Item 1.A. Risk
Factors.
An investment in our
securities involves a high degree of risk. You should consider carefully all of the risks described below, together with the other
information contained in this Annual Report, including our financial statements and related notes, before making a decision to
invest in our securities. If any of the following events occur, our business, financial condition and operating results may be
materially adversely affected. In that event, the trading price of our securities could decline, and you could lose all or part
of your investment. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties
that we are unaware of, or that we currently believe are not material, may also become important factors that adversely affect
our business, financial condition and operating results. For risk factors related to the proposed Achronix Business Combination,
see the “Risk Factors” section of the Achronix Disclosure Statement that we have filed with the SEC.
Risks Relating to
Our Search for, and Consummation of or Inability to Consummate, a Business Combination
Our public shareholders
may not be afforded an opportunity to vote on our proposed business combination, which means we may complete our initial business
combination even though a majority of our public shareholders do not support such a combination.
We may not hold a
shareholder vote to approve our initial business combination unless the business combination would require shareholder
approval under applicable law or stock exchange rules or if we decide to hold a shareholder vote for business or other
reasons. For instance, Nasdaq listing rules currently allow us to engage in a tender offer in lieu of a general meeting, but
would still require us to obtain shareholder approval if we were seeking to issue more than 20% of our issued and outstanding
shares to a target business as consideration in any business combination. Therefore, if we were structuring a business
combination that required us to issue more than 20% of our issued and outstanding shares, we would seek shareholder approval
of such business combination. However, except as required by applicable law or stock exchange rules, the decision as to
whether we will seek shareholder approval of a proposed business combination or will allow shareholders to sell their shares
to us in a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the
timing of the transaction and whether the terms of the transaction would otherwise require us to seek shareholder approval.
Accordingly, we may consummate our initial business combination even if holders of a majority of the issued and outstanding
ordinary shares do not approve of the business combination we consummate.
If we seek shareholder
approval of our initial business combination, our initial shareholders, directors and officers have agreed to vote in favor of
such initial business combination, regardless of how our public shareholders vote.
Unlike some other blank
check companies in which the initial shareholders agree to vote their founder shares in accordance with the majority of the votes
cast by the public shareholders in connection with an initial business combination, our initial shareholders, directors and officers
have agreed (and their permitted transferees will agree), pursuant to the terms of a letter agreement entered into with us, to
vote their founder shares and any public shares held by them in favor of our initial business combination. As a result, in addition
to our initial shareholders’ founder shares, we would need 8,625,001, or 37.5% (assuming all issued and outstanding shares
are voted) of the 23,000,000 public shares sold in the Initial Public Offering to be voted in favor of an initial business combination
in order to have such initial business combination approved, assuming no resolution or other approval is required pursuant to Cayman
Islands or other applicable law. We expect that our initial shareholders and their permitted transferees will own at least 20%
of our issued and outstanding ordinary shares at the time of any such shareholder vote. Accordingly, if we seek shareholder approval
of our initial business combination, it is more likely that the necessary shareholder approval will be received than would be the
case if such persons agreed to vote their founder shares in accordance with the majority of the votes cast by our public shareholders.
Your only opportunity to affect the
investment decision regarding a potential business combination will be limited to the exercise of your right to redeem your shares
from us for cash, unless we seek shareholder approval of such business combination.
Since our board of directors may complete
a business combination without seeking shareholder approval, public shareholders may not have the right or opportunity to vote
on the business combination, unless we seek such shareholder approval. Accordingly, if we do not seek shareholder approval, your
only opportunity to affect the investment decision regarding a potential business combination may be limited to exercising your
redemption rights within the period of time (which will be at least 20 business days) set forth in our tender offer documents mailed
to our public shareholders in which we describe our initial business combination.
The ability of our public shareholders
to redeem their shares for cash may make our financial condition unattractive to potential business combination targets, which
may make it difficult for us to enter into a business combination with a target.
We may seek to enter into a business combination
transaction agreement with a prospective target that requires as a closing condition that we have a minimum net worth or a certain
amount of cash. If too many public shareholders exercise their redemption rights, we would not be able to meet such closing condition
and, as a result, would not be able to proceed with the business combination. The amount of the deferred underwriting commissions
payable to the underwriters will not be adjusted for any shares that are redeemed in connection with a business combination and
such amount of deferred underwriting discount is not available for us to use as consideration in an initial business combination.
If we are able to consummate an initial business combination, the per-share value of shares held by non-redeeming shareholders
will reflect our obligation to pay and the payment of the deferred underwriting commissions. Furthermore, in no event will we redeem
our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 following such redemptions,
or any greater net tangible asset or cash requirement that may be contained in the agreement relating to our initial business combination.
Consequently, if accepting all properly submitted redemption requests would cause our net tangible assets to be less than $5,000,001
or such greater amount necessary to satisfy a closing condition as described above, we would not proceed with such redemption and
the related business combination and may instead search for an alternate business combination. Prospective targets will be aware
of these risks and, thus, may be reluctant to enter into a business combination transaction with us.
The ability of our public shareholders
to exercise redemption rights with respect to a large number of our shares may not allow us to complete the most desirable business
combination or optimize our capital structure.
At the time we enter into an
agreement for our initial business combination, we will not know how many shareholders may exercise their redemption rights
and, therefore, we will need to structure the transaction based on our expectations as to the number of shares that will be
submitted for redemption. If our initial business combination agreement requires us to use a portion of the cash in the Trust
Account to pay the purchase price, or requires us to have a minimum amount of cash at closing, we will need to reserve a
portion of the cash in the Trust Account to meet such requirements, or arrange for third-party financing. In addition, if a
larger number of shares is submitted for redemption than we initially expected, we may need to restructure the transaction to
reserve a greater portion of the cash in the Trust Account or arrange for third-party financing. Raising additional
third-party financing may involve dilutive equity issuances or the incurrence of indebtedness at higher than desirable
levels. The above considerations may limit our ability to complete the most desirable business combination available to us or
optimize our capital structure.
The ability of our public shareholders
to exercise redemption rights with respect to a large number of our shares could increase the probability that our initial business
combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your shares.
If our initial business combination agreement
requires us to use a portion of the cash in the Trust Account to pay the purchase price, or requires us to have a minimum amount
of cash at closing, the probability that our initial business combination would be unsuccessful increases. If our initial business
combination is unsuccessful, you would not receive your pro rata portion of the Trust Account until we liquidate the Trust Account.
If you are in need of immediate liquidity, you could attempt to sell your shares in the open market; however, at such time our
shares may trade at a discount to the pro rata amount per share in the Trust Account. In either situation, you may suffer a material
loss on your investment or lose the benefit of funds expected in connection with our redemption until we liquidate or you are able
to sell your shares in the open market.
The requirement that we complete
our initial business combination within the prescribed time frame may give potential target businesses leverage over us in negotiating
a business combination and may limit the time we have in which to conduct due diligence on potential business combination targets,
in particular as we approach our dissolution deadline, which could undermine our ability to complete our initial business combination
on terms that would produce value for our shareholders.
Any potential target business with which
we enter into negotiations concerning a business combination will be aware that we must complete our initial business combination
within 18 months from the closing of our Initial Public Offering. Consequently, such target business may obtain leverage over us
in negotiating a business combination, knowing that if we do not complete our initial business combination with that particular
target business, we may be unable to complete our initial business combination with any target business. This risk will increase
as we get closer to the end of the 18-month period. In addition, we may have limited time to conduct due diligence and may enter
into our initial business combination on terms that we would have rejected upon a more comprehensive investigation.
We may not be able to complete our
initial business combination within the prescribed time frame, in which case we would cease all operations except for the purpose
of winding up and we would redeem our public shares and liquidate, in which case our public shareholders may receive only $10.00
per share, or less than such amount in certain circumstances, and our warrants will expire worthless.
Our Sponsor, directors and officers have
agreed that we must complete our initial business combination within 18 months from the closing of our Initial Public Offering.
We may not be able to find a suitable target business and complete our initial business combination within such time period. Our
ability to complete our initial business combination may be negatively impacted by general market conditions, volatility in the
capital and debt markets and the other risks described herein, including as a result of terrorist attacks, natural disasters or
a significant outbreak of infectious diseases. For example, the outbreak of COVID-19 continues to grow both in the U.S. and globally
and, while the extent of the impact of the outbreak on us will depend on future developments, it could limit our ability to complete
our initial business combination, including as a result of increased market volatility, decreased market liquidity and third-party
financing being unavailable on terms acceptable to us or at all. Additionally, the outbreak of COVID-19 and other events (such
as terrorist attacks, natural disasters or a significant outbreak of other infectious diseases) may negatively impact businesses
we may seek to acquire.
If we have not completed our initial
business combination within such time period or during any Extension Period, we will: (1) cease all operations except for the
purpose of winding up; (2) as promptly as reasonably possible but not more than 10 business days thereafter, redeem the
public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account,
including interest (less up to $100,000 of interest to pay dissolution expenses and which interest shall be net of taxes
payable), divided by the number of then issued and outstanding public shares, which redemption will completely extinguish
public shareholders’ rights as shareholders (including the right to receive further liquidating distributions, if any);
and (3) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders
and our board of directors, liquidate and dissolve, subject in each case to our obligations under Cayman Islands law to
provide for claims of creditors and the requirements of other applicable law. In such case, our public shareholders may
receive only $10.00 per share, or less than $10.00 per share, on the redemption of their shares, and our warrants will expire
worthless. See “— If third parties bring claims against us, the proceeds held in the Trust Account could be
reduced and the per-share redemption amount received by shareholders may be less than $10.00 per share” and other risk
factors herein.
Our search for a business combination,
and any target business with which we ultimately consummate a business combination, may be materially adversely affected by the
coronavirus (“COVID-19”) outbreak and other events and the status of debt and equity markets.
In December 2019, a novel strain of coronavirus
was reported to have surfaced, which has and is continuing to spread throughout parts of the world, including the United States.
On January 30, 2020, the World Health Organization declared the outbreak of COVID-19 a “Public Health Emergency of International
Concern.” On January 31, 2020, U.S. Health and Human Services Secretary Alex M. Azar II declared a public health emergency
for the United States to aid the U.S. healthcare community in responding to COVID-19, and on March 11, 2020, the World Health Organization
characterized the outbreak as a “pandemic.” The COVID-19 outbreak has adversely affected, and other events (such as
terrorist attacks, natural disasters or a significant outbreak of other infectious diseases) could adversely affect, economies
and financial markets worldwide, business operations and the conduct of commerce generally, and the business of any potential target
business with which we consummate a Business Combination could be, or may already have been, materially and adversely affected.
Furthermore, we may be unable to complete a Business Combination if concerns relating to COVID-19 continue to restrict travel or
limit the ability to have meetings with potential investors, or the target company’s personnel, vendors and services providers
are unavailable to negotiate and consummate a transaction in a timely manner. The extent to which COVID-19 impacts our search for
a Business Combination will depend on future developments, which are highly uncertain and cannot be predicted, including new information
which may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others. If
the disruptions posed by COVID-19 or other events (such as terrorist attacks, natural disasters or a significant outbreak of other
infectious diseases) continue for an extensive period of time, our ability to consummate a Business Combination, or the operations
of a target business with which we ultimately consummate a Business Combination, may be materially adversely affected.
In addition, our ability to consummate
a transaction may be dependent on the ability to raise equity and debt financing which may be impacted by COVID-19 and other events
(such as terrorist attacks, natural disasters or a significant outbreak of other infectious diseases), including as a result of
increased market volatility and decreased market liquidity and third-party financing being unavailable on terms acceptable to us
or at all.
Finally, the outbreak of COVID-19 may also
have the effect of heightening many of the other risks described in this “Risk Factors” section, such as those related
to the market for our securities and crossborder transactions.
If we seek shareholder approval of
our initial business combination, our sponsor, directors, officers, advisors or any of their respective affiliates may elect to
purchase shares or warrants from public shareholders, which may influence a vote on a proposed business combination and reduce
the public “float” of our securities.
If we seek shareholder approval of our
initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to
the tender offer rules, our Sponsor, directors, officers, advisors or any of their respective affiliates may purchase public shares
or warrants in privately negotiated transactions or in the open market either prior to or following the completion of our initial
business combination.
Any such price per share may be different
than the amount per share a public shareholder would receive if it elected to redeem its shares in connection with our initial
business combination. Additionally, at any time at or prior to our initial business combination, subject to applicable securities
laws (including with respect to material nonpublic information), our sponsor, directors, officers, advisors or any of their respective
affiliates may enter into transactions with investors and others to provide them with incentives to acquire public shares, vote
their public shares in favor of our initial business combination or not redeem their public shares. However, our sponsor, directors,
officers, advisors or any of their respective affiliates are under no obligation or duty to do so and they have no current commitments,
plans or intentions to engage in such purchases or other transactions and have not formulated any terms or conditions for any such
purchases or other transactions. The purpose of such purchases could be to vote such shares in favor of our initial business combination
and thereby increase the likelihood of obtaining shareholder approval of our 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. This 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 securities and the number of beneficial holders of our securities may be reduced, possibly
making it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.
If a shareholder fails to receive
notice of our offer to redeem our public shares in connection with our initial business combination, or fails to comply with the
procedures for tendering its shares, such shares may not be redeemed.
We will comply with the tender offer rules
or proxy rules, as applicable, when conducting redemptions in connection with our initial business combination. Despite our compliance
with these rules, if a shareholder fails to receive our tender offer or proxy materials, as applicable, such shareholder may not
become aware of the opportunity to redeem its shares. In addition, the tender offer documents or proxy materials, as applicable,
that we will furnish to holders of our public shares in connection with our initial business combination will describe the various
procedures that must be complied with in order to validly tender or redeem public shares. In the event that a shareholder fails
to comply with these procedures, its shares may not be redeemed.
You are not entitled to protections
normally afforded to investors of many other blank check companies.
Because we had net tangible assets in excess
of $5,000,000 upon the successful completion of the Initial Public Offering and the Private Placement and filed a Current Report
on Form 8-K, including an audited balance sheet of the company demonstrating this fact, we are exempt from rules promulgated by
the SEC to protect investors in blank check companies, such as Rule 419. Accordingly, investors are not afforded the benefits or
protections of those rules. Among other things, this means we will have a longer period of time to complete our initial Business
Combination than do companies subject to Rule 419. Moreover, if the Initial Public Offering was subject to Rule 419, that rule
would prohibit the release of any interest earned on funds held in the Trust Account to us unless and until the funds in the Trust
Account were released to us in connection with our completion of an initial Business Combination.
If we seek shareholder approval of
our initial business combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a “group”
of shareholders are deemed to hold in excess of 15% of our Class A ordinary shares, you will lose the ability to redeem all such
shares in excess of 15% of our Class A ordinary shares.
If we seek shareholder approval of our
initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to
the tender offer rules, our amended and restated memorandum and articles of association provide that a public shareholder, together
with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group”
(as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate
of 15% of the shares sold in the Initial Public Offering, which we refer to as the “Excess Shares,” without our prior
consent. However, we would not be restricting our shareholders’ ability to vote all of their shares (including Excess Shares)
for or against our initial business combination. Your inability to redeem the Excess Shares will reduce your influence over our
ability to complete our initial business combination and you could suffer a material loss on your investment in us if you sell
Excess Shares in open market transactions. Additionally, you will not receive redemption distributions with respect to the Excess
Shares if we complete our initial business combination. And as a result, you will continue to hold that number of shares exceeding
15% and, in order to dispose of such shares, would be required to sell your shares in open market transactions, potentially at
a loss.
Because of our limited resources
and the significant competition for business combination opportunities, it may be more difficult for us to complete our initial
business combination. If we have not completed our initial business combination within the required time period, our public shareholders
may receive only approximately $10.00 per share, or less in certain circumstances, on our redemption of their shares, and our warrants
will expire worthless.
We expect to encounter intense
competition from other entities having a business objective similar to ours, including private investors (which may be
individuals or investment partnerships), other blank check companies and other entities, domestic and international,
competing for the types of businesses we intend to acquire. Many of these individuals and entities are well established and
have extensive experience in identifying and effecting, directly or indirectly, acquisitions of companies operating in or
providing services to various industries. Many of these competitors possess greater technical, human and other resources or
more local industry knowledge than we do and our financial resources will be relatively limited when contrasted with those of
many of these competitors. Additionally, the number of blank check companies looking for Business Combination targets has
increased compared to recent years and many of these blank check companies are Sponsored by entities or persons that have
significant experience with completing Business Combinations. While we believe there are numerous target businesses we could
potentially acquire with the net proceeds of the Initial Public Offering and the sale of the private placement warrants, our
ability to compete with respect to the acquisition of certain target businesses that are sizable will be limited by our
available financial resources. This inherent competitive limitation gives others an advantage in pursuing the acquisition of
certain target businesses. Furthermore, in the event we seek shareholder approval of our initial business combination and we
are obligated to pay cash for our Class A ordinary shares, it will potentially reduce the resources available to us for
our initial business combination. Any of these obligations may place us at a competitive disadvantage in successfully
negotiating a business combination. If we have not completed our initial business combination within the required time
period, our public shareholders may receive only approximately $10.00 per share, or less in certain circumstances, on the
liquidation of our Trust Account and our warrants will expire worthless. See “— If third parties bring claims
against us, the proceeds held in the Trust Account could be reduced and the per-share redemption amount received by
shareholders may be less than $10.00 per share” and other risk factors herein.
As the number of special purpose
acquisition companies increases, there may be more competition to find an attractive target for an initial Business Combination.
This could increase the costs associated with completing our initial Business Combination and may result in our inability to find
a suitable target for our initial Business Combination.
In recent years, the number of special
purpose acquisition companies that have been formed has increased substantially. Many companies have entered into Business Combinations
with special purpose acquisition companies, and there are still many special purpose acquisition companies seeking targets for
their initial Business Combination, as well as many additional special purpose acquisition companies currently in registration.
As a result, at times, fewer attractive targets may be available, and it may require more time, effort and resources to identify
a suitable target for an initial Business Combination.
In addition, because there are more special
purpose acquisition companies seeking to enter into an initial Business Combination with available targets, the competition for
available targets with attractive fundamentals or business models may increase, which could cause target companies to demand improved
financial terms. Attractive deals could also become scarcer for other reasons, such as economic or industry sector downturns, geopolitical
tensions or increases in the cost of additional capital needed to close Business Combinations or operate targets post-Business
Combination. This could increase the cost of, delay or otherwise complicate or frustrate our ability to find a suitable target
for and/or complete our initial Business Combination.
If the funds not being held in the
Trust Account are insufficient to allow us to operate for at least the 18 months following the closing of the Initial Public Offering,
we may be unable to complete our initial business combination.
The funds available to us outside of the
Trust Account may not be sufficient to allow us to operate for at least the 18 months following the closing of our Initial Public
Offering, assuming that our initial business combination is not completed during that time. We expect to incur significant costs
in pursuit of our acquisition plans. Management’s plans to address this need for capital through potential loans from certain
of our affiliates are discussed in “Item 7—Management’s Discussion and Analysis of Financial Condition and Results
of Operations.” However, our affiliates are not obligated to make loans to us in the future, and we may not be able to raise
additional financing from unaffiliated parties necessary to fund our expenses.
Of the funds available to us, we could
use a portion of the funds available to us to pay fees to consultants to assist us with our search for a target business. We could
also use a portion of the funds as a down payment or to fund a “no-shop” provision (a provision in letters of intent
designed to keep target businesses from “shopping” around for transactions with other companies or investors on terms
more favorable to such target businesses) with respect to a particular proposed business combination, although we do not have any
current intention to do so. If we entered into a letter of intent where we paid for the right to receive exclusivity from a target
business and were subsequently required to forfeit such funds (whether as a result of our breach or otherwise), we might not have
sufficient funds to continue searching for, or conduct due diligence with respect to, a target business. If we have not completed
our initial business combination within the required time period, our public shareholders may receive only approximately $10.00
per share, or less in certain circumstances, on the liquidation of our Trust Account and our warrants will expire worthless. See
“— If third parties bring claims against us, the proceeds held in the Trust Account could be reduced and the per-share
redemption amount received by shareholders may be less than $10.00 per share” and other risk factors herein.
Changes in the market for directors
and officers liability insurance could make it more difficult and more expensive for us to negotiate and complete an initial business
combination.
In recent months, the market for directors
and officers liability insurance for special purpose acquisition companies has changed in ways adverse to us and our management
team. Fewer insurance companies are offering quotes for directors and officers liability coverage, the premiums charged for such
policies have generally increased and the terms of such policies have generally become less favorable. These trends may continue
into the future.
The increased cost and decreased availability
of directors and officers liability insurance could make it more difficult and more expensive for us to negotiate and complete
an initial business combination. In order to obtain directors and officers liability insurance or modify its coverage as a result
of becoming a public company, the post-business combination entity might need to incur greater expense and/or accept less favorable
terms. Furthermore, any failure to obtain adequate directors and officers liability insurance could have an adverse impact on the
post-business combination’s ability to attract and retain qualified officers and directors.
In addition, after completion of any initial
business combination, our directors and officers could be subject to potential liability from claims arising from conduct alleged
to have occurred prior to such initial business combination. As a result, in order to protect our directors and officers, the post-business
combination entity may need to purchase additional insurance with respect to any such claims (“run-off insurance”).
The need for run-off insurance would be an added expense for the post-business combination entity and could interfere with or frustrate
our ability to consummate an initial business combination on terms favorable to our investors.
If third parties bring claims against
us, the proceeds held in the Trust Account could be reduced and the per-share redemption amount received by shareholders may be
less than $10.00 per share.
Our placing of funds in the Trust Account
may not protect those funds from third-party claims against us. Although we will seek to have all vendors, service providers (other
than our independent auditors), prospective target businesses and other entities with which we do business execute agreements with
us waiving any right, title, interest or claim of any kind in or to any monies held in the Trust Account for the benefit of our
public shareholders, such parties may not execute such agreements, or even if they execute such agreements they may not be prevented
from bringing claims against the Trust Account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility
or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage
with respect to a claim against our assets, including the funds held in the Trust Account. If any third party refuses to execute
an agreement waiving such claims to the monies held in the Trust Account, our management will perform an analysis of the alternatives
available to it and will enter into an agreement with a third party that has not executed a waiver only 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 we are unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that
such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts
or agreements with us and will not seek recourse against the Trust Account for any reason. Upon redemption of our public shares,
if we have not completed our initial business combination within the required time period, or upon the exercise of a redemption
right in connection with our initial business combination, we will be required to provide for payment of claims of creditors that
were not waived that may be brought against us within the 10 years following redemption. Accordingly, the per-share redemption
amount received by public shareholders could be less than the $10.00 per public share initially held in the Trust Account, due
to claims of such creditors.
Our sponsor has agreed that it will be
liable to us if and to the extent any claims by a third party (other than our independent auditors) for services rendered or products
sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amount
of funds in the Trust Account to below (1) $10.00 per public share or (2) such lesser amount per public share held in the Trust
Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each case
net of the interest which may be withdrawn to pay taxes, except as to any claims by a third party who executed a waiver of any
and all rights to seek access to the Trust Account and except as to any claims under our indemnity of the underwriters of the
Initial Public Offering against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that
an executed waiver is deemed to be unenforceable against a third party, our sponsor will not be responsible to the extent of any
liability for such third-party claims. We have not independently verified whether our sponsor has sufficient funds to satisfy
its indemnity obligations and believe that our sponsor’s only assets are securities of our company. Our sponsor may not
have sufficient funds available to satisfy those obligations. We have not asked our sponsor to reserve for such obligations, and
therefore, no funds are currently set aside to cover any such obligations. As a result, if any such claims were successfully made
against the Trust Account, the funds available for our initial business combination and redemptions could be reduced to less than
$10.00 per public share. In such event, we may not be able to complete our initial business combination, and you would receive
such lesser amount per share in connection with any redemption of your public shares. None of our directors or officers will indemnify
us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.
Our directors may decide not to enforce
the indemnification obligations of our sponsor, resulting in a reduction in the amount of funds in the Trust Account available
for distribution to our public shareholders.
In the event that the proceeds in the Trust
Account are reduced below the lesser of (1) $10.00 per public share or (2) such lesser amount per public share held in the Trust
Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each case
net of the interest which may be withdrawn to pay taxes, and our sponsor asserts that it is unable to satisfy its obligations or
that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to
take legal action against our sponsor to enforce its indemnification obligations. While we currently expect that our independent
directors would take legal action on our behalf against our Sponsor to enforce its indemnification obligations to us, it is possible
that our independent directors in exercising their business judgment may choose not to do so in any particular instance. If our
independent directors choose not to enforce these indemnification obligations, the amount of funds in the Trust Account available
for distribution to our public shareholders may be reduced below $10.00 per share.
The securities in which we invest
the funds held in the Trust Account could bear a negative rate of interest, which could reduce the value of the assets held in
trust such that the per-share redemption amount received by public shareholders may be less than $10.00 per share.
The proceeds held in the Trust Account
are invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting
certain conditions under Rule 2a-7 under the Investment Company Act, which invest only in direct U.S. government treasury obligations.
While short-term U.S. government treasury obligations currently yield a positive rate of interest, they have briefly yielded negative
interest rates in recent years. Central banks in Europe and Japan pursued interest rates below zero in recent years, and the Open
Market Committee of the Federal Reserve has not ruled out the possibility that it may in the future adopt similar policies in the
United States. In the event that we are unable to complete our initial business combination or make certain amendments to our Amended
and Restated Certificate of Incorporation, our public shareholders are entitled to receive their pro-rata share of the proceeds
held in the Trust Account, plus any interest income not released to us, net of taxes payable. Negative interest rates could impact
the per-share redemption amount that may be received by public shareholders.
If, after we distribute the proceeds
in the Trust Account to our public shareholders, we file a winding-up or bankruptcy petition or an involuntary winding-up or bankruptcy
petition is filed against us that is not dismissed, a bankruptcy court may seek to recover such proceeds, and the members of our
board of directors may be viewed as having breached their fiduciary duties to our creditors, thereby exposing the members of our
board of directors and us to claims of punitive damages.
If, after we distribute the proceeds in
the Trust Account to our public shareholders, we file a winding-up or bankruptcy petition or an involuntary winding-up or bankruptcy
petition is filed against us that is not dismissed, any distributions received by shareholders could be viewed under applicable
debtor/creditor and/or insolvency laws as a voidable preference. As a result, a liquidator could seek to recover some or all amounts
received by our shareholders. In addition, our board of directors may be viewed as having breached its fiduciary duty to our creditors
and/or having acted in bad faith by paying public shareholders from the Trust Account prior to addressing the claims of creditors,
thereby exposing itself and us to claims of punitive damages.
If, before distributing the proceeds
in the Trust Account to our public shareholders, we file a winding-up petition or a winding-up petition is filed against us that
is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our shareholders and the per-share
amount that would otherwise be received by our shareholders in connection with our liquidation may be reduced.
If, before distributing the proceeds in
the Trust Account to our public shareholders, we file a winding-up petition or a winding-up petition is filed against us that is
not dismissed, the proceeds held in the Trust Account could be subject to applicable insolvency law, and may be included in our
liquidation estate and subject to the claims of third parties with priority over the claims of our shareholders. To the extent
any liquidation claims deplete the Trust Account, the per-share amount that would otherwise be received by our shareholders in
connection with our liquidation would be reduced.
If we are deemed to be an investment
company under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities
may be restricted, which may make it difficult for us to complete our initial business combination.
If we are deemed to be an investment company
under the Investment Company Act, our activities may be restricted, including:
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restrictions on the nature of our investments; and
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restrictions on the issuance of securities;each of which may make it difficult for
us to complete our initial business combination.
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In addition, we may have imposed upon us
burdensome requirements, including:
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registration as an investment company with the SEC;
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adoption of a specific form of corporate structure; and
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reporting, record keeping, voting, proxy and disclosure requirements and other rules and regulations
that we are currently not subject to.
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We do not believe that our anticipated
principal activities will subject us to the Investment Company Act. The proceeds held in the Trust Account may be invested by the
trustee only in U.S. government treasury bills with a maturity of 185 days or less or in money market funds investing solely in
U.S. Treasuries and meeting certain conditions under Rule 2a-7 under the Investment Company Act. Because the investment of the
proceeds will be restricted to these instruments, we believe we will meet the requirements for the exemption provided in Rule 3a-1
promulgated under the Investment Company Act. If we were deemed to be subject to the Investment Company Act, compliance with these
additional regulatory burdens would require additional expenses for which we have not allotted funds and may hinder our ability
to complete a business combination. If we have not completed our initial business combination within the required time period,
our public shareholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of
our Trust Account and our warrants will expire worthless.
Changes in laws or regulations, or
a failure to comply with any laws and regulations, may adversely affect our business, including our ability to negotiate and complete
our initial business combination, and results of operations.
We are and will be subject to laws and
regulations enacted by national, regional and local governments. In particular, we will be required to comply with certain SEC
and other legal requirements, our initial business combination may be contingent on our ability to comply with certain laws and
regulations and any post-business combination company may be subject to additional laws and regulations. Compliance with, and monitoring
of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations and their interpretation
and application may also change from time to time and those changes could have a material adverse effect on our business, investments
and results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could
have a material adverse effect on our business, including our ability to negotiate and complete our initial business combination,
and results of operations.
If we have not completed our initial
business combination within 18 months of the closing of our Initial Public Offering or during any Extension Period, our public
shareholders may be forced to wait beyond such 18 months before redemption from our Trust Account.
If we have not completed our initial business
combination within 18 months from the closing of our Initial Public Offering or during any Extension Period, we will distribute
the aggregate amount then on deposit in the Trust Account, including interest (less up to $100,000 of interest to pay dissolution
expenses and which interest shall be net of taxes payable), pro rata to our public shareholders by way of redemption and cease
all operations except for the purposes of winding up of our affairs, as further described herein. Any redemption of public shareholders
from the Trust Account shall be effected automatically by function of our amended and restated memorandum and articles of association
prior to any voluntary winding up. If we are required to windup, liquidate the Trust Account and distribute such amount therein,
pro rata, to our public shareholders, as part of any liquidation process, such winding up, liquidation and distribution must comply
with the applicable provisions of the Companies Act. In that case, investors may be forced to wait beyond the initial 18 months
before the redemption proceeds of our Trust Account become available to them and they receive the return of their pro rata portion
of the proceeds from our Trust Account. We have no obligation to return funds to investors prior to the date of our redemption
or liquidation unless, prior thereto, we consummate our initial business combination or amend certain provisions of our amended
and restated memorandum and articles of association and then only in cases where investors have properly sought to redeem their
Class A ordinary shares. Only upon our redemption or any liquidation will public shareholders be entitled to distributions if we
have not completed our initial business combination within the required time period and do not amend certain provisions of our
amended and restated memorandum and articles of association prior thereto.
Our shareholders may be held liable
for claims by third parties against us to the extent of distributions received by them upon redemption of their shares.
If we are forced to enter into an
insolvent liquidation, any distributions received by shareholders could be viewed as an unlawful payment if it was proved
that immediately following the date on which the distribution was made, we were unable to pay our debts as they fall due in
the ordinary course of business. As a result, a liquidator could seek to recover some or all amounts received by our
shareholders. Furthermore, our directors may be viewed as having breached their fiduciary duties to us or our creditors
and/or may have acted in bad faith, and thereby exposing themselves and our company to claims, by paying public shareholders
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. We and our directors and officers who knowingly and willfully authorized or permitted any
distribution to be paid out of our share premium account while we were unable to pay our debts as they fall due in the
ordinary course of business would be guilty of an offense and may be liable for a fine of up to approximately $18,300 and to
imprisonment for up to five years in the Cayman Islands.
We may not hold an annual general
meeting until after the consummation of our initial business combination.
In accordance with Nasdaq corporate governance
requirements, we are not required to hold an annual general meeting until one year after our fiscal year end following our listing
on Nasdaq. There is no requirement under the Companies Act for us to hold annual or extraordinary general meetings to appoint directors.
Until we hold an annual general meeting, public shareholders may not be afforded the opportunity to discuss company affairs with
management.
The grant of registration rights
to our initial shareholders and their permitted transferees may make it more difficult to complete our initial business combination,
and the future exercise of such rights may adversely affect the market price of our Class A ordinary shares.
At or after the time of our initial business
combination, our initial shareholders and their permitted transferees can demand that we register the resale of their founder shares
after those shares convert to our Class A ordinary shares. In addition, our sponsor and its permitted transferees can demand that
we register the resale of the private placement warrants and the Class A ordinary shares issuable upon exercise of the private
placement warrants, and holders of warrants that may be issued upon conversion of working capital loans may demand that we register
the resale of such warrants or the Class A ordinary shares issuable upon exercise of such warrants. We will bear the cost of registering
these securities. The registration and availability of such a significant number of securities for trading in the public market
may have an adverse effect on the market price of our Class A ordinary shares. In addition, the existence of the registration rights
may make our initial business combination more costly or difficult to conclude. This is because the shareholders of the target
business may increase the equity stake they seek in the combined entity or ask for more cash consideration to offset the negative
impact on the market price of our Class A ordinary shares that is expected when the ordinary shares owned by our initial shareholders
or their permitted transferees, our private placement warrants or warrants issued in connection with working capital loans are
registered for resale.
Because we are not limited to a particular
industry, sector or geographic area or any specific target businesses with which to pursue our initial business combination, you
will be unable to ascertain the merits or risks of any particular target business’s operations.
We may seek to complete a business combination
with an operating company of any size (subject to our satisfaction of the 80% fair market value test) and in any industry, sector
or geographic area. However, we will not, under our amended and restated memorandum and articles of association, be permitted to
effectuate our initial business combination solely with another blank check company or similar company with nominal operations.
To the extent we complete our initial business combination, we may be affected by numerous risks inherent in the business operations
with which we combine. For example, if we combine with a financially unstable business or an entity lacking an established record
of sales or earnings, we may be affected by the risks inherent in the business and operations of a financially unstable or development
stage entity. Although our directors and officers will endeavor to evaluate the risks inherent in a particular target business,
we cannot assure you that we will properly ascertain or assess all of the significant risk factors or that we will have adequate
time to complete due diligence. Furthermore, some of these risks may be outside of our control and leave us with no ability to
control or reduce the chances that those risks will adversely impact a target business. We also cannot assure you that an investment
in our securities will not ultimately prove to be less favorable to our investors than a direct investment, if such opportunity
were available, in a business combination target. Accordingly, any shareholder or warrant holder who chooses to remain a shareholder
or warrant holder, respectively, following our initial business combination could suffer a reduction in the value of their securities.
Such shareholders and warrant holders are unlikely to have a remedy for such reduction in value.
We may seek acquisition opportunities
in industries outside of our management’s areas of expertise.
We will consider a business combination
in industries outside of our management’s areas of expertise, if a business combination candidate is presented to us and
we determine that such candidate offers an attractive acquisition opportunity for our company. In the event we elect to pursue
an acquisition outside of the areas of our management’s expertise, our management’s expertise may not be directly applicable
to its evaluation or operation, and our management’s expertise would not be relevant to an understanding of the business
that we elect to acquire. As a result, our management may not be able to adequately ascertain or assess all of the significant
risk factors relevant to such acquisition. Accordingly, any shareholder or warrant holder who chooses to remain a shareholder or
warrant holder, respectively, following our initial business combination could suffer a reduction in the value of their securities.
Such shareholders and warrant holders are unlikely to have a remedy for such reduction in value.
Although we have identified general
criteria and guidelines that we believe are important in evaluating prospective target businesses, we may enter into our initial
business combination with a target that does not meet such criteria and guidelines, and as a result, the target business with which
we enter into our initial business combination may not have attributes entirely consistent with our general criteria and guidelines.
Although we have identified general criteria
and guidelines for evaluating prospective target businesses, it is possible that a target business with which we enter into our
initial business combination will not have all of these positive attributes. If we complete our initial business combination with
a target that does not meet some or all of these criteria and guidelines, such combination may not be as successful as a combination
with a business that does meet all of our general criteria and guidelines. In addition, if we announce a prospective business combination
with a target that does not meet our general criteria and guidelines, a greater number of shareholders may exercise their redemption
rights, which may make it difficult for us to meet any closing condition with a target business that requires us to have a minimum
net worth or a certain amount of cash. In addition, if shareholder approval of the transaction is required by applicable law or
stock exchange listing requirements, or we decide to obtain shareholder approval for business or other reasons, it may be more
difficult for us to attain shareholder approval of our initial business combination if the target business does not meet our general
criteria and guidelines. If we have not completed our initial business combination within the required time period, our public
shareholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of our Trust
Account and our warrants will expire worthless.
We may seek acquisition opportunities
with an early stage company, a financially unstable business or an entity lacking an established record of revenue or earnings.
To the extent we complete our initial business
combination with an early stage company, a financially unstable business or an entity lacking an established record of sales or
earnings, we may be affected by numerous risks inherent in the operations of the business with which we combine. These risks include
investing in a business without a proven business model and with limited historical financial data, volatile revenues or earnings,
intense competition and difficulties in obtaining and retaining key personnel. Although our directors and officers will endeavor
to evaluate the risks inherent in a particular target business, we may not be able to properly ascertain or assess all of the significant
risk factors and we may not have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our
control and leave us with no ability to control or reduce the chances that those risks will adversely impact a target business.
We are not required to obtain an
opinion from an independent investment banking firm or from an independent accounting firm regarding fairness. Consequently, you
may have no assurance from an independent source that the price we are paying for the business is fair to our company from a financial
point of view.
Unless we complete our initial business
combination with an affiliated entity, we are not required to obtain an opinion that the price we are paying is fair to our company
from a financial point of view. If no opinion is obtained, our shareholders will be relying on the judgment of our board of directors,
who will determine fair market value based on standards generally accepted by the financial community. Such standards used will
be disclosed in our tender offer documents or proxy solicitation materials, as applicable, related to our initial business combination.
We may issue additional Class A ordinary
shares or preferred shares to complete our initial business combination or under an employee incentive plan after completion of
our initial business combination. We may also issue Class A ordinary shares upon the conversion of the Class B ordinary shares
at a ratio greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions
contained in our amended and restated memorandum and articles of association. Any such issuances would dilute the interest of our
shareholders and likely present other risks.
Our amended and restated memorandum and
articles of association authorizes the issuance of up to 500,000,000 Class A ordinary shares, par value $0.0001 per share, 50,000,000
Class B ordinary shares, par value $0.0001 per share, and 5,000,000 undesignated preferred shares, par value $0.0001 per share.
As of December 31, 2020, there were 41,100,000 and 5,750,000 authorized but unissued Class A ordinary shares and Class B ordinary
shares, respectively, available for issuance, which amount takes into account shares reserved for issuance upon exercise of outstanding
warrants but not upon conversion of the Class B ordinary shares. Class B ordinary shares are convertible into Class A ordinary
shares, initially at a one-for-one ratio but subject to adjustment as set forth herein. As of December 31, 2020, there were no
preferred shares issued and outstanding.
We may issue a substantial number of
additional Class A ordinary shares, and may issue preferred shares, in order to complete our initial business combination or
under an employee incentive plan after completion of our initial business combination. We may also issue Class A ordinary
shares upon conversion of the Class B ordinary shares at a ratio greater than one-to-one at the time of our initial business
combination as a result of the anti-dilution provisions contained in our amended and restated memorandum and articles of
association. However, our amended and restated memorandum and articles of association provide, among other things, that prior
to our initial business combination, we may not issue additional ordinary shares that would entitle the holders thereof to
(1) receive funds from the Trust Account or (2) vote as a class with our public shares on any initial business combination.
The issuance of additional ordinary shares or preferred shares:
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may significantly dilute the equity interest of investors in the Initial Public Offering, which
dilution would increase if the anti-dilution provisions in the Class B ordinary shares resulted in the issuance of Class A ordinary
shares on a greater than one-to-one basis upon conversion of the Class B ordinary shares;
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may subordinate the rights of holders of ordinary shares if preferred shares are issued with rights
senior to those afforded our ordinary shares;
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could cause a change of control if a substantial number of our ordinary shares is issued, which
may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation
or removal of our present directors and officers;
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may have the effect of delaying or preventing a change of control of us by diluting the share ownership
or voting rights of a person seeking to obtain control of us;
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may adversely affect prevailing market prices for our Units, ordinary shares and/or warrants; and
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may not result in adjustment to the exercise price of our warrants.
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Our initial business combination
or reincorporation may result in taxes imposed on shareholders or warrant holders.
We may, subject to requisite shareholder
approval by special resolution under the Companies Act, effect a business combination with a target company in another jurisdiction,
reincorporate in the jurisdiction in which the target company or business is located, or reincorporate in another jurisdiction.
Such transactions may result in tax liability for a shareholder or warrant holder in the jurisdiction in which the shareholder
or warrant holder is a tax resident (or in which its members are resident if it is a tax transparent entity), in which the target
company is located, or in which we reincorporate. In the event of a reincorporation pursuant to our initial business combination,
such tax liability may attach prior to any consummation of redemptions. We do not intend to make any cash distributions to pay
such taxes.
Resources could be wasted in researching
acquisitions that are not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge
with another business. If we have not completed our initial business combination within the required time period, our public shareholders
may receive only approximately $10.00 per share, or less than such amount in certain circumstances, on the liquidation of our Trust
Account and our warrants will expire worthless.
We anticipate that the investigation of
each specific target business and the negotiation, drafting and execution of relevant agreements, disclosure documents and other
instruments will require substantial management time and attention and substantial costs for accountants, attorneys and others.
If we decide not to complete a specific initial business combination, the costs incurred up to that point for the proposed transaction
likely would not be recoverable. Furthermore, if we reach an agreement relating to a specific target business, we may fail to complete
our initial business combination for any number of reasons including those beyond our control. Any such event will result in a
loss to us of the related costs incurred which could materially adversely affect subsequent attempts to locate and acquire or merge
with another business. If we have not completed our initial business combination within the required time period, our public shareholders
may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of our Trust Account and
our warrants will expire worthless.
We may engage in a business combination
with one or more target businesses that have relationships with entities that may be affiliated with our sponsor, directors or
officers which may raise potential conflicts of interest.
In light of the involvement of our
sponsor, directors and officers with other entities, we may decide to acquire one or more businesses affiliated with our
sponsor, directors and officers. Certain of our directors and officers also serve as officers and/or board members for other
entities, including those described under “Item 10. Director, Executive Officer and Corporate
Governance — Conflicts of Interest.” Such entities may compete with us for business combination
opportunities. Although we will not be specifically focusing on, or targeting, any transaction with any affiliated entities,
we would pursue such a transaction if we determined that such affiliated entity met our criteria and guidelines for a
business combination and such transaction was approved by a majority of our independent and disinterested directors. Despite
our agreement that we, or a committee of independent and disinterested directors, will obtain an opinion from an independent
investment banking firm that is a member of FINRA or from an independent accounting firm, regarding the fairness to our
company from a financial point of view of a business combination with one or more domestic or international businesses
affiliated with our Sponsor, directors or officers, potential conflicts of interest still may exist and, as a result, the
terms of the business combination may not be as advantageous to our public shareholders as they would be absent any conflicts
of interest.
Since our initial shareholders will
lose their entire investment in us if our initial business combination is not completed, a conflict of interest may arise in determining
whether a particular business combination target is appropriate for our initial business combination.
Our initial shareholders hold 5,750,000
founder shares as of the date of this Annual Report, including 5,595,000 held by our Sponsor. The founder shares will be worthless
if we do not complete an initial Business Combination. In addition, our Sponsor purchased an aggregate of 6,600,000 Private Placement
Warrants, each exercisable for one Class A ordinary share, for a purchase price of $6.6 million in the aggregate, or $1.00 per
warrant, that will also be worthless if we do not complete a Business Combination. Each Private Placement Warrant may be exercised
for one Class A ordinary share at a price of $11.50 per share, subject to adjustment as provided herein.
The founder shares are identical to the
ordinary shares included in the Units sold in the Initial Public Offering except that: (1) the founder shares are subject to certain
transfer restrictions; (2) our initial shareholders, directors and officers have entered into a letter agreement with us, pursuant
to which they have agreed to waive: (i) their redemption rights with respect to any founder shares and public shares held by them,
as applicable, in connection with the completion of our initial business combination; (ii) their redemption rights with respect
to any founder shares and public shares held by them in connection with a shareholder vote to amend our amended and restated memorandum
and articles of association (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 within
18 months from the closing of the Initial Public Offering or (B) with respect to any other provision relating to shareholders’
rights or pre-initial business combination activity; and (iii) their rights to liquidating distributions from the Trust Account
with respect to any founder shares they hold if we fail to complete our initial business combination within 18 months from the
closing of the Initial Public Offering or during any Extension Period (although they will be entitled to liquidating distributions
from the Trust Account with respect to any public shares they hold if we fail to complete our initial business combination within
the prescribed time frame); (3) the founder shares will automatically convert into our Class A ordinary shares at the time of our
initial business combination, or earlier at the option of the holder, on a one-for-one basis, subject to adjustment pursuant to
certain anti-dilution rights, as described in more detail below; and (4) the founder shares are entitled to registration rights.
If we submit our initial business combination to our public shareholders for a vote, our initial shareholders have agreed (and
their permitted transferees will agree), pursuant to the terms of a letter agreement entered into with us, to vote their founder
shares and any public shares held by them purchased during or after the Initial Public Offering in favor of our initial business
combination.
The personal and financial interests of
our Sponsor, directors and officers may influence their motivation in identifying and selecting a target business combination,
completing an initial business combination and influencing the operation of the business following the initial business combination.
This risk may become more acute as the 18-month deadline following the closing of our Initial Public Offering nears, which is the
deadline for the completion of our initial business combination.
We may issue notes or other debt
securities, or otherwise incur substantial debt, to complete a business combination, which may adversely affect our leverage and
financial condition and thus negatively impact the value of our shareholders’ investment in us.
We may choose to incur substantial debt
to complete our initial business combination. We have agreed that we will not incur any indebtedness unless we have obtained from
the lender a waiver of any right, title, interest or claim of any kind in or to the monies held in the Trust Account. As such,
no issuance of debt will affect the per-share amount available for redemption from the Trust Account. Nevertheless, the incurrence
of debt could have a variety of negative effects, including:
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default and foreclosure on our assets if our operating revenues after an initial business combination
are insufficient to repay our debt obligations;
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acceleration of our obligations to repay the indebtedness even if we make all principal and interest
payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a
waiver or renegotiation of that covenant;
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our immediate payment of all principal and accrued interest, if any, if the debt is payable on
demand;
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our inability to obtain necessary additional financing if the debt contains covenants restricting
our ability to obtain such financing while the debt is outstanding;
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our inability to pay dividends on our ordinary shares;
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using a substantial portion of our cash flow to pay principal and interest on our debt, which will
reduce the funds available for dividends on our ordinary shares if declared, expenses, capital expenditures, acquisitions and other
general corporate purposes;
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limitations on our flexibility in planning for and reacting to changes in our business and in the
industry in which we operate;
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increased vulnerability to adverse changes in general economic, industry and competitive conditions
and adverse changes in government regulation; and
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limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions,
debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who
have less debt.
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We may be able to complete only one
business combination with the proceeds of the Initial Public Offering and Private Placement, which will cause us to be solely dependent
on a single business which may have a limited number of products or services. This lack of diversification may negatively impact
our operations and profitability.
We may effectuate our initial business
combination with a single target business or multiple target businesses simultaneously or within a short period of time. However,
we may not be able to effectuate our initial business combination with more than one target business because of various factors,
including the existence of complex accounting issues and the requirement that we prepare and file pro forma financial statements
with the SEC that present operating results and the financial condition of several target businesses as if they had been operated
on a combined basis. By completing our initial business combination with only a single entity our lack of diversification may subject
us to numerous economic, competitive and regulatory risks. Further, we would not be able to diversify our operations or benefit
from the possible spreading of risks or offsetting of losses, unlike other entities which may have the resources to complete several
business combinations in different industries or different areas of a single industry. Accordingly, the prospects for our success
may be:
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solely dependent upon the performance of a single business, property or asset; or
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dependent upon the development or market acceptance of a single or limited number of products,
processes or services.
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This lack of diversification may subject
us to numerous economic, competitive and regulatory risks, any or all of which may have a substantial adverse impact upon the particular
industry in which we may operate subsequent to our initial business combination.
We may attempt to simultaneously
complete business combinations with multiple prospective targets, which may hinder our ability to complete our initial business
combination and give rise to increased costs and risks that could negatively impact our operations and profitability.
If we determine to simultaneously acquire
several businesses that are owned by different sellers, we will need for each of such sellers to agree that our purchase of its
business is contingent on the simultaneous closings of the other business combinations, which may make it more difficult for us,
and delay our ability, to complete our initial business combination. With multiple business combinations, we could also face additional
risks, including additional burdens and costs with respect to possible multiple negotiations and due diligence investigations (if
there are multiple sellers) and the additional risks associated with the subsequent assimilation of the operations and services
or products of the acquired companies in a single operating business. If we are unable to adequately address these risks, it could
negatively impact our profitability and results of operations.
We may attempt to complete our initial
business combination with a private company about which little information is available, which may result in a business combination
with a company that is not as profitable as we suspected, if at all.
In pursuing our acquisition strategy, we
may seek to effectuate our initial business combination with a privately held company. Very little public information generally
exists about private companies, and we could be required to make our decision on whether to pursue a potential initial business
combination on the basis of limited information, which may result in a business combination with a company that is not as profitable
as we suspected, if at all.
We do not have a specified maximum
redemption threshold. The absence of such a redemption threshold may make it possible for us to complete a business combination
with which a substantial majority of our shareholders do not agree.
Our amended and restated memorandum and
articles of association do not provide a specified maximum redemption threshold, except that in no event will we redeem our public
shares in an amount that would cause our net tangible assets to be less than $5,000,001 following such redemptions, or any greater
net tangible asset or cash requirement that may be contained in the agreement relating to our initial business combination. As
a result, we may be able to complete our initial business combination even though a substantial majority of our public shareholders
do not agree with the transaction and have redeemed their shares or, if we seek shareholder approval of our initial business combination
and do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, have entered
into privately negotiated agreements to sell their shares to our sponsor, directors, officers, advisors or any of their respective
affiliates. In the event the aggregate cash consideration we would be required to pay for all public shares that are validly submitted
for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed
the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares, and all ordinary
shares submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business combination.
In order to effectuate an initial
business combination, blank check companies have, in the past, amended various provisions of their charters and modified governing
instruments, including their warrant agreements. We cannot assure you that we will not seek to amend our amended and restated memorandum
and articles of association or governing instruments in a manner that will make it easier for us to complete our initial business
combination that some of our shareholders may not support.
In order to effectuate an initial business
combination, blank check companies have, in the recent past, amended various provisions of their charters and modified governing
instruments, including their warrant agreements. For example, blank check companies have amended the definition of business combination,
increased redemption thresholds and extended the time to consummate an initial business combination and, with respect to their
warrants, amended their warrant agreements to require the warrants to be exchanged for cash and/or other securities. Amending our
amended and restated memorandum and articles of association requires at least a special resolution of our shareholders as a matter
of Cayman Islands law. A resolution is deemed to be a special resolution as a matter of Cayman Islands law where it has been approved
by either (1) holders of at least two-thirds (or any higher threshold specified in a company’s articles of association) of
a company’s ordinary shares at a general meeting for which notice specifying the intention to propose the resolution as a
special resolution has been given or (2) if so authorized by a company’s articles of association, by a unanimous written
resolution of all of the company’s shareholders. Our amended and restated memorandum and articles of association provide
that special resolutions must be approved either by holders of at least two-thirds of our ordinary shares who attend and vote in
person or by proxy at a general meeting (i.e., the lowest threshold permissible under Cayman Islands law), or by a unanimous written
resolution of all of our shareholders. The warrant agreement provides that the terms of the warrants may be amended without the
consent of any holder to cure any ambiguity or correct any defective provision, but requires the approval by the holders of at
least 65% of the then issued and outstanding public warrants to make any change that adversely affects the interests of the registered
holders of public warrants and, solely with respect to any amendment to the terms of the private placement warrants or any provision
of the warrant agreement with respect to the private placement warrants, 65% of the number of the then outstanding private placement
warrants. We cannot assure you that we will not seek to amend our amended and restated memorandum and articles of association or
governing instruments, including the warrant agreement, or extend the time to consummate an initial business combination in order
to effectuate our initial business combination. To the extent any of such amendments would be deemed to fundamentally change the
nature of any of the securities offered through this registration statement, we would register, or seek an exemption from registration
for, the affected securities.
Certain provisions of our amended
and restated memorandum and articles of association that relate to our pre-business combination activity (and corresponding provisions
of the agreement governing the release of funds from our Trust Account) may be amended with the approval of holders of at least
two-thirds of our ordinary shares who attend and vote in person or by proxy at a quorate general meeting, which is a lower amendment
threshold than that of some other blank check companies. It may be easier for us, therefore, to amend our amended and restated
memorandum and articles of association and the trust agreement to facilitate the completion of an initial business combination
that some of our shareholders may not support.
Some other blank check companies have
a provision in their charter which prohibits the amendment of certain of its provisions, including those which relate to a
company’s pre-business combination activity, without approval by holders of a certain percentage of the company’s
shares. In those companies, amendment of these provisions typically requires approval by holders holding between 90% and 100%
of the company’s public shares. Our amended and restated memorandum and articles of association provide that any of its
provisions, including those related to pre-business combination activity (including the requirement to deposit proceeds of
the Initial Public Offering and Private Placement into the Trust Account and not release such amounts except in specified
circumstances), may be amended if approved by holders of at least two-thirds of our ordinary shares who attend and vote in
person or by proxy at a general meeting, and corresponding provisions of the trust agreement governing the release of funds
from our Trust Account may be amended if approved by holders of 65% of our ordinary shares. Our initial shareholders, who
collectively beneficially own 20% of our ordinary shares, may participate in any vote to amend our amended and restated
memorandum and articles of association and/or trust agreement and will have the discretion to vote in any manner they choose.
As a result, we may be able to amend the provisions of our amended and restated memorandum and articles of association which
govern our pre-business combination behavior more easily than some other blank check companies, and this may increase our
ability to complete our initial business combination with which you do not agree. In certain circumstances, our shareholders
may pursue remedies against us for any breach of our amended and restated memorandum and articles of association.
We may be unable to obtain additional
financing to complete our initial business combination or to fund the operations and growth of a target business, which could compel
us to restructure or abandon a particular business combination.
If the net proceeds of the Initial Public
Offering and the sale of the private placement warrants available to us prove to be insufficient, either because of the size of
our initial business combination, the depletion of the available net proceeds in search of a target business, the obligation to
redeem for cash a significant number of shares from shareholders who elect redemption in connection with our initial business combination
or the terms of negotiated transactions to purchase shares in connection with our initial business combination, we may be required
to seek additional financing or to abandon the proposed business combination. We cannot assure you that such financing will be
available on acceptable terms, if at all. To the extent that additional financing proves to be unavailable when needed to complete
our initial business combination, we would be compelled to either restructure the transaction or abandon that particular business
combination and seek an alternative target business candidate.
In addition, even if we do not need additional
financing to complete our initial business combination, we may require such financing to fund the operations or growth of the target
business. The failure to secure additional financing could have a material adverse effect on the continued development or growth
of the target business. None of our directors, officers or shareholders is required to provide any financing to us in connection
with or after our initial business combination. If we have not completed our initial business combination within the required time
period, our public shareholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation
of our Trust Account, and our warrants will expire worthless.
Our initial shareholders hold a substantial
interest in us. As a result, they may exert a substantial influence on actions requiring shareholder vote, potentially in a manner
that you do not support.
Our initial shareholders own 20% of our
issued and outstanding ordinary shares. In addition, as a result of their substantial ownership in our company, our initial shareholders
may exert a substantial influence on other actions requiring a shareholder vote, potentially in a manner that you do not support,
including appointment of directors, amendments to our amended and restated memorandum and articles of association and approval
of major corporate transactions. If our initial shareholders purchase any Class A ordinary shares in the aftermarket or in privately
negotiated transactions, this would increase their influence over these actions. In addition, we may not hold an annual meeting
of shareholders to elect new directors prior to the completion of our initial business combination, in which case all of the current
directors will continue in office until at least the completion of our initial business combination. Accordingly, our initial shareholders
will exert significant influence over actions requiring a shareholder vote at least until the completion of our initial business
combination.
A provision of our warrant agreement
may make it more difficult for us to consummate an initial business combination.
Unlike some blank check companies, if
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we issue additional ordinary shares or equity-linked securities for capital raising purposes in
connection with the closing of the initial business combination at an issue price or effective issue price of less than $9.20 per
ordinary share (with such issue price or effective issue price to be determined in good faith by our board of directors and, in
the case of any such issuance to the Sponsor or its affiliates, without taking into account any founder shares held by the Sponsor
or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”),
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the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds,
and interest thereon, available for the funding of our initial business combination on the date of the completion of our initial
business combination (net of redemptions), and
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the volume weighted average trading price of our Class A ordinary shares during the 20 trading
day period starting on the trading day prior to the day on which we consummate our initial business combination (such price, the
“Market Value”) is below $9.20 per share,
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then the exercise price of the warrants
will be adjusted to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption
trigger price applicable to our warrants will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market
Value and the Newly Issued Price. This may make it more difficult for us to consummate an initial business combination with a target
business.
Our warrants and founder shares may
have an adverse effect on the market price of our Class A ordinary shares and make it more difficult to effectuate our initial
business combination.
We have issued warrants to purchase 11,500,000
Class A ordinary shares at a price of $11.50 per whole share (subject to adjustment as provided herein), as part of the Units and,
simultaneously with the closing of the Initial Public Offering, we issued in the Private Placement an aggregate of 6,600,000 private
placement warrants, each exercisable to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment
as provided herein. Our initial shareholders currently hold 5,750,000 Class B ordinary shares. The Class B ordinary shares are
convertible into Class A ordinary shares on a one-for-one basis, subject to adjustment as set forth herein. In addition, if our
Sponsor, an affiliate of our sponsor or certain of our directors and officers make any working capital loans, up to 1,500,000 of
such loans may be converted into warrants, at the price of $1.00 per warrant at the option of the lender. Such warrants would be
identical to the private placement warrants. To the extent we issue Class A ordinary shares to effectuate a business combination,
the potential for the issuance of a substantial number of additional Class A ordinary shares upon exercise of these warrants or
conversion rights could make us a less attractive acquisition vehicle to a target business. Any such issuance will increase the
number of issued and outstanding Class A ordinary shares and reduce the value of the Class A ordinary shares issued to complete
the business combination. Therefore, our warrants and founder shares may make it more difficult to effectuate a business combination
or increase the cost of acquiring the target business.
The private placement warrants are identical
to the warrants sold as part of the Units, except that, so long as they are held by our Sponsor or its permitted transferees: (1)
they will not be redeemable by us; (2) they (including the Class A ordinary shares issuable upon exercise of these warrants) may
not, subject to certain limited exceptions, be transferred, assigned or sold by our Sponsor until 30 days after the completion
of our initial business combination; (3) they may be exercised by the holders on a cashless basis; and (4) they (including the
ordinary shares issuable upon exercise of these warrants) are entitled to registration rights.
Because we must furnish our shareholders
with target business financial statements, we may lose the ability to complete an otherwise advantageous initial business combination
with some prospective target businesses.
The federal proxy rules require that a
proxy statement with respect to a vote on a business combination meeting certain financial significance tests include historical
and/or pro forma financial statement disclosure in periodic reports. We will include the same financial statement disclosure in
connection with our tender offer documents, whether or not they are required under the tender offer rules. These financial statements
may be required to be prepared in accordance with, or be reconciled to, accounting principles generally accepted in the United
States of America (“U.S. GAAP”), or international financial reporting standards as issued by the International Accounting
Standards Board (“IFRS”), depending on the circumstances and the historical financial statements may be required to
be audited in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”).
These financial statement requirements may limit the pool of potential target businesses we may acquire because some targets may
be unable to provide such financial statements in time for us to disclose such financial statements in accordance with federal
proxy rules and complete our initial business combination within the prescribed time frame.
Compliance obligations under the
Sarbanes-Oxley Act may make it more difficult for us to effectuate our initial business combination, require substantial financial
and management resources, and increase the time and costs of completing an acquisition.
Section 404 of the Sarbanes-Oxley Act requires
that we evaluate and report on our system of internal controls beginning with our Annual Report on Form 10-K for the year ending
December 31, 2021. Only in the event we are deemed to be a large accelerated filer or an accelerated filer, and no longer qualify
as an emerging growth company, will we be required to comply with the independent registered public accounting firm attestation
requirement on our internal control over financial reporting. The fact that we are a blank check company makes compliance with
the requirements of the Sarbanes-Oxley Act particularly burdensome on us as compared to other public companies because a target
business with which we seek to complete our initial business combination may not be in compliance with the provisions of the Sarbanes-Oxley
Act regarding adequacy of its internal controls. The development of the internal control of any such entity to achieve compliance
with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition.
If our management team pursues a
company with operations or opportunities outside of the United States for our initial business combination, we may face additional
burdens in connection with investigating, agreeing to and completing such combination, and if we effect such initial business combination,
we would be subject to a variety of additional risks that may negatively impact our operations.
If our management team pursues a company
with operations or opportunities outside of the United States for our initial business combination, we would be subject to risks
associated with cross-border business combinations, including in connection with investigating, agreeing to and completing our
initial business combination, conducting due diligence in a foreign market, having such transaction approved by any local governments,
regulators or agencies and changes in the purchase price based on fluctuations in foreign exchange rates.
If we effect our initial business combination
with such a company, we would be subject to any special considerations or risks associated with companies operating in an international
setting (including how relevant governments respond to such factors), including any of the following:
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costs and difficulties inherent in managing cross-border business operations and complying with
commercial and legal requirements of overseas markets;
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rules and regulations regarding currency redemption;
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complex corporate withholding taxes on individuals;
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laws governing the manner in which future business combinations may be effected;
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tariffs and trade barriers;
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regulations related to customs and import/export matters;
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tax consequences, such as tax law changes, including termination or reduction of tax and other
incentives that the applicable government provides to domestic companies, and variations in tax laws as compared to the United
States;
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currency fluctuations and exchange controls, including devaluations and other exchange rate movements;
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rates of inflation, price instability and interest rate fluctuations;
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liquidity of domestic capital and lending markets;
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challenges in collecting accounts receivable;
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cultural and language differences;
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employment regulations;
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crime, strikes, riots, civil disturbances, terrorist attacks, natural disasters, wars and other
forms of social instability;
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deterioration of political relations with the United States;
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obligatory military service by personnel; and
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government appropriation of assets.
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We may not be able to adequately address
these additional risks. If we were unable to do so, we may be unable to complete such combination or, if we complete such combination,
our operations might suffer, either of which may adversely impact our results of operations and financial condition.
Risks Relating to the Post-Business
Combination Company
We may face risks related to companies
in the technology industries.
Business combinations with companies in
the technology industries entail special considerations and risks. If we are successful in completing a business combination with
such a target business, we may be subject to, and possibly adversely affected by, the following risks:
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an inability to compete effectively in a highly competitive environment with many incumbents having
substantially greater resources;
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an inability to manage rapid change, increasing customer expectations and growth; an inability to
build strong brand identity and improve subscriber or customer satisfaction and loyalty;
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a reliance on proprietary technology to provide services and to manage our operations, and the failure
of this technology to operate effectively, or our failure to use such technology effectively;
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an inability to deal with our subscribers’ or customers’ privacy concerns;
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an inability to attract and retain subscribers or customers;
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an inability to license or enforce intellectual property rights on which our business may depend;
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any significant disruption in our computer systems or those of third parties that we may utilize or
rely on in our operations;
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an inability by us, or a refusal by third parties, to license content to us upon acceptable terms;
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potential liability for negligence, copyright, or trademark infringement or other claims based on
the nature and content of materials that we may distribute;
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competition for advertising revenue;
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competition for the leisure and entertainment time and discretionary spending of subscribers or customers,
which may intensify in part due to advances in technology and changes in consumer expectations and behavior;
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disruption or failure of our networks, systems or technology as a result of computer viruses, “cyber-attacks,”
misappropriation of data or other malfeasance, as well as outages, natural disasters, terrorist attacks, accidental releases of
information or similar events;
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an inability to obtain necessary hardware, software and operational support; and
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reliance on third-party vendors or service providers.
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Any of the foregoing could have
an adverse impact on our operations following a business combination. However, our efforts in identifying prospective target businesses
will not be limited to the technology industries. Accordingly, if we acquire a target business in another industry, these risks
we will be subject to risks attendant with the specific industry in which we operate or target business which we acquire, which
may or may not be different than those risks listed above. For risk factors related to the proposed Achronix Business Combination,
see the “Risk Factors” section of the Achronix Disclosure Statement that we filed with the SEC.
Subsequent to our completion of our
initial business combination, we may be required to subsequently take write-downs or write-offs, restructuring and impairment or
other charges that could have a significant negative effect on our financial condition, results of operations and the price of
our securities, which could cause you to lose some or all of your investment.
Even if we conduct extensive due diligence
on a target business with which we combine, we cannot assure you that this diligence will identify all material issues that may
be present with a particular target business that it would be possible to uncover all material issues through a customary amount
of due diligence, or that factors outside of the target business and outside of our control will not later arise. As a result of
these factors, we may be forced to later write down or write off assets, restructure our operations, or incur impairment or other
charges that could result in our reporting losses. Even if our due diligence successfully identifies certain risks, unexpected
risks may arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis. Even
though these charges may be non-cash items and not have an immediate impact on our liquidity, the fact that we report charges of
this nature could contribute to negative market perceptions about us or our securities. In addition, charges of this nature may
cause us to violate net worth or other covenants to which we may be subject as a result of assuming pre-existing debt held by a
target business or by virtue of our obtaining post-combination debt financing. Accordingly, any shareholder or warrant holder who
chooses to remain a shareholder or warrant holder, respectively, following our initial business combination could suffer a reduction
in the value of their securities. Such shareholders and warrant holders are unlikely to have a remedy for such reduction in value.
After our initial business combination,
our results of operations and prospects could be subject, to a significant extent, to the economic, political, social and government
policies, developments and conditions in the country in which we operate.
The economic, political and social conditions,
as well as government policies, of the country in which our operations are located could affect our business. Economic growth could
be uneven, both geographically and among various sectors of the economy and such growth may not be sustained in the future. If
in the future such country’s economy experiences a downturn or grows at a slower rate than expected, there may be less demand
for spending in certain industries. A decrease in demand for spending in certain industries could materially and adversely affect
our ability to find an attractive target business with which to consummate our initial business combination and if we effect our
initial business combination, the ability of that target business to become profitable.
Our management may not be able to
maintain control of a target business after our initial business combination. We cannot provide assurance that, upon loss of control
of a target business, new management will possess the skills, qualifications or abilities necessary to profitably operate such
business.
We may structure our initial business combination
so that the post-transaction company in which our public shareholders own shares will own less than 100% of the equity interests
or assets of a target business, but we will complete such business combination only if the post-transaction company owns or acquires
50% or more of the issued and outstanding voting securities of the target or otherwise acquires a controlling interest in the target
business sufficient for us not to be required to register as an investment company under the Investment Company Act. We will not
consider any transaction that does not meet such criteria. Even if the post-transaction company owns 50% or more of the voting
securities of the target, our shareholders prior to our initial business combination may collectively own a minority interest in
the post business combination company, depending on valuations ascribed to the target and us in our initial business combination
transaction. For example, we could pursue a transaction in which we issue a substantial number of new ordinary shares in exchange
for all of the issued and outstanding capital stock, shares or other equity securities of a target, or issue a substantial number
of new shares to third-parties in connection with financing our initial business combination. In this case, we would acquire a
100% interest in the target. However, as a result of the issuance of a substantial number of new ordinary shares, our shareholders
immediately prior to such transaction could own less than a majority of our issued and outstanding ordinary shares subsequent to
such transaction. In addition, other minority shareholders may subsequently combine their holdings resulting in a single person
or group obtaining a larger share of the company’s shares than we initially acquired. Accordingly, this may make it more
likely that our management will not be able to maintain our control of the target business.
We may have limited ability to assess
the management of a prospective target business and, as a result, may affect our initial business combination with a target business
whose management may not have the skills, qualifications or abilities to manage a public company.
When evaluating the desirability of effecting
our initial business combination with a prospective target business, our ability to assess the target business’s management
may be limited due to a lack of time, resources or information. Our assessment of the capabilities of the target’s management,
therefore, may prove to be incorrect and such management may lack the skills, qualifications or abilities we suspected. Should
the target’s management not possess the skills, qualifications or abilities necessary to manage a public company, the operations
and profitability of the post-combination business may be negatively impacted. Accordingly, any shareholder or warrant holder who
chooses to remain a shareholder or warrant holder, respectively, following our initial business combination could suffer a reduction
in the value of their securities. Such shareholders and warrant holders are unlikely to have a remedy for such reduction in value.
The directors and officers of an acquisition
candidate may resign upon completion of our initial business combination. The departure of a business combination target’s
key personnel could negatively impact the operations and profitability of our post-combination business. The role of an acquisition
candidate’s key personnel upon the completion of our initial business combination cannot be ascertained at this time. Although
we contemplate that certain members of an acquisition candidate’s management team will remain associated with the acquisition
candidate following our initial business combination, it is possible that members of the management of an acquisition candidate
will not wish to remain in place.
After our initial business combination,
it is possible that a majority of our directors and officers will live outside the United States and all or substantially all of
our assets will be located outside the United States; therefore investors may not be able to enforce federal securities laws or
their other legal rights.
It is possible that after our initial business
combination, a majority of our directors and officers will reside outside of the United States and all or substantially all of
our assets will be located outside of the United States. As a result, it may be difficult, or in some cases not possible, for investors
in the United States to enforce their legal rights, to effect service of process upon all of our directors or officers or to enforce
judgments of United States courts predicated upon civil liabilities and criminal penalties on our directors and officers under
United States laws.
If our management following our initial
business combination is unfamiliar with U.S. securities laws, they may have to expend time and resources becoming familiar with
such laws, which could lead to various regulatory issues.
Following our initial business combination,
any or all of our management could resign from their positions as officers of the company, and the management of the target business
at the time of the business combination could remain in place. Management of the target business may not be familiar with U.S.
securities laws. If new management is unfamiliar with U.S. securities laws, they may have to expend time and resources becoming
familiar with such laws. This could be expensive and time-consuming and could lead to various regulatory issues which may adversely
affect our operations.
Risks Relating to Our Management Team
We are dependent upon our directors
and officers and their departure could adversely affect our ability to operate.
Our operations are dependent upon a relatively
small group of individuals and in particular, Behrooz Abdi, our Chief Executive Officer and Chairman of the board of directors,
Dr. Sunny Siu, our President and one of our directors, and Denis Tse, our Secretary and one of our directors. We believe that
our success depends on the continued service of our directors and officers, at least until we have completed our initial business
combination. In addition, our directors and officers are not required to commit any specified amount of time to our affairs and,
accordingly, will have conflicts of interest in allocating their time among various business activities, including identifying
potential business combinations and monitoring the related due diligence. We do not have an employment agreement with, or key-man
insurance on the life of, any of our directors or officers. The unexpected loss of the services of one or more of our directors
or officers could have a detrimental effect on us.
Our ability to successfully effect
our initial business combination and to be successful thereafter will be dependent upon the efforts of our key personnel, some
of whom may join us following our initial business combination. The loss of our or a target’s key personnel could negatively
impact the operations and profitability of our post-combination business.
Our ability to successfully effect our
initial business combination is dependent upon the efforts of our key personnel. The role of our key personnel in the target business,
however, cannot presently be ascertained. Although some of our key personnel may remain with the target business in senior management
or advisory positions following our initial business combination, it is likely that some or all of the management of the target
business will remain in place. While we intend to closely scrutinize any individuals we engage after our initial business combination,
we cannot assure you that our assessment of these individuals will prove to be correct. These individuals may be unfamiliar with
the requirements of operating a company regulated by the SEC, which could cause us to have to expend time and resources helping
them become familiar with such requirements.
In addition, the directors and
officers of an acquisition candidate may resign upon completion of our initial business combination. The departure of a
business combination target’s key personnel could negatively impact the operations and profitability of our
post-combination business. The role of an acquisition candidate’s key personnel upon the completion of our initial
business combination cannot be ascertained at this time. Although we contemplate that certain members of an acquisition
candidate’s management team will remain associated with the acquisition candidate following our initial business
combination, it is possible that members of the management of an acquisition candidate will not wish to remain in place. The
loss of key personnel could negatively impact the operations and profitability of our post-combination business.
Our key personnel may negotiate employment
or consulting agreements with a target business in connection with a particular business combination. These agreements may provide
for them to receive compensation following our initial business combination and as a result, may cause them to have conflicts of
interest in determining whether a particular business combination is the most advantageous.
Our key personnel may be able to remain
with the company after the completion of our initial business combination only if they are able to negotiate employment or consulting
agreements in connection with the business combination. Such negotiations would take place simultaneously with the negotiation
of the business combination and could provide for such individuals to receive compensation in the form of cash payments and/or
our securities for services they would render to us after the completion of our initial business combination. The personal and
financial interests of such individuals may influence their motivation in identifying and selecting a target business, subject
to his or her fiduciary duties under Cayman Islands law. However, we believe the ability of such individuals to remain with us
after the completion of our initial business combination will not be the determining factor in our decision as to whether or not
we will proceed with any potential business combination. There is no certainty, however, that any of our key personnel will remain
with us after the completion of our initial business combination. We cannot assure you that any of our key personnel will remain
in senior management or advisory positions with us. The determination as to whether any of our key personnel will remain with us
will be made at the time of our initial business combination.
Certain of our directors and officers
are now, and all of them may in the future become, affiliated with entities engaged in business activities similar to those intended
to be conducted by us and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity
should be presented.
Until we consummate our initial business
combination, we intend to engage in the business of identifying and combining with one or more businesses. Our Sponsor and directors
and officers are, or may in the future become, affiliated with entities that are engaged in a similar business, although they may
not participate in the formation of, or become an officer or director of, any other special purpose acquisition companies with
a class of securities registered under the Exchange Act until we have entered into a definitive agreement regarding our initial
business combination or we have failed to complete our initial business combination within 18 months after the closing of
the Initial Public Offering.
Our directors and officers also may become
aware of business opportunities which may be appropriate for presentation to us and the other entities to which they owe certain
fiduciary or contractual duties or otherwise have an interest in, including any other special purpose acquisition company in which
they may become involved with. Accordingly, they may have conflicts of interest in determining to which entity a particular business
opportunity should be presented. These conflicts may not be resolved in our favor and a potential target business may be presented
to other entities prior to its presentation to us, subject to his or her fiduciary duties under Cayman Islands law. Our amended
and restated memorandum and articles of association provide 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 the company and it is an opportunity that we are able to complete on a reasonable basis.
For a complete discussion of our officers’
and directors’ business affiliations and the potential conflicts of interest that you should be aware of, please see “Item
10. Directors, Executive Officer and Corporate Governance,” “Item 10. Directors, Executive Officer and Corporate Governance—Conflicts
of Interest” and “Item 13—Certain Relationships and Related Party Transactions—Support Services Agreement.”
Our directors, officers, security
holders and their respective affiliates may have competitive pecuniary interests that conflict with our interests.
We have not adopted a policy that expressly
prohibits our directors, officers, security holders or affiliates from having a direct or indirect pecuniary or financial interest
in any investment to be acquired or disposed of by us or in any transaction to which we are a party or have an interest. In fact,
we may enter into a business combination with a target business that is affiliated with our sponsor, our directors or officers.
Nor do we have a policy that expressly prohibits any such persons from engaging for their own account in business activities of
the types conducted by us. Accordingly, such persons or entities may have a conflict between their interests and ours.
In particular, affiliates of our Sponsor
have invested in the technology industry, including in several software companies. As a result, there may be substantial overlap
between companies that would be a suitable business combination for us and companies that would make an attractive target for such
other affiliates.
Risks Relating to Our Securities
You will not have any rights or interests
in funds from the Trust Account, except under certain limited circumstances. To liquidate your investment, therefore, you may be
forced to sell your public shares and/or warrants, potentially at a loss.
Our public shareholders will be entitled
to receive funds from the Trust Account only upon the earliest to occur of: (1) our completion of an initial business combination,
and then only in connection with those Class A ordinary shares that such shareholder properly elected to redeem, subject to
the limitations described herein; (2) the redemption of any public shares properly submitted in connection with a shareholder
vote to amend our amended and restated memorandum and articles of association (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 within 18 months from the closing of the Initial Public Offering or (B) with
respect to any other provision relating to shareholders’ rights or pre-initial business combination activity; and (3) the
redemption of our public shares if we have not completed an initial business combination within 18 months from the closing
of the Initial Public Offering, subject to applicable law. In no other circumstances will a shareholder have any right or interest
of any kind to or in the Trust Account. Holders of warrants will not have any right to the proceeds held in the Trust Account with
respect to the warrants. Accordingly, to liquidate your investment, you may be forced to sell your public shares and/or warrants,
potentially at a loss.
Nasdaq may delist our securities
from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject us
to additional trading restrictions.
We cannot assure you that our securities
will continue to be listed on Nasdaq in the future or prior to our initial business combination. In order to continue listing our
securities on Nasdaq prior to our initial business combination, we must maintain certain financial, distribution and share price
levels. In general, we must maintain a minimum amount in shareholders’ equity (generally $2,500,000) and a minimum of 300
public shareholders. Additionally, in connection with our initial business combination, we will be required to demonstrate compliance
with Nasdaq’s initial listing requirements, which are more rigorous than Nasdaq’s continued listing requirements, in
order to continue to maintain the listing of our securities on Nasdaq. We cannot assure you that we will be able to meet those
initial listing requirements at that time.
If Nasdaq delists any of our securities
from trading on its exchange and we are not able to list our securities on another national securities exchange, we expect such
securities could be quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences,
including:
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a limited availability of market quotations for our securities;
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reduced liquidity for our securities;
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a determination that our Class A ordinary shares are a “penny stock” which will require
brokers trading in our Class A ordinary shares to adhere to more stringent rules and possibly result in a reduced level of
trading activity in the secondary trading market for our securities;
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a limited amount of news and analyst coverage; and
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a decreased ability to issue additional securities or obtain additional financing in the future.
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The National Securities Markets Improvement
Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which
are referred to as “covered securities.” Our Units, Class A ordinary shares and warrants currently qualify
as covered securities under such statute. Although the states are preempted from regulating the sale of covered securities, the
federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of
fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. While we are not
aware of a state having used these powers to prohibit or restrict the sale of securities issued by blank check companies, other
than the State of Idaho, certain state securities regulators view blank check companies unfavorably and might use these powers,
or threaten to use these powers, to hinder the sale of securities of blank check companies in their states. Further, if we were
no longer listed on Nasdaq, our securities would not qualify as covered securities under such statute and we would be subject to
regulation in each state in which we offer our securities.
You will not be permitted to exercise
your warrants unless we register and qualify the issuance of the underlying Class A ordinary shares or certain exemptions are available.
Under the terms of the warrant agreement,
we have agreed that, as soon as practicable, but in no event later than 15 business days after the closing of our initial business
combination, we will use our commercially reasonable efforts to file with the SEC a registration statement covering the issuance
of such shares, and we will use our commercially reasonable efforts to cause the same to become effective within 60 business days
after the closing of our initial business combination and to maintain the effectiveness of such registration statement and a current
prospectus relating to those Class A ordinary shares until the warrants expire or are redeemed. We cannot assure you that
we will be able to do so if, for example, any facts or events arise which represent a fundamental change in the information set
forth in the registration statement or prospectus, the financial statements contained or incorporated by reference therein are
not current, complete or correct or the SEC issues a stop order. If the shares issuable upon exercise of the warrants are not
registered under the Securities Act in accordance with the above requirements, we will be required to permit holders to exercise
their warrants on a cashless basis. However, no warrant will be exercisable for cash or on a cashless basis, and we will not be
obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise
is registered or qualified under the securities laws of the state of the exercising holder, or an exemption from registration
is available. Notwithstanding the above, if our Class A ordinary shares are at the time of any exercise of a warrant not
listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1)
of the Securities Act, we may, at our option, require holders of public warrants who exercise their warrants to do so on a “cashless
basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required
to file or maintain in effect a registration statement, but we will use our commercially reasonable efforts to register or qualify
the shares under applicable blue sky laws to the extent an exemption is not available. In no event will we be required to net
cash settle any warrant, or issue securities or other compensation in exchange for the warrants in the event that we are unable
to register or qualify the shares underlying the warrants under applicable state securities laws and no exemption is available.
If the issuance of the shares upon exercise of the warrants is not so registered or qualified or exempt from registration or qualification,
the holder of such warrant shall not be entitled to exercise such warrant and such warrant may have no value and expire worthless.
In such event, holders who acquired their warrants as part of a purchase of units will have paid the full unit purchase price
solely for the Class A ordinary shares included in the units. There may be a circumstance where an exemption from registration
exists for holders of our private placement warrants to exercise their warrants while a corresponding exemption does not exist
for holders of the public warrants that were included as part of Units sold in the Initial Public Offering. In such an instance,
our Sponsor and its permitted transferees (which may include our directors and executive officers) would be able to exercise their
private placement warrants and sell the ordinary shares underlying such warrants while holders of our public warrants would not
be able to exercise their warrants and sell the underlying ordinary shares. If and when the warrants become redeemable by us,
we may exercise our redemption right even if we are unable to register or qualify the underlying Class A ordinary shares
for sale under all applicable state securities laws. As a result, we may redeem the warrants as set forth above even if the holders
are otherwise unable to exercise their warrants.
We may amend the terms of the warrants
in a manner that may be adverse to holders of public warrants with the approval by the holders of at least 65% of the then-outstanding
public warrants. As a result, the exercise price of your warrants could be increased, the exercise period could be shortened and
the number of our Class A ordinary shares purchasable upon exercise of a warrant could be decreased, all without your approval.
Our warrants will be issued in registered
form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. The warrant agreement
provides that the terms of the warrants may be amended without the consent of any holder for the purpose of (i) curing any
ambiguity or correct any mistake, including to conform the provisions of the warrant agreement to the description of the terms
of the warrants and the warrant agreement set forth in the prospectus related to the Initial Public Offering, or defective provision
or (ii) adding or changing any provisions with respect to matters or questions arising under the warrant agreement as the
parties to the warrant agreement may deem necessary or desirable and that the parties deem to not adversely affect the interest
of the registered holders of the warrants, provided that the approval by the holders of at least 65% of the then-outstanding public
warrants is required to make any change that adversely affects the interests of the registered holders of public warrants. Accordingly,
we may amend the terms of the public warrants in a manner adverse to a holder if holders of at least 65% of the then-outstanding
public warrants approve of such amendment and, solely with respect to any amendment to the terms of the private placement warrants
or any provision of the warrant agreement with respect to the private placement warrants, 65% of the number of the then-outstanding
private placement warrants. Although our ability to amend the terms of the public warrants with the consent of at least 65% of
the then-outstanding public warrants is unlimited, examples of such amendments could be amendments to, among other things, increase
the exercise price of the warrants, convert the warrants into cash, shorten the exercise period or decrease the number of Class A
ordinary shares purchasable upon exercise of a warrant.
We may redeem unexpired warrants
prior to their exercise at a time that is disadvantageous to the warrant holders, thereby making such warrants worthless.
We have the ability to redeem the outstanding
warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant if, among other
things, the last reported sale price of Class A ordinary shares for any 20 trading days within a 30-trading day period ending
on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders (the “Reference
Value”) equals or exceeds $18.00 per share (as adjusted). If and when the warrants become redeemable by us, we may exercise
our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state
securities laws. As a result, we may redeem the warrants as set forth above even if the holders are otherwise unable to exercise
the warrants. Redemption of the outstanding warrants as described above could force you to: (1) exercise your warrants and
pay the exercise price therefor at a time when it may be disadvantageous for you to do so; (2) sell your warrants at the
then-current market price when you might otherwise wish to hold your warrants; or (3) accept the nominal redemption price
which, at the time the outstanding warrants are called for redemption, we expect would be substantially less than the market value
of your warrants.
Because each unit contains one-half
of one redeemable warrant and only a whole warrant may be exercised, the units may be worth less than units of other
blank check companies.
Each unit contains one-half of one redeemable
warrant. Pursuant to the warrant agreement, no fractional warrants will be issued upon separation of the units, and only whole
warrants will trade. This is different from other offerings similar to ours whose units include one ordinary share and one
whole warrant or a greater fraction of one whole warrant to purchase one share. We have established the components of the units
in this way in order to reduce the dilutive effect of the warrants upon completion of a business combination since the warrants
will be exercisable in the aggregate for a half of the number of shares compared to units that each contain a whole warrant
to purchase one whole share, thus making us, we believe, a more attractive business combination partner for target businesses.
Nevertheless, this Unit structure may cause our Units to be worth less than if they included one whole warrant or a greater
fraction of one whole warrant to purchase one whole share.
Because we are incorporated under
the laws of the Cayman Islands, you may face difficulties in protecting your interests, and your ability to protect your rights
through the U.S. Federal courts may be limited.
We are an exempted company incorporated
under the laws of the Cayman Islands. As a result, it may be difficult for investors to effect service of process within the United
States upon our directors or officers, or enforce judgments obtained in the United States courts against our directors or officers.
Our corporate affairs will be governed
by our amended and restated memorandum and articles of association, the Companies Act (as the same may be supplemented or amended
from time to time) and the common law of the Cayman Islands. The rights of shareholders to take action against the directors, actions
by minority shareholders and the fiduciary responsibilities of our directors to us under Cayman Islands law are to a large extent
governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited
judicial precedent in the Cayman Islands as well as from English common law and other common law jurisdictions, the decisions of
whose courts are of persuasive authority, but are not binding on a court in the Cayman Islands. The rights of our shareholders
and the fiduciary responsibilities of our directors under Cayman Islands law are different from what they would be under statutes
or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands has a different body of securities
laws as compared to the United States, and certain states, such as Delaware, may have more fully developed and judicially interpreted
bodies of corporate law. In addition, Cayman Islands companies may not have standing to initiate a shareholders derivative action
in a Federal court of the United States.
We have been advised by our Cayman Islands
legal counsel, that the courts of the Cayman Islands are unlikely (1) to recognize or enforce against us judgments of courts
of the United States predicated upon the civil liability provisions of the federal securities laws of the United States or any
state; and (2) in original actions brought in the Cayman Islands, to impose liabilities against us predicated upon the civil
liability provisions of the federal securities laws of the United States or any state, so far as the liabilities imposed by those
provisions are penal in nature. In those circumstances, although there is no statutory enforcement in the Cayman Islands of judgments
obtained in the United States, the courts of the Cayman Islands will recognize and enforce a foreign money judgment of a foreign
court of competent jurisdiction without retrial on the merits based on the principle that a judgment of a competent foreign court
imposes upon the judgment debtor an obligation to pay the sum for which judgment has been given provided certain conditions are
met. For a foreign judgment to be enforced in the Cayman Islands, such judgment must be final and conclusive and for a liquidated
sum, and must not be in respect of taxes or a fine or penalty, inconsistent with a Cayman Islands judgment in respect of the same
matter, impeachable on the grounds of fraud or obtained in a manner, or be of a kind the enforcement of which is, contrary to natural
justice or the public policy of the Cayman Islands (awards of punitive or multiple damages may well be held to be contrary to public
policy). A Cayman Islands Court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere.
As a result of all of the above, public
shareholders may have more difficulty in protecting their interests in the face of actions taken by management, members of the
board of directors or controlling shareholders than they would as public shareholders of a United States company.
Provisions in our amended and restated
memorandum and articles of association may inhibit a takeover of us, which could limit the price investors might be willing to
pay in the future for our Class A ordinary shares and could entrench management.
Our amended and restated memorandum and
articles of association contain provisions that may discourage unsolicited takeover proposals that shareholders may consider to
be in their best interests. These provisions include two-year director terms and the ability of the board of directors to designate
the terms of and issue new series of preferred shares, which may make more difficult the removal of management and may discourage
transactions that otherwise could involve payment of a premium over prevailing market prices for our securities.
General Risk Factors
Our
warrants are accounted for as liabilities and the changes in value of our warrants could have a material effect on our financial results.
On
April 12, 2021, the Acting Director of the Division of Corporation Finance and Acting Chief Accountant of the SEC together issued a statement
regarding the accounting and reporting considerations for warrants issued by special purpose acquisition companies entitled “Staff
Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (“SPACs”)”
(the “SEC Statement”). Specifically, the SEC Statement focused on certain settlement terms and provisions related to certain
tender offers following a business combination, which terms are similar to those contained in the warrant agreement governing our warrants.
As a result of the SEC Statement, we reevaluated the accounting treatment of our 11,500,000 public warrants and 6,600,000 private placement
warrants, and determined to classify the warrants as derivative liabilities measured at fair value, with changes in fair value each period
reported in earnings.
As
a result, included on our balance sheet as of December 31, 2020 contained elsewhere in this Annual Report are derivative
liabilities related to embedded features contained within our warrants. Accounting Standards Codification 815, Derivatives and Hedging
(“ASC 815”), provides for the remeasurement of the fair value of such derivatives at each balance sheet date, with a resulting
non-cash gain or loss related to the change in the fair value being recognized in earnings in the statement of operations. As a result
of the recurring fair value measurement, our financial statements and results of operations may fluctuate quarterly, based
on factors, which are outside of our control. Due to the recurring fair value measurement, we expect that we will recognize non-cash
gains or losses on our warrants each reporting period and that the amount of such gains or losses could be material.
We
have identified a material weakness in our internal control over financial reporting as of December 31, 2020. If we are unable to develop
and maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial
results in a timely manner, which may adversely affect investor confidence in us and materially and adversely affect our business and
operating results.
Following
this issuance of the SEC Statement, on May 4, 2021, as discussed with our independent registered public accounting firm, our management
and our audit committee concluded that, in light of the SEC Statement, it was appropriate to restate our previously issued audited financial
statements as of and for the period ended December 31, 2020 (the “Restatement”). See “—Our warrants are accounted
for as liabilities and the changes in value of our warrants could have a material effect on our financial results.” As part of
such process, we identified a material weakness in our internal controls over financial reporting.
A
material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is
a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented, or detected
and corrected on a timely basis.
Effective
internal controls are necessary for us to provide reliable financial reports and prevent fraud. We continue to evaluate steps to remediate
the material weakness. These remediation measures may be time consuming and costly and there is no assurance that these initiatives will
ultimately have the intended effects.
If
we identify any new material weaknesses in the future, any such newly identified material weakness could limit our ability to prevent
or detect a misstatement of our accounts or disclosures that could result in a material misstatement of our annual or interim financial
statements. In such case, we may be unable to maintain compliance with securities law requirements regarding timely filing of periodic
reports in addition to applicable stock exchange listing requirements, investors may lose confidence in our financial reporting and our
stock price may decline as a result. We cannot assure you that the measures we have taken to date, or any measures we may take in the
future, will be sufficient to avoid potential future material weaknesses.
We
may face litigation and other risks as a result of the material weakness in our internal control over financial reporting.
Following
the issuance of the SEC Statement, as discussed with our independent registered public accounting firm, our management and our audit
committee concluded that it was appropriate to restate our previously issued audited financial statements as of December 31, 2020 and
for the period ended December 31, 2020. See “—Our warrants are accounted for as liabilities and the changes in value of our
warrants could have a material effect on our financial results.” As part of the Restatement, we identified a material weakness
in our internal controls over financial reporting.
As
a result of such material weakness, the Restatement, the change in accounting for the warrants, and other matters raised or that may
in the future be raised by the SEC, we face potential for litigation or other disputes which may include, among others, claims invoking
the federal and state securities laws, contractual claims or other claims arising from the Restatement and material weaknesses in our
internal control over financial reporting and the preparation of our financial statements. As of the date of this Annual Report, we have
no knowledge of any such litigation or dispute. However, we can provide no assurance that such litigation or dispute will not arise in
the future. Any such litigation or dispute, whether successful or not, could have a material adverse effect on our business, results
of operations and financial condition or our ability to complete a Business Combination.
We are a newly incorporated company
with no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.
We are a newly incorporated company incorporated
under the laws of the Cayman Islands with no operating results. Because we lack an operating history, you have no basis upon which
to evaluate our ability to achieve our business objective of completing our initial business combination with one or more target
businesses. We may be unable to complete our initial business combination. If we fail to complete our initial business combination,
we will never generate any operating revenues.
Past performance by our management
team and their respective affiliates may not be indicative of future performance of an investment in the company.
Information regarding performance by our
management team and their respective affiliates is presented for informational purposes only. Past performance by our management
team and their respective affiliates is not a guarantee either (1) that we will be able to identify a suitable candidate for
our initial business combination or (2) of success with respect to any business combination we may consummate. You should
not rely on the historical record of our management team or their respective affiliates or any related investment’s performance
as indicative of the future performance of an investment in the company or the returns the company will, or is likely to, generate
going forward.
We may be a passive foreign investment
company, or “PFIC,” which could result in adverse U.S. federal income tax consequences to U.S. investors.
If we are a PFIC for
any taxable year (or portion thereof) that is included in the holding period of a U.S. Holder of our ordinary shares or warrants,
the U.S. Holder may be subject to adverse U.S. federal income tax consequences and may be subject to additional reporting requirements.
Our PFIC status for our taxable year ended December 31, 2020, our current taxable year, and our subsequent taxable years may
depend upon the status of an acquired company pursuant to a business combination and whether we qualify for the PFIC start-up exception.
Depending on the particular circumstances, the application of the start-up exception may be subject to uncertainty, and there cannot
be any assurance that we will qualify for the start-up exception. Accordingly, there can be no assurances with respect to our status
as a PFIC for our taxable year ended December 31, 2020, our current taxable year or any subsequent taxable year. Our actual PFIC
status for any taxable year, moreover, will not be determinable until after the end of such taxable year. If we determine we are
a PFIC for any taxable year, we will endeavor to provide to a U.S. Holder such information as the Internal Revenue Service (“IRS”)
may require, including a PFIC Annual Information Statement, in order to enable the U.S. Holder to make and maintain a “qualified
electing fund” election, but there can be no assurance that we will timely provide such required information, and such election
would likely be unavailable with respect to our warrants in all cases. We urge U.S. Holders to consult their own tax advisors regarding
the possible application of the PFIC rules to holders of our ordinary shares and warrants.
We are an emerging growth company
and a smaller reporting company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure
requirements available to emerging growth companies or smaller reporting companies, this could make our securities less attractive
to investors and may make it more difficult to compare our performance with other public companies.
We are an “emerging
growth company” within the meaning of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and we may take advantage of certain
exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies
including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the
Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements,
and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval
of any golden parachute payments not previously approved. As a result, our shareholders may not have access to certain information
they may deem important. We could be an emerging growth company for up to five years, although circumstances could cause
us to lose that status earlier, including if the market value of our ordinary shares held by non-affiliates exceeds $700 million
as of the end of any second quarter of a fiscal year, in which case we would no longer be an emerging growth company as of the
end of such fiscal year. We cannot predict whether investors will find our securities less attractive because we will rely on
these exemptions. If some investors find our securities less attractive as a result of our reliance on these exemptions, the trading
prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities
and the trading prices of our securities may be more volatile.
Further, Section 102(b)(1)
of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards
until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not
have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting
standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements
that apply to non-emerging growth companies but any such election to opt out is irrevocable. We have elected not to opt out of
such extended transition period which means that when a standard is issued or revised and it has different application dates for
public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies
adopt the new or revised standard. This may make comparison of our financial statements with another public company which is neither
an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult
or impossible because of the potential differences in accounting standards used.
Additionally, we are
a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies
may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited
financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market
value of our ordinary shares held by non-affiliates equals or exceeds $250 million as of the end of that year’s second
fiscal quarter, and (2) our annual revenues equal or exceed $100 million during such completed fiscal year or the market
value of our ordinary shares held by non-affiliates equals or exceeds $700 million as of the end of that year’s second
fiscal quarter. To the extent we take advantage of such reduced disclosure obligations, it may also make comparison of our financial
statements with other public companies difficult or impossible.