Item
1A. Risk Factors
An
investment in our securities involves a high degree of risk. Careful consideration should be given to all of the risks described
below, together with the other information contained in this Annual Report on Form 10-K, 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 our stockholders could lose all or part
of their investment.
We
are a newly formed company with no operating history and no revenues, and stockholders 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, stockholders 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 may be unable to complete our initial business combination within the time period required. If we fail to complete
our initial business combination, we will never generate any operating revenues.
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) pandemic.
The
COVID-19 pandemic has resulted in a widespread health crisis that has adversely affected 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 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.
Our
public stockholders may not be afforded an opportunity to vote on our proposed initial business combination, which means we may
complete our initial business combination even though a majority of our public stockholders do not support such a combination.
We
may choose not to hold a stockholder vote to approve our initial business combination unless the initial business combination
would require stockholder approval under applicable law or stock exchange listing requirements or if we decide to hold a stockholder
vote for business or other legal reasons. Except as required by applicable law or stock exchange requirements, the decision as
to whether we will seek stockholder approval of a proposed initial business combination or will allow stockholders to sell their
shares to us in a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors, such as
the timing of the transaction and whether the terms of the transaction would otherwise require us to seek stockholder approval.
Accordingly, we may complete our initial business combination even if holders of a majority of our public shares do not approve
of the initial business combination we complete.
If
we seek stockholder approval of our initial business combination, our initial stockholders have agreed to vote in favor of such
initial business combination, regardless of how our public stockholders vote.
Pursuant
to the letter agreement, our sponsor, officers and directors have agreed to vote any founder shares and placement shares held
by them, as well as any public shares they may have acquired during or after our initial public offering (including in open market
and privately negotiated transactions), in favor of our initial business combination. As a result, in addition to our initial
stockholders’ founder shares and placement shares, we would need only 3,572,501, or 35.7%, of the 10,000,000 public shares
sold in our initial public offering to be voted in favor of an initial business combination (assuming all outstanding shares are
voted and the placement shares issued to the underwriters are voted in favor of the transaction) in order to have our initial
business combination approved. Our initial stockholders own shares representing approximately 21.8% of our outstanding shares
of common stock. Accordingly, if we seek stockholder approval of our initial business combination, the agreement by our initial
stockholders to vote in favor of our initial business combination will increase the likelihood that we will receive the requisite
stockholder approval for such initial business combination.
Our
stockholders’ only opportunity to affect the investment decision regarding a potential business combination will be limited
to the exercise of their right to redeem their shares from us for cash, unless we seek stockholder approval of the initial business
combination.
Since
our board of directors may complete an initial business combination without seeking stockholder approval, public stockholders
may not have the right or opportunity to vote on the initial business combination, unless we seek such stockholder vote. Accordingly,
if we do not seek stockholder approval, our stockholders’ only opportunity to affect the investment decision regarding a
potential business combination may be limited to exercising their redemption rights within the period of time (which will be at
least 20 business days) set forth in our tender offer documents mailed to our public stockholders in which we describe our initial
business combination.
The
ability of our public stockholders to redeem their shares for cash may make our financial condition unattractive to potential
business combination targets, which may make it difficult for us to enter into an initial business combination with a target.
We
may seek to enter into an initial business combination agreement with a prospective target that requires as a closing condition
that we have a minimum net worth or a certain amount of cash. If too many public stockholders exercise their redemption rights,
we would not be able to meet such closing condition and, as a result, would not be able to proceed with the initial business combination.
Furthermore, in no event will we redeem our public shares unless our net tangible assets are at least $5,000,001 either immediately
prior to or upon consummation of our initial business combination and after payment of underwriters’ fees and commissions
(so that we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement
which may be contained in the agreement relating to our initial business combination. Consequently, if accepting all properly
submitted redemption requests would cause our net tangible assets to be less than $5,000,001 upon consummation of our initial
business combination and after payment of underwriters’ fees and commissions or such greater amount necessary to satisfy
a closing condition, each as described above, we would not proceed with such redemption and the related business combination and
may instead search for an alternate business combination. Prospective targets will be aware of these risks and, thus, may be reluctant
to enter into an initial business combination with us.
The
ability of our public stockholders to exercise redemption rights with respect to a large number of our shares may not allow us
to complete the most desirable business combination or optimize our capital structure.
At
the time we enter into an agreement for our initial business combination, we will not know how many stockholders may exercise
their redemption rights, and therefore will need to structure the transaction based on our expectations as to the number of shares
that will be submitted for redemption. If our initial business combination agreement requires us to use a portion of the cash
in the trust account to pay the purchase price, or requires us to have a minimum amount of cash at closing, we will need to reserve
a portion of the cash in the trust account to meet such requirements, or arrange for third party financing. In addition, if a
larger number of shares are submitted for redemption than we initially expected, we may need to restructure the transaction to
reserve a greater portion of the cash in the trust account or arrange for third party financing. Raising additional third-party financing
may involve dilutive equity issuances or the incurrence of indebtedness at higher than desirable levels. Furthermore, this dilution
would increase to the extent that the anti-dilution provision of the Class B common stock result in the issuance of
Class A shares on a greater than one-to-one basis upon conversion of the Class B common stock at the time of the
consummation of our business combination. The above considerations may limit our ability to complete the most desirable business
combination available to us or optimize our capital structure. The amount of the deferred underwriting commissions payable to
the underwriters will not be adjusted for any shares that are redeemed in connection with an initial business combination. The
per-share amount we will distribute to stockholders who properly exercise their redemption rights will not be reduced by
the deferred underwriting commission and after such redemptions, the per-share value of shares held by non-redeeming stockholders
will reflect our obligation to pay the deferred underwriting commissions.
The
ability of our public stockholders to exercise redemption rights with respect to a large number of our shares could increase the
probability that our initial business combination would be unsuccessful and that stockholders would have to wait for liquidation
in order to redeem their stock.
If
our initial business combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price,
or requires us to have a minimum amount of cash at closing, the probability that our initial business combination would be unsuccessful
is increased. If our initial business combination is unsuccessful, stockholders would not receive their pro rata portion of the
trust account until we liquidate the trust account. If stockholders are in need of immediate liquidity, they could attempt to
sell their 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, stockholders may suffer a material loss on their investment or lose the benefit of
funds expected in connection with our redemption until we liquidate or such stockholders are able to sell their stock in the open
market.
The
requirement that we complete our initial business combination within the prescribed time frame may give potential target businesses
leverage over us in negotiating an initial business combination and may decrease our ability to conduct due diligence on potential
business combination targets as we approach our dissolution deadline, which could undermine our ability to complete our initial
business combination on terms that would produce value for our stockholders.
Any
potential target business with which we enter into negotiations concerning an initial business combination will be aware that
we must complete our initial business combination within 24 months from the closing of our initial public offering. Consequently,
such target business may obtain leverage over us in negotiating an initial business combination, knowing that if we do not complete
our initial business combination with that particular target business, we may be unable to complete our initial business combination
with any target business. This risk will increase as we get closer to the timeframe described above. In addition, we may have
limited time to conduct due diligence and may enter into our initial business combination on terms that we would have rejected
upon a more comprehensive investigation.
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
amended and restated certificate of incorporation provides 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. Our ability to complete our initial business combination may be negatively impacted
by general market conditions, volatility in the capital and debt markets and the other risks described herein. For example, if
the outbreak of COVID-19 continues to grow both in the U.S. and globally and, while the extent of the impact of the outbreak
on us will depend on future developments, it could limit our ability to complete our initial business combination, 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. Additionally, the outbreak of COVID-19 may negatively impact businesses we may seek to acquire.
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 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 the case of clauses (ii) and
(iii) above 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 seek stockholder approval of our initial business combination, our sponsor, directors, officers and their affiliates may elect
to purchase shares or warrants from public stockholders, which may influence a vote on a proposed initial business combination
and reduce the public “float” of our Class A common stock.
If
we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial
business combination pursuant to the tender offer rules, our sponsor, directors, officers or their affiliates may purchase public
shares or public warrants or a combination thereof in privately negotiated transactions or in the open market either prior to
or following the completion of our initial business combination, although they are under no obligation to do so. However, they
have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions
for any such transactions. None of the funds in the trust account will be used to purchase shares or public warrants in such transactions.
Such
a purchase may include a contractual acknowledgement that such stockholder, although still the record holder of our shares is
no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that our sponsor,
directors, officers or their affiliates purchase shares in privately negotiated transactions from public stockholders who have
already elected to exercise their redemption rights or submitted a proxy to vote against our initial business combination, such
selling stockholders would be required to revoke their prior elections to redeem their shares and any proxy to vote against our
initial business combination. The price per share paid in any such transaction may be different than the amount per share a public
stockholder would receive if it elected to redeem its shares in connection with our initial business combination. The purpose
of such purchases could be to vote such shares in favor of the initial business combination and thereby increase the likelihood
of obtaining stockholder approval of the initial business combination, or to satisfy a closing condition in an agreement with
a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination,
where it appears that such requirement would otherwise not be met. The purpose of any such purchases of public warrants could
be to reduce the number of public warrants outstanding or to vote such warrants on any matters submitted to the warrantholders
for approval in connection with our initial business combination. Any such purchases of our securities may result in the completion
of our initial business combination that may not otherwise have been possible. We expect that any such purchases will be reported
pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting
requirements.
In
addition, if such purchases are made, the public “float” of our Class A common stock or public warrants and the
number of beneficial holders of our securities may be reduced, possibly making it difficult to obtain or maintain the quotation,
listing or trading of our securities on a national securities exchange.
If
a stockholder fails to receive notice of our offer to redeem our public shares in connection with our initial business combination,
or fails to comply with the procedures for tendering its shares, such shares may not be redeemed.
We
will comply with the tender offer rules or proxy rules, as applicable, when conducting redemptions in connection with our initial
business combination. Despite our compliance with these rules, if a stockholder fails to receive our tender offer or proxy materials,
as applicable, such stockholder may not become aware of the opportunity to redeem its shares. In addition, proxy materials or
tender offer documents, as applicable, that we will furnish to holders of our public shares in connection with our initial business
combination will describe the various procedures that must be complied with in order to validly tender or redeem public shares.
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 deliver their stock certificates to our transfer agent prior to the
date set forth in the tender offer documents mailed to such holders, or up to two business days prior to the vote on the proposal
to approve the initial business combination in the event we distribute proxy materials, or to deliver their shares to the transfer
agent electronically. In the event that a stockholder fails to comply with these or any other procedures disclosed in the proxy
or tender offer materials, as applicable, its shares may not be redeemed.
Stockholders
will not have any rights or interests in funds from the trust account, except under certain limited circumstances. To liquidate
an investment in our securities, therefore, stockholders may be forced to sell their 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: (i) our
completion of an initial business combination, and then only in connection with those shares of Class A common stock that
such stockholder properly elected to redeem, subject to the limitations described herein, (ii) the redemption of any public
shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation
(A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination
or certain amendments to our charter prior thereto 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 stockholders’ rights or pre-initial business combination activity and (iii) the redemption of our
public shares if we are unable to complete an initial business combination within 24 months from the closing of our initial
public offering, subject to applicable law. In no other circumstances will a public stockholder have any right or interest of
any kind in the trust account. Holders of warrants will not have any right to the proceeds held in the trust account with respect
to the warrants. Accordingly, to liquidate an investment in our securities, our stockholders may be forced to sell their public
shares or warrants, potentially at a loss.
Nasdaq
may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our
securities and subject us to additional trading restrictions.
We
cannot make any assurances that our securities will continue to be listed on Nasdaq in the future or prior to our initial business
combination. In order to continue listing our securities on Nasdaq prior to our initial business combination, we must maintain
certain financial, distribution and stock price levels. Generally, we must maintain a minimum amount in stockholders’ equity
(generally $2,500,000) and a minimum number of holders of our securities (generally 300 public holders). Additionally, in connection
with our initial business combination, we will be required to demonstrate compliance with Nasdaq’s initial listing requirements,
which are more rigorous than Nasdaq’s continued listing requirements, in order to continue to maintain the listing of our
securities on Nasdaq. For instance, our stock price would generally be required to be at least $4.00 per share, our stockholders’
equity would generally be required to be at least $5.0 million and we would be required to have a minimum of 300 round lot
holders (with at least 50% of such round lot holders holding securities with a market value of at least $2,500) of our securities.
We cannot make any assurances that we will be able to meet those initial listing requirements at that time.
If
Nasdaq delists our securities from trading on its exchange and we are not able to list our securities on another national securities
exchange, we expect our securities could be quoted on an over-the-counter market. If this were to occur, we could face significant
material adverse consequences, including:
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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 units, Class A common
stock and warrants are listed on Nasdaq, our units, Class A common stock and warrants are covered securities. Although the
states are preempted from regulating the sale of our securities, the federal statute does allow the states to investigate companies
if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale
of covered securities in a particular case. While we are not aware of a state having used these powers to prohibit or restrict
the sale of securities issued by blank check companies, other than the State of Idaho, certain state securities regulators view
blank check companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities
of blank check companies in their states. Further, if we were no longer listed on Nasdaq, our securities would not be covered
securities and we would be subject to regulation in each state in which we offer our securities, including in connection with
our initial business combination.
If
we seek stockholder approval of our initial business combination and we do not conduct redemptions pursuant to the tender offer
rules, and if stockholders or a “group” of stockholders are deemed to hold in excess of 15% of our Class A common
stock, stockholders will lose the ability to redeem all such shares in excess of 15% of our Class A common stock.
If
we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial
business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation provides that a
public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in
concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption
rights with respect to more than an aggregate of 15% of the shares sold in our initial public offering without our prior consent,
which we refer to as the “Excess Shares.” However, we would not be restricting our stockholders’ ability to
vote all of their shares (including Excess Shares) for or against our initial business combination. The inability to redeem the
Excess Shares will reduce our stockholders’ influence over our ability to complete our initial business combination and
our stockholders could suffer a material loss on their investment in us if they sell Excess Shares in open market transactions.
Additionally, our stockholders will not receive redemption distributions with respect to the Excess Shares if we complete our
initial business combination. And as a result, our stockholders will continue to hold that number of shares exceeding 15% and,
in order to dispose of such shares, would be required to sell stock in open market transactions, potentially at a loss.
Because
of our limited resources and the significant competition for business combination opportunities, it may be more difficult for
us to complete our initial business combination. If we are unable to complete our initial business combination, our public stockholders
may receive only approximately $10.00 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 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 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, 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 and completing an 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 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 placement units not being held in the trust account are insufficient
to allow us to operate for at least the 24 months following the closing of our initial public offering, we may be unable to complete
our initial business combination, in which case our public stockholders may only receive $10.00 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 to fund our working capital requirements may not be sufficient to allow us
to operate for at least the 24 months following 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 at least the 24 months following the closing of our initial public offering; however,
we cannot provide any assurance that our estimate is accurate.
Of
the funds available to us, we could use a portion of the funds available to us to pay fees to consultants to assist us with our
search for a target business. We could also use a portion of the funds as a down payment or to fund a “no-shop” provision
(a provision in letters of intent or merger agreements designed to keep target businesses from “shopping” around for
transactions with other companies or investors on terms more favorable to such target businesses) with respect to a particular
proposed initial business combination, although we do not have any current intention to do so. If we entered into a letter of
intent or merger agreement where we paid for the right to receive exclusivity from a target business and were subsequently required
to forfeit such funds (whether as a result of our breach or otherwise), we might not have sufficient funds to continue searching
for, or conduct due diligence with respect to, a target business. If we are unable to complete our initial business combination,
our public stockholders may receive only approximately $10.00 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 placement units not being held in the trust account are insufficient,
it could limit the amount available to fund our search for a target business or businesses and complete our initial business combination
and we will depend on loans from our sponsor or management team to fund our search for an initial business combination, to pay
our 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.
If
we are required to seek additional capital, we would need to borrow funds from our sponsor, management team or other third parties
to operate or may be forced to liquidate. None of our sponsor, members of our management team nor any of their affiliates is under
any obligation to advance funds to us in such circumstances. Any such advances would be repaid only from funds held outside the
trust account or from funds released to us upon completion of our initial business combination. Up to $1,500,000 of such loans
may be convertible into units, at a price of $10.00 per unit at the option of the lender, upon consummation of our initial business
combination. The units would be identical to the placement units. Prior to the completion of our initial business combination,
we do not expect to seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties
will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.
If we are unable to obtain these loans, we may be unable to complete our initial business combination. If we are unable to complete
our initial business combination because we do not have sufficient funds available to us, we will be forced to cease operations
and liquidate the trust account. Consequently, our public stockholders may only receive approximately $10.00 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.
Subsequent
to the completion of our initial business combination, we may be required to take write-downs or write-offs, restructuring and
impairment or other charges that could have a significant negative effect on our financial condition, results of operations and
our stock price.
Even
if we conduct extensive due diligence on a target business with which we combine, we cannot assure our stockholders that this
diligence will surface all material issues that may be present inside a particular target business, that it would be possible
to uncover all material issues through a customary amount of due diligence, or that factors outside of the target business and
outside of our control will not later arise. As a result of these factors, we may be forced to later write-down or write-off assets,
restructure our operations, or incur impairment or other charges that could result in our reporting losses. Even if our due diligence
successfully identifies certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent
with our preliminary risk analysis. Even though these charges may be non-cash items and not have an immediate impact on our
liquidity, the fact that we report charges of this nature could contribute to negative market perceptions about us or our securities.
In addition, charges of this nature may cause us to violate net worth or other covenants to which we may be subject as a result
of assuming pre-existing debt held by a target business or by virtue of our obtaining debt financing to partially finance
the initial business combination. Accordingly, any stockholders who choose to remain stockholders following the initial business
combination could suffer a reduction in the value of their shares. Such stockholders are unlikely to have a remedy for such reduction
in value unless they are able to successfully claim that the reduction was due to the breach by our officers or directors of a
duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities
laws that the proxy solicitation or tender offer materials, as applicable, relating to the initial business combination constituted
an actionable material misstatement or omission.
If
third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount
received by stockholders may be less than $10.00 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, prospective target businesses and other entities with which we do business execute agreements
with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit
of our public stockholders, such parties may not execute such agreements, or even if they execute such agreements they may not
be prevented from bringing claims against the trust account, including, but not limited to, fraudulent inducement, breach of fiduciary
responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order
to gain advantage with respect to a claim against our assets, including the funds held in the trust account. If any third party
refuses to execute an agreement waiving such claims to the monies held in the trust account, our management will perform an analysis
of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if
management believes that such third party’s engagement would be significantly more beneficial to us than any alternative.
Marcum LLP, our independent registered public accounting firm, and the underwriters of our initial public offering, have not executed
agreements with us waiving such claims to the monies held in the trust account.
Examples
of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third party
consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants
that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver.
In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of,
or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for
any reason. Upon redemption of our public shares, if we are unable to complete our initial business combination within the prescribed
timeframe, or upon the exercise of a redemption right in connection with our initial business combination, we will be required
to provide for payment of claims of creditors that were not waived that may be brought against us within the 10 years following
redemption. Accordingly, the per-share redemption amount received by public stockholders could be less than the $10.00 per
share initially held in the trust account, due to claims of such creditors. Pursuant to the letter agreement, our sponsor has
agreed that it will be liable to us if and to the extent any claims by a third party for services rendered or products sold to
us, or a prospective target business with which we have entered into a written letter of intent, confidentiality or similar agreement
or business combination agreement, reduce the amount of funds in the trust account to below the lesser of (i) $10.00 per public
share and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the trust
account, if less than $10.00 per share due to reductions in the value of the trust assets, less taxes payable, provided that such
liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights
to the monies held in the trust account (whether or not such waiver is enforceable) nor will it apply to any claims under our
indemnity of the underwriters of our initial public offering against certain liabilities, including liabilities under the Securities
Act. However, we have not asked our sponsor to reserve for such indemnification obligations, nor have we independently verified
whether our sponsor has sufficient funds to satisfy its indemnity obligations and believe that our sponsor’s only assets
are securities of our company. Therefore, we cannot provide any assurance that our sponsor would be able to satisfy those obligations.
None of our officers or directors will indemnify us for claims by third parties including, without limitation, claims by vendors
and prospective target businesses.
Our
directors may decide not to enforce the indemnification obligations of our sponsor, resulting in a reduction in the amount of
funds in the trust account available for distribution to our public stockholders.
In
the event that the proceeds in the trust account are reduced below the lesser of (i) $10.00 per share and (ii) the actual
amount per share held in the trust account as of the date of the liquidation of the trust account if less than $10.00 per share
due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes, and
our sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular
claim, our independent directors would determine whether to take legal action against our sponsor to enforce its indemnification
obligations.
While
we currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification
obligations to us, it is possible that our independent directors in exercising their business judgment and subject to their fiduciary
duties may choose not to do so in any particular instance if, for example, the cost of such legal action is deemed by the independent
directors to be too high relative to the amount recoverable or if the independent directors determine that a favorable outcome
is not likely. If our independent directors choose not to enforce these indemnification obligations, the amount of funds in the
trust account available for distribution to our public stockholders may be reduced below $10.00 per share.
We
may not have sufficient funds to satisfy indemnification claims of our directors and executive officers.
We
have agreed to indemnify our officers and directors to the fullest extent permitted by law. However, our officers and directors
have agreed to waive any right, title, interest or claim of any kind in or to any monies in the trust account and to not seek
recourse against the trust account for any reason whatsoever. Accordingly, any indemnification provided will be able to be satisfied
by us only if (i) we have sufficient funds outside of the trust account or (ii) we consummate an initial business combination.
Our obligation to indemnify our officers and directors may discourage stockholders from bringing a lawsuit against our officers
or directors for breach of their fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative
litigation against our officers and directors, even though such an action, if successful, might otherwise benefit us and our stockholders.
Furthermore, a stockholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage
awards against our officers and directors pursuant to these indemnification provisions.
If,
after we distribute the proceeds in the trust account to our public stockholders, we file a bankruptcy 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 some or all amounts received by our stockholders. In addition, our board
of directors may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith, thereby exposing
itself and us to claims of punitive damages, by paying public stockholders from the trust account prior to addressing the claims
of creditors.
If,
before distributing the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary
bankruptcy petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over
the claims of our stockholders and the per-share amount that would otherwise be received by our stockholders in connection with
our liquidation may be reduced.
If,
before distributing the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary
bankruptcy petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable
bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the
claims of our stockholders. To the extent any bankruptcy claims deplete the trust account, the per-share amount that would
otherwise be received by our stockholders in connection with our liquidation may be reduced.
If
we are deemed to be an investment company under the Investment Company Act, we may be required to institute burdensome compliance
requirements and our activities may be restricted, which may make it difficult for us to complete our initial business combination.
If
we are deemed to be an investment company under the Investment Company Act, our activities may be restricted, including:
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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 initial 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 with the SEC;
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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 that we are currently not subject to.
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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
will be to identify and complete an initial business combination and thereafter to operate the post-transaction business
or assets for the long term. We do not plan to buy businesses or assets with a view to resale or profit from their resale. We
do not plan to buy unrelated businesses or assets or to be a passive investor.
We
do not believe that our 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. The
trust account is intended as a holding place for funds pending the earliest to occur of: (i) the completion of our initial
business combination; (ii) the redemption of any public shares properly submitted in connection with a stockholder vote to
amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow
redemption in connection with our initial business combination or certain amendments to our charter prior thereto 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 stockholders’ rights or pre-initial business
combination activity; or (iii) absent an initial business combination within 24 months from the closing of our initial
public offering, our return of the funds held in the trust account to our public stockholders as part of our redemption of the
public shares. If we do not invest the proceeds as discussed above, we may be deemed to be subject to the Investment Company Act.
If we were deemed to be subject to the Investment Company Act, compliance with these additional regulatory burdens would require
additional expenses for which we have not allotted funds and may hinder our ability to complete an initial business combination
or may result in our liquidation. If we are unable to complete our initial business combination, our public stockholders may receive
only approximately $10.00 per share on the liquidation of our trust account and our warrants will expire worthless.
Changes
in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, including our
ability to negotiate and complete our initial business combination and results of operations.
We
are subject to laws and regulations enacted by national, regional and local governments. In particular, we will be required to
comply with certain SEC and other legal requirements. Compliance with, and monitoring of, applicable laws and regulations may
be difficult, time consuming and costly.
Those
laws and regulations and their interpretation and application may also change from time to time and those changes could have a
material adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable
laws or regulations, as interpreted and applied, could have a material adverse effect on our business, including our ability to
negotiate and complete our initial business combination and results of operations.
Our
stockholders may be held liable for claims by third parties against us to the extent of distributions received by them upon redemption
of their shares.
Under
the DGCL, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received
by them in a dissolution. The pro rata portion of our trust account distributed to our public stockholders upon the redemption
of our public shares in the event we do not complete our initial business combination within 24 months from the closing of
our initial public offering may be considered a liquidating distribution under Delaware law. If a corporation complies with certain
procedures set forth in Section 280 of the DGCL intended to ensure that it makes reasonable provision for all claims against
it, including a 60-day notice period during which any third-party claims can be brought against the corporation, a 90-day period
during which the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating
distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to
the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability
of the stockholder would be barred after the third anniversary of the dissolution. However, it is our intention to redeem our
public shares as soon as reasonably possible following the 24th month from the closing of our initial public offering
in the event we do not complete our initial business combination and, therefore, we do not intend to comply with the foregoing
procedures.
Because
we 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 our
stockholders that we will properly assess all claims that may be potentially brought against us. As such, our stockholders could
potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of our stockholders
may extend beyond the third anniversary of such date. Furthermore, if the pro rata portion of our trust account distributed to
our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination
within 24 months from the closing of our initial public offering is not considered a liquidating distribution under Delaware
law and such redemption distribution is deemed to be unlawful (potentially due to the imposition of legal proceedings that a party
may bring or due to other circumstances that are currently unknown), then pursuant to Section 174 of the DGCL, the statute
of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years,
as in the case of a liquidating distribution.
We
may not hold an annual meeting of stockholders until after the consummation of our initial business combination, which could delay
the opportunity for our stockholders to elect directors.
In
accordance with Nasdaq corporate governance requirements, we are not required to hold an annual meeting until no later than one
year after our first fiscal year end following our listing on Nasdaq. Under Section 211(b) of the DGCL, we are, however,
required to hold an annual meeting of stockholders for the purposes of electing directors in accordance with our 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.
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 a warrant holder desires to exercise warrants, thus
precluding such warrant holder from being able to exercise its warrants except on a cashless basis. If the issuance of the shares
upon exercise of warrants is not registered, qualified or exempt from registration or qualification, the holder of such warrant
will not be entitled to exercise such warrant and such warrant may have no value and expire worthless.
We
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. However, under the terms of the warrant agreement, we have agreed that as soon as practicable, but
in no event later than 15 business days after the closing of our initial business combination, we will use our best efforts to
file with the SEC a registration statement for the registration under the Securities Act of the issuance of the shares of Class A
common stock issuable upon exercise of the warrants and thereafter will use our best efforts to cause the same to become effective
within 60 business days following our initial business combination and to maintain a current prospectus relating to the Class A
common stock issuable upon exercise of the warrants, until the expiration of the warrants in accordance with the provisions of
the warrant agreement. We cannot provide any assurance 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
of Class A common stock issuable upon exercise of the warrants are not registered under the Securities Act, we will be required
to permit holders to exercise their warrants on a cashless basis. 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 foregoing, if a registration statement covering the issuance of
the Class A common stock issuable upon exercise of the warrants is not effective within a specified period following the
consummation of our initial business combination, warrant holders may, until such time as there is an effective registration statement
and during any period when we shall have failed to maintain an effective registration statement, exercise warrants on a cashless
basis pursuant to the exemption provided by Section 3(a)(9) of the Securities Act, provided that such exemption is available.
If that exemption, or another exemption, is not available, holders will not be able to exercise their warrants on a cashless basis.
We will use our best 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 will not be entitled to exercise such warrant
and such warrant may have no value and expire worthless. In such event, holders who acquired their warrants as part of a purchase
of units will have paid the full unit purchase price solely for the shares of Class A common stock included in the units.
If and when the warrants become redeemable by us, we may not exercise our redemption right if the issuance of shares of common
stock upon exercise of the warrants is not exempt from registration or qualification under applicable state blue sky laws or we
are unable to effect such registration or qualification. We will use our best efforts to register or qualify such shares of common
stock under the blue sky laws of the state of residence in those states in which the warrants were offered by us. However, there
may be instances in which holders of our public warrants may be unable to exercise such public warrants but holders of our placement
warrants may be able to exercise such placement warrants.
If
our warrant holders exercise their public warrants on a “cashless basis,” they will receive fewer shares of Class A
common stock from such exercise than if they were to exercise such warrants for cash.
There
are circumstances in which the exercise of the public warrants may be required or permitted to be made on a cashless basis. First,
if a registration statement covering the issuance of the shares of Class A common stock issuable upon exercise of the warrants
is not effective by the 60th business day after the closing of our initial business combination, warrantholders
may, until such time as there is an effective registration statement, exercise warrants on a cashless basis in accordance with
Section 3(a)(9) of the Securities Act or another exemption. Second, if a registration statement covering the Class A
common stock issuable upon exercise of the warrants is not effective within a specified period following the consummation of our
initial business combination, warrant holders may, until such time as there is an effective registration statement and during
any period when we shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant
to the exemption provided by Section 3(a)(9) of the Securities Act, provided that such exemption is available; if that exemption,
or another exemption, is not available, holders will not be able to exercise their warrants on a cashless basis. Third, if we
call the public warrants for redemption, our management will have the option to require all holders that wish to exercise warrants
to do so on a cashless basis. In the event of an exercise on a cashless basis, a holder would pay the warrant exercise price by
surrendering the warrants for that number of shares of Class A common stock equal to the quotient obtained by dividing (x) the
product of the number of shares of Class A common stock underlying the warrants, multiplied by the difference between the
exercise price of the warrants and the “fair market value” (as defined in the next sentence) by (y) the fair
market value. The “fair market value” for this purpose shall mean the average reported last sale price of the Class A
common stock for the 10 trading days ending on the third trading day prior to the date on which the notice of exercise is received
by the warrant agent or on which the notice of redemption is sent to the holders of warrants, as applicable. As a result, they
would receive fewer shares of Class A common stock from such exercise than if they were to exercise such warrants for cash.
The
grant of registration rights to our initial stockholders and the underwriters 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, the underwriters and their permitted transferees can demand that we register the resale of the placement units,
the placement shares, the placement warrants, the shares of Class A common stock issuable upon exercise of the placement
warrants, the shares of Class A common stock issuable upon conversion of the founder shares, the shares of Class A common
stock included in the placement units and holders of units that may be issued upon conversion of working capital loans may demand
that we register the resale of such shares of Class A common stock, warrants or the Class A common stock issuable upon
exercise of such units and 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 complete. This is because the stockholders of the target business may increase the equity stake they
seek in the combined entity or ask for more cash consideration to offset the negative impact on the market price of our Class A
common stock that is expected when the securities owned by our initial stockholders or holders of working capital loans or their
respective permitted transferees are registered.
Because
we are not limited to evaluating a target business in a particular industry sector, our stockholders will be unable to ascertain
the merits or risks of any particular target business’s operations.
We
will seek to complete an initial business combination with companies in the healthcare industry but may also pursue other business
combination opportunities, except that we will not, under our amended and restated certificate of incorporation, be permitted
to effectuate our initial business combination with another blank check company or similar company with nominal operations. To
the extent we complete our initial business combination, we may be affected by numerous risks inherent in the business operations
with which we combine. For example, if we combine with a financially unstable business or an entity lacking an established record
of sales or earnings, we may be affected by the risks inherent in the business and operations of a financially unstable or a development
stage entity. Although our officers and directors will endeavor to evaluate the risks inherent in a particular target business,
we cannot provide any assurance 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 provide any
assurance that an investment in our securities will ultimately prove to be more favorable to investors than a direct investment,
if such opportunity were available, in a business combination target. Accordingly, any stockholders who choose to remain stockholders
following our initial business combination could suffer a reduction in the value of their securities. Such stockholders are unlikely
to have a remedy for such reduction in value unless they are able to successfully claim that the reduction was due to the breach
by our officers or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring
a private claim under securities laws that the proxy solicitation or tender offer materials, as applicable, relating to the business
combination contained an actionable material misstatement or material omission.
Past
performance by our management team may not be indicative of future performance of an investment in us.
Past
performance by our management team is not a guarantee either (i) of success with respect to any business combination we may
consummate or (ii) that we will be able to locate a suitable candidate for our initial business combination. The historical
record of our management team’s performance should not be relied upon as indicative of our future performance of an investment
in the company or the returns the company will, or is likely to, generate going forward. Other than Rajiv Shukla, our Chief Executive
Officer, and Patrick A. Sturgeon, our Chief Financial Officer, none of our directors has experience with blank check companies
or special purpose acquisition companies. Additionally, in the course of their respective careers, members of our management team
have been involved in businesses and deals that were unsuccessful.
We
may seek business combination opportunities in industries or sectors which may or may not be outside of our management’s
area of expertise.
Although
we intend to focus on identifying healthcare companies, we will consider an initial business combination outside of our management’s
area of expertise if an initial business combination candidate is presented to us and we determine that such candidate offers
an attractive business combination opportunity for our company or we are unable to identify a suitable candidate in this sector
after having expanded a reasonable amount of time and effort in an attempt to do so. Although our management will endeavor to
evaluate the risks inherent in any particular business combination candidate, we cannot provide any assurance that we will adequately
ascertain or assess all of the significant risk factors. We also cannot provide any assurance that an investment in our securities
will not ultimately prove to be less favorable to our stockholders than a direct investment, if an opportunity were available,
in an initial business combination candidate. In the event we elect to pursue a business combination outside of the areas of our
management’s expertise, our management’s expertise may not be directly applicable to its evaluation or operation,
and the information contained in this Form 10-K regarding the areas of our management’s expertise would not be relevant
to an understanding of the business that we elect to acquire. As a result, our management may not be able to adequately ascertain
or assess all of the significant risk factors. Accordingly, any stockholders who choose to remain stockholders following our initial
business combination could suffer a reduction in the value of their shares. Such stockholders are unlikely to have a remedy for
such reduction in value.
Although
we have identified general criteria and guidelines that we believe are important in evaluating prospective target businesses,
we may enter into our initial business combination with a target that does not meet such criteria and guidelines, and as a result,
the target business with which we enter into our initial business combination may not have attributes entirely consistent with
our general criteria and guidelines.
Although
we have identified general criteria and guidelines for evaluating prospective target businesses, it is possible that a target
business with which we enter into our initial business combination will not have all of these positive attributes. If we complete
our initial business combination with a target that does not meet some or all of these guidelines, such combination may not be
as successful as a combination with a business that does meet all of our general criteria and guidelines. In addition, if we announce
a prospective business combination with a target that does not meet our general criteria and guidelines, a greater number of stockholders
may exercise their redemption rights, which may make it difficult for us to meet any closing condition with a target business
that requires us to have a minimum net worth or a certain amount of cash. In addition, if stockholder approval of the transaction
is required by applicable law or stock exchange requirements, 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. In certain circumstances, our public stockholders may receive less than $10.00 per share on the redemption of
their shares.
We
may seek business combination opportunities with a financially unstable business or an entity lacking an established record of
revenue, cash flow or earnings, which could subject us to volatile revenues, cash flows or earnings or difficulty in retaining
key personnel.
To
the extent we complete our initial business combination with a financially unstable business or an entity lacking an established
record of revenues or earnings, we may be affected by numerous risks inherent in the operations of the business with which we
combine. These risks include volatile revenues or earnings and difficulties in obtaining and retaining key personnel. Although
our officers and directors will endeavor to evaluate the risks inherent in a particular target business, we may not be able to
properly ascertain or assess all of the significant risk factors and we may not have adequate time to complete due diligence.
Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that
those risks will adversely impact a target business.
We
are not required to obtain a fairness opinion and consequently, our stockholders 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 initial business combination with an affiliated entity or our board cannot independently determine the fair market
value of the target business or businesses, we are not required to obtain an opinion from an independent investment banking firm
or another independent entity that commonly renders valuation opinions that the price we are paying is fair to our company from
a financial point of view. If no opinion is obtained, our stockholders will be relying on the judgment of our board of directors,
who will determine fair market value based on standards generally accepted by the financial community. Such standards used will
be disclosed in our proxy materials or tender offer documents, as applicable, related to our initial business combination.
We
may issue additional common stock or preferred stock to complete our initial business combination or under an employee incentive
plan after completion of our initial business combination. We may also issue shares of Class A common stock upon the conversion
of the Class B common stock at a ratio greater than one-to-one at the time of the consummation 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 100,000,000 shares of Class A common
stock, par value $0.0001 per share, 10,000,000 shares of Class B common stock, par value $0.0001 per share, and 1,000,000 shares
of preferred stock, par value $0.0001 per share. There are 89,645,000 and 7,500,000 authorized but unissued shares of Class A
common stock and Class B common stock, respectively, available for issuance, which amount does not take into account the
shares of Class A common stock reserved for issuance upon exercise of outstanding warrants or the shares of Class A
common stock issuable upon conversion of Class B common stock. There are no shares of preferred stock issued and outstanding.
Shares of Class B common stock are convertible into shares of our Class A common stock initially at a one-for-one ratio
but subject to adjustment, including in certain circumstances in which we issue Class A common stock or equity-linked securities
related to our initial business combination.
We
may issue a substantial number of additional shares of common or preferred stock to complete our initial business combination
or under an employee incentive plan after completion of our initial business combination (although our amended and restated certificate
of incorporation provides that we may not issue securities that can vote with common stockholders on matters related to our pre-initial business
combination activity). We may also issue shares of Class A common stock upon conversion of the Class B common stock
at a ratio greater than one-to-one at the time of the consummation of our initial business combination as a result of the
anti-dilution provisions contained in our amended and restated certificate of incorporation. However, our amended and restated
certificate of incorporation provides, among other things, that prior to our initial business combination, we may not issue additional
shares of capital stock that would entitle the holders thereof to (i) receive funds from the trust account or (ii) vote
on any initial business combination. These provisions of our amended and restated certificate of incorporation, like all provisions
of our amended and restated certificate of incorporation, may be amended with the approval of our stockholders. However, our executive
officers and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended
and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemption in
connection with our initial business combination or certain amendments to our charter prior thereto 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 stockholders’ rights or pre-initial business combination
activity, unless we provide our public stockholders with the opportunity to redeem their shares of common stock upon approval
of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account,
including interest (which interest shall be net of taxes payable), divided by the number of then outstanding public shares.
The
issuance of additional shares of common or preferred stock:
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may
significantly dilute the equity interest of our public stockholders, which dilution would increase if the anti-dilution provisions
in the Class B common stock resulted in the issuance of Class A shares on a greater than one-to-one basis upon
conversion of the Class B common stock;
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may
subordinate the rights of holders of our 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;
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may
have the effect of delaying or preventing a change of control of us by diluting the stock ownership or voting rights of a person
seeking to obtain control of us; 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 business combinations that are not completed, which could materially adversely affect subsequent
attempts to locate and acquire or merge with another business. If we are unable to complete our initial business combination,
our public stockholders may receive only approximately $10.00 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, consultants and others. If we decide not to complete a specific initial business combination, the costs incurred up
to that point for the proposed transaction likely would not be recoverable. Furthermore, if we reach an agreement relating to
a specific target business, we may fail to complete our initial business combination for any number of reasons including those
beyond our control. Any such event will result in a loss to us of the related costs incurred which could materially adversely
affect subsequent attempts to locate and acquire or merge with another business. If we are unable to complete our initial business
combination, our public stockholders may receive only approximately $10.00 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 on
the redemption of their shares.
Our
ability to successfully effect our initial business combination and to be successful thereafter will be totally dependent upon
the efforts of our key personnel, some of whom may join us following our initial business combination. The loss of key personnel
could negatively impact the operations and profitability of our post-combination business.
Our
ability to successfully effect our initial business combination is dependent upon the efforts of our key personnel. The role of
our key personnel in the target business, however, cannot presently be ascertained. Although some of our key personnel may remain
with the target business in senior management or advisory positions following our initial business combination, it is likely that
some or all of the management of the target business will remain in place. While we intend to closely scrutinize any individuals
we employ after our initial business combination, we cannot provide any assurance that our assessment of these individuals will
prove to be correct. These individuals may be unfamiliar with the requirements of operating a company regulated by the SEC, which
could cause us to have to expend time and resources helping them become familiar with such requirements. In addition, the officers
and directors of an initial business combination candidate may resign upon completion of our initial business combination. The
departure of an initial business combination target’s key personnel could negatively impact the operations and profitability
of our post-combination business. The role of an initial business combination candidate’s key personnel upon the completion
of our initial business combination cannot be ascertained at this time. Although we contemplate that certain members of an initial
business combination candidate’s management team will remain associated with the initial business combination candidate
following our initial business combination, it is possible that members of the management of an initial business combination candidate
will not wish to remain in place. The loss of key personnel could negatively impact the operations and profitability of our post-combination business.
We
are dependent upon our executive officers and directors and their departure could adversely affect our ability to operate.
Our
operations are dependent upon a relatively small group of individuals and, in particular, our executive officers and directors.
We believe that our success depends on the continued service of our executive officers and directors, at least until we have completed
our initial business combination. We do not have an employment agreement with, or key-man insurance on the life of, any of
our directors or executive officers. The unexpected loss of the services of one or more of our directors or executive officers
could have a detrimental effect on us.
Our
key personnel may negotiate employment or consulting agreements with a target business in connection with a particular business
combination. These agreements may provide for them to receive compensation following our initial business combination and as a
result, may cause them to have conflicts of interest in determining whether a particular business combination is the most advantageous.
Our
key personnel may be able to remain with the company after the completion of our initial business combination only if they are
able to negotiate employment or consulting agreements in connection with the initial business combination. Such negotiations would
take place simultaneously with the negotiation of the initial business combination and could provide for such individuals to receive
compensation in the form of cash payments and/or our securities for services they would render to us after the completion of the
initial business combination. The personal and financial interests of such individuals may influence their motivation in identifying
and selecting a target business. However, we believe the ability of such individuals to remain with us after the completion of
our initial business combination will not be the determining factor in our decision as to whether or not we will proceed with
any potential business combination. There is no certainty, however, that any of our key personnel will remain with us after the
completion of our initial business combination. We cannot provide any assurance 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 the consummation of our initial business combination.
We
may have a limited ability to assess the management of a prospective target business and, as a result, may effect our initial
business combination with a target business whose management may not have the skills, qualifications or abilities to manage a
public company, which could, in turn, negatively impact the value of our stockholders’ investment in us.
When
evaluating the desirability of effecting our initial business combination with a prospective target business, our ability to assess
the target business’s management may be limited due to a lack of time, resources or information. Our assessment of the capabilities
of the target’s management, therefore, may prove to be incorrect and such management may lack the skills, qualifications
or abilities we suspected. Should the target’s management not possess the skills, qualifications or abilities necessary
to manage a public company, the operations and profitability of the post-combination business may be negatively impacted.
Accordingly, any stockholders who choose to remain stockholders following the initial business combination could suffer a reduction
in the value of their shares. Such stockholders are unlikely to have a remedy for such reduction in value.
Our
officers and directors will allocate their time to other businesses thereby causing conflicts of interest in their determination
as to how much time to devote to our affairs. This conflict of interest could have a negative impact on our ability to complete
our initial business combination.
Our
officers and directors are not required to, and will not, commit their full time to our affairs, which may result in a conflict
of interest in allocating their time between our operations and our search for an initial business combination and their other
businesses. We do not intend to have any full-time employees prior to the completion of our initial business combination.
Each of our officers is engaged in other business endeavors for which he may be entitled to substantial compensation and our officers
are not obligated to contribute any specific number of hours per week to our affairs. Our independent directors may also serve
as officers or board members for other entities. If our officers’ and directors’ other business affairs require them
to devote substantial amounts of time to such affairs in excess of their current commitment levels, it could limit their ability
to devote time to our affairs which may have a negative impact on our ability to complete our initial business combination.
Certain
of our officers and directors are now, and all of them may in the future become, affiliated with entities engaged in business
activities similar to those intended to be conducted by us and, accordingly, may have conflicts of interest in allocating their
time and determining to which entity a particular business opportunity should be presented.
Until
we consummate our initial business combination, we intend to engage in the business of identifying and combining with one or more
businesses. Our sponsor and officers and directors are, and may in the future become, affiliated with entities (such as operating
companies or investment vehicles) that are engaged in a similar business and our officers and directors may become officers or
directors of another special purpose acquisition company with a class of securities intended to be registered under the Exchange
Act, even prior to us entering into a definitive agreement for our initial business combination. Our officers and directors also
may become aware of business opportunities which may be appropriate for presentation to us and the other entities to which they
owe certain fiduciary or contractual duties.
Accordingly,
they may have conflicts of interest in determining to which entity a particular business opportunity should be presented. These
conflicts may not be resolved in our favor and a potential target business may be presented to another entity prior to its presentation
to us. Our amended and restated certificate of incorporation provides that we renounce our interest in any corporate opportunity
offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as
a director or officer of our company and such opportunity is one we are legally and contractually permitted to undertake and would
otherwise be reasonable for us to pursue, and to the extent the director or officer is permitted to refer that opportunity to
us without violating another legal obligation.
Our
officers, directors, security holders and their respective affiliates may have competitive pecuniary interests that conflict with
our interests.
We
have not adopted a policy that expressly prohibits our directors, officers, security holders or affiliates from having a direct
or indirect pecuniary or financial interest in any investment to be acquired or disposed of by us or in any transaction to which
we are a party or have an interest. In fact, we may enter into an initial business combination with a target business that is
affiliated with our sponsor, our directors or officers, although we do not intend to do so. We do not have a policy that expressly
prohibits any such persons from engaging for their own account in business activities of the types conducted by us. Accordingly,
such persons or entities may have a conflict between their interests and ours.
We
may engage in an initial business combination with one or more target businesses that have relationships with entities that may
be affiliated with our sponsor, officers, directors or existing holders which may raise potential conflicts of interest.
In
light of the involvement of our sponsor, officers and directors with other entities, we may decide to acquire one or more businesses
affiliated with our sponsor, officers or directors. Our directors and officers 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 initial business combination with any entities with which
they are affiliated, and there have been no preliminary discussions concerning an initial business combination with any such entity
or entities. Although we will not be specifically focusing on, or targeting, any transaction with any affiliated entities, we
would pursue such a transaction if we determined that such affiliated entity met our criteria for an initial business combination
and such transaction was approved by a majority of our disinterested directors. Despite our agreement to obtain an opinion from
an independent investment banking firm or another independent entity that commonly renders valuation opinions, regarding the fairness
to our stockholders from a financial point of view of an initial business combination with one or more businesses affiliated with
our sponsor, officers, directors or existing holders, potential conflicts of interest still may exist and, as a result, the terms
of the initial business combination may not be as advantageous to our public stockholders as they would be absent any conflicts
of interest.
Since
our sponsor, officers and directors will lose their entire investment in us if our initial business combination is not completed,
a conflict of interest may arise in determining whether a particular business combination target is appropriate for our initial
business combination.
The
securities held by our founders will be worthless if we do not complete an initial business combination. Holders of founder shares
have agreed (A) to vote any shares owned by them in favor of any proposed initial business combination and (B) not to
redeem any founder shares or placement shares held by them 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.
We
may issue notes or other debt securities, or otherwise incur substantial debt, to complete an initial business combination, which
may adversely affect our leverage and financial condition and thus negatively impact the value of our stockholders’ investment
in us.
Although
we have no commitments to issue any notes or other debt securities, or to otherwise incur outstanding debt, we may choose to incur
substantial debt to complete our initial business combination. We have agreed that we will not incur any indebtedness unless we
have obtained from the lender a waiver of any right, title, interest or claim of any kind in or to the monies held in the trust
account. As such, no issuance of debt will affect the per-share amount available for redemption from the trust account. Nevertheless,
the incurrence of debt could have a variety of negative effects, including:
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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 concurrent private
placement, which will cause us to be solely dependent on a single business which may have a limited number of services and limited
operating activities. This lack of diversification may negatively impact our operating results and profitability.
Of
the net proceeds from our initial public offering and the sale of the placement units, $100,000,000 is available to complete our
initial business combination and pay related fees and expenses (which includes up to $3,500,000 for the payment of deferred underwriting
commissions).
We
may effectuate our initial business combination with a single target business or multiple target businesses simultaneously or
within a short period of time. However, we may not be able to effectuate our initial business combination with more than one target
business because of various factors, including the existence of complex accounting issues and the requirement that we prepare
and file pro forma financial statements with the SEC that present operating results and the financial condition of several target
businesses as if they had been operated on a combined basis. By completing our initial business combination with only a single
entity, our lack of diversification may subject us to numerous economic, competitive and regulatory developments. Further, we
would not be able to diversify our operations or benefit from the possible spreading of risks or offsetting of losses, unlike
other entities which may have the resources to complete several business combinations in different industries or different areas
of a single industry. In addition, we intend to focus our search for an initial business combination in a single industry. Accordingly,
the prospects for our success may be:
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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 risks, any or all of which may have a
substantial adverse impact upon the particular industry in which we may operate subsequent to our initial business combination.
We
may attempt to simultaneously complete business combinations with multiple prospective targets, which may hinder our ability to
complete our initial business combination and give rise to increased costs and risks that could negatively impact our operations
and profitability.
If
we determine to simultaneously acquire several businesses that are owned by different sellers, we will need for each of such sellers
to agree that our purchase of its business is contingent on the simultaneous closings of the other business combinations, which
may make it more difficult for us, and delay our ability, to complete our initial business combination. We do not, however, intend
to purchase multiple businesses in unrelated industries in conjunction with our initial business combination. With multiple business
combinations, we could also face additional risks, including additional burdens and costs with respect to possible multiple negotiations
and due diligence investigations (if there are multiple sellers) and the additional risks associated with the subsequent assimilation
of the operations and services or products of the acquired companies in a single operating business. If we are unable to adequately
address these risks, it could negatively impact our profitability and results of operations.
We
may attempt to complete our initial business combination with a private company about which little information is available, which
may result in an initial business combination with a company that is not as profitable as we suspected, if at all.
In
pursuing our initial business combination strategy, we may seek to effectuate our initial business combination with a privately
held company. Very little public information generally exists about private companies, and we could be required to make our decision
on whether to pursue a potential initial business combination on the basis of limited information, which may result in an initial
business combination with a company that is not as profitable as we suspected, if at all.
Our
management may not be able to maintain control of a target business after our initial business combination.
We
may structure an initial business combination so that the post-transaction company in which our public stockholders own shares
will own less than 100% of the equity interests or assets of a target business, but we will only complete such business combination
if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise
acquires a controlling interest in the target sufficient for us not to be required to register as an investment company under
the Investment Company Act. We will not consider any transaction that does not meet such criteria. Even if the post-transaction company
owns 50% or more of the voting securities of the target, our stockholders prior to the initial business combination may collectively
own a minority interest in the post business combination company, depending on valuations ascribed to the target and us in the
initial business combination. For example, we could pursue a transaction in which we issue a substantial number of new shares
of Class A common stock in exchange for all of the outstanding capital stock of a target. In this case, we would acquire
a 100% interest in the target. However, as a result of the issuance of a substantial number of new shares of common stock, our
stockholders immediately prior to such transaction could own less than a majority of our outstanding shares of common stock subsequent
to such transaction. In addition, other minority stockholders may subsequently combine their holdings resulting in a single person
or group obtaining a larger share of the company’s stock than we initially acquired. Accordingly, this may make it more
likely that our management will not be able to maintain our control of the target business. We cannot provide assurance that,
upon loss of control of a target business, new management will possess the skills, qualifications or abilities necessary to profitably
operate such business.
We
do not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for us to
complete an initial business combination with which a substantial majority of our stockholders do not agree.
Our
amended and restated certificate of incorporation does not provide a specified maximum redemption threshold, except that in no
event will we redeem our public shares unless our net tangible assets are at least $5,000,001 either immediately prior to or upon
consummation of our initial business combination and after payment of underwriters’ fees and commissions (such that we are
not subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which may
be contained in the agreement relating to our initial business combination. As a result, we may be able to complete our initial
business combination even though a substantial majority of our public stockholders do not agree with the transaction and have
redeemed their shares or, if we seek stockholder approval of our initial business combination and do not conduct redemptions in
connection with our initial business combination pursuant to the tender offer rules, have entered into privately negotiated agreements
to sell their shares to our sponsor, officers, directors or their affiliates. In the event the aggregate cash consideration we
would be required to pay for all shares of Class A common stock that are validly submitted for redemption plus any amount
required to satisfy cash conditions pursuant to the terms of the proposed initial business combination exceed the aggregate amount
of cash available to us, we will not complete the initial business combination or redeem any shares, all shares of Class A
common stock submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business
combination.
In
order to effectuate an initial business combination, blank check companies have, in the recent past, amended various provisions
of their charters and other governing instruments, including their warrant agreements. We cannot provide any assurance that we
will not seek to amend our amended and restated certificate of incorporation or governing instruments in a manner that will make
it easier for us to complete our initial business combination that our stockholders may not support.
In
order to effectuate an initial business combination, blank check companies have, in the recent past, amended various provisions
of their charters and modified governing instruments, including their warrant agreements. For example, blank check companies have
amended the definition of business combination, increased redemption thresholds and extended the time to consummate an initial
business combination and, with respect to their warrants, amended their warrant agreements to require the warrants to be exchanged
for cash and/or other securities. Amending our amended and restated certificate of incorporation will require the approval of
holders of 65% of our common stock, and amending our warrant agreement will require a vote of holders of at least a majority of
the public warrants (which may include public warrants acquired by our sponsor or its affiliates in our initial public offering
or thereafter in the open market). In addition, our amended and restated certificate of incorporation requires us to provide our
public stockholders with the opportunity to redeem their public shares for cash if we propose an amendment to our amended and
restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemption in connection
with our initial business combination or certain amendments to our charter prior thereto 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 stockholders’ rights or pre-initial business combination activity.
To
the extent any such amendments would be deemed to fundamentally change the nature of any securities offered through this registration
statement, we would register, or seek an exemption from registration for, the affected securities. We cannot assure our stockholders
that we will not seek to amend our charter or governing instruments or extend the time to consummate an initial business combination
in order to effectuate our initial business combination.
The
provisions of our amended and restated certificate of incorporation that relate to our pre-business combination activity (and
corresponding provisions of the agreement governing the release of funds from our trust account), including an amendment to permit
us to withdraw funds from the trust account such that the per share amount investors will receive upon any redemption or liquidation
is substantially reduced or eliminated, may be amended with the approval of holders of at least 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-initial business combination
activity (including the requirement to deposit proceeds of our initial public offering and concurrent private placement into the
trust account and not release such amounts except in specified circumstances, and to provide redemption rights to public stockholders
and including to permit us to withdraw funds from the trust account such that the per share amount investors will receive upon
any redemption or liquidation is substantially reduced or eliminated) may be amended if approved by holders of at least 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 at least 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. We may
not issue additional securities that can vote on amendments to our amended and restated certificate of incorporation. Our initial
stockholders, who will collectively beneficially own approximately 21.8% 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-initial business combination behavior more easily than some other blank check companies, and this may
increase our ability to complete an initial business combination with which stockholders do not agree. Our stockholders may pursue
remedies against us for any breach of our amended and restated certificate of incorporation.
Our
sponsor, officers and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment
to our amended and restated certificate of incorporation (i) to modify the substance or timing of our obligation to allow
redemption in connection with our initial business combination or certain amendments to our charter prior thereto 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 provision relating to stockholders’ rights or pre-initial business
combination activity, unless we provide our public stockholders with the opportunity to redeem their shares of Class A common
stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit
in the trust account, divided by the number of then outstanding public shares. These agreements are contained in a letter agreement
that we have entered into with our sponsor, officers and directors. Our stockholders are not parties to, or third-party beneficiaries
of, these agreements and, as a result, will not have the ability to pursue remedies against our sponsor, officers or directors
for any breach of these agreements. As a result, in the event of a breach, our stockholders would need to pursue a stockholder
derivative action, subject to applicable law.
We
may be unable to obtain additional financing to complete our initial business combination or to fund the operations and growth
of a target business, which could compel us to restructure or abandon a particular business combination.
We
intend to target businesses larger than we could acquire with the net proceeds of our initial public offering and the concurrent
private placement. As a result, we may be required to seek additional financing to complete such proposed initial business combination.
We cannot assure our stockholders that such financing will be available on acceptable terms, if at all. To the extent that additional
financing proves to be unavailable when needed to complete our initial business combination, we would be compelled to either restructure
the transaction or abandon that particular business combination and seek an alternative target business candidate. Further, the
amount of additional financing we may be required to obtain could increase as a result of future growth capital needs for any
particular transaction, the depletion of the available net proceeds in search of a target business, the obligation to repurchase
for cash a significant number of shares from stockholders who elect redemption in connection with our initial business combination
and/or the terms of negotiated transactions to purchase shares in connection with our initial business combination. If we are
unable to complete our initial business combination, our public stockholders may receive only approximately $10.00 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 taxes on the
liquidation of our trust account and our warrants will expire worthless. In addition, even if we do not need additional financing
to complete our initial business combination, we may require such financing to fund the operations or growth of the target business.
The failure to secure additional financing could have a material adverse effect on the continued development or growth of the
target business. None of our officers, directors or stockholders is required to provide any financing to us in connection with
or after our initial business combination. If we are unable to complete our initial business combination, our public stockholders
may only receive approximately $10.00 per share on the liquidation of our trust account, and our warrants will expire worthless.
Furthermore, under certain circumstances our public stockholders may receive less than $10.00 per share upon the liquidation of
the trust account.
Our
initial stockholders may exert a substantial influence on actions requiring a stockholder vote, potentially in a manner that our
public stockholders do not support.
Our
initial stockholders own shares representing approximately 21.8% 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 public stockholders
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 open market 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 initial business combination, in which case all of the current directors
will continue in office until at least the completion of the initial business combination. If there is an annual meeting, as a
consequence of our “staggered” board of directors, only a minority of the board of directors will be considered for
election and our initial stockholders, because of their ownership position, will have considerable influence regarding the outcome.
Accordingly, our initial stockholders will continue to exert control at least until the completion of our initial business combination.
Our
sponsor paid an aggregate of $25,000 for the founder shares, or approximately $0.009 per founder share. As a result of this low
initial price, our sponsor, its affiliates and our management team stand to make a substantial profit even if an initial business
combination subsequently declines in value or is unprofitable for our public stockholders.
As
a result of the low acquisition cost of our founder shares, our sponsor, its affiliates and our management team could make a substantial
profit even if we select and consummate an initial business combination with an acquisition target that subsequently declines
in value or is unprofitable for our public stockholders. Thus, such parties may have more of an economic incentive for us to enter
into an initial business combination with a riskier, weaker-performing or financially unstable business, or an entity lacking
an established record of revenues or earnings, than would be the case if such parties had paid the full offering price for their
founder shares.
Unlike
many other similarly structured special purpose acquisition companies, our initial stockholders will receive additional shares
of Class A common stock if we issue shares to consummate an initial business combination.
The
founder shares will automatically convert into Class A common stock at the time of the consummation of our initial business
combination, on a one-for-one basis, subject to adjustment. In the case that additional shares of Class A common stock,
or equity-linked securities convertible or exercisable for Class A common stock, are issued or deemed issued in excess
of the amounts issued in our initial public offering and related to the closing of the initial business combination, the ratio
at which founder shares shall convert into Class A common stock will be adjusted so that the number of Class A common
stock issuable upon conversion of all founder shares will equal, in the aggregate, on an as-converted basis, 20% of the total
number of all outstanding shares of common stock upon completion of the initial business combination, excluding the placement
shares and any shares or equity-linked securities issued, or to be issued, to any seller in the business combination and
any private placement-equivalent units and their underlying securities issued to our sponsor or its affiliates upon conversion
of loans made to us. This is different from most other similarly structured blank check companies in which the initial stockholder
will only be issued an aggregate of 20% of the total number of shares to be outstanding prior to the initial business combination.
Additionally, the aforementioned adjustment will not take into account any shares of Class A common stock redeemed in connection
with the business combination. Accordingly, the holders of the founder shares could receive additional shares of Class A
common stock even if the additional shares of Class A common stock, or equity-linked securities convertible or exercisable
for Class A common stock, are issued or deemed issued solely to replace those shares that were redeemed in connection with
the business combination. The foregoing may make it more difficult and expensive for us to consummate an initial business combination.
We
may amend the terms of the warrants in a manner that may be adverse to holders of public warrants with the approval by the holders
of at least a majority of the then outstanding public warrants. As a result, the exercise price of the 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.
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 to cure 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, but requires the approval by the holders of at
least a majority of the then outstanding public warrants to make any change that adversely affects the interests of the registered
holders of public warrants (which may include public warrants acquired by our sponsor or its affiliates in the initial public
offering or thereafter in the open market). Accordingly, we may amend the terms of the public warrants in a manner adverse to
a holder if holders of at least a majority of the then outstanding public warrants approve of such amendment. Although our ability
to amend the terms of the public warrants with the consent of at least a majority of the then outstanding public warrants is unlimited,
examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, convert the
warrants into cash or stock, shorten the exercise period or decrease the number of shares of our Class A common stock purchasable
upon exercise of a warrant.
Our
warrant agreement designates the courts of the State of New York or the United States District Court for the Southern District
of New York as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by holders of our
warrants, which could limit the ability of warrant holders to obtain a favorable judicial forum for disputes with our company.
Our
warrant agreement provides that, subject to applicable law, (i) any action, proceeding or claim against us arising out of or relating
in any way to the warrant agreement, including under the Securities Act, will be brought and enforced in the courts of the State
of New York or the United States District Court for the Southern District of New York, and (ii) that we irrevocably submit to
such jurisdiction, which jurisdiction shall be the exclusive forum for any such action, proceeding or claim. We will waive any
objection to such exclusive jurisdiction and that such courts represent an inconvenient forum.
Notwithstanding
the foregoing, these provisions of the warrant agreement will not apply to suits brought to enforce any liability or duty created
by the Exchange Act or any other claim for which the federal district courts of the United States of America are the sole and
exclusive forum. Any person or entity purchasing or otherwise acquiring any interest in any of our warrants shall be deemed to
have notice of and to have consented to the forum provisions in our warrant agreement. If any action, the subject matter of which
is within the scope the forum provisions of the warrant agreement, is filed in a court other than a court of the State of New
York or the United States District Court for the Southern District of New York (a “foreign action”) in the name of
any holder of our warrants, such holder shall be deemed to have consented to: (x) the personal jurisdiction of the state and federal
courts located in the State of New York in connection with any action brought in any such court to enforce the forum provisions
(an “enforcement action”), and (y) having service of process made upon such warrant holder in any such enforcement
action by service upon such warrant holder’s counsel in the foreign action as agent for such warrant holder.
This
choice-of-forum provision may limit a warrant holder’s ability to bring a claim in a judicial forum that it finds favorable
for disputes with our company, which may discourage such lawsuits. Alternatively, if a court were to find this provision of our
warrant agreement inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings,
we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially and adversely
affect our business, financial condition and results of operations and result in a diversion of the time and resources of our
management and board of directors
We
may redeem unexpired warrants prior to their exercise at a time that is disadvantageous to the warrant holders, thereby making
the 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 reported last sale price of our Class A common stock equals or exceeds $18.00
per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading
days within a 30 trading-day period commencing once the warrants become exercisable and ending on the third trading day prior
to the date on which we give proper notice of such redemption and provided certain other conditions are met. If and when the warrants
become redeemable by us, we may not exercise our redemption right if the issuance of shares of common stock upon exercise of the
warrants is not exempt from registration or qualification under applicable state blue sky laws or we are unable to effect such
registration or qualification. Redemption of the outstanding warrants could force warrant holders (i) to exercise their warrants
and pay the exercise price therefor at a time when it may be disadvantageous for them to do so, (ii) to sell their warrants
at the then-current market price when they might otherwise wish to hold the 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 the warrants. None of the placement warrants will be redeemable by us so long as they are held by the sponsor,
the underwriters or their permitted transferees.
Our
warrants and founder shares may have an adverse effect on the market price of our Class A common stock and make it more difficult
to effectuate our initial business combination.
We
issued warrants to purchase 5,000,000 shares of our Class A common stock as part of the units sold in our initial public
offering and, simultaneously with the closing of our initial public offering, issued placement units, in a private placement,
consisting of an aggregate of 177,500 placement warrants. Our initial stockholders currently own an aggregate of 2,500,000 founder
shares. The founder shares are convertible into shares of Class A common stock on a one-for-one basis, subject to adjustment.
In addition, if our sponsor makes any working capital loans, up to $1,500,000 of such loans may be converted into units, at a
price of $10.00 per unit at the option of the lender, upon consummation of our initial business combination. The units would be
identical to the placement units. To the extent we issue shares of Class A common stock to effectuate an initial business
combination, the potential for the issuance of a substantial number of additional shares of Class A common stock upon exercise
of these warrants and conversion rights could make us a less attractive business combination vehicle to a target business. Any
such issuance will increase the number of issued and outstanding shares of our Class A common stock and reduce the value
of the shares of Class A common stock issued to complete the initial business combination. Therefore, our warrants and founder
shares may make it more difficult to effectuate an initial business combination or increase the cost of acquiring the target business.
The
placement warrants included in the placement units 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, the underwriters or their permitted transferees, (i) they
will not be redeemable by us, (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 the holders until 30 days after the completion
of our initial business combination, (iii) they may be exercised by the holders on a cashless basis, (iv) will be entitled
to registration rights and (v) for so long as they are held by the underwriters, will not be exercisable more than five years
from the effective date of the registration statement in connection with our initial public offering in accordance with FINRA
Rule 5110(f)(2)(G)(i).
Because
each unit contains one-half of one redeemable warrant and only a whole warrant may be exercised, the units may be worth less than
units of other special purpose acquisition companies.
Each
unit contains one-half of one redeemable warrant. No fractional warrants will be issued upon separation of the units and
only whole warrants will trade. Accordingly, unless a public stockholder holds at least two units, such stockholder will not be
able to receive or trade a whole warrant. We have established the components of the units in this way in order to reduce the dilutive
effect of the warrants upon completion of an initial business combination since the warrants will be exercisable in the aggregate
for one-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.
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
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(i)
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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 a newly issued price of less than $9.20 per share;
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(ii)
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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
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(iii)
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the
market value is below $9.20 per share,
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then
the exercise price of the warrants will be adjusted to be equal to 115% of the greater of the market value and the newly issued
price, and the $18.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 180% of the greater
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.
Because
we must furnish our stockholders with target business financial statements, we may lose the ability to complete an otherwise advantageous
initial business combination with some prospective target businesses.
The
federal proxy rules require that a proxy statement with respect to a vote on an initial business combination meeting certain financial
significance tests include historical and/or pro forma financial statement disclosure in periodic reports. We will include the
same financial statement disclosure in connection with our tender offer documents, whether or not they are required under the
tender offer rules. These financial statements may be required to be prepared in accordance with, or be reconciled to, accounting
principles generally accepted in the United States of America, or GAAP, or international financial reporting standards as
issued by the International Accounting Standards Board, or IFRS, depending on the circumstances and the historical financial statements
may be required to be audited in accordance with the standards of the Public Company Accounting Oversight Board (United States),
or PCAOB. These financial statement requirements may limit the pool of potential target businesses we may acquire because some
targets may be unable to provide such financial statements in time for us to disclose such statements in accordance with federal
proxy rules and complete our initial business combination within the prescribed time frame.
We
are an emerging growth company and a smaller reporting company within the meaning of the rules adopted by the Securities and Exchange
Commission, and if we take advantage of certain exemptions from disclosure requirements available to emerging growth companies
and 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 rules adopted by the Securities and Exchange Commission,
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, although circumstances could cause us to lose that status earlier, including
if the market value of our Class A common stock held by non-affiliates exceeds $700 million as of any June 30 before
that time, in which case we would no longer be an emerging growth company as of the following December 31. We cannot predict whether
investors will find our securities less attractive because we will rely on these exemptions. If some investors find our securities
less attractive as a result of our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise
would be, there may be a less active trading market for our securities and the trading prices of our securities may be more volatile.
Further,
Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial
accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared
effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised
financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and
comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable.
We have elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it
has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised
standard at the time private companies adopt the new or revised standard. This may make comparison of our financial statements
with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of
using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Additionally,
we are a “smaller reporting company” as defined in Rule 10(f)(1) of Regulation S-K. Smaller reporting companies
may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited
financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market
value of our common stock held by non-affiliates equals or exceeds $250 million as of the end of the prior June 30th,
or (2) our annual revenues equaled or exceeded $100 million during such completed fiscal year and the market value of
our common stock held by non-affiliates exceeds $700 million as of the prior June 30th. To the extent we
take advantage of such reduced disclosure obligations, it may also make comparison of our financial statements with other public
companies difficult or impossible.
Compliance
obligations under the Sarbanes-Oxley Act may make it more difficult for us to effectuate our initial business combination, require
substantial financial and management resources, and increase the time and costs of completing an initial business combination.
Section 404
of the Sarbanes-Oxley Act requires that we evaluate and report on our system of internal controls beginning with our Annual
Report on Form 10-K for the year ending December 31, 2021. Only in the event we are deemed to be a large accelerated
filer or an accelerated filer, and no longer qualify as an emerging growth company, will we be required to comply with the independent
registered public accounting firm attestation requirement on our internal control over financial reporting. Further, for as long
as we remain an emerging growth company, we will not be required to comply with the independent registered public accounting firm
attestation requirement on our internal control over financial reporting. The fact that we are a blank check company makes compliance
with the requirements of the Sarbanes-Oxley Act particularly burdensome on us as compared to other public companies because
a target company with which we seek to complete our initial business combination may not be in compliance with the provisions
of the Sarbanes-Oxley Act regarding adequacy of its internal controls. The development of the internal control of any such
entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such business
combination.
Provisions
in our amended and restated certificate of incorporation and Delaware law may inhibit a takeover of us, which could limit the
price investors might be willing to pay in the future for our Class A common stock and could entrench management.
Our
amended and restated certificate of incorporation contains provisions that may discourage unsolicited takeover proposals that
stockholders may consider to be in their best interests. These provisions include a staggered board of directors and the ability
of the board of directors to designate the terms of and issue new series of preferred shares, which may make the removal of management
more difficult and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices
for our securities.
We
are also subject to anti-takeover provisions under Delaware law, which could delay or prevent a change of control. Together
these provisions may make the removal of management more difficult and may discourage transactions that otherwise could involve
payment of a premium over prevailing market prices for our securities.
Our
amended and restated certificate of incorporation requires, to the fullest extent permitted by law, that derivative actions brought
in our name, actions against our directors, officers, other employees or stockholders for breach of fiduciary duty and certain
other actions may be brought only in the Court of Chancery in the State of Delaware and, if brought outside of Delaware, the stockholder
bringing the suit will, subject to certain exceptions, be deemed to have consented to service of process on such stockholder’s
counsel, which may have the effect of discouraging lawsuits against our directors, officers, other employees or stockholders.
Our
amended and restated certificate of incorporation requires, to the fullest extent permitted by law, that derivative actions brought
in our name, actions against our directors, officers, other employees or stockholders for breach of fiduciary duty and certain
other actions may be brought only in the Court of Chancery in the State of Delaware and, if brought outside of Delaware, the stockholder
bringing the suit will be deemed to have consented to service of process on such stockholder’s counsel except any action
(A) as to which the Court of Chancery in the State of Delaware determines that there is an indispensable party not subject
to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the
Court of Chancery within ten days following such determination), (B) which is vested in the exclusive jurisdiction of a court
or forum other than the Court of Chancery or (C) for which the Court of Chancery does not have subject matter jurisdiction.
Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock shall be deemed to have notice
of and consented to the forum provisions in our amended and restated certificate of incorporation. This choice of forum provision
may limit or make more costly a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes
with us or any of our directors, officers, other employees or stockholders, which may discourage lawsuits with respect to such
claims. Alternatively, if a court were to find the choice of forum provision contained in our amended and restated certificate
of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such
action in other jurisdictions, which could harm our business, operating results and financial condition.
Our
amended and restated certificate of incorporation provides that the exclusive forum provision will be applicable to the fullest
extent permitted by applicable law, subject to certain exceptions. Section 27 of the Exchange Act creates exclusive federal
jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations
thereunder. As a result, the exclusive forum provision will not apply to suits brought to enforce any duty or liability created
by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. In addition, the exclusive forum
provision will not apply to actions brought under the Securities Act, or the rules and regulations thereunder.
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 ability to consummate a business combination and lead to financial loss.
If
we effect our initial business combination with a company with operations or opportunities outside of the United States,
we would be subject to a variety of additional risks that may negatively impact our operations.
If
we effect our initial business combination with a company with operations or opportunities outside of the United States,
we would be subject to any special considerations or risks associated with companies operating in an international setting, including
any of the following:
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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, including but not limited to 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.
There
are risks related to the healthcare industry to which we may be subject.
Business
combinations with companies with operations in the healthcare industry entail special considerations and risks. If we are successful
in completing a business combination with a target business with operations in the healthcare industry, we will be subject to,
and possibly adversely affected by, the following risks, including but not limited to:
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Competition
could reduce profit margins.
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Our
inability to comply with governmental regulations affecting the healthcare industry could negatively affect our operations.
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An
inability to license or enforce intellectual property rights on which our business may depend.
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The
success of our planned business following consummation of our initial business combination may depend on maintaining a well-secured business
and technology infrastructure.
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If
we are required to obtain governmental approval of our products, the production of our products could be delayed and we could
be required to engage in a lengthy and expensive approval process that may not ultimately be successful.
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Continuing
government and private efforts to contain healthcare costs, including through the implementation of legal and regulatory changes,
may reduce our future revenue and our profitability following such business combination.
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Changes
in the healthcare related wellness industry and markets for such products affecting our customers or retailing practices could
negatively impact customer relationships and our results of operations.
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The
healthcare industry is susceptible to significant liability exposure. If liability claims are brought against us following a business
combination, it could materially adversely affect our operations.
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Dependence
of our operations upon third-party suppliers, manufacturers or contractors whose failure to perform adequately could disrupt
our business.
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The
Affordable Care Act, possible changes to it or its repeal, and how it is implemented could negatively impact our business.
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A
disruption in supply could adversely impact our business.
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Any
of the foregoing could have an adverse impact on our operations following a business combination. However, our efforts in identifying
prospective target businesses will not be limited to the healthcare industry. Accordingly, if we acquire a target business in
another industry, these risks will likely not affect us and we will be subject to other risks attendant with the specific industry
in which we operate or target business which we acquire, none of which can be presently ascertained.