An investment in our securities involves a high degree of risk. You should consider carefully all of the risks described below, together
with the other information contained in this Annual Report, before making a decision to invest in our securities. If any of the following events occur, our business, financial condition and operating results may be materially adversely affected. In
that event, the trading price of our securities could decline, and you could lose all or part of your investment. See also the Risk Factors that will be set forth in our preliminary prospectus/proxy statement to be included in a Registration
Statement on Form S-4 that we will file with the SEC relating to our proposed business combination with 23andMe.
Risks Related to the Merger
Agreement
We may not be able to effect the Business Combination pursuant to the Merger Agreement. If we are unable to do so, we
will incur substantial costs associated with withdrawing from the transaction, and may not be able to find additional sources of financing to cover those costs.
In connection with the Merger Agreement, we have incurred substantial costs researching, planning and negotiating the transaction. These costs
include, but are not limited to, costs associated with securing sources of equity and debt financing, costs associated with employing and retaining third-party advisors who performed the financial, auditing and legal services required to complete
the transaction, and the expenses generated by our officers, executives, managers and employees in connection with the transaction. If, for whatever reason, the transactions contemplated by the Merger Agreement fail to close, we will be responsible
for these costs, but will have no source of revenue with which to pay them. We may need to obtain additional sources of financing in order to meet our obligations, which we may not be able to secure on the same terms as our existing financing or at
all. If we are unable to secure new sources of financing and do not have sufficient funds to meet our obligations, we will be forced to cease operations and liquidate the Trust Account.
If the anticipated Business Combination with 23andMe fails, it may be difficult to research a new prospective target business, negotiate
and agree to a new business combination, and/or arrange for new sources of financing by October 6, 2022, in which case we would cease all operations except for the purpose of winding up and we would redeem our public shares and liquidate.
Finding, researching, analyzing and negotiating with 23andMe took a substantial amount of time, and if the Business Combination
with 23andMe fails, we may not be able to find a suitable target business and complete our Initial Business Combination within 24 months after the closing of our Initial Public Offering. Our ability to complete our Initial Business Combination may
be negatively impacted by general market conditions, volatility in the capital and debt markets and the other risks described herein. If we have not completed 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 (10) 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 (less up to $100,000 of interest to pay dissolution expenses and net of taxes payable), divided by the number of then outstanding public shares, which
redemption will completely extinguish public shareholders rights as shareholders (including the right to receive further liquidation distributions, if any) and (iii) as promptly as reasonably possible following such redemption, subject to
the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in the case of clauses (ii) and (iii), to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of
other applicable law.
General Risk Factors
Our warrants are accounted for as liabilities and the changes in value of our warrants could have a material effect on our financial
results.
On April 12, 2021, the SEC issued a statement (the Statement) discussing the accounting implications of
certain terms that are common in warrants issued by special purpose acquisition companies (SPACs). In light of the Statement and guidance in ASC 815-40, Derivatives and Hedging Contracts in Entitys Own
Equity, the Companys management evaluated the terms of the Warrant Agreement entered into in connection with the Companys initial public offering and concluded that the Companys public warrants and private placement warrants
(together, the Warrants) include provisions that, based on the Statement, preclude the Warrants from being classified as components of equity. As a result, the Company has classified the Warrants as liabilities. Under this accounting
treatment, the Company is required to measure the fair value of the Warrants at the end of each reporting period and recognize changes in the fair value from the prior period in the Companys operating results for the current period. As a
result of the recurring fair value measurement, our financial statements and results of operations may fluctuate quarterly based on factors which are outside our control. We expect that we will recognize non-cash gains or losses due to the quarterly
fair valuation of our Warrants and that such gains or losses could be material.
We have identified a material weakness in our
internal control over financial reporting as of December 31, 2020. If we are unable to develop and maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results in a timely
manner, which may adversely affect investor confidence in us and materially and adversely affect our business and operating results.
Following the issuance of the SEC Statement, on May 2, 2021, our management and our audit committee concluded that, in light of the SEC
Statement, it was appropriate to restate our previously issued audited financial statements as of and for the period ended December 31, 2020. See Our warrants are accounted for as liabilities and the changes in value of our warrants
could have a material effect on our financial results. As part of such process, we identified a material weakness in our internal controls over financial reporting.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a
reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented, or detected and corrected on a timely basis. Effective internal controls are necessary for us to provide reliable financial
reports and prevent fraud. We continue to evaluate steps to remediate the material weakness. These remediation measures may be time consuming and costly and there is no assurance that these initiatives will ultimately have the intended effects.
If we identify any new material weaknesses in the future, any such newly identified material weakness could limit our ability to prevent or
detect a misstatement of our accounts or disclosures that could result in a material misstatement of our annual or interim financial statements. In such case, we may be unable to maintain compliance with securities law requirements regarding timely
filing of periodic reports in addition to applicable stock exchange listing requirements, investors may lose confidence in our financial reporting and our stock price may decline as a result. We cannot assure you that the measures we have taken to
date, or any measures we may take in the future, will be sufficient to avoid potential future material weaknesses.
We may face
litigation and other risks as a result of the material weakness in our internal control over financial reporting.
Following the
issuance of the SEC Statement, our management and our audit committee concluded that it was appropriate to restate our previously issued audited financial statements as of December 31, 2020 and for the period ended December 31, 2020. See
Our warrants are accounted for as liabilities and the changes in value of our warrants could have a material effect on our financial results. As part of such restatement, we identified a material weakness in our internal controls
over financial reporting.
As a result of such material weakness, the restatement described above, the change in accounting for the
warrants, and other matters raised or that may in the future be raised by the SEC, we face potential for litigation or other disputes which may include, among others, claims invoking the federal and state securities laws, contractual claims or other
claims arising from the restatement and material weaknesses in our internal control over financial reporting and the preparation of our financial statements. As of the date of this Annual Report, we have no knowledge of any such litigation or
dispute arising due to restatement or material weakness of our internal controls over financial reporting. However, we can provide no assurance that such litigation or dispute will not arise in the future. Any such litigation or dispute, whether
successful or not, could have a material adverse effect on our business, results of operations and financial condition or our ability to complete a business combination.
We are a blank check company with no operating history and no revenues, and you have no basis on which to evaluate our ability to
achieve our business objective.
We are a blank check company incorporated under the laws of the Cayman Islands and all of our
activities to date have been related to our formation, our initial public offering and our search for a business combination target. Because we lack an operating history, you have no basis upon which to evaluate our ability to achieve our business
objective of completing our initial business combination. If we fail to complete our initial business combination, we will never generate any operating revenues.
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