Item 1. Business.
Introduction
We
are a blank check company formed on April 17, 2020 as a Delaware corporation for the purpose of effecting an initial business combination.
Since our initial public offering, we have focused our search for an initial business combination on businesses that may provide significant
opportunities for attractive investor returns. Our efforts to identify a prospective target business are not limited to a particular industry
or geographic region, although we are focusing on a target in an industry where we believe our management team’s and founders’
expertise will provide us with a competitive advantage, including the financial services, healthcare, real estate services, technology
and software industries.
Our
management team consists of:
| ● | Howard W. Lutnick, our Chairman
and Chief Executive Officer, who joined Cantor in 1983 and has served as President and Chief Executive Officer of Cantor since 1992 and
as Chairman since 1996; |
| ● | Anshu Jain, our President,
who also serves as the President of Cantor, a position he has held since January 2017, and previously served as a senior executive of
Deutsche Bank, which firm he joined from Merrill Lynch in 1995, most recently in the position of Co-CEO from June 2012 to June 2015;
and |
| ● | Jane
Novak, our Chief Financial Officer, who joined Cantor in October 2017 and, since then, has served as the Global Head of Accounting Policy. |
We,
the sponsor, and CF&Co. are all affiliates of Cantor. Cantor is a diversified company specializing in financial and real estate services
for customers operating in the global financial and commercial real estate markets, whose businesses include CF&Co., a leading independent
middle market investment bank and primary dealer; BGC Partners, Inc. (“BGC”), whose common stock trades on the Nasdaq Global
Select Market under the ticker symbol “BGCP”, a leading global financial technology and brokerage business primarily servicing
the global financial markets; and Newmark Group, Inc. (“Newmark”), whose Class A common stock trades on the Nasdaq Global
Select Market under the ticker symbol “NMRK”, a leading full-service commercial real estate services business. We believe
that the combination of our management team’s and our affiliates’ financial services, financial and real estate technology,
and real estate industry expertise and proven ability to grow businesses through acquisitions make us uniquely qualified to pursue acquisitions.
Past
performance of Cantor, its affiliates and our management team is not a guarantee either (i) that we will be able to identify a suitable
candidate for our initial business combination or (ii) of success with respect to any business combination we may consummate. You should
not rely on the historical performance record of Cantor, its affiliates, or our management team as indicative of our future performance.
Initial Public Offering
On February 23, 2021, we consummated
our initial public offering of 30,000,000 units. Each unit consists of one public share and one-fourth of one public warrant, with each
public warrant entitling the holder thereof to purchase one share of Class A common stock for $11.50 per whole share. The units were sold
at a price of $10.00 per unit, generating gross proceeds to the Company of $300,000,000.
Simultaneously with the closing
of the initial public offering, we completed the private sale of an aggregate of 700,000 private placement units to the sponsor at a purchase
price of $10.00 per private placement unit, generating gross proceeds of $7,000,000.
A total of $300,000,000, comprised
of $293,000,000 of the proceeds from the initial public offering and $7,000,000 of the proceeds of the sale of the private placement units,
was placed in the trust account maintained by Continental, acting as trustee.
We must complete our initial
business combination by February 23, 2023, 24 months from the closing of our initial public offering. If our initial business combination
is not consummated by February 23, 2023, then we will proceed to liquidate, and we will distribute all amounts in the trust account.
Our units, public shares and
public warrants are each traded on Nasdaq under the symbols “CFVIU,” “CFVI” and “CFVIW,” respectively.
Our units commenced public trading on February 19, 2021, and our public shares and public warrants commenced separate public trading on
April 12, 2021.
Rumble Business Combination
On December 1, 2021, we entered
into the Business Combination Agreement with Rumble. Capitalized terms used in this section of the Report but not otherwise defined herein
have the meanings given to them in the Business Combination Agreement. Pursuant to the Business Combination Agreement and by means of
an arrangement under Section 182 of the Business Corporations
Act (Ontario) (the “Arrangement”),
subject to the terms and conditions set forth in the Business Combination Agreement and a plan of arrangement (the “Plan of Arrangement”)
to be submitted to the Ontario Superior Court of Justice (Commercial List), upon the closing of the transactions contemplated by the
Business Combination Agreement (the “Closing” and such transactions, the “Transactions”), in exchange for their
respective shares of capital stock of Rumble:
| ● | For
each share of Rumble capital stock held by eligible electing Canadian shareholders of Rumble
(“Electing Shareholders”), the Electing Shareholder will receive a number of
exchangeable shares in an indirect, wholly owned Canadian subsidiary of the Company (the
“ExchangeCo Shares”) equal to the quotient obtained by dividing the Price Per
Company Share (as defined below) by $10.00 (the “Company Exchange Ratio”), and
such Electing Shareholders shall concurrently subscribe for nominal value for a corresponding
number of shares of Class C common stock of the Company, par value $0.0001 per share (the
“Class C Common Stock”), a new class of voting, non-economic shares of common
stock of the Company to be created and issued in connection with the Closing; and |
| ● | For
each share of Rumble capital stock held by all other shareholders of Rumble (“Non-Electing
Shareholders”, and collectively with the Electing Shareholders, the “Rumble Shareholders”),
such Non-Electing Shareholder will receive a number of shares of Class A common stock equal
to the Company Exchange Ratio. |
The
“Arrangement Consideration” means the sum of $3,150,000,000, plus the cash and cash equivalents balance
held by Rumble as of the Closing (net of outstanding indebtedness), plus the aggregate exercise price of all outstanding
options to purchase Rumble stock.
The
“Price Per Company Share” is obtained by dividing (x) the Arrangement Consideration by (y) the number of outstanding shares
of capital stock of Rumble (calculated on a fully-diluted basis in accordance with the Business Combination Agreement).
In
addition, under the Business Combination Agreement and the Arrangement, all outstanding options and warrants to purchase shares of Rumble
capital stock will be exchanged for a certain number of options and warrants to purchase Class A common stock, respectively, based
upon formulas set forth in the Business Combination Agreement, including earnout provisions for the options.
At
Closing, the Escrow Portion (as defined below) of the aggregate shares of Class A common stock, shares of Class C Common Stock and ExchangeCo
Shares issued in connection with the Arrangement to the Rumble Shareholders in exchange for their Rumble shares will be set aside in escrow
accounts (the “Forfeiture Escrow Accounts”, and the shares in the Forfeiture Escrow Accounts, the “Forfeiture Escrow
Shares”). “Escrow Portion” means the quotient of (a) 105,000,000 divided by (b) the Arrangement Consideration divided
by $10.00. The Forfeiture Escrow Shares will be held in escrow for five years after the Closing (such period, the “Escrow
Period”), at which time, if not earned and released to the Rumble Shareholders in accordance with the terms of the Business Combination
Agreement, such Forfeiture Escrow Shares will be released to the Company for cancellation. The Forfeiture Escrow Shares will be earned
and released by the Rumble Shareholders upon the closing price of the Class A common stock equaling or exceeding targets of $15.00 and
$17.50, respectively (with 50% released at each target, or if the latter target is reached first, 100%) for a period of 20 trading days
during any 30 consecutive trading day period during the Escrow Period. In addition, the Forfeiture Escrow Shares are subject to early
vesting in the event of a change of control transaction during the Escrow Period involving payments per share (including the Forfeiture
Escrow Shares vested) exceeding the same target levels set forth above.
Subject to payment of
the applicable exercise price of Exchanged Company Options, the holders thereof will receive corresponding Tandem Option Earnout Shares,
which will be treated substantially the same as the Forfeiture Escrow Shares.
In
addition, for an aggregate purchase price of $1.0 million (the “Class D Investment”), upon the Closing and pursuant to a subscription
agreement to be entered into between Christopher Pavlovski, Rumble’s CEO and founder (“Mr. Pavlovski”) and the Company,
the Company will issue and sell to Mr. Pavlovski a number of shares of Class D common stock, par value $0.001 per share (the “Class
D Common Stock”), a new class of non-economic shares of common stock of the Company carrying the right to multiple votes per share
to be created and issued in connection with the Closing, such that, taking into account the shares of Class A common stock (if any) and
Class C Common Stock to be issued to Mr. Pavlovski at Closing, upon Closing, Mr. Pavlovski will have 85% of the voting power of the Company
on a fully-diluted basis. Such shares of Class D Common Stock to be issued to Mr. Pavlovski are expected to be the only issued and outstanding
shares of Class D Common Stock.
Contemporaneously
with the execution of the Business Combination Agreement, the Company entered into separate Subscription Agreements (the “Subscription
Agreements”) with a number of subscribers (each a “Subscriber”), including the sponsor, pursuant to which the Subscribers
agreed to purchase, and the Company agreed to sell to the Subscribers, an aggregate of 8.5 million shares of Class A common stock (the
“PIPE Shares”), for a purchase price of $10.00 per share and an aggregate purchase price of $85.0 million (the “PIPE
Investments”), with the sponsor’s Subscription Agreement accounting for up to $7.59 million of such aggregate PIPE Investments.
The closing of the sale of the PIPE Shares pursuant to the Subscription Agreements is contingent upon, among other customary closing conditions,
the substantially concurrent Closing.
Contemporaneously
with the execution of the Business Combination Agreement, the Company, Rumble and certain Rumble Shareholders entered into a Shareholder
Support Agreement, pursuant to which, among other things, the Rumble Shareholders party to such agreement agreed (i) to vote their Rumble
shares in favor of the Arrangement and other resolutions needed to consummate the Arrangement and the other Transactions, and, subject
to limited exceptions, to not transfer such shares, (ii) to waive, and not to exercise, any dissent rights for Rumble shares in connection
with the Arrangement, and (iii) to consent to the termination of certain existing agreements at Closing. The Rumble Shareholders party
to the Shareholder Support Agreement collectively have a sufficient number of votes to approve the Arrangement.
Contemporaneously
with the execution of the Business Combination Agreement, the Company entered into a Sponsor Support Agreement with the sponsor and
Rumble, pursuant to which, among other things, the sponsor agreed (i) to vote its shares of the Company’s capital stock in favor
of the Business Combination Agreement and each of the Transaction Proposals, and to not transfer such shares, (ii) not to redeem any of
its shares of Company capital stock in connection with the Transactions, (iii) to waive its anti-dilution rights with respect to its shares
of Class B common stock under the Charter, and (iv) to subject (a) certain of its shares of Company capital stock and warrants to additional
transfer restrictions after Closing, (b) certain of its shares of Company capital stock to certain restrictions and potential forfeiture,
pending the satisfaction of certain earnout targets, and (c) certain of its shares of Company capital stock to certain restrictions and
potential forfeiture based on the available cash at Closing and then the satisfaction of certain earnout targets and other conditions
set forth in the Sponsor Support Agreement.
Concurrently
with the execution of the Business Combination Agreement, the Company entered into a Share Repurchase Agreement with Mr. Pavlovski, pursuant
to which the Company agreed to repurchase from Mr. Pavlovski, upon the Closing, 1.1 million ExchangeCo Shares and redeem a corresponding
number of shares of Class C Common Stock, for a total purchase price of $11.0 million. The closing of the share repurchase is contingent
upon (and will take place immediately following), the Closing.
Concurrently
with the execution of the Business Combination Agreement, the Company entered into separate Lock-Up Agreements (each a “Lock-Up
Agreement”) with a number of Rumble Shareholders pursuant to which the securities of the Company and ExchangeCo held by such holders
will be subject to customary transfer restrictions for a period of time following the Closing.
For
more information on the Rumble Business Combination and the agreements described above, please see the Forms 8-K filed by the Company
with the SEC on December 2, 2021 and the Rumble Registration Statement.
Business Strategy
Our
acquisition and value creation strategy is to identify, acquire and, after our initial business combination, which would include the Rumble
Business Combination, help to build a company in an industry that complements the experience and expertise of our management team. Our
acquisition selection process leverages the network of contacts developed by our management team and those of the sponsor and its affiliates,
including relationships in the financial services, healthcare, real estate services, technology and software industries, comprising management
teams of public and private companies, investment bankers, private equity sponsors, venture capital investors, advisers, attorneys and
accountants that we believe should provide us with a number of business combination opportunities. We are deploying a proactive sourcing
strategy and are focusing on companies where we believe the combination of our operating experience, relationships, capital and capital
markets expertise can be catalysts to transform a target company and can help accelerate the target’s growth and performance. Following
our initial public offering, our management team began communicating with their network of relationships, including employees of Cantor
and its affiliates, to set forth the type of company that we want to target so that we could begin the process of locating, identifying,
pursuing and reviewing potential target companies and promising leads.
Our
management team and Cantor and its affiliates have experience in:
| ● | sourcing, structuring, acquiring
and selling businesses; |
| ● | fostering relationships with
sellers, capital providers and target management teams; |
| ● | negotiating transactions favorable
to investors; |
| ● | executing transactions in multiple
geographies and under varying economic and financial market conditions; |
| ● | accessing the capital markets,
including financing businesses and helping companies transition to public ownership; |
| ● | operating companies, setting
and changing strategies, and identifying, monitoring and recruiting world-class talent; |
| ● | acquiring and integrating companies;
and |
| ● | developing and growing companies,
both organically and through acquisitions and strategic transactions and expanding the product range and geographic footprint of a number
of target businesses. |
Investment Criteria
We
are seeking to acquire one or more businesses with an aggregate enterprise value of approximately $600 million to $1.5 billion or
more. We developed the following high level, non-exclusive investment criteria that we will use to screen for and evaluate target businesses.
We are seeking to acquire a business that (1) has sustainable competitive advantages, (2) generates, or has the near-term potential
to generate, predicable free cash flows, (3) would benefit from the capabilities of the sponsor and management team to improve its
operations and market position, (4) has an experienced and capable management team, (5) has the potential to grow both organically
and through additional acquisitions and (6) can be acquired at an attractive valuation to maximize potential returns to our stockholders.
While
we may pursue an acquisition opportunity in any business, industry, sector or geographical location, we are focusing on industries that
complement our management team’s background, and to capitalize on the ability of our officers and directors to identify and acquire
a business or businesses consistent with the experience of our management team and affiliates of the sponsor. We therefore are focusing
on potential target companies in the financial services, healthcare, real estate services, technology and software industries.
These
criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be
based, to the extent relevant, on these general guidelines as well as other considerations, factors and criteria that our management may
deem relevant. In the event that we decide to enter into our initial business combination with a target business that only meets some
but not all of the above criteria and guidelines, we will disclose that the target business does not meet all of the above criteria in
our stockholder communications related to our initial business combination, which, as discussed in this Report, would be in the form of
proxy solicitation materials or tender offer documents that we would file with the SEC.
Initial Business Combination
So long as we maintain a listing
for our securities on Nasdaq, we must complete one or more business combinations having an aggregate fair market value of at least 80%
of the value of the assets held in the trust account (excluding taxes payable on the interest earned on the trust account) at the time
of our signing a definitive agreement in connection with our initial business combination. Our board of directors will make the determination
as to the fair market value of our initial business combination. If our board of directors is not able to independently determine the
fair market value of our initial business combination, we will obtain an opinion from an independent investment banking firm or another
independent firm that commonly renders valuation opinions with respect to the satisfaction of such criteria. While we consider it unlikely
that our board of directors will not be able to make an independent determination of the fair market value of our initial business combination,
it may be unable to do so if it is less familiar or experienced with the business of a particular target or if there is a significant
amount of uncertainty as to the value of a target’s assets or prospects. Additionally, pursuant to Nasdaq rules, any initial business
combination must be approved by a majority of our independent directors. If we are no longer listed on Nasdaq, we would not be required
to satisfy the above-referenced fair market value test.
We
may, at our option, pursue an Affiliated Joint Acquisition. We do not expect that we would pursue any such opportunity with another special
purpose acquisition company sponsored by Cantor. Any such parties would co-invest only if (i) permitted by applicable regulatory
and other legal limitations; (ii) we and Cantor considered a transaction to be mutually beneficial to us as well as the affiliated
entity; and (iii) other business reasons exist to do so, such as the strategic merits of including such co-investors, the need for
additional capital beyond the amount held in our trust account to fund the initial business combination and/or the desire to obtain committed
capital for closing the initial business combination.
An
Affiliated Joint Acquisition may be effected through a co-investment with us in the target business at the time of our initial business
combination, or we could raise additional proceeds to complete the initial business combination by issuing to such parties a specified
future issuance. Any such Affiliated Joint Acquisition or specified future issuance would be in addition to, and would not include, the
FPS. The amount and other terms and conditions of any such specified future issuance would be determined at the time thereof. We are not
obligated to make any specified future issuance and may determine not to do so. This is not an offer for any specified future issuance.
Pursuant to the anti-dilution provisions of our Class B common stock, any such specified future issuance would result in an adjustment
to the conversion ratio such that our initial stockholders and their permitted transferees, if any, would retain their aggregate percentage
ownership at 20% of the sum of the total number of all shares of common stock outstanding upon completion of the initial public offering
(not including the private placement shares) plus all shares issued in the specified future issuance, unless the holders of a majority
of the then-outstanding shares of Class B common stock agreed to waive such adjustment with respect to the specified future issuance
at the time thereof. We cannot determine at this time whether a majority of the holders of our Class B common stock at the time of
any such specified future issuance would agree to waive such adjustment to the conversion ratio. They may waive such adjustment due to
(but not limited to) the following: (i) closing conditions which are part of the agreement for our initial business combination;
(ii) negotiation with Class A stockholders on structuring an initial business combination; (iii) negotiation with parties
providing financing which would trigger the anti-dilution provisions of the Class B common stock; or (iv) as part of the Affiliated
Joint Acquisition. If such adjustment is not waived, the specified future issuance would not reduce the percentage ownership of holders
of our Class B common stock, but would reduce the percentage ownership of holders of our Class A common stock. If such adjustment
is waived, the specified future issuance would reduce the percentage ownership of holders of both classes of our common stock. The issuance
of the FPS will not result in such an adjustment to the conversion ratio of our Class B common stock.
We
anticipate structuring our initial business combination, such as the Rumble Business Combination, either (i) in such a way so that
the post-transaction company in which our public stockholders own shares will own or acquire 100% of the equity interests or assets of
the target business or businesses, or (ii) in such a way so that the post-transaction company owns or acquires less than 100% of
such interests or assets of the target business in order to meet certain objectives of the target management team or stockholders, or
for other reasons, including an Affiliated Joint Acquisition as described above. However, we will only complete an initial business combination
if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires
a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company
Act. Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our stockholders prior
to the initial business combination may collectively own a minority interest in the post-transaction company, depending on valuations
ascribed to the target and us in the initial business combination. For example, we could pursue a transaction in which we issue a substantial
number of new shares in exchange for all of the outstanding capital stock of a target. In this case, we would acquire a 100% controlling
interest in the target. However, as a result of the issuance of a substantial number of new shares, our stockholders immediately prior
to our initial business combination could own less than a majority of our outstanding shares subsequent to our initial business combination.
If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company,
the portion of such business or businesses that is owned or acquired is what will be taken into account for purposes of Nasdaq’s
80% fair market value test. If the initial business combination involves more than one target business, the 80% fair market value test
will be based on the aggregate value of all of the transactions and we will treat the target businesses together as the initial business
combination for purposes of a tender offer or for seeking stockholder approval, as applicable. So long as we obtain and maintain a listing
for our securities on Nasdaq, we would be required to comply with such 80% rule.
We
do not believe we will need to raise additional funds in order to meet the expenditures required for operating our business. However,
if our estimates of the costs of identifying a target business, undertaking in-depth due diligence and negotiating an initial business
combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior
to our initial business combination. Moreover, we may need to obtain additional financing either to complete our initial business combination
or because we become obligated to redeem a significant number of our public shares upon completion of our initial business combination,
in which case we may issue additional securities or incur debt in connection with such business combination. In addition, we are targeting
businesses with enterprise values that are greater than the net proceeds of our initial public offering, the sale of the private placement
units and the sale of the FPS, and, as a result, if any cash portion of the purchase price exceeds the amount available from the trust
account, net of amounts needed to satisfy redemptions by public stockholders, we may be required to seek additional financing to complete
such proposed initial business combination. We may also obtain financing prior to the closing of our initial business combination to fund
our working capital needs and transaction costs in connection with our search for and completion of our initial business combination.
There is no limitation on our ability to raise funds through the issuance of equity or equity-linked securities or through loans, advances
or other indebtedness in connection with our initial business combination, including pursuant to forward purchase agreements or backstop
arrangements into which we may enter. Subject to compliance with applicable securities laws, we would only complete such financing simultaneously
with the completion of our 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. In addition, following our initial
business combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.
For
more information regarding the PIPE Shares to be issued and the PIPE Investments to be made in connection with the Rumble Business Combination,
please see “Rumble Business Combination” above.
Our Business Combination
Process
In
evaluating prospective business combinations, we conduct a thorough due diligence review that encompasses, among other things, a review
of historical and projected financial and operating data, meetings with management and their advisors (if applicable), on-site inspection
of facilities and assets to the extent possible, discussion with customers and suppliers, document reviews, as well as a review of financial,
operational, legal and other information which will be made available to us and which we deem appropriate. We utilize our expertise and
the sponsor’s expertise in analyzing companies and evaluating operating projections, financial projections and determining the appropriate
return expectations.
We
are not prohibited from pursuing an initial business combination with a business that is affiliated with Cantor or its affiliates or the
sponsor or our officers or directors, including an Affiliated Joint Acquisition. While Rumble is not affiliated with the sponsor or our
officers or directors, in the event we do not consummate the Rumble Business Combination and we seek to complete our initial business
combination with a business that is affiliated with Cantor or its affiliates or the sponsor, or our officers or directors, we, or a committee
of independent directors, will obtain an opinion from an independent investment banking firm or another independent firm that commonly
renders valuation opinions that our initial business combination is fair to our stockholders from a financial point of view. The sponsor
has committed, pursuant to the FPA, to purchase, in a private placement for gross proceeds of $15,000,000 to occur concurrently with the
consummation of our initial business combination, 1,500,000 of our units on substantially the same terms as the sale of units in the initial
public offering at $10.00 per unit, and 375,000 shares of Class A common stock. The funds from the sale of the FPS will be used as part
of the consideration to the sellers in the initial business combination; any excess funds from this private placement will be used for
working capital in the post-transaction company. This commitment is independent of the percentage of stockholders electing to redeem their
public shares and provides us with a minimum funding level for the initial business combination.
Cantor
is the beneficial owner of founder shares and/or private placement units by virtue of its ownership of the sponsor and members of our
management team may indirectly own such securities. Either the sponsor will transfer up to 10,000 founder shares to each of our independent
directors or we will pay cash fees to such directors, at our discretion. Because of such ownership and interests, Cantor and our officers
and directors may have a conflict of interest in determining whether a particular target business is an appropriate business with which
to effectuate our initial business combination. Further, each of our officers and directors may have a conflict of interest with respect
to evaluating a particular business combination if the retention or resignation of any such officers and directors were to be included
by a target business as a condition to any agreement with respect to our initial business combination.
All
of our officers are employed by Cantor or its affiliates. Cantor is continuously made aware of potential business opportunities, one or
more of which we may desire to pursue for an initial business combination. While Cantor does not have any duty to offer acquisition opportunities
to us, Cantor may become aware of a potential transaction that is an attractive opportunity for us, which Cantor may decide to share with
us.
The
sponsor, our officers, our directors, Cantor and their affiliates may participate in the formation of, or become an officer or director
of, any other blank check company prior to completion of our initial business combination. In particular, certain of our executive officers
and directors also serve as executive officers or directors of other special purpose acquisition companies sponsored by Cantor as set
forth below, each of which is focused on searching for businesses that may provide significant opportunities for attractive investor returns
in industries similar to the industries in which our search is focused. As a result, the sponsor and our officers or directors could have
conflicts of interest in determining whether to present business combination opportunities to us or to any other blank check company with
which they may become involved.
Each
of our officers and directors presently has, and any of them in the future may have additional, fiduciary, contractual or other obligations
or duties to one or more other entities pursuant to which such officer or director is or will be required to present a business combination
opportunity. The Charter 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, 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. Accordingly, if any of our
officers or directors becomes aware of a business combination opportunity which is suitable for one or more entities to which he or she
has fiduciary, contractual or other obligations or duties, he or she will honor these obligations and duties to present such business
combination opportunity to such entities first, and only present it to us if such entities reject the opportunity and he or she determines
to present the opportunity to us.
Our Management Team
Members
of our management team are not obligated to devote any specific number of hours to our matters but they intend to devote as much of their
time as they deem necessary to our affairs until we have completed our initial business combination. The amount of time that any member
of our management team will devote in any time period will vary based on whether a target business has been selected for our initial business
combination and the current stage of the business combination process.
We
believe our management team’s operating and transaction experience and relationships with companies will provide us with a substantial
number of potential business combination targets, such as Rumble. Over the course of their careers, the members of our management team
have developed a broad network of contacts and corporate relationships in various industries. This network has grown through the activities
of our management team sourcing, acquiring and financing businesses, our management team’s relationships with sellers, financing
sources and target management teams and the experience of our management team in executing transactions under varying economic and financial
market conditions.
Status as a Public
Company
We
believe our structure makes us an attractive business combination partner to target businesses. As a public company, we offer a target
business an alternative to the traditional initial public offering through a merger or other business combination with us. Following an
initial business combination, we believe the target business would have greater access to capital and additional means of creating management
incentives that are better aligned with stockholders’ interests than it would as a private company. A target business can further
benefit by augmenting its profile among potential new customers and vendors and aid in attracting talented employees. In a business combination
transaction with us, the owners of the target business may, for example, exchange their shares of stock in the target business for shares
of Class A common stock (or shares of a new holding company) or for a combination of shares of Class A common stock and cash,
allowing us to tailor the consideration to the specific needs of the sellers.
Although
there are various costs and obligations associated with being a public company, we believe target businesses will find this method a more
expeditious and cost effective method to becoming a public company than the typical initial public offering. The typical initial public
offering process takes a significantly longer period of time than the typical business combination transaction process, and there are
significant expenses in the initial public offering process, including underwriting discounts and commissions, marketing and road show
efforts that may not be present to the same extent in connection with an initial business combination with us.
Furthermore,
once a proposed initial business combination is completed, the target business will have effectively become public, whereas an initial
public offering is always subject to the underwriters’ ability to complete the offering, as well as general market conditions, which
could delay or prevent the offering from occurring or could have negative valuation consequences. Following an initial business combination,
we believe the target business would then have greater access to capital and an additional means of providing management incentives consistent
with stockholders’ interests and the ability to use its shares as currency for acquisitions. Being a public company can offer further
benefits by augmenting a company’s profile among potential new customers and vendors and aid in attracting talented employees.
While
we believe that our structure and our management team’s backgrounds will make us an attractive business partner, some potential
target businesses may view our status as a blank check company, such as our lack of an operating history and our ability to seek stockholder
approval of any proposed initial business combination, negatively.
We
are an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As such,
we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies
that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation
requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic
reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and
stockholder approval of any golden parachute payments not previously approved. If some investors find our securities less attractive as
a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile.
In
addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition
period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an
“emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply
to private companies. We intend to take advantage of the benefits of this extended transition period.
We
will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following February 23, 2026,
(b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large
accelerated filer, which means the market value of our Class A common stock that is held by non-affiliates exceeds $700 million
as of the prior June 30, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities
during the prior three-year period. References herein to “emerging growth company” will have the meaning associated with it
in the JOBS Act.
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 exceeds $250 million as of the prior June 30, or (2) our annual revenues exceed $100 million during such
completed fiscal year and the market value of our common stock held by non-affiliates exceeds $700 million as of the prior June 30.
In
addition, only holders of our founder shares have the right to vote on the election of directors prior to the consummation of our initial
business combination. As a result, Nasdaq considers us to be a “controlled company” within the meaning of Nasdaq corporate
governance standards. Under Nasdaq corporate governance standards, a company of which more than 50% of the voting power for the election
of directors is held by an individual, group or another company is a “controlled company” and may elect not to comply with
certain corporate governance requirements. We have utilized, and will continue to utilize, these exemptions.
Financial Position
With
funds available for an initial business combination in the amount of $300,000,000, based on the balance of our trust account as of December
31, 2021, we offer a target business, such as Rumble, a variety of options such as creating a liquidity event for its owners, providing
capital for the potential growth and expansion of its operations or strengthening its balance sheet by reducing its debt or leverage ratio.
Because we are able to complete our initial business combination using our cash, debt or equity securities, or a combination of the foregoing,
we have the flexibility to use the most efficient combination that will allow us to tailor the consideration to be paid to the target
business to fit its needs and desires. However, other than with respect to the PIPE Investments for the Rumble Business Combination, we
have not taken any steps to secure any third party financing and there can be no assurance any additional third party financing will be
available to us.
Effecting Our Initial
Business Combination
We
are not presently engaged in, and we will not engage in, any operations other than the pursuit of our business combination, at which point
we will engage in the business of the target we acquire in our initial business combination. We intend to effectuate our initial business
combination using cash from the proceeds of the (i) initial public offering, (ii) private placement of the private placement units, (iii)
$15,000,000 FPA, (iv) sale of our securities in connection with our initial business combination (pursuant to forward purchase contracts
or any backstop agreements we may enter into following the consummation of the initial public offering or otherwise), (v) shares issued
to the owners of the target, (vi) debt issued to bank or other lenders or the owners of the target, or (vii) a combination of the foregoing.
We may seek to complete our initial business combination with a company or business that may be financially unstable or in its early stages
of development or growth, which would subject us to the numerous risks inherent in such companies and businesses.
If
our initial business combination is paid for using equity or debt securities, or not all of the funds released from the trust account
are used for payment of the consideration in connection with our initial business combination or used for redemptions of our Class A
common stock, we may apply the balance of the cash released to us from the trust account, as well as the $15,000,000 from the FPA, for
general corporate purposes, including for maintenance or expansion of operations of the post-transaction company, the payment of principal
or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for
working capital.
In
addition to the transactions contemplated by the FPA, we may seek to raise additional funds through a private offering of debt or equity
securities in connection with the completion of our initial business combination (which may include a specified future issuance), and
we may effectuate our initial business combination using the proceeds of such offering rather than using the amounts held in the trust
account. In addition, we are targeting businesses larger than we could acquire with the net proceeds of our initial public offering, the
sale of the private placement units as well as the $15,000,000 from the FPA, and may as a result be required to seek additional financing
to complete such proposed initial business combination. Subject to compliance with applicable securities laws, we would expect to complete
such financing only simultaneously with the completion of our initial business combination. In the case of an initial business combination
funded with assets other than the trust account assets, our proxy materials or tender offer documents disclosing the initial business
combination would disclose the terms of the financing and, only if required by law, we would seek stockholder approval of such financing.
There are no prohibitions on our ability to raise funds privately, including pursuant to any specified future issuance, or through loans
in connection with our initial business combination. At this time, other than the FPA and the Subscription Agreements, we are not a party
to any arrangement or understanding with any third party with respect to raising any additional funds through the sale of securities or
otherwise.
Sources of Target
Businesses
Target
business candidates are brought to our attention from various unaffiliated sources, including investment bankers and investment professionals.
Target businesses are also brought to our attention by such unaffiliated sources as a result of being solicited by us by calls or mailings.
These sources introduce us to target businesses in which they think we may be interested on an unsolicited basis, since many of these
sources will have read the prospectus of our initial public offering and know what types of businesses we are targeting. Our officers
and directors, as well as the sponsor and its affiliates, have brought, and may bring, to our attention target business candidates that
they become aware of through their business contacts as a result of formal or informal inquiries or discussions they may have. In addition,
we have received a number of proprietary deal flow opportunities that would not otherwise necessarily be available to us as a result of
the business relationships of our officers and directors and the sponsor and its affiliates.
We
may also contact targets that any of the other special purpose acquisition companies sponsored by Cantor had considered if we become aware
that such targets are interested in a potential initial business combination with us and such transaction would be attractive to our stockholders.
While
we have not and do not anticipate engaging the services of professional firms or other individuals that specialize in business acquisitions
on any formal basis, we may engage these firms or other individuals in the future, in which event we may pay a finder’s fee, consulting
fee, advisory fee or other compensation to be determined in an arm’s length negotiation based on the terms of the transaction. We
will engage a finder only to the extent our management determines that the use of a finder may bring opportunities to us that may not
otherwise be available to us or if finders approach us on an unsolicited basis with a potential transaction that our management determines
is in our best interest to pursue. Payment of finder’s fees is customarily tied to completion of a transaction, in which case any
such fee will be paid out of the funds held in the trust account. In no event, however, will the sponsor or any of our existing officers
or directors, or any entity with which the sponsor or officers are affiliated, be paid any finder’s fee, reimbursement, consulting
fee, monies in respect of any payment of a loan or other compensation by the company prior to, or in connection with any services rendered
for any services they render in order to effectuate, the completion of our initial business combination (regardless of the type of transaction
that it is) other than as described herein. Some of our officers and directors may enter into employment or consulting agreements with
the post-transaction company following our initial business combination. The presence or absence of any such fees or arrangements will
not be used as a criterion in our selection process of an initial business combination candidate.
We
are not prohibited from pursuing an initial business combination with a business that is affiliated with Cantor or its affiliates or the
sponsor or our officers or directors, including an Affiliated Joint Acquisition. While Rumble is not affiliated with the sponsor, its
affiliates or our officers or directors, in the event we do not consummate the Rumble Business Combination and we seek to complete our
initial business combination with an initial business combination target that is affiliated with the sponsor, its affiliates, or our officers
or directors, we, or a committee of independent directors, would obtain an opinion from an independent investment banking firm or another
independent firm that commonly renders valuation opinions that such an initial business combination is fair to our stockholders from a
financial point of view. We are not required to obtain such an opinion in any other context.
Each
of our officers and directors presently has, and any of them in the future may have additional, fiduciary, contractual or other obligations
or duties to one or more other entities pursuant to which such officer or director is or will be required to present a business combination
opportunity to such entities. 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, contractual or other duties. Accordingly, if any of our
officers or directors becomes aware of a business combination opportunity which is suitable for one or more entities to which he or she
has fiduciary, contractual or other obligations or duties, he or she will honor these obligations and duties to present such business
combination opportunity to such entities first, and only present it to us if such entities reject the opportunity and he or she determines
to present the opportunity to us. These conflicts may not be resolved in our favor and a potential target business may be presented to
another entity prior to its presentation to us. The Charter provides that we renounce our interest in any corporate opportunity offered
to any director or officer unless (i) such opportunity is expressly offered to such person solely in his or her capacity as a director
or officer of our company, (ii) such opportunity is one we are legally and contractually permitted to undertake and would otherwise
be reasonable for us to pursue and (iii) the director or officer is permitted to refer the opportunity to us without violating another
legal obligation.
Selection of a Target
Business and Structuring of our Initial Business Combination
So
long as we maintain a listing for our securities on Nasdaq, we must complete one or more business combinations having an aggregate fair
market value of at least 80% of the value of the assets held in the trust account (excluding taxes payable on the interest earned on the
trust account) at the time of our signing a definitive agreement in connection with our initial business combination. The fair market
value of our initial business combination will be determined by our board of directors based upon one or more standards generally accepted
by the financial community, such as discounted cash flow valuation, a valuation based on trading multiples of comparable public businesses
or a valuation based on the financial metrics of merger and acquisition transactions of comparable businesses. If our board of directors
is not able to independently determine the fair market value of our initial business combination, we will obtain an opinion from an independent
investment banking firm or another independent firm that commonly renders valuation opinions with respect to the satisfaction of such
criteria. While we consider it unlikely that our board of directors will not be able to make an independent determination of the fair
market value of our initial business combination, it may be unable to do so if it is less familiar or experienced with the business of
a particular target or if there is a significant amount of uncertainty as to the value of a target’s assets or prospects. We do
not intend to purchase multiple businesses in unrelated industries in conjunction with our initial business combination. Subject to this
requirement, our management will have virtually unrestricted flexibility in identifying and selecting one or more prospective target businesses,
although we will not be permitted to effectuate our initial business combination with another blank check company or a similar company
with nominal operations.
In
any case, we will only complete an initial business combination in which we own or acquire 50% or more of the outstanding voting securities
of the target or otherwise acquire a controlling interest in the target sufficient for it not to be required to register as an investment
company under the Investment Company Act. If we own or acquire less than 100% of the equity interests or assets of a target business or
businesses, the portion of such business or businesses that are owned or acquired by the post-transaction company is what will be taken
into account for purposes of Nasdaq’s 80% fair market value test. There is no basis for our investors to evaluate the possible merits
or risks of any target business with which we may ultimately complete our initial business combination.
To
the extent we effect our initial business combination with a company or business that may be financially unstable or in its early stages
of development or growth we may be affected by numerous risks inherent in such company or business. Although our management will endeavor
to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all significant
risk factors.
In
evaluating prospective business targets, we have conducted, and, if applicable, will conduct, a thorough due diligence review, which encompasses
and may encompass, among other things, meetings with incumbent management and employees, document reviews, interviews of customers and
suppliers, inspection of facilities, as well as a review of financial and other information that is made available to us.
We have engaged CF&Co.,
an affiliate of the sponsor, pursuant to a business combination marketing agreement as an advisor in connection with our initial business
combination to assist us in holding meetings with our stockholders to discuss
any potential initial business combination and the target business’ attributes, introduce us to potential investors that are interested
in purchasing our securities and assist us with our press releases and public filings in connection with our initial business combination.
We will pay CF&Co. a cash fee for such services upon the consummation of the initial business combination as described elsewhere in
this Report. We have also engaged CF&Co. as a financial advisor and placement agent in connection with the Rumble Business Combination
and have agreed to pay CF&Co. a customary financial advisory fee and placement agent fee in an amount that constitutes a market standard
financial advisory or placement agent fee for comparable transactions. In the event the Rumble Business Combination is not consummated,
we may engage CF&Co, or another affiliate of the sponsor, as a financial advisor in connection with our initial business combination
and/or placement agent for any securities offering to occur concurrently with our initial business combination and pay such affiliate
a customary financial advisory and/or placement agent fee in an amount that constitutes a market standard financial advisory or placement
agent fee for comparable transactions. Furthermore, we may acquire a target company that has engaged CF&Co., or another affiliate
of the sponsor, as a financial advisor, and such target company may pay such affiliate a financial advisory fee in connection with our
initial business combination.
Any
costs incurred with respect to the identification and evaluation of a prospective target business with which our initial business combination
is not ultimately completed will result in our incurring losses and will reduce the funds we can use to complete another business combination.
Lack of Business Diversification
For
an indefinite period of time after the completion of our initial business combination, the prospects for our success may depend entirely
on the future performance of a single business. Unlike other entities that have the resources to complete business combinations with multiple
entities in one or several industries, it is probable that we will not have the resources to diversify our operations and mitigate the
risks of being in a single line of business. In addition, we have focused our search for an initial business combination in a single industry.
By completing our initial business combination with only a single entity, our lack of diversification may:
| ● | subject us to negative economic,
competitive and regulatory developments, any or all of which may have a substantial adverse impact on the particular industry in which
we operate after our initial business combination, and |
| ● | cause us to depend on the marketing
and sale of a single product or limited number of products or services. |
Limited Ability to
Evaluate the Target’s Management Team
Although we closely scrutinize
the management of a prospective target business, including the management of Rumble, when evaluating the desirability of effecting our
initial business combination with that business and will continue to do so if the Rumble Business Combination is not consummated and we
seek other business combination opportunities, our assessment of the target business’ management may not prove to be correct. In
addition, the future management may not have the necessary skills, qualifications or abilities to manage a public company. Furthermore,
other than with respect to the Rumble Business Combination, the future role of members of our management team, if any, in the target business
cannot presently be stated with any certainty. The determination as to whether any of the members of our management team will remain with
the combined company will be made at the time of our initial business combination. While it is possible that one or more of our directors
will remain associated in some capacity with us following our initial business combination, it is unlikely that any of them will devote
their full efforts to our affairs subsequent to our initial business combination. If the Rumble Business Combination is consummated, none
of our directors are expected to remain with the Company after consummation of the Rumble Business Combination. Moreover, we cannot assure
you that members of our management team will have significant experience or knowledge relating to the operations of the particular target
business.
We
cannot assure you that any of our key personnel will remain in senior management or advisory positions with the combined company. If the
Rumble Business Combination is consummated, none of our key personnel are expected to remain with the Company after consummation of the
Rumble Business Combination. The determination as to whether any of our key personnel will remain with any other potential combined company,
if the Rumble Business Combination is not consummated, will be made at the time of our initial business combination.
Stockholders May Not
Have the Ability to Approve Our Initial Business Combination
We
may conduct redemptions without a stockholder vote pursuant to the tender offer rules of the SEC. However, we will seek stockholder approval
if it is required by applicable law or stock exchange rule (as is the case with the Rumble Business Combination), or, if the Rumble Business
Combination is not consummated, we may decide to seek stockholder approval for business or other legal reasons. Presented in the table
below is a graphic explanation of the types of initial business combinations we may consider and whether stockholder approval is currently
required under Delaware law for each such transaction.
Type of Transaction |
|
Whether Stockholder
Approval is Required |
|
|
|
Purchase of assets |
|
No |
|
|
|
Purchase of stock of target not involving a merger with the company |
|
No |
|
|
|
Merger of target into a subsidiary of the company |
|
No |
|
|
|
Merger of the company with a target |
|
Yes |
So
long as we maintain a listing for our securities on Nasdaq, stockholder approval would be required for our initial business combination
if, for example:
| ● | we issue shares of Class A
common stock that will be equal to or in excess of 20% of the number of shares of our Class A common stock then outstanding (other
than in a public offering); |
| ● | any of our directors, officers
or substantial stockholders (as defined by Nasdaq rules) has a 5% or greater interest (or such persons collectively have a 10% or greater
interest), directly or indirectly, in the target business or assets to be acquired or otherwise and the present or potential issuance
of common stock could result in an increase in outstanding shares of common stock or voting power of 5% or more; or |
| ● | the issuance or potential issuance
of common stock will result in our undergoing a change of control. |
Permitted Purchases
of our Securities
If
we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business
combination pursuant to the tender offer rules, our initial stockholders, directors, officers, advisors or any their respective affiliates
may purchase shares or public warrants in privately negotiated transactions or in the open market either prior to or following the completion
of our initial business combination. There is no limit on the number of shares our initial stockholders, directors, officers, advisors
or any of their respective affiliates may purchase in such transactions, subject to compliance with applicable law and Nasdaq rules. However,
they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for
any such transactions.
In
the event our initial stockholders, directors, officers, advisors or any of their respective affiliates determine to make any such purchases
at the time of a stockholder vote relating to our initial business combination, such purchases could have the effect of influencing the
vote necessary to approve such transaction. If they engage in such transactions, they will be restricted from making any such purchases
when they are in possession of any material non-public information not disclosed to the seller or if such purchases are prohibited by
Regulation M under the Exchange Act. Such a purchase may include a contractual acknowledgement that such stockholder, although still the
record holder of our shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. We
do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange
Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at
the time of any such purchases that the purchases are subject to such rules, the purchasers will comply with such rules. Any such purchases
will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting
requirements. None of the funds held in the trust account will be used to purchase shares or public warrants in such transactions prior
to completion of our initial business combination.
The
purpose of any such purchases of shares could be to vote such shares in favor of the initial business combination and thereby increase
the likelihood of obtaining stockholder approval of the initial business combination or to satisfy a closing condition in an agreement
with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination,
where it appears that such requirement would otherwise not be met. The purpose of any such purchases of public warrants could be to reduce
the number of public warrants outstanding or to vote such warrants on any matters submitted to the warrant holders for approval in connection
with our initial business combination. Any such purchases of our securities may result in the completion of our initial business combination
that may not otherwise have been possible. In addition, if such purchases are made, the public “float” of our shares of Class A
common stock or warrants may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult
to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.
The
sponsor, our officers, directors, advisors and/or any of their respective affiliates anticipate that they may identify the stockholders
with whom the sponsor, our officers, directors, advisors or any of their respective affiliates may pursue privately negotiated purchases
by either the stockholders contacting us directly or by our receipt of redemption requests submitted by stockholders following our mailing
of proxy materials in connection with our initial business combination. To the extent that the sponsor, our officers, directors, advisors
or any of their respective affiliates enter into a private purchase, they would identify and contact only potential selling stockholders
who have expressed their election to redeem their shares for a pro rata share of the trust account or vote against our initial business
combination, whether or not such stockholder has already submitted a proxy with respect to our initial business combination. Such persons
would select the stockholders from whom to acquire shares based on the number of shares available, the negotiated price per share and
such other factors as any such person may deem relevant at the time of purchase. 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 sponsor, our officers, directors, advisors or any of their respective affiliates will purchase shares only if
such purchases comply with Regulation M under the Exchange Act and the other federal securities laws.
Any
purchases by the sponsor, our officers, directors and/or any of their respective affiliates who are affiliated purchasers under Rule 10b-18
under the Exchange Act will only be made to the extent such purchases are able to be made in compliance with Rule 10b-18, which is a safe
harbor from liability for manipulation under Section 9(a)(2) and Rule 10b-5 of the Exchange Act. Rule 10b-18 has certain technical requirements
that must be complied with in order for the safe harbor to be available to the purchaser. The sponsor, our officers, directors, advisors
and/or any of their respective affiliates will not make purchases of common stock if the purchases would violate Section 9(a)(2) or Rule
10b-5 of the Exchange Act. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent
such purchases are subject to such reporting requirements.
Redemption Rights
for Public Stockholders upon Completion of our Initial Business Combination
We
will provide our public stockholders with the opportunity to redeem all or a portion of their shares of Class A common stock upon
the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit
in the trust account as of two business days prior to the consummation of the initial business combination including interest earned on
the funds held in the trust account and not previously released to us to pay our taxes, divided by the number of then outstanding public
shares, subject to the limitations described herein. As of December 31, 2021, the amount in the trust account was approximately $10.00
per public share. The sponsor and our officers and directors have entered into a letter agreement with us, pursuant to which they have
agreed to waive their redemption rights with respect to any founder shares and any public shares held by them in connection with the completion
of our initial business combination.
Manner of Conducting
Redemptions
We
will provide our public stockholders with the opportunity to redeem all or a portion of their shares of Class A common stock upon
the completion of our initial business combination either (i) in connection with a stockholder meeting called to approve the initial
business combination, or (ii) by means of a tender offer. The decision as to whether we will seek stockholder approval of a proposed
initial business combination or conduct a tender offer will be made by us, solely in our discretion, and will be based on a variety of
factors such as the timing of the transaction and whether the terms of the transaction would require us to seek stockholder approval under
applicable law or stock exchange listing requirement. Under Nasdaq rules, asset acquisitions and stock purchases would not typically require
stockholder approval while direct mergers with our company where we do not survive and any transactions where we issue more than 20% of
our outstanding common stock or seek to amend the Charter would require stockholder approval. If we structure an initial business combination
with a target company in a manner that requires stockholder approval, we will not have discretion as to whether to seek a stockholder
vote to approve the proposed initial business combination. We may conduct redemptions without a stockholder vote pursuant to the tender
offer rules of the SEC unless stockholder approval is required by applicable law or stock exchange listing requirements or we choose to
seek stockholder approval for business or other legal reasons. So long as we obtain and maintain a listing for our securities on Nasdaq,
we will be required to comply with such rules.
If
a stockholder vote is not required and we do not decide to hold a stockholder vote for business or other legal reasons, we will, pursuant
to the Charter:
|
● |
conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers, and |
|
● |
file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies. |
In
the event we conduct redemptions pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days,
in accordance with Rule 14e-1(a) under the Exchange Act, and we will not be permitted to complete our initial business combination until
the expiration of the tender offer period. In addition, the tender offer will be conditioned on public stockholders not tendering more
than a specified number of public shares which are not purchased by the sponsor, which number will be based on the requirement that we
may only redeem our public shares so long as 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. If public stockholders tender more shares than we have offered to purchase, we will withdraw the
tender offer and not complete the initial business combination.
If,
however, stockholder approval of the transaction is required by applicable law or stock exchange listing requirement, or we decide to
obtain stockholder approval for business or other legal reasons, we will, pursuant to the Charter:
|
● |
conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules, and |
|
● |
file proxy materials with the SEC. |
In
the event that we seek stockholder approval of our initial business combination, we will distribute proxy materials and, in connection
therewith, provide our public stockholders with the redemption rights described above upon completion of the initial business combination.
If
we seek stockholder approval, we will complete our initial business combination only if a majority of the outstanding shares of common
stock are voted in favor of the initial business combination. A quorum for such meeting will consist of the holders present in person
or by proxy of shares of outstanding capital stock of the company representing a majority of the voting power of all outstanding shares
of capital stock of the company entitled to vote at such meeting. Our initial stockholders will count toward this quorum and pursuant
to the letter agreement, the sponsor and our officers and directors have agreed to vote their founder shares, private placement shares
and any public shares purchased during or after our initial public offering (including in open market and privately negotiated transactions)
in favor of our initial business combination. For purposes of seeking approval of the majority of our outstanding shares of common stock
voted, non-votes will have no effect on the approval of our initial business combination once a quorum is obtained. As a result, in addition
to our initial stockholders’ founder shares and private placement shares, we would need only 10,900,001,
or 36.3%, of the 30,000,000 public shares sold in our initial public offering to be voted in favor of an initial business combination
(assuming all outstanding shares are voted) in order to have our initial business combination approved. We intend to give approximately
30 days (but not less than 10 days nor more than 60 days) prior written notice of any such meeting, if required, at which a vote shall
be taken to approve our initial business combination. These quorum and voting thresholds, and the voting agreements of our initial stockholders,
may make it more likely that we will consummate our initial business combination. Each public stockholder may elect to redeem its public
shares irrespective of whether they vote for or against the proposed business combination.
The
Charter provides that we may only redeem our public shares so long as 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. For example, the proposed initial business combination may
require: (i) cash consideration to be paid to the target or its owners, (ii) cash to be transferred to the target for working
capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions in accordance with the terms
of the proposed initial business combination. In the event the aggregate cash consideration we would be required to pay for all shares
of Class A common stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to
the terms of the proposed initial business combination exceed the aggregate amount of cash available to us, we will not complete the initial
business combination or redeem any shares, and all shares of Class A common stock submitted for redemption will be returned to the
holders thereof.
Limitation on Redemption
upon Completion of our Initial Business Combination if we Seek Stockholder Approval
Notwithstanding
the foregoing, if we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with
our initial business combination pursuant to the tender offer rules, the Charter 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 (the “Excess Shares”). We believe this restriction will discourage stockholders
from accumulating large blocks of shares, and subsequent attempts by such holders to use their ability to exercise their redemption rights
against a proposed initial business combination as a means to force us or our management to purchase their shares at a significant premium
to the then-current market price or on other undesirable terms. Absent this provision, a public stockholder holding more than an aggregate
of 15% of the shares sold in our initial public offering could threaten to exercise its redemption rights if such holder’s shares
are not purchased by us or our management at a premium to the then-current market price or on other undesirable terms. By limiting our
stockholders’ ability to redeem no more than 15% of the shares sold in our initial public offering without our prior consent, we
believe we will limit the ability of a small group of stockholders to unreasonably attempt to block our ability to complete our initial
business combination, particularly in connection with an initial business combination with a target that requires as a closing condition
that we have a minimum net worth or a certain amount of cash. However, we would not be restricting our stockholders’ ability to
vote all of their shares (including Excess Shares) for or against our initial business combination.
Tendering Stock
Certificates in Connection with Redemption Rights
We
may require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares
in “street name,” to either tender their certificates to our transfer agent prior to the date set forth in the tender offer
materials 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 using the DWAC System, at
the holder’s option. The proxy materials that we will furnish to holders of our public shares in connection with our initial business
combination will indicate whether we are requiring public stockholders to satisfy such delivery requirements. Accordingly, a public stockholder
would have up to two business days prior to the vote on the initial business combination if we distribute proxy materials to tender its
shares if it wishes to seek to exercise its redemption rights. Given the relatively short exercise period, it is advisable for stockholders
to use electronic delivery of their public shares.
There
is a nominal cost associated with the above-referenced tendering process and the act of certificating the shares or delivering them through
the DWAC System. The transfer agent will typically charge the tendering broker $80.00 and it would be up to the broker whether or not
to pass this cost on to the redeeming holder. However, this fee would be incurred regardless of whether or not we require holders seeking
to exercise redemption rights to tender their shares. The need to deliver shares is a requirement of exercising redemption rights regardless
of the timing of when such delivery must be effectuated.
The
foregoing is different from the procedures used by many blank check companies. In order to perfect redemption rights in connection with
their business combinations, many blank check companies would distribute proxy materials for the stockholders’ vote on an initial
business combination, and a holder could simply vote against a proposed initial business combination and check a box on the proxy card
indicating such holder was seeking to exercise his or her redemption rights. After the initial business combination was approved, the
company would contact such stockholder to arrange for him or her to deliver his or her certificate to verify ownership. As a result, the
stockholder then had an “option window” after the completion of the initial business combination during which he or she could
monitor the price of the company’s stock in the market. If the price rose above the redemption price, he or she could sell his or
her shares in the open market before actually delivering his or her shares to the company for cancellation. As a result, the redemption
rights, to which stockholders were aware they needed to commit before the stockholder meeting, would become “option” rights
surviving past the completion of the initial business combination until the redeeming holder delivered its certificate. The requirement
for physical or electronic delivery prior to the meeting ensures that a redeeming holder’s election to redeem is irrevocable once
the initial business combination is approved.
Any
request to redeem such shares, once made, may be withdrawn with our consent at any time up to the date of the stockholder meeting set
forth in our proxy materials. Furthermore, if a holder of a public share delivered its certificate in connection with an election of redemption
rights and subsequently decides prior to the applicable date not to elect to exercise such rights, such holder may simply request that
the transfer agent return the certificate (physically or electronically). It is anticipated that the funds to be distributed to holders
of our public shares electing to redeem their shares will be distributed promptly after the completion of our initial business combination.
If
our initial business combination is not approved or completed for any reason, then our public stockholders who elected to exercise their
redemption rights would not be entitled to redeem their shares for the applicable pro rata share of the trust account. In such case, we
will promptly return any certificates delivered by public holders who elected to redeem their shares.
If the Rumble Business Combination
is not completed, we may continue to try to complete an initial business combination with a different target until February 23, 2023.
Redemption of Public
Shares and Liquidation if no Initial Business Combination
The
Charter provides that we will have until February 23, 2023 to consummate a business combination. If we are unable to complete 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 each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There
will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to complete
our initial business combination within the allotted time period.
The
sponsor and our officers and directors have entered into a letter agreement with us, pursuant to which they have waived their rights to
liquidating distributions from the trust account with respect to any founder shares or private placement shares held by them if we fail
to complete our initial business combination by February 23, 2023. However, if the sponsor or our officers or directors acquire public
shares in or after our initial public offering, they will be entitled to liquidating distributions from the trust account with respect
to such public shares if we fail to complete our initial business combination within the allotted time period.
The
sponsor and our officers and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment
to the Charter (i) to modify the substance or timing of our obligation to allow redemption in connection with our initial business
combination or to redeem 100% of our public shares if we do not complete our initial business combination by February 23, 2023 or (ii) with
respect to any other provision relating to stockholders’ rights or pre-initial business combination activity, unless we provide
our public stockholders with the opportunity to redeem their shares of Class A common stock upon approval of any such amendment at
a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest earned on the
funds held in the trust account and not previously released to us to pay our taxes divided by the number of then outstanding public shares.
However, we may only redeem our public shares so long as 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). If this optional redemption right is exercised with respect to an excessive
number of public shares such that we cannot satisfy the net tangible asset requirement (described above), we would not proceed with the
amendment or the related redemption of our public shares at such time.
If
we do not consummate the Rumble Business Combination or any other initial business combination by February 23, 2023, we expect that all
costs and expenses associated with implementing our plan of dissolution, as well as payments to any creditors, will be funded from any
amounts held outside the trust account, together with the $1,750,000 loan committed by the sponsor, although we cannot assure you that
there will be sufficient funds for such purpose. We will depend on sufficient interest being earned on the proceeds held in the trust
account to pay any tax obligations we may owe. However, if those funds are not sufficient to cover the costs and expenses associated with
implementing our plan of dissolution, to the extent that there is any interest accrued in the trust account not required to pay taxes
on interest income earned on the trust account balance, we may request the trustee to release to us an additional amount of up to $100,000
of such accrued interest to pay those costs and expenses.
If
we were to expend all of the net proceeds of our initial public offering and the sale of the private placement units, other than the proceeds
deposited in the trust account, and without taking into account interest, if any, earned on the trust account, the per-share redemption
amount received by stockholders upon our dissolution would be approximately $10.00 per share. The proceeds deposited in the trust account
could, however, become subject to the claims of our creditors which would have higher priority than the claims of our public stockholders.
We cannot assure you that the actual per-share redemption amount received by stockholders will not be substantially less than $10.00.
Under Section 281(b) of the DGCL, our plan of dissolution must provide for all claims against us to be paid in full or make provision
for payments to be made in full, as applicable, if there are sufficient assets. These claims must be paid or provided for before we make
any distribution of our remaining assets to our stockholders. While we intend to pay such amounts, if any, we cannot assure you that we
will have funds sufficient to pay or provide for all creditors’ claims.
Although
we will seek to have all vendors, service providers, prospective target businesses or other entities with which we do business execute
agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit
of our public stockholders, there is no guarantee that they will execute such agreements or even if they execute such agreements that
they would be prevented from bringing claims against the trust account including but not limited to fraudulent inducement, breach of fiduciary
responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain
an advantage with respect to a claim against our assets, including the funds held in the trust account. If any third party refuses to
execute an agreement waiving such claims to the monies held in the trust account, our management will perform an analysis of the alternatives
available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes that such
third party’s engagement would be significantly more beneficial to us than any alternative. Examples of possible instances where
we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular expertise
or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or
in cases where management is unable to find a service provider willing to execute a waiver. Withum, our independent registered public
accounting firm, and the underwriters of the initial public offering, did not, or will not, execute agreements with us waiving such claims
to the monies held in the trust account.
In
addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising
out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason. The sponsor
has agreed that it will be liable to us if and to the extent any claims by a third party (other than our independent registered public
accounting firm) 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 from interest, 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 the initial public offering against certain liabilities, including liabilities under
the Securities Act. However, we have not asked the sponsor to reserve for such indemnification obligations, nor have we independently
verified whether the sponsor has sufficient funds to satisfy its indemnity obligations and believe that the sponsor’s only assets
are securities of our company. Therefore, we cannot assure you that the sponsor would be able to satisfy those obligations. None of our
officers or directors will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target
businesses.
In
the event that the proceeds in the trust account are reduced below (i) $10.00 per public share or (ii) such lesser amount per public
share held in the trust account as of the date of the liquidation of the trust account, due to reductions in value of the trust assets,
in each case net of the amount of interest which may be withdrawn to pay taxes, and the sponsor asserts that it is unable to satisfy its
indemnification obligations or that it has no indemnification obligations related to a particular claim, our independent directors would
determine whether to take legal action against the sponsor to enforce its indemnification obligations. While we currently expect that
our independent directors would take legal action on our behalf against the sponsor to enforce its indemnification obligations to us,
it is possible that our independent directors in exercising their business judgment may choose not to do so if, for example, the cost
of such legal action is deemed by the independent directors to be too high relative to the amount recoverable or if the independent directors
determine that a favorable outcome is not likely. We have not asked the sponsor to reserve for such indemnification obligations and we
cannot assure you that the sponsor would be able to satisfy those obligations. Accordingly, we cannot assure you that due to claims of
creditors the actual value of the per-share redemption price will not be less than $10.00 per public share.
We
will seek to reduce the possibility that the sponsor will have to indemnify the trust account due to claims of creditors by endeavoring
to have all vendors, service providers, prospective target businesses or other entities with which we do business execute agreements with
us waiving any right, title, interest or claim of any kind in or to monies held in the trust account. The sponsor will also not be liable
as to any claims under our indemnity of the underwriters of the initial public offering against certain liabilities, including liabilities
under the Securities Act. We have access to the amounts held outside of the trust account ($25,000 as of December 31, 2021) with which
to pay any such potential claims (including costs and expenses incurred in connection with our liquidation, currently estimated to be
no more than approximately $100,000). In the event that we liquidate and it is subsequently determined that the reserve for claims and
liabilities is insufficient, stockholders who received funds from our trust account could be liable for claims made by creditors.
Under
the DGCL, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received by
them in a dissolution. The pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public
shares in the event we do not complete our initial business combination within 24 months from the closing of the initial public offering
may be considered a liquidating distribution under Delaware law. If the corporation complies with certain procedures set forth in Section
280 of the DGCL intended to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during
which any third-party claims can be brought against the corporation, a 90-day period during which the corporation may reject any claims
brought, and an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability of stockholders
with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount
distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution.
Furthermore,
if the pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event
we do not complete our initial business combination within 24 months from the closing of the initial public offering is not considered
a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful (potentially due to the imposition
of legal proceedings that a party may bring or due to other circumstances that are currently unknown), then pursuant to Section 174 of
the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead
of three years, as in the case of a liquidating distribution. If we are unable to complete our initial business combination by February
23, 2023, 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 each case to our
obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. Accordingly, it is our
intention to redeem our public shares as soon as reasonably possible following February 23, 2023 and, therefore, we do not intend to
comply with those procedures. As such, our stockholders could potentially be liable for any claims to the extent of distributions received
by them (but no more) and any liability of our stockholders may extend well beyond the third anniversary of such date.
Because
we will not be complying with Section 280 of the DGCL, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to
us at such time that will provide for our payment of all existing and pending claims or claims that may be potentially brought against
us within the subsequent 10 years. However, because we are a blank check company, rather than an operating company, and our operations
will be limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such
as lawyers, investment bankers, etc.) or prospective target businesses. As described above, pursuant to the obligation contained in our
underwriting agreement, we will seek to have all vendors, service providers, prospective target businesses or other entities with which
we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust
account. As a result of this obligation, the claims that could be made against us are significantly limited and the likelihood that any
claim that would result in any liability extending to the trust account is remote. Further, the sponsor may be liable if no waiver against
the trust account is executed, only to the extent necessary to ensure that the amounts in the trust account are not reduced below (i)
$10.00 per public share or (ii) such lesser amount per public share held in the trust account as of the date of the liquidation of
the trust account, due to reductions in value of the trust assets, in each case net of the amount of interest withdrawn to pay taxes and
will not be liable as to any claims under our indemnity of the underwriters of the initial public offering against certain liabilities,
including liabilities under the Securities Act. In the event that an executed waiver is deemed to be unenforceable against a third party,
the sponsor will not be responsible to the extent of any liability for such third-party claims.
If
we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the proceeds held in the
trust account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of
third parties with priority over the claims of our stockholders. To the extent any bankruptcy claims deplete the trust account, we cannot
assure you we will be able to return $10.00 per share to our public stockholders. Additionally, if we file a bankruptcy petition or an
involuntary bankruptcy petition is filed against us that is not dismissed, any distributions received by stockholders could be viewed
under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.”
As a result, a bankruptcy court could seek to recover some or all of the amounts received by our stockholders. Furthermore, our board
of directors may be viewed as having breached its fiduciary duty to our creditors and/or may have acted in bad faith, thereby exposing
itself and our company to claims of punitive damages, by paying public stockholders from the trust account prior to addressing the claims
of creditors. We cannot assure you that claims will not be brought against us for these reasons.
Our
public stockholders will be entitled to receive funds from the trust account only upon the earlier to occur of: (i) the completion
of our initial business combination, (ii) the redemption of any public shares properly tendered in connection with a stockholder
vote to amend any provisions of the Charter (A) to modify the substance or timing of our obligation to allow redemption in connection
with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination by
February 23, 2023 or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination
activity, and (iii) the redemption of all of our public shares if we are unable to complete our business combination by February
23, 2023, subject to applicable law. In no other circumstances will a stockholder have any right or interest of any kind to or in the
trust account. In the event we seek stockholder approval in connection with our initial business combination, a stockholder’s voting
in connection with the initial business combination alone will not result in such stockholder’s redemption of its shares for an
applicable pro rata share of the trust account. Such stockholder must have also exercised its redemption rights as described above. These
provisions of the Charter, like all provisions of the Charter, may be amended with a stockholder vote.
Competition
In
identifying, evaluating and selecting a target business for our initial business combination, we have encountered, and if the Rumble Business
Combination is not consummated, we may encounter intense competition from other entities having a business objective similar to ours,
including other blank check companies, private equity groups and leveraged buyout funds, public companies and operating businesses seeking
strategic business combinations, including affiliates of the sponsor. Many of these entities are well established and have extensive experience
identifying and effecting business combinations directly or through affiliates. Moreover, many of these competitors possess greater financial,
technical, human and other resources than we do. Our ability to acquire larger target businesses will be limited by our available financial
resources. This inherent limitation gives others an advantage in pursuing the initial business combination of a target business. Furthermore,
our obligation to pay cash in connection with our public stockholders who exercise their redemption rights may reduce the resources available
to us for our initial business combination and our outstanding warrants, and the future dilution they potentially represent, may not be
viewed favorably by certain target businesses. Either of these factors may place us at a competitive disadvantage in successfully negotiating
an initial business combination if the Rumble Business Combination is not consummated.
Facilities
Our
executive offices are located at 110 East 59th Street, New York, NY 10022, and our telephone number is (212) 938-5000.
The cost for our use of this space is included in the $10,000 per month fee we pay to the sponsor for office space, administrative and
shared personnel support services. We consider our current office space adequate for our current operations.
Employees
We
currently have three executive officers. These individuals are not obligated to devote any specific number of hours to our matters but
they devote as much of their time as they deem necessary to our affairs until we have completed our initial business combination. The
amount of time our officers devote in any time period varies based on the stage of the initial business combination process we are in.
We do not intend to have any full time employees prior to the completion of our initial business combination.
Periodic Reporting
and Financial Information
We
have registered our units, public shares and public warrants under the Exchange Act and have reporting obligations, including the requirement
that we file annual, quarterly and current reports with the SEC. In accordance with the requirements of the Exchange Act, our annual reports
will contain financial statements audited and reported on by our independent registered public accountants.
We
will provide stockholders with audited financial statements of the prospective target business as part of the tender offer materials or
proxy solicitation materials sent to stockholders to assist them in assessing the target business. In all likelihood, these financial
statements will need to be prepared in accordance with, or reconciled to, U.S. GAAP, or the International Financial Reporting Standards,
as issued by the International Accounting Standards Board, depending on the circumstances, and the historical financial statements may
be required to be audited in accordance with the standards of the PCAOB. These financial statement requirements may limit the pool of
potential targets we may conduct an initial business combination with because some targets may be unable to provide such financial statements
in time for us to disclose such financial statements in accordance with federal proxy rules and complete our initial business combination
within the prescribed time frame. We cannot assure you that any particular target business identified by us as a potential business combination
candidate will have financial statements prepared in accordance with U.S. GAAP or that the potential target business will be able to prepare
its financial statements in accordance with the requirements outlined above. To the extent that these requirements cannot be met, we may
not be able to acquire the proposed target business. While this may limit the pool of potential business combination candidates, we do
not believe that this limitation will be material.
We
will be required to evaluate our internal control procedures for the fiscal year ending December 31, 2022 as required by the Sarbanes-Oxley
Act. Only in the event we are deemed to be a large accelerated filer or an accelerated filer will we be required to have our internal
control procedures audited. A target company may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy
of their internal controls. The development of the internal controls of any such entity to achieve compliance with the Sarbanes-Oxley
Act may increase the time and costs necessary to complete any such business combination. We have filed a Registration Statement on Form
8-A with the SEC to voluntarily register our securities under Section 12 of the Exchange Act. As a result, we are subject to the rules
and regulations promulgated under the Exchange Act. We have no current intention of filing a Form 15 to suspend our reporting or other
obligations under the Exchange Act prior or subsequent to the consummation of our initial business combination.
We
will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following February 23, 2026,
(b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large
accelerated filer, which means the market value of our shares of Class A common stock that are held by non-affiliates exceeds $700 million
as of the prior June 30, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during
the prior three-year period.