii) the volume weighted average trading price
of our shares of Class A common stock during the 20 trading day period starting on the trading day prior to the day on which we consummate
our initial business combination (such price, the “Market Value”) is below $9.20 per share, then the exercise price of the
warrants will be adjusted to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption
trigger prices will be adjusted (to the nearest cent) to be equal to 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.
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 acquisition.
Section 404 of the Sarbanes-Oxley Act requires
that we evaluate and report on our system of internal controls over financial reporting beginning with our Annual Report on Form 10-K
for the year ending December 31, 2021. Only in the event we are deemed to be a large accelerated filer or an accelerated filer and
no longer qualify as an emerging growth company, will we be required to comply with the independent registered public accounting firm
attestation requirement on our internal control over financial reporting. 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 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 over financial reporting of any such entity to achieve compliance
with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition.
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 a 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.
As of December 31, 2020, we had $2,245,798
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. Neither
our sponsor, members of our management team nor any of their affiliates is under any obligation to advance funds to us in such circumstances.
Any such advances would be repaid only from funds held outside the trust account or from funds released to us upon completion of our initial
business combination. 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 $10.00 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 $10.00 per share
on the redemption of their shares.
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 have not registered the shares of Class A
common stock issuable upon exercise of the warrants under the Securities Act or any state securities laws, 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 and potentially causing such warrants to expire worthless.
However, under the terms of the warrant agreement,
we have agreed that, as soon as practicable, but in no event later than twenty 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 issuance of such
shares, and we will use our commercially reasonable efforts to cause the same to become effective within 60 business days after the closing
of our initial business combination and to maintain the effectiveness of such registration statement and a current prospectus relating
to those shares until the warrants expire or are redeemed. We cannot assure you that we will be able to do so if, for example, any facts
or events arise which represent a fundamental change in the information set forth in the registration statement or prospectus, the financial
statements contained or incorporated by reference therein are not current, complete or correct or the SEC issues a stop order. If the
shares issuable upon exercise of the warrants are not registered under the Securities Act in accordance with the above requirements, we
will be required to permit holders to exercise their warrants on a cashless basis, in which case, the number of shares of Class A
common stock that you will receive upon cashless exercise will be based on a formula subject to a maximum amount of shares equal to 0.361
shares per warrant (subject to adjustment). However, 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. Notwithstanding
the above, if our Class A common stock is at the time of any exercise of a warrant not listed on a national securities exchange such
that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at
our option, require holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance with
Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a
registration statement, but we will be required to use our commercially reasonable efforts to register or qualify the shares under applicable
blue sky laws to the extent an exemption is not available. In no event will we be required to net cash settle any warrant, or issue securities
or other compensation in exchange for the warrants in the event that we are unable to register or qualify the shares underlying the warrants
under 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 shall 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.
There may be a circumstance where an exemption from registration exists for holders of our private placement warrants to exercise their
warrants while a corresponding exemption does not exist for holders of the public warrants included as part of units sold in our
initial public offering. In such an instance, our sponsor and its permitted transferees (which may include our directors and officers)
would be able to exercise their warrants and sell the shares of common stock underlying their warrants while holders of our public warrants
would not be able to exercise their warrants and sell the underlying shares of common stock. If and when the warrants become redeemable
by us, we may exercise our redemption right even if we are unable to register or qualify the underlying shares of Class A common
stock for sale under all applicable state securities laws. As a result, we may redeem the warrants as set forth above even if the holders
are otherwise unable to exercise their warrants.
We may attempt to complete our initial business combination with
a private company about which little information is available, which may result in a business combination with a company that is not
as profitable as we suspected, if at all.
In pursuing our acquisition strategy, we may seek
to effectuate our initial business combination with a privately held company. By definition, very little public information exists about
private companies, and we could be required to make our decision on whether to pursue a potential initial business combination on the
basis of limited information, which may result in a business combination with a company that is not as profitable as we suspected, if
at all.
Risks Relating to Our Securities
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, which we refer to as the “Excess Shares,” without our prior consent. However, we would not be restricting
our stockholders’ ability to vote all of their shares (including Excess Shares) for or against our business combination. Your inability
to redeem the Excess Shares will reduce your influence over our ability to complete our 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 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.
The NYSE may delist our securities from trading on its exchange,
which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.
Our Class A common stock shares are listed
on the NYSE. Although we expect to continue to meet the minimum listing standards set forth in the NYSE listing standards, our securities
may not continue to be listed on the NYSE in the future or prior to our initial business combination. In order to continue listing our
securities on the NYSE prior to our initial business combination, we must maintain certain financial, distribution and stock price levels.
Additionally, in connection with our initial business combination, we will be required to demonstrate compliance with the NYSE’s
initial listing requirements, which are more rigorous than the NYSE’s continued listing requirements, in order to continue to maintain
the listing of our securities on the NYSE. For instance, our stock price would generally be required to be at least $4.00 per share and
we must have 400 round lot holders upon the consummation of our initial business combination. We may not be able to meet those initial
listing requirements at that time.
If the NYSE delists our securities from trading
on its exchange and we are not able to list our securities on another national securities exchange, we expect our securities could be
quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including:
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a limited availability of market quotations for our securities;
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reduced liquidity for our securities;
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a determination that our Class A 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;
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a limited amount of news and analyst coverage; and
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a decreased ability to issue additional securities or obtain additional financing in the future.
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The National Securities Markets Improvement Act
of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred
to as “covered securities.” Because our Class A common stock and warrants are listed on the NYSE, our units, Class A
common stock and warrants will be covered securities. Although the states are preempted from regulating the sale of covered 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 the NYSE, our securities would
not be covered securities and we would be subject to regulation in each state in which we offer our securities.
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.
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 an agreement entered into concurrently
with the issuance and sale of the securities in our initial public offering, our initial stockholders and their permitted transferees
can demand that we register the private placement warrants and the shares of Class A common stock issuable upon exercise of the founder
shares and the private placement warrants 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.
Risks Relating to our Sponsor and Management Team
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 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 business combination, it is likely that some or all of the management of the target business will remain in place. While
we intend to closely scrutinize any individuals we engage after our initial business combination, we cannot assure you that our assessment
of these individuals will prove to be correct. These individuals may be unfamiliar with the requirements of operating a company regulated
by the SEC, which could cause us to have to expend time and resources helping them become familiar with such requirements.
In addition, the officers and directors of an acquisition
candidate may resign upon completion of our initial business combination. The departure of a business combination target’s key personnel
could negatively impact the operations and profitability of our post-combination business. The role of an acquisition candidate’s
key personnel upon the completion of our initial business combination cannot be ascertained at this time. Although we contemplate that
certain members of an acquisition candidate’s management team will remain associated with the acquisition candidate following our
initial business combination, it is possible that members of the management of an acquisition candidate will not wish to remain in place.
The loss of key personnel could negatively impact the operations and profitability of our post-combination business.
Our key personnel may negotiate employment or consulting agreements
with a target business in connection with a particular business combination. These agreements may provide for them to receive compensation
following our 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 business combination only if they are able to negotiate employment or consulting agreements in connection
with the business combination. Such negotiations would take place simultaneously with the negotiation of the business combination and
could provide for such individuals to receive compensation in the form of cash payments and/or our securities for services they would
render to us after the completion of the business combination. 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 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 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 an agreement entered into concurrently with the issuance and sale of the securities in our initial
public offering, our sponsor, upon consummation of an initial business combination, will be entitled to nominate three individuals for
election to our board of directors.
Our officers, directors and Advisors 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, directors and Advisors are not required
to, and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our
operations and our search for a business combination and their other businesses. We do not intend to have any full-time employees prior
to the completion of our initial business combination. Each of our officers and Advisors is engaged in other business endeavors for which
he may be entitled to substantial compensation and our officers and Advisors are not obligated to contribute any specific number of hours
per week to our affairs. Our directors and Advisors also serve as officers or board members for other entities. If our officers’,
directors’ and Advisors’ 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.
Following the completion of our initial public
offering and until we consummate our initial business combination, we intend to engage in the business of identifying and combining with
one or more businesses. Our sponsor and officers and directors are, and may in the future become, affiliated with entities that are engaged
in a similar business.
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.
Our officers, directors, security holders and their respective
affiliates may have competitive pecuniary interests that conflict with our interests.
We have not adopted a policy that expressly prohibits
our directors, officers, security holders or affiliates from having a direct or indirect pecuniary or financial interest in any investment
to be acquired or disposed of by us or in any transaction to which we are a party or have an interest. In fact, we may enter into a business
combination with a target business that is affiliated with our sponsor, our directors or officers, although we do not intend to do so.
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.
Members of our management team and board of directors have significant
experience as founders, board members, officers or executives of other companies. As a result, certain of those persons have been, may
be, or may become, involved in proceedings, investigations and litigation relating to the business affairs of the companies with which
they were, are, or may in the future be, affiliated. This may have an adverse effect on us, which may impede our ability to consummate
an initial business combination.
During the course of their careers, members of
our management team and board of directors have had significant experience as founders, board members, officers or executives of other
companies. As a result of their involvement and positions in these companies, certain persons were, are now, or may in the future become,
involved in litigation, investigations or other proceedings relating to the business affairs of such companies or transactions entered
into by such companies. Any such litigation, investigations or other proceedings may divert our management team’s and board’s
attention and resources away from identifying and selecting a target business or businesses for our initial business combination and may
negatively affect our reputation, which may impede our ability to complete an initial business combination.
We may engage in a business combination with one or more target
businesses that have relationships with entities that may be affiliated with our sponsor, officers, directors or existing holders which
may raise potential conflicts of interest.
In light of the involvement of our sponsor, officers
and directors with other entities, we may decide to acquire one or more businesses affiliated with our sponsor, officers or directors.
Our directors also serve as officers and board members for other entities. Such entities may compete with us for business combination
opportunities. Our sponsor, officers and directors are not currently aware of any specific opportunities for us to complete our business
combination with any entities with which they are affiliated, and there have been no preliminary discussions concerning a business combination
with any such entity or entities. Although we will not be specifically focusing on, or targeting, any transaction with any affiliated
entities, we would pursue such a transaction if we determined that such affiliated entity met our criteria for a business combination
as set forth herein 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 from an independent accounting firm, regarding the fairness to our company from
a financial point of view of a business combination with one or more domestic or international businesses affiliated with our officers,
directors or existing holders, potential conflicts of interest still may exist and, as a result, the terms of the business combination
may not be as advantageous to our public stockholders as they would be absent any conflicts of interest.
Since our sponsor, officers and directors will lose their entire
investment in us if our business combination is not completed, a conflict of interest may arise in determining whether a particular business
combination target is appropriate for our initial business combination.
In June 2020, our sponsor purchased 8,625,000
founder shares for an aggregate purchase price of $25,000, or approximately $0.003 per share (269,607 of which were subsequently forfeited
due to the expiration of the underwriter’s over-allotment option). The founder shares will be worthless if we do not complete an
initial business combination. In addition, our sponsor purchased 9,700,000 private placement warrants, each exercisable for one share
of our Class A common stock at $11.50 per share, for a purchase price of $9,700,000, or $1.00 per warrant, that will also be worthless
if we do not complete a business combination. Holders of founder shares have agreed (A) to vote any shares owned by them in favor
of any proposed business combination and (B) not to redeem any founder shares in connection with a stockholder vote to approve a
proposed initial business combination. In addition, we may obtain loans from our sponsor, affiliates of our sponsor or an officer or director.
The personal and financial interests of our officers and directors may influence their motivation in identifying and selecting a target
business combination, completing an initial business combination and influencing the operation of the business following the initial business
combination.
Our management may not be able to maintain control of a target
business after our initial business combination.
We may structure a business combination so that
the post-transaction company in which our public stockholders own shares 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 business combination
may collectively own a minority interest in the post business combination company, depending on valuations ascribed to the target and
us in the business combination transaction. 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.
Certain agreements related to our initial public offering may be
amended without stockholder approval.
Each of the agreements related to our initial public
offering to which we are a party, other than the warrant agreement and the investment management trust agreement, may be amended without
stockholder approval. Such agreements are: the underwriting agreement; the letter agreement among us and our initial stockholders, sponsor,
officers and directors; the registration and stockholder rights agreement among us and our initial stockholders; the private placement
warrants purchase agreement between us and our sponsor; and the administrative services agreement among us, our sponsor and an affiliate
of our sponsor. These agreements contain various provisions that our public stockholders might deem to be material. For example, our letter
agreement and the underwriting agreement contain certain lock-up provisions with respect to the founder shares, private placement warrants
and other securities held by our initial stockholders, sponsor, officers and directors. Amendments to such agreements would require the
consent of the applicable parties thereto and would need to be approved by our board of directors, which may do so for a variety of reasons,
including to facilitate our initial business combination. While we do not expect our board of directors to approve any amendment to any
of these agreements prior to our initial business combination, it may be possible that our board of directors, in exercising its business
judgment and subject to its fiduciary duties, chooses to approve one or more amendments to any such agreement. Any amendment entered into
in connection with the consummation of our initial business combination will be disclosed in our proxy solicitation or tender offer materials,
as applicable, related to such initial business combination, and any other material amendment to any of our material agreements will be
disclosed in a filing with the SEC. Any such amendments would not require approval from our stockholders, may result in the completion
of our initial business combination that may not otherwise have been possible, and may have an adverse effect on the value of an investment
in our securities. For example, amendments to the lock-up provision discussed above may result in our initial stockholders selling their
securities earlier than they would otherwise be permitted, which may have an adverse effect on the price of our securities.
General Risk Factors
We have identified a material weakness in our internal control over
financial reporting. This material weakness could continue to adversely affect our ability to report our results of operations and financial
condition accurately and in a timely manner.
Our management is responsible for establishing
and maintaining adequate internal control over financial reporting designed to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Our management is likewise
required, on a quarterly basis, to evaluate the effectiveness of our internal controls and to disclose any changes and material weaknesses
identified through such evaluation in those internal controls. A material weakness is a deficiency, or a combination of deficiencies,
in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or
interim financial statements will not be prevented or detected on a timely basis.
As described elsewhere in this Amendment, we
identified a material weakness in our internal control over financial reporting related to the accounting for a significant and unusual
transaction related to the warrants we issued in connection with our initial public offering in September 2020. As a result of this
material weakness, our management concluded that our internal control over financial reporting was not effective as of December 31,
2020. This material weakness resulted in a material misstatement of our warrant liabilities, change in fair value of warrant liabilities,
Class A common stock subject to possible redemption, additional paid-in capital, accumulated deficit and related financial disclosures
for the fiscal year ended December 31, 2020 and for the quarterly period ended September 30, 2020 (the “Affected Periods”).
To respond to this material weakness, we have
devoted significant effort and resources to the remediation and improvement of our internal control over financial reporting, and we
intend to take additional steps to remediate this material weakness, including plans to enhance processes to better evaluate our research
and understanding of the nuances of the complex accounting standards that apply to our consolidated financial statements, enhance access
to accounting literature, research materials and documents and increase communication among our personnel and third-party professionals
with whom we consult regarding complex accounting applications. The elements of our remediation plan can only be accomplished over time,
and we can offer no assurance that these initiatives will ultimately have the intended effects. For a discussion of management’s
consideration of the material weakness identified related to our accounting for a significant and unusual transaction related to the
warrants we issued in connection with the September 2020 initial public offering, see “Note 2—Restatement of Previously
Issued Financial Statements” to the accompanying consolidated financial statements, as well as Part II, Item 9A:
Controls and Procedures included in this Amendment.
Our efforts to remediate this material
weakness may not be effective or prevent any future material weakness or significant deficiency in our internal control over
financial reporting. If our efforts are not successful or other material weaknesses or control deficiencies
occur in the future, we may be unable to report our financial results accurately on a timely basis, which could
cause our reported financial results to be materially misstated and result in the loss of investor confidence
and cause the market price of our securities to decline.
We may face litigation and other risks as a result of the material
weakness in our internal control over financial reporting.
Following the issuance of the SEC Staff Statement,
after consultation with our independent registered public accounting firm, our management and our audit committee concluded that it was
appropriate to restate our previously issued audited financial statements as of December 31, 2020 and for the quarterly period ended
September 30, 2020. As discussed elsewhere in this Amendment, we identified a material weakness in our internal controls over
financial reporting related to the accounting for a significant and unusual transaction related to the warrants we issued in connection
with our September 2020 initial public offering.
As a result of such material weakness, the
restatement of our financial statements for the Affected Periods, the change in accounting for the warrants, and other matters
raised or that may in the future be raised by the SEC, we face potential for litigation or other disputes which may include, among
others, claims invoking the federal and state securities laws, contractual claims or other claims arising from the restatement and
material weaknesses in our internal control over financial reporting and the preparation of our financial statements. As of the date
of this Annual Report, we have no knowledge of any such litigation or dispute. However, we can provide no assurance that such
litigation or dispute will not arise in the future. Any such litigation or dispute, whether successful or not, could have a material
adverse effect on us and our results of operations and financial condition.
Our warrants are expected to be accounted for as derivative liabilities
with changes in fair value each period included in earnings, which may have an adverse effect on the market price of our shares of Class A
common stock or may make it more difficult for us to consummate an initial business combination.
We expect to account for our warrants as a “warrant liability”.
At each reporting period (1) the accounting treatment of the warrants will be re-evaluated for proper accounting treatment as a liability
or equity and (2) the fair value of the liability of the public warrants and private placement warrants will be remeasured and the
change in the fair value of the liability will be recorded as other income (expense) in our income statement. The impact of changes in
fair value on earnings may have an adverse effect on the market price of our shares of Class A common stock. In addition, potential
targets may seek a special purpose acquisition company that does not have warrants that are accounted for as a warrant liability, which
may make it more difficult for us to consummate an initial business combination with a target business.
Changes in laws or regulations, or a failure to comply with any laws
and regulations, may adversely affect our business, investments 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 and results of operations.
We may amend the terms of the warrants in a manner that may be
adverse to holders with the approval by the holders of at least 50% of the then outstanding public warrants. As a result, the exercise
price of your warrants could be increased, the exercise period could be shortened and the number of shares of our Class A common
stock purchasable upon exercise of a warrant could be decreased, all without your approval.
Our warrants were issued in registered form under
a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. The warrant agreement provides
that the terms of the warrants may be amended without the consent of any holder for the purpose of (i) curing any ambiguity or correct
any mistake, including to conform the provisions of the warrant agreement to the description of the terms of the warrants and the warrant
agreement, or defective provision, (ii) amending the provisions relating to cash dividends on shares of common stock as contemplated
by and in accordance with the warrant agreement or (iii) adding or changing any provisions with respect to matters or questions arising
under the warrant agreement as the parties to the warrant agreement may deem necessary or desirable and that the parties deem to not adversely
affect the rights of the registered holders of the warrants, provided that the approval by the holders of at least 50% of the then-outstanding
public warrants is required to make any change that adversely affects the interests of the registered holders of public warrants. Accordingly,
we may amend the terms of the public warrants in a manner adverse to a holder if holders of at least 50% of the then outstanding public
warrants approve of such amendment and, solely with respect to any amendment to the terms of the private placement warrants or any provision
of the warrant agreement with respect to the private placement warrants, 50% of the number of the then outstanding private placement warrants.
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, shorten
the exercise period or decrease the number of shares of our Class A common stock purchasable upon exercise of a warrant.
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 of 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 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 exercise our redemption right even if we are unable to register or qualify
the underlying securities for sale under all applicable state securities laws. Redemption of the outstanding warrants could force you
(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.
In addition, we may redeem your warrants after
they become exercisable for $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders
will be able to exercise their warrants prior to redemption for a number of Class A common stock determined based on the redemption
date and the fair market value of our Class A common stock. The value received upon exercise of the warrants (1) may be less
than the value the holders would have received if they had exercised their warrants at a later time where the underlying share price is
higher and (2) may not compensate the holders for the value of the warrants, including because the number of shares of common stock
received is capped at 0.361 shares of Class A common stock per warrant (subject to adjustment) irrespective of the remaining life
of the warrants.
None of the private placement warrants will be
redeemable by us as (except as set forth under “Description of Securities — Warrants — Public
Stockholders’ Warrants — Redemption of warrants when the price per share of Class A common stock equals
or exceeds $10.00” in the final prospectus related to our initial public offering) so long as they are held by our sponsor or its
permitted transferees.
Because each unit contains one-half of one warrant and only a whole
warrant may be exercised, the units may be worth less than units of other blank check companies.
Each unit contains one-half of one warrant. Because,
pursuant to the warrant agreement, the warrants may only be exercised for a whole number of shares, only a whole warrant may be exercised
at any given time. This is different from other offerings similar to ours whose units include one share of common stock and one whole
warrant to purchase one share. We have established the components of the units in this way in order to reduce the dilutive effect
of the warrants upon completion of a business combination since the warrants will be exercisable in the aggregate for one-half 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.
We are an emerging growth company and a smaller reporting company
within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to emerging
growth companies or smaller reporting companies, this could make our securities less attractive to investors and may make it more difficult
to compare our performance with other public companies.
We are an “emerging growth company”
within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from various reporting
requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being
required to comply with the auditor internal controls attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced
disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements
of holding a nonbinding advisory vote on executive compensation and 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 from the date of our initial public offering, 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 the end
of a prior fiscal year’s second fiscal quarter 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 end of the prior fiscal year’s second fiscal quarter, or (2) our annual
revenues exceeded $100 million during such completed fiscal year and the market value of our common stock held by non-affiliates
exceeds $700 million as of the end of the prior fiscal year’s second fiscal quarter. 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.
Our amended and restated certificate of incorporation designates
the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may
be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes
with our company or our company’s directors, officers or other employees.
Our amended and restated certificate of incorporation
provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall,
to the fullest extent permitted by law, be the sole and exclusive forum for any (1) derivative action or proceeding brought on behalf
of our company, (2) action asserting a claim of breach of a fiduciary duty owed by any director, officer, employee or agent of our
company to our company or our stockholders, or any claim for aiding and abetting any such alleged breach, (3) action asserting a
claim against our company or any director, or officer or employee of our company arising pursuant to any provision of the DGCL or our
amended and restated certificate of incorporation or our bylaws, or (4) action asserting a claim against us or any director, or officer
or employee of our company governed by the internal affairs doctrine except for, as to each of (1) through (4) above, any claim
(a) as to which the Court of Chancery 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, or (c) arising
under the federal securities laws, including the Securities Act, as to which the Court of Chancery and the federal district court for
the District of Delaware shall concurrently be the sole and exclusive forums. Notwithstanding the foregoing, the provisions of this paragraph
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 shall be the sole and exclusive forum. Any person or entity purchasing or otherwise acquiring
any interest in any shares of our capital stock shall be deemed to have notice of and to have consented to the forum provisions in our
amended and restated certificate of incorporation. If any action the subject matter of which is within the scope the forum provisions
is filed in a court other than a court located within the State of Delaware (a “foreign action”) in the name of any stockholder,
such stockholder shall be deemed to have consented to: (x) the personal jurisdiction of the state and federal courts located within
the State of Delaware 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 stockholder in any such enforcement action by service upon such stockholder’s
counsel in the foreign action as agent for such stockholder.
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 our company or its directors, officers or other
employees, which may discourage such lawsuits.
Alternatively, if a court were to find this provision of our amended
and restated certificate of incorporation 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.
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:
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higher costs and difficulties inherent in managing cross-border business operations and complying with different commercial and legal requirements of overseas markets;
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rules and regulations regarding currency redemption;
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complex corporate withholding taxes on individuals;
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laws governing the manner in which future business combinations may be effected;
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tariffs and trade barriers;
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regulations related to customs and import/export matters;
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longer payment cycles and challenges in collecting accounts receivable;
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tax issues, such as tax law changes and variations in tax laws as compared to the United States;
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currency fluctuations and exchange controls;
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cultural and language differences;
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employment regulations;
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crime, strikes, riots, civil disturbances, terrorist attacks, natural disasters and wars;
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deterioration of political relations with the United States; and
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government appropriations of assets.
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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.
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.
Since only holders of our founder shares will have the right to
vote on the election of directors, the NYSE may consider us to be a “controlled company” within the meaning of the NYSE rules and,
as a result, we may qualify for exemptions from certain corporate governance requirements.
Until we complete our initial business combination,
only holders of our founder shares will have the right to vote on the election of directors. As a result, the NYSE may consider us to
be a “controlled company” within the meaning of the NYSE corporate governance standards. Under the NYSE corporate governance
standards, a company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled
company” and may elect not to comply with certain corporate governance requirements, including the requirements that:
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we have a board that includes a majority of “independent directors,” as defined under the rules of the NYSE;
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we have a compensation committee of our board that is comprised entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and
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we have a nominating and corporate governance committee of our board that is comprised entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities.
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We do not intend
to utilize these exemptions and intend to comply with the corporate governance requirements of the NYSE, subject to applicable phase-in
rules. However, if we determine in the future to utilize some or all of these exemptions, you will not have the same protections afforded
to stockholders of companies that are subject to all of the NYSE corporate governance requirements.