Item 1. Business
General
We are a newly organized blank check company incorporated
as a Delaware corporation on January 7, 2021 and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition,
stock purchase, reorganization or similar business combination with one or more businesses, which we refer to throughout this Report as
our initial business combination.
While we may pursue an acquisition opportunity in
any industry or sector, we are focused on the consumer sector and consumer-related businesses, which complements our management team’s
expertise and which will benefit from our operational value add. We believe that the experience and capabilities of our management team
will make us an attractive partner to potential target businesses, enhance our ability to complete a successful business combination,
and bring value to the business post-business combination. Not only does our management team bring a combination of operating, investing,
financial and transactional experience, but also has worked closely together in the past at multiple consumer companies, creating value
for shareholders. We believe that companies operating in the consumer sector have characteristics which make them attractive investments.
Many companies in the consumer industry generate high margins and strong free cash flow, maintain operational stability throughout economic
cycles, and serve as good platforms for future acquisitions. Furthermore, these companies can create significant value by introducing
new products and/or services to the marketplace, growing distribution, and building brands that resonate in households worldwide. Our
management team has executed on these growth strategies throughout their careers.
Our management team has prior experience in raising
blank check companies similar to our own company and executing successful business combinations. Please refer to the paragraphs below
under “Conyers Park Acquisition Corp.” and “Conyers Park II Acquisition Corp.” for more detail on our prior blank
check companies’ respective business combinations with Atkins Nutritionals, Inc. (to form The Simply Good Foods Company) in 2017
and with Advantage Solutions in 2020.
Our management team is led by James M. Kilts and
David J. West, our Co-Chief Executive Officers, Brian K. Ratzan, our Chief Financial Officer and Max Papkov, our Vice President of
Strategy. Mr. Kilts’ and Mr. West’s careers have centered on identifying and implementing value creation initiatives throughout
the consumer industry. They have collectively created approximately $50 billion in shareholder value throughout their combined 75+ year
careers in the consumer industry by relying on what we believe to be tried-and-true management strategies: cost management and productivity
enhancement and reinvesting the savings behind product innovation, marketing and brand building. Mr. Ratzan and Mr. Papkov collectively
bring 35+ years of private equity and special purpose acquisition company (“SPAC”) investing experience. The deep operating
experience of Mr. Kilts and Mr. West complements Mr. Ratzan’s and Mr. Papkov’s financial and transactional expertise to create
a unique team capable of identifying attractive investments and executing deals in the consumer sector.
Mr. Kilts is a renowned leader in the consumer industry,
with over 40 years of experience leading a range of companies and iconic brands. Mr. Kilts served as Chairman of the Board, Chief
Executive Officer and President of The Gillette Company, or Gillette, from 2001 until it merged with The Procter & Gamble Company
in 2005; at that time he became Vice Chairman of the Board of The Procter & Gamble Company. Before Mr. Kilts joined Gillette,
the company’s sales had been flat for four years, and it had missed earnings estimates for 14 consecutive quarters. Mr. Kilts
took steps to rebuild the management team, cut costs and reinvest the savings in innovation and marketing. During his tenure as Chief
Executive Officer, Mr. Kilts oversaw the creation of approximately $30 billion in equity value for Gillette’s public shareholders,
with Gillette’s share price appreciating 110% while the S&P 500 declined 3% over the same time period. Under Mr. Kilts’
leadership, Gillette rejoined the top ranks of consumer products companies as sales increased an average of 9% each year. The Harvard
Business Review cited Mr. Kilts’ leadership as the driving force behind Gillette’s turnaround. Prior to Gillette, Mr. Kilts
served as President and Chief Executive Officer of The Nabisco Company, or Nabisco, from 1998 until its acquisition by The Philip Morris
Companies in 2000. Before joining Nabisco, Mr. Kilts was an Executive Vice President of The Philip Morris Companies from 1994 to 1997
and headed the Worldwide Food group. In that role, Mr. Kilts was responsible for integrating Kraft and General Foods and for shaping the
group’s domestic and international strategy. Mr. Kilts had previously served as President of Kraft USA and Oscar Mayer. More recently,
Mr. Kilts served as Chairman of the Board of Nielsen Holdings PLC from 2011 to 2014 while it was under private ownership. During this
time Mr. Kilts worked closely with management to defend key existing customers and win new business. During their investment period, the
investor group’s equity value creation was nearly $7 billion.
Mr. West is an established leader in the consumer
industry, with over 30 years of experience leading a range of companies and well-known brands. Mr. West served as Chief Executive
Officer and President of Big Heart Pet Brands (formerly Del Monte Foods) from 2011 to 2015. Mr. West worked closely with Mr. Kilts during
this time period, as Mr. Kilts was Chairman of the Board of Big Heart Pet Brands. Mr. West repositioned the business to focus on growth
and innovation, enhance distribution, and develop a marketing culture to focus on brands and products. The J. M. Smucker Company purchased
Big Heart Pet Brands in March 2015. During his tenure as Chief Executive Officer of Big Heart Pet Brands, Mr. West oversaw the creation
of approximately $2 billion of equity value for investors. Prior to joining Big Heart Pet Brands, Mr. West served as the Chief Executive
Officer, President and a director of The Hershey Company, or Hershey, from 2007 to 2011. Under Mr. West’s leadership, Hershey experienced
net sales and profit growth and strong shareholder returns, and was recognized as one of the World’s 100 Most Innovative Companies
by Forbes Magazine in 2011. The success created by Mr. West’s leadership at Hershey led to more than $5 billion of equity value
creation for shareholders during his tenure. Hershey’s share price appreciated 68% during this time period, while the S&P 500
was flat. Prior to joining Hershey in 2001, Mr. West spent 14 years with Nabisco, where he worked closely with Mr. Kilts during Mr.
Kilts’ tenure as Chief Executive Officer.
Our sponsor is an affiliate of Centerview Capital.
Founded in 2006, Centerview Capital sponsors multiple investment funds, including consumer funds (also known as Centerview Capital Consumer)
and technology funds (also known as Centerview Capital Technology). Our management team, including James M. Kilts, David J. West,
Brian K. Ratzan and Max Papkov, are all partners and/or investment professionals of Centerview Capital Consumer. Our management team has
made investments across the consumer industry spectrum, including the food and beverage, household/personal care and consumer services
sectors with a proven track record of identifying high-quality assets, businesses and management teams. Centerview Capital is associated
with Centerview Partners. Certain partners in Centerview Partners are also partners (either directly or indirectly) in the ultimate general
partner and the manager of Centerview Capital Consumer’s investment funds, and serve on Centerview Capital Consumer’s investment
committee. Centerview Partners is a leading independent investment banking and advisory firm which provides advice on mergers and acquisitions,
financial restructurings, valuation and capital structure to companies, institutions and governments. Since the founding of Centerview
Partners in 2006, the firm has advised on nearly $3 trillion of transactions. Centerview Partners’ clients include over 20%
of the 50 largest companies in the world by market capitalization, including many of the world’s most influential consumer companies,
which we believe further broaden our reach and network of deal contacts.
Our management team’s proprietary deal sourcing
network, ranging from industry executives, private owners, private equity funds and investment bankers, in addition to the extensive global
industry and geographical reach of Centerview Capital Consumer and Centerview Partners, will enable us to pursue a broad range of opportunities
across the entire consumer sector. Our management believes that its ability to identify and implement operational value creation initiatives
will remain central to its differentiated acquisition strategy. Additionally, our network and current affiliations will allow us to lean
heavily on an existing infrastructure of resources that will assist in due diligence and ultimately structuring an acquisition.
Conyers Park Acquisition Corp.
In April 2016, our management team founded
Conyers Park Acquisition Corp. (“Conyers Park I”), a blank check company formed for substantially similar purposes as our
company. Conyers Park I completed its initial public offering in July 2016, generating aggregate proceeds of $402.5 million, which
it used to complete a business combination with Atkins Nutritionals, Inc. in July 2017 and to form The Simply Good Foods Company
(“Simply Good Foods”). Simply Good Foods is a developer, marketer and seller of branded nutritional foods and snacking products
including nutrition bars, ready-to-drink shakes, snacks and confectionery products marketed under the Atkins®, Quest®
and Atkin Endulge® brand names. Since the business combination, Simply Good Foods has executed on its strategic plan and
grown the business organically through product innovation, improved packaging and new marketing campaigns. Simply Good Foods also acquired
Quest Nutrition in November 2019 for $1.0 billion, which further strengthened Simply Good Foods’ position within the nutritional
snacking category by expanding its portfolio of brands and product offerings. Total reported net sales for Simply Good Foods and Atkins®
North America brand net sales (an organic measure) have grown at 26% and 12% CAGRs, respectively, from FY2017 to FY2021. Simply Good Foods’
common stock is listed on the Nasdaq under the symbol “SMPL”. Mr. Kilts and Mr. West currently serve as Chairman and Vice
Chairman, respectively, and Mr. Ratzan currently serves as a Director of Simply Good Foods.
Conyers Park II Acquisition Corp.
In May 2019, our management team founded Conyers
Park II Acquisition Corp. (“Conyers Park II”), a blank check company formed for substantially similar purposes as our company
and Conyers Park I. Conyers Park II completed its initial public offering in July 2019, generating aggregate proceeds of $450 million,
which it used to complete a business combination with Advantage Solutions Inc. (“Advantage Solutions” or “Advantage”),
in October 2020. The combination valued Advantage at an enterprise value of approximately $5.2 billion and included a common stock
private placement of $855 million, of which $500 million was raised from institutional investors. Advantage is a leading provider of sales
and marketing services to consumer goods brands and retailers. Advantage’s data and technology-enabled omnichannel solutions —
including sales, retail merchandising, business intelligence, digital commerce and a full suite of marketing services — help
brands and retailers across a broad range of channels drive consumer demand, increase sales and achieve operating efficiencies. Advantage’s
common stock is listed on the Nasdaq under the symbol “ADV”. Mr. Kilts serves as Chairman and Mr. West and Mr. Ratzan currently
serve as Directors of Advantage.
Potential Special Purpose Acquisition Vehicles
We expect that members of our management team and
our board, as well as Centerview Capital, are likely to sponsor, form or participate in other blank check companies during the period
in which we are seeking an initial business combination, and these future blank check companies that members of our management team, our
board and/or Centerview Capital, may be affiliated with, may compete with us for acquisition opportunities. We would expect that any such
blank check companies that members of our management team, our board and/or Centerview Capital are affiliated with in the future will
have a more generalist focus than our company, although like our company, they would not be limited in their ability to pursue an initial
business combination in the consumer sector and consumer related businesses. However, given the history of our management team and board
in executing successful business combinations with Conyers Park I and Conyers Park II, we would anticipate that appropriate targets in
the consumer sector and consumer related businesses would be more likely to seek to enter into a transaction with our company rather than
a blank check company that does not have a specific emphasis on the consumer sector. See Part III, Item 10 “Directors, Executive
Officers and Corporate Governance — Conflicts of Interest” for a discussion of the fiduciary and contractual obligations members
of our management team and board have or may have in the future.
With respect to the foregoing examples, past performance
by our management team or Centerview Capital Consumer, including with respect to Conyers Park I and Conyers Park II and, in turn, Simply
Good Foods and Advantage, is not a guarantee either (i) of success with respect to any business combination we may consummate or
(ii) that we will be able to identify a suitable candidate for our initial business combination. You should not rely on the historical
record of our management’s or Centerview Capital Consumer’s performance as indicative of our future performance. In addition,
for a list of our executive officers and entities for which a conflict of interest may or does exist between such officers and the company,
as well as the priority and preference that such entity has with respect to performance of obligations and presentation of business opportunities
to us, please refer to the table and subsequent explanatory paragraph under Part III, Item 10 “Directors, Executive Officers and
Corporate Governance — Conflicts of Interest.”
Business Strategy
Our acquisition and value creation strategy is to
identify, acquire and build a company in the consumer sector that complements the experience of our management team and can benefit from
its strategic and operational expertise. After our initial business combination, we envision our strategy may include additional mergers
and acquisitions with a focus on generating attractive risk adjusted returns for our stockholders. We will leverage our management team’s
network of potential proprietary and public transaction sources where we believe a combination of our relationships, knowledge and experience
in the consumer sector could effect a positive transformation or augmentation of existing businesses to improve their overall value.
We have utilized and plan to continue to utilize
the network and industry experience of Mr. Kilts, Mr. West, Mr. Ratzan, Mr. Papkov, our sponsor and their affiliates and our association
with Centerview Partners in seeking an initial business combination and employing our acquisition strategy. Over the course of their careers,
the members of our management team and their affiliates have developed a broad network of contacts and corporate relationships that we
believe will serve as a useful source of acquisition opportunities. This network has been developed through our management team’s:
|
● | extensive experience in sourcing, structuring, acquiring, operating, integrating, developing,
growing, financing and selling businesses;; |
| ● | deep relationships with sellers, financing providers and target management teams; and |
| ● | experience in executing transactions in the consumer sector under varying economic and financial
market conditions. |
We expect these networks will continue to provide
our management team with a robust flow of acquisition opportunities. In addition, we anticipate that target business candidates will be
brought to our attention from various unaffiliated sources, which may include investment market participants, private equity groups, investment
banking firms, consultants, accounting firms and large business enterprises. Upon completion of our initial public offering, members of
our management team communicated with their vast networks of relationships to articulate the parameters of our search for a target company
and a potential initial business combination and began the process of pursuing and reviewing potentially interesting leads.
Acquisition Criteria
Consistent with this strategy, we have identified
the following general criteria and guidelines that we believe are important in evaluating prospective target businesses. We will use these
criteria and guidelines in evaluating acquisition opportunities, but we may decide to enter into our initial business combination with
a target business that does not meet these criteria and guidelines. We intend to acquire companies that we believe:
| ● | have market and/or cost leadership positions in their respective consumer niches and would
benefit from our extensive networks and insights within the consumer sector; |
| ● | provide enduring products or services, with the potential for revenue, market share
and/or distribution improvements; |
| ● | are well-positioned within emerging growth areas of the consumer sector, including
agricultural and farm technologies, protein alternative products and infrastructure technologies; |
| ● | offer the opportunity for our management team to partner with established management
teams or business owners to achieve long-term strategic and operational excellence; |
| ● | exhibit unrecognized value or other characteristics, desirable returns on capital
and a need for capital to achieve the company’s growth strategy, that we believe have been misevaluated by the marketplace based
on our analysis and due diligence review; and |
| ● | will offer an attractive risk-adjusted return for our stockholders. |
These criteria are not intended to be exhaustive.
Any evaluation relating to the merits of a particular initial business combination may be based, to the extent relevant, on these general
guidelines as well as other considerations, factors and criteria that our management may deem relevant. In the event that we decide to
enter into our initial business combination with a target business that does not meet the above criteria and guidelines, we will disclose
that the target business does not meet the above criteria in our stockholder communications related to our initial business combination,
which, as discussed in this Report, would be in the form of tender offer documents or proxy solicitation materials that we would file
with the SEC.
Our Acquisition Process
In evaluating a prospective target business, we
expect to conduct a thorough due diligence review that will encompass, among other things, meetings with incumbent management and employees,
document reviews and inspection of facilities, as well as a review of financial and other information that will be made available to us.
We will also utilize our operational and capital allocation experience.
We are not prohibited from pursuing an initial business
combination with a company that is affiliated with our sponsor, officers or directors. In the event we seek to complete our initial business
combination with a company that is affiliated with our sponsor, officers or directors, we, or a committee of independent directors, will
obtain an opinion from an independent investment banking firm, which is a member of the Financial Industry Regulatory Authority (“FINRA”)
or an independent accounting firm that our initial business combination is fair to our company from a financial point of view.
Members of our management team and our independent
directors directly or indirectly own founder shares and/or private placement warrants and, accordingly, may have a conflict of interest
in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination.
In particular, because the founder shares were purchased at approximately $0.002 per share, the holders of our founder shares (including
members of our management team that directly or indirectly own founder shares) could make a substantial profit after our initial business
combination even if our public stockholders lose money on their investment as a result of a decrease in the post-combination value of
their shares of common stock (after accounting for any adjustments in connection with an exchange or other transaction contemplated by
the business combination). Further, each of our officers and directors may have a conflict of interest with respect to evaluating a particular
business combination if the retention or resignation of any such officers and directors was included by a target business as a condition
to any agreement with respect to our initial business combination.
All of the members of our management team are employed
by Centerview Capital Consumer. Centerview Capital Consumer is continuously made aware of potential business opportunities, one or more
of which we may desire to pursue for a business combination. In addition, members of our management team and certain directors were previously
in discussions with potential business combination partners in their capacity as officers and directors of Conyers Park I and II. We have
not (nor has anyone on our behalf) contacted any prospective target business with respect to a business combination transaction with us.
We may pursue any business combination target that has already been considered by members of our management team, our board, Centerview
Capital and/or Centerview Partners in a different context.
Each of our officers and directors presently has,
and any of them in the future may have additional, fiduciary or contractual obligations to other entities pursuant to which such officer
or director is or will be required to present a business combination opportunity.
In addition, we may, at our option, pursue an
Affiliated Joint Acquisition (as defined below) opportunity with an entity to which an officer or director has a fiduciary or contractual
obligation. Any such entity may co-invest with us in the target business at the time of our initial business combination, or we could
raise additional proceeds to complete the acquisition by making a specified future issuance to any such entity. Our amended and restated
certificate of incorporation provides that we renounce our interest in any corporate opportunity offered to any director or officer unless
such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company and such opportunity
is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue.
In addition to the above, some of our executive
officers have fiduciary or contractual duties to Simply Good Foods, Advantage, Centerview Capital Consumer and/or to certain companies
in which Centerview Capital Consumer has invested. As a result, some of our officers may have a duty to offer acquisition opportunities
to certain parties before we can pursue such opportunities. Our executive officers are not required to commit any specified amount of
time to our affairs and, accordingly, will have conflicts of interest in allocating management time among various business activities.
However, we do not expect either potential conflicts of interest or the time taken by our management team’s other duties to present
a significant constraint in our ability to identify, diligence and execute potential business combinations. Moreover, some of our executive
officers have time and attention requirements for private investment funds of which affiliates of Centerview Capital Consumer are the
investment managers.
In addition to the entities for which members of
our management team and our board have current fiduciary or contractual obligations, we expect that members of our management team and
our board, as well as Centerview Capital and Centerview Partners, are likely to sponsor, form or participate in other blank check companies
during the period in which we are seeking an initial business combination. As a result, all of the entities for which members of our management
team and our board have current fiduciary or contractual obligations, as well as any future blank check company that members of our management
team, our board and/or Centerview Capital, may be affiliated with, may compete with us for acquisition opportunities. We do not believe,
however, that any of the foregoing fiduciary duties or contractual obligations will materially affect our ability to complete our initial
business combination.
We would expect that any such blank check companies
that members of our management team, our board and/or Centerview Capital are affiliated with in the future will have a broader industry
scope than our company, although like our company, they would not be limited in their ability to pursue an initial business combination
in the consumer sector and consumer related businesses. However, given the history of our management team and board in executing successful
business combinations with Conyers Park I and Conyers Park II, we would anticipate that appropriate targets in the consumer sector and
consumer related businesses would be more likely to seek to enter into a transaction with our company rather than a blank check company
that does not have a specific emphasis on the consumer sector.
Our amended and restated certificate of incorporation
provides that we renounce our interest in any corporate opportunity offered to any of our directors or officers unless such opportunity
is expressly offered to such person solely in his or her capacity as a director or officer of our company and such opportunity is one
we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue. Accordingly, if any of our
executive officers, directors or director nominees becomes aware of a business combination opportunity which is suitable for any of the
above entities, or any blank check company our executive officers, directors or director nominees may be affiliated with in the future,
and to which he or she has current or future fiduciary or contractual obligations, and such opportunity was not presented to such individual
solely in their capacity as a director or officer of our company, we would expect that he or she will honor his or her fiduciary or contractual
obligations to present such business combination opportunity to such entity, and only present it to us if such entity rejects the opportunity.
Conversely, if such individual was presented an opportunity solely in their capacity as a director or officer of our company, and our
company is legally and contractually permitted to undertake, and it would otherwise be reasonable for us to pursue, such opportunity,
we would expect he or she will honor his or her fiduciary or contractual obligations to present such business combination opportunity
to our company and only present it to such other entities for which he or she has fiduciary or contractual obligations if we reject the
opportunity. Finally, if such individual was presented or made aware of a business combination opportunity not in their capacity as a
director or officer of our company or any other entity to which they have fiduciary or contractual obligations, such individual would
have discretion as to which entity it would present such business combination opportunity.
Significant Activities Since Inception
On August 12, 2021, we consummated our initial
public offering of 35,700,000 Units (each a “Unit” and, collectively, the “Units”), including Units issued pursuant
to the partial exercise of the underwriters’ option to purchase additional Units to cover overallotments. Each Unit consists of
one share of Class A common stock, $0.0001 par value per share, and one-third of one redeemable warrant, to purchase one share of Class
A common stock at an exercise price of $11.50 per share. The Units were sold at an offering price of $10.00 per Unit, generating gross
proceeds of $357,000,000 (before underwriting discounts and commissions and offering expenses). Simultaneously with the consummation of
our initial public offering and the sale of the Units, we consummated the private placement of 6,760,000 warrants at a price of $1.50
per private placement warrant, issued to our sponsor, generating total proceeds of $10,140,000.
Approximately $357 million of the net proceeds
from the initial public offering (including the over-allotment) and certain of the proceeds of the private placements with our sponsor
were deposited in a trust account established for the benefit of our public stockholders.
Our Units began trading on August 10, 2021
on the Nasdaq under the symbol “CPAAU.” Commencing on September 30, 2021, the securities comprising the Units began
separate trading. The Units, common stock, and warrants are trading on the Nasdaq under the symbols “CPAAU,”
“CPAA” and “CPAAW,” respectively.
Initial Business Combination
Our initial business combination must occur with
one or more target businesses that together have an aggregate fair market value of at least 80% of the assets held in the trust account
(excluding the deferred underwriting commissions and taxes payable on the income earned on the trust account) at the time of the agreement
to enter into the initial business combination. If our board is not able to independently determine the fair market value of the target
business or businesses, we will obtain an opinion from an independent investment banking firm that is a member of FINRA or an independent
accounting firm with respect to the satisfaction of such criteria.
We may, at our option, pursue an acquisition opportunity
jointly with one or more entities affiliated with Centerview Capital and/or one or more investors in funds managed by Centerview Capital,
which we refer to as an “Affiliated Joint Acquisition.” Any such parties may co-invest with us in the target business at the
time of our initial business combination, or we could raise additional proceeds to complete the acquisition by issuing to such parties
a class of equity or equity-linked securities. We refer to this potential future issuance, or a similar issuance to other specified purchasers,
as a “specified future issuance” throughout this Report. The amount and other terms and conditions of any such specified future
issuance would be determined at the time thereof. We are not obligated to make any specified future issuance and may determine not to
do so. This is not an offer for any specified future issuance. Pursuant to the anti-dilution provisions of our Class B common stock,
any such specified future issuance would result in an adjustment to the conversion ratio such that our initial stockholders and their
permitted transferees, if any, would retain their aggregate percentage ownership at 20% of the sum of the total number of all shares of
common stock outstanding upon completion of our initial public offering plus all shares issued in the specified future issuance, unless
the holders of a majority of the then-outstanding shares of Class B common stock agreed to waive such adjustment with respect to
the specified future issuance at the time thereof. They may waive such specified future issuance due to (but not limited to) the following:
(i) closing conditions which are part of the initial business combination; (ii) during negotiations with Class A stockholders
on structuring an initial business combination; (iii) during negotiations with parties providing financing which would trigger the
anti-dilution provisions of the Class B common stock; or (iv) as part of the Affiliated Joint Acquisition. We cannot determine
at this time whether a majority of the holders of our Class B common stock at the time of any such specified future issuance would
agree to waive such adjustment to the conversion ratio. If such adjustment is not waived, the specified future issuance would not reduce
the percentage ownership of holders of our Class B common stock, but would reduce the percentage ownership of holders of our Class A
common stock. If such adjustment is waived, the specified future issuance would reduce the percentage ownership of holders of both classes
of our common stock.
We anticipate structuring our initial business combination
so that the post-transaction company in which our public stockholders own shares will own or acquire 100% of the equity interests or assets
of the target business or businesses. We may, however, structure our initial business combination such that the post-transaction company
owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management
team or stockholders or for other reasons, including an Affiliated Joint Acquisition as described above. However, we will only complete
such business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target
or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under
the Investment Company Act of 1940, as amended (the “Investment Company Act”). Even if the post-transaction company owns or
acquires 50% or more of the voting securities of the target, our stockholders prior to the business combination may collectively own a
minority interest in the post-transaction company, depending on valuations ascribed to the target and us in the business combination transaction.
For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding
capital stock of a target. In this case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance
of a substantial number of new shares, our stockholders immediately prior to our initial business combination could own less than a majority
of our outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests or assets of a target
business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned
or acquired is what will be valued for purposes of the 80% of net assets test. If the business combination involves more than one target
business, the 80% of net assets test will be based on the aggregate value of all of the target businesses and we will treat the target
businesses together as the initial business combination for purposes of a tender offer or for seeking stockholder approval, as applicable.
Our Management Team
Members of our management team are not obligated
to devote any specific number of hours to our matters but they intend to devote as much of their time as they deem necessary to our affairs
until we have completed our initial business combination. The amount of time that any member of our management team will devote in any
time period will vary based on whether a target business has been selected for our initial business combination and the current stage
of the business combination process.
We believe our management team’s operating
and transaction experience and relationships with companies will provide us with a substantial number of potential business combination
targets. Over the course of their careers, the members of our management team have developed a broad network of contacts and corporate
relationships around the world. This network has grown through the activities of our management team sourcing, acquiring and financing
businesses, our management team’s relationships with sellers, financing sources and target management teams and the experience of
our management team in executing transactions under varying economic and financial market conditions. See Part III, Item 10 “Directors,
Executive Officers and Corporate Governance” for a more complete description of our management team’s experience.
Status as a Public Company
We believe our structure will make us an attractive
business combination partner to target businesses. As an existing public company, we offer a target business an alternative to the traditional
initial public offering through a merger or other business combination. In this situation, the owners of the target business would exchange
their shares of stock in the target business for shares of our stock or for a combination of shares of our stock and cash, allowing us
to tailor the consideration to the specific needs of the sellers. Although there are various costs and obligations associated with being
a public company, we believe target businesses will find this method a more certain and cost effective method to becoming a public company
than the typical initial public offering. In a typical initial public offering, there are additional expenses incurred in marketing, road
show and public reporting efforts that may not be present to the same extent in connection with a business combination with us.
Furthermore, once a proposed business combination
is completed, the target business will have effectively become public, whereas an initial public offering is always subject to the underwriters’
ability to complete the offering, as well as general market conditions, which could delay or prevent the offering from occurring or could
have negative valuation consequences. Once public, we believe the target business would then have greater access to capital and an additional
means of providing management incentives consistent with stockholders’ interests. It can offer further benefits by augmenting a
company’s profile among potential new customers and vendors and aid in attracting talented employees.
We are an “emerging growth company,”
as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As such, we are eligible to take advantage of certain exemptions
from various reporting requirements that are applicable to other public companies that are not “emerging growth companies”
including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley
Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from
the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments
not previously approved. If some investors find our securities less attractive as a result, there may be a less active trading market
for our securities and the prices of our securities may be more volatile.
In addition, Section 107 of the JOBS Act also provides
that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the
Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay
the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take advantage
of the benefits of this extended transition period.
We will remain an emerging growth company until
the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of our initial public offering,
(b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer,
which means the market value of our Class A common stock that is held by non-affiliates exceeds $700 million as of the prior June 30th,
and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.
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 shares of our Class A common stock held by non-affiliates
exceeds $250 million as of the prior June 30, and (2) our annual revenues exceeded $100 million during such completed fiscal year or the
market value of shares of our Class A common stock held by non-affiliates exceeds $700 million as of the prior June 30.
Financial Position
With funds available for a business combination
in the amount of $344,511,796, after payment of $12,495,000 of deferred underwriting fees, and before fees and expenses associated with
our initial business combination, we offer a target business a variety of options such as creating a liquidity event for its owners, providing
capital for the potential growth and expansion of its operations or strengthening its balance sheet by reducing its debt or leverage ratio.
Because we are able to complete our business combination using our cash, debt or equity securities, or a combination of the foregoing,
we have the flexibility to use the most efficient combination that will allow us to tailor the consideration to be paid to the target
business to fit its needs and desires. However, we have not taken any steps to secure third party financing and there can be no assurance
it will be available to us.
Effecting our Initial Business Combination
We are not presently engaged in, and we will not
engage in, any operations for an indefinite period of time. We intend to effectuate our initial business combination using cash from the
proceeds of our initial public offering and the private placement of the private placement warrants, our capital stock, debt or a combination
of these as the consideration to be paid in our initial business combination. We may seek to complete our initial business combination
with a company or business that may be financially unstable or in its early stages of development or growth, which would subject us to
the numerous risks inherent in such companies and businesses.
If our initial business combination is paid for
using equity or debt securities, or not all of the funds released from the trust account are used for payment of the consideration in
connection with our business combination or used for redemptions of purchases of our Class A common stock, we may apply the balance of
the cash released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations of
the post-transaction company, the payment of principal or interest due on indebtedness incurred in completing our initial business combination,
to fund the purchase of other companies or for working capital.
We currently do not have any specific transaction
under consideration with a target business with which to consummate our initial business combination. Certain members of our management
team are employed by Centerview Capital Consumer. Centerview Capital Consumer is continuously made aware of potential business opportunities,
one or more of which we may desire to pursue for a business combination, but we have not (nor has anyone on our behalf) contacted any
prospective target business with respect to a business combination transaction with us.
We may seek to raise additional funds through a
private offering of debt or equity securities in connection with the completion of our initial business combination (which may include
a specified future issuance), and we may effectuate our initial business combination using the proceeds of such offering rather than using
the amounts held in the trust account. Subject to compliance with applicable securities laws, we would expect to complete such financing
only simultaneously with the completion of our business combination. In the case of an initial business combination funded with assets
other than the trust account assets, our tender offer documents or proxy materials disclosing the business combination would disclose
the terms of the financing and, only if required by law, we would seek stockholder approval of such financing. There are no prohibitions
on our ability to raise funds privately, including pursuant to any specified future issuance, or through loans in connection with our
initial business combination. At this time, we are not a party to any arrangement or understanding with any third party with respect to
raising any additional funds through the sale of securities or otherwise.
Sources of Target Businesses
We anticipate that target business candidates will
be brought to our attention from various unaffiliated sources, including investment market participants, private equity groups, investment
banking firms, consultants, accounting firms and large business enterprises. Target businesses may be brought to our attention by such
unaffiliated sources as a result of being solicited by us through calls or mailings. These sources may also introduce us to target businesses
in which they think we may be interested on an unsolicited basis, since many of these sources will have read this Report and know what
types of businesses we are targeting. Our officers and directors, as well as their affiliates, may also bring to our attention target
business candidates that they become aware of through their business contacts as a result of formal or informal inquiries or discussions
they may have, as well as attending trade shows or conventions. In addition, we expect to receive a number of proprietary deal flow opportunities
that would not otherwise necessarily be available to us as a result of the business relationships of our officers and directors. While
we do not presently anticipate engaging the services of professional firms or other individuals that specialize in business acquisitions
on any formal basis, we may engage these firms, including one or more of the underwriters or one of their respective affiliates, or other
individuals in the future, in which event we may pay a finder’s fee, consulting fee or other compensation to be determined in an
arm’s length negotiation based on the terms of the transaction. In addition, the underwriters may provide these services without
additional compensation. We will formally engage a finder only to the extent our management determines that the use of a finder may bring
opportunities to us that may not otherwise be available to us or if finders approach us on an unsolicited basis with a potential transaction
that our management determines is in our best interest to pursue. Payment of finder’s fees is customarily tied to completion of
a transaction, in which case any such fee will be paid out of the funds held in the trust account. In no event, however, will our sponsor
or any of our existing officers or directors, or any entity with which they are affiliated, be paid any finder’s fee, consulting
fee or other compensation prior to, or for any services they render in order to effectuate, the completion of our initial business combination
(regardless of the type of transaction that it is). We have agreed to pay an affiliate of our sponsor a total of $10,000 per month for
office space, utilities and secretarial and administrative support and to reimburse our sponsor for any out-of-pocket expenses related
to identifying, investigating and completing an initial business combination. Some of our officers and directors may enter into employment
or consulting agreements with the post-transaction company following our initial business combination. The presence or absence of any
such fees or arrangements will not be used as a criterion in our selection process of an acquisition candidate.
We are not prohibited from pursuing an initial business
combination with a business combination target that is affiliated with our sponsor, officers or directors or making the acquisition through
a joint venture or other form of shared ownership with our sponsor, officers or directors. In the event we seek to complete our initial
business combination with a business combination target that is affiliated with our sponsor, officers or directors, we, or a committee
of independent directors, would obtain an opinion from an independent investment banking firm which is a member of FINRA or an independent
accounting firm that such an initial business combination is fair to our company from a financial point of view. We are not required to
obtain such an opinion in any other context.
As more fully discussed in Part III, Item 10 “Directors,
Executive Officers and Corporate Governance — Conflicts of Interest,” if any of our officers or directors becomes aware of
a business combination opportunity that falls within the line of business of any entity to which he or she has pre-existing fiduciary
or contractual obligations, he or she may be required to present such business combination opportunity to such entity prior to presenting
such business combination opportunity to us. Our officers and directors currently have certain relevant fiduciary duties or contractual
obligations that may take priority over their duties to us. We may, at our option, pursue an Affiliated Joint Acquisition opportunity
with an entity to which an officer or director has a fiduciary or contractual obligation. Any such entity may co-invest with us in the
target business at the time of our initial business combination, or we could raise additional proceeds to complete the acquisition by
making a specified future issuance to any such entity.
Selection of a Target Business and Structuring of our Initial
Business Combination
Our initial business combination must occur with
one or more target businesses that together have an aggregate fair market value of at least 80% of our assets held in the trust account
(excluding the deferred underwriting commissions and taxes payable on the income earned on the trust account) at the time of the agreement
to enter into the initial business combination. The fair market value of the target or targets will be determined by our board of directors
based upon one or more standards generally accepted by the financial community, such as discounted cash flow valuation or value of comparable
businesses. If our board is not able to independently determine the fair market value of the target business or businesses, we will obtain
an opinion from an independent investment banking firm that is a member of FINRA or from an independent accounting firm, with respect
to the satisfaction of such criteria. We do not intend to purchase multiple businesses in unrelated industries in conjunction with our
initial business combination. Subject to this requirement, our management will have virtually unrestricted flexibility in identifying
and selecting one or more prospective target businesses, although we are not be permitted to effectuate our initial business combination
with another blank check company or a similar company with nominal operations.
In any case, we will only complete an initial business
combination in which we own or acquire 50% or more of the outstanding voting securities of the target or otherwise acquire a controlling
interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act. If
we own or acquire less than 100% of the equity interests or assets of a target business or businesses, the portion of such business or
businesses that are owned or acquired by the post-transaction company is what will be valued for purposes of the 80% of net assets test.
There is no basis for investors in our initial public offering to evaluate the possible merits or risks of any target business with which
we may ultimately complete our business combination.
To the extent we effect our business combination
with a company or business that may be financially unstable or in its early stages of development or growth we may be affected by numerous
risks inherent in such company or business. Although our management will endeavor to evaluate the risks inherent in a particular target
business, we cannot assure you that we will properly ascertain or assess all significant risk factors.
In evaluating a prospective target business, we
expect to conduct a thorough due diligence review, which will encompass, among other things, meetings with incumbent management and employees,
document reviews, interviews of customers and suppliers and inspection of facilities, as well as a review of financial and other information
that will be made available to us.
The time required to select and evaluate a target
business and to structure and complete our initial business combination, and the costs associated with this process, are not currently
ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation of a prospective target
business with which our business combination is not ultimately completed will result in our incurring losses and will reduce the funds
we can use to complete another business combination.
Lack of Business Diversification
For
an indefinite period of time after the completion of our initial business combination, the prospects for our success may depend entirely
on the future performance of a single business. Unlike other entities that have the resources to complete business combinations with
multiple entities in one or several industries, it is probable that we will not have the resources to diversify our operations and mitigate
the risks of being in a single line of business. In addition, we focus our search for an initial business combination in a single industry.
By completing our business combination with only a single entity, our lack of diversification may:
| ● | subject
us to negative economic, competitive and regulatory developments, any or all of which may
have a substantial adverse impact on the particular industry in which we operate after our
initial business combination, and |
| ● | cause
us to depend on the marketing and sale of a single product or limited number of products
or services. |
Limited
Ability to Evaluate the Target’s Management Team
Although we intend to closely scrutinize the management
of a prospective target business when evaluating the desirability of effecting our business combination with that business, our assessment
of the target business’ management may not prove to be correct. In addition, the future management may not have the necessary skills,
qualifications or abilities to manage a public company. Furthermore, the future role of members of our management team, if any, in the
target business cannot presently be stated with any certainty. While it is possible that one or more of our directors will remain associated
in some capacity with us following our business combination, it is unlikely that any of them will devote their full efforts to our affairs
subsequent to our business combination. Moreover, we cannot assure you that members of our management team will have significant experience
or knowledge relating to the operations of the particular target business.
We cannot assure you that any of our key personnel
will remain in senior management or advisory positions with the combined company. The determination as to whether any of our key personnel
will remain with the combined company will be made at the time of our initial business combination.
Following a business combination, we may seek to
recruit additional managers to supplement the incumbent management of the target business. We cannot assure you that we will have the
ability to recruit additional managers, or that those additional managers will have the requisite skills, knowledge or experience necessary
to enhance the incumbent management.
Stockholders May Not Have the Ability to Approve our Initial Business
Combination
We may conduct redemptions without a stockholder
vote pursuant to the tender offer rules of the SEC. However, we will seek stockholder approval if it is required by law or applicable
stock exchange rule, or we may decide to seek stockholder approval for business or other legal reasons.
Presented in the table below is a graphic explanation
of the types of initial business combinations we may consider and whether stockholder approval is currently required under Delaware law
for each such transaction.
Type
of Transaction | |
Whether
Stockholder Approval is Required |
Purchase of assets | |
No |
Purchase of stock of target not involving a
merger with the company | |
No |
Merger of target into a subsidiary of the company | |
No |
Merger of the company with a target | |
Yes |
Under
Nasdaq’s listing rules, stockholder approval would be required for our initial business combination if, for example:
| ● | we
issue shares of Class A common stock that will be equal to or in excess of 20% of the number
of shares of our Class A common stock then outstanding; |
| ● | any
of our directors, officers or substantial stockholders (as defined by Nasdaq rules) has a
5% or greater interest (or such persons collectively have a 10% or greater interest), directly
or indirectly, in the target business or assets to be acquired or otherwise and the present
or potential issuance of common stock could result in an increase in outstanding shares of
common stock or voting power of 5% or more; or the issuance or potential issuance of common
stock will result in our undergoing a change of control. |
The
decision as to whether we will seek stockholder approval of a proposed business combination in those instances in which stockholder approval
is not required by law will be made by us, solely in our discretion, and will be based on business and legal reasons, which include a
variety of factors, including, but not limited to:
| ● | the
timing of the transaction, including in the event we determine stockholder approval would
require additional time and there is either not enough time to seek stockholder approval
or doing so would place; |
| ● | the
company at a disadvantage in the transaction or result in other additional burdens on the
company; |
| ● | the
expected cost of holding a stockholder vote; |
| ● | the
risk that the stockholders would fail to approve the proposed business combination; |
| ● | other
time and budget constraints of the company; and |
| ● | additional
legal complexities of a proposed business combination that would be time-consuming and burdensome
to present to stockholders. |
Permitted Purchases of our Securities
In the event we seek stockholder approval of our
business combination and we do not conduct redemptions in connection with our business combination pursuant to the tender offer rules,
our sponsor, directors, officers, advisors or their affiliates may purchase shares in privately negotiated transactions or in the open
market either prior to or following the completion of our initial business combination. However, they have no current commitments, plans
or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds
in the trust account will be used to purchase shares in such transactions. They will not make any such purchases when they are in possession
of any material non-public information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange
Act. Such a purchase may include a contractual acknowledgement that such stockholder, although still the record holder of our shares is
no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. We have adopted an insider trading
policy which will require insiders to refrain from purchasing shares during certain blackout periods and when they are in possession of
any material nonpublic information and to clear all trades with our legal counsel prior to execution. We cannot currently determine whether
our insiders will make such purchases pursuant to a Rule 10b5-1 plan, as such purchases will be dependent upon several factors, including
but not limited to, the timing and size of such purchases. Depending on such circumstances, our insiders may either make such purchases
pursuant to a Rule 10b5-1 plan or determine that such a plan is not necessary.
In the event that our sponsor, directors, officers,
advisors or their affiliates purchase shares in privately negotiated transactions from public stockholders who have already elected to
exercise their redemption rights, such selling stockholders would be required to revoke their prior elections to redeem their shares.
We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the
Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine
at the time of any such purchases that the purchases are subject to such rules, the purchasers will comply with such rules.
The purpose of such purchases would be to (i) vote
such shares in favor of the business combination and thereby increase the likelihood of obtaining stockholder approval of the business
combination or (ii) to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain
amount of cash at the closing of our business combination, where it appears that such requirement would otherwise not be met. This may
result in the completion of our business combination that may not otherwise have been possible.
In addition, if such purchases are made, the public
“float” of our common stock may be reduced and the number of beneficial holders of our securities may be reduced, which may
make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.
Our sponsor, officers, directors and/or their affiliates
anticipate that they may identify the stockholders with whom our sponsor, officers, directors or their affiliates may pursue privately
negotiated purchases by either the stockholders contacting us directly or by our receipt of redemption requests submitted by stockholders
following our mailing of proxy materials in connection with our initial business combination. To the extent that our sponsor, officers,
directors, advisors or their affiliates enter into a private purchase, they would identify and contact only potential selling stockholders
who have expressed their election to redeem their shares for a pro rata share of the trust account or vote against the business combination.
Our sponsor, officers, directors, advisors or their affiliates will only purchase shares if such purchases comply with Regulation M under
the Exchange Act and the other federal securities laws.
Any purchases by our sponsor, officers, directors
and/or their affiliates who are affiliated purchasers under Rule 10b-18 under the Exchange Act will only be made to the extent such purchases
are able to be made in compliance with Rule 10b-18, which is a safe harbor from liability for manipulation under Section 9(a)(2) and Rule 10b-5
of the Exchange Act. Rule 10b-18 has certain technical requirements that must be complied with in order for the safe harbor to be available
to the purchaser. Our sponsor, officers, directors and/or their affiliates will not make purchases of common stock if the purchases would
violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act.
Redemption Rights for Public Stockholders upon Completion of our
Initial Business Combination
We will provide our public stockholders with the
opportunity to redeem all or a portion of their shares of Class A common stock upon the completion of our initial business combination
at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account as of two business days prior
to the consummation of the initial business combination including interest earned on the funds held in the trust account and not previously
released to us to pay up to $1,000,000 of our working capital requirements as well as to pay our franchise and income taxes, divided by
the number of then outstanding public shares, subject to the limitations described herein. The amount in the trust account is initially
anticipated to be approximately $10.00 per public share. The per-share amount we will distribute to investors who properly redeem their
shares will not be reduced by the deferred underwriting commissions we will pay to the underwriters. The redemption rights include the
requirement that a beneficial holder must identify itself in order to validly redeem its shares. Our sponsor, officers and directors have
entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder
shares and any public shares held by them in connection with the completion of our business combination.
Manner of Conducting Redemptions
We will provide our public stockholders with the
opportunity to redeem all or a portion of their shares of Class A common stock upon the completion of our initial business combination
either (i) in connection with a stockholder meeting called to approve the business combination or (ii) by means of a tender offer. The
decision as to whether we will seek stockholder approval of a proposed business combination or conduct a tender offer will be made by
us, solely in our discretion, and will be based on a variety of factors described above “— Stockholders May Not Have the Ability
to Approve our Initial Business Combination”, such as the timing of the transaction and whether the terms of the transaction would
require us to seek stockholder approval under the law or stock exchange listing requirement. Asset acquisitions and stock purchases would
not typically require stockholder approval while direct mergers with our company where we do not survive and any transactions where we
issue more than 20% of our outstanding common stock or seek to amend our amended and restated certificate of incorporation would require
stockholder approval. If we structure a business combination transaction with a target company in a manner that requires stockholder approval,
we will not have discretion as to whether to seek a stockholder vote to approve the proposed business combination. We intend to conduct
redemptions without a stockholder vote pursuant to the tender offer rules of the SEC unless stockholder approval is required by law or
stock exchange listing requirements or we choose to seek stockholder approval for business or other legal reasons.
If a stockholder vote is not required and we do
not decide to hold a stockholder vote for business or other legal reasons, we will, pursuant to our amended and restated certificate of
incorporation:
| ● | conduct
the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate
issuer tender offers, and |
| ● | file
tender offer documents with the SEC prior to completing our initial business combination
which contain substantially the same financial and other information about the initial business
combination and the redemption rights as is required under Regulation 14A of the Exchange
Act, which regulates the solicitation of proxies. |
Upon the public announcement of our business
combination, we or our sponsor will terminate any plan established in accordance with Rule 10b5-1 to purchase shares of our Class A common
stock in the open market if we elect to redeem our public shares through a tender offer, to comply with Rule 14e-5 under the Exchange
Act.
In the event we conduct redemptions pursuant
to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a) under
the Exchange Act, and we will not be permitted to complete our initial business combination until the expiration of the tender offer period.
In addition, the tender offer will be conditioned on public stockholders not tendering more than a specified number of public shares which
are not purchased by our sponsor, which number will be based on the requirement that we may not redeem public shares in an amount that
would cause our net tangible assets to be less than $5,000,001 upon consummation of our initial business combination (so that we are not
subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which may be contained
in the agreement relating to our initial business combination. If public stockholders tender more shares than we have offered to purchase,
we will withdraw the tender offer and not complete the initial business combination.
If,
however, stockholder approval of the transaction is required by law or stock exchange listing requirement, or we decide to obtain stockholder
approval for business or other legal reasons, we will, pursuant to our amended and restated certificate of incorporation:
| ● | conduct
the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the
Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender
offer rules, and |
| ● | file
proxy materials with the SEC. |
In
the event that we seek stockholder approval of our initial business combination, we will distribute proxy materials and, in connection
therewith, provide our public stockholders with the redemption rights described above upon completion of the initial business combination.
If we seek stockholder approval, we will complete
our initial business combination only if a majority of the outstanding shares of common stock voted are voted in favor of the business
combination. A quorum for such meeting will consist of the holders present in person or by proxy of shares of outstanding capital stock
of the company representing a majority of the voting power of all outstanding shares of capital stock of the company entitled to vote
at such meeting. Our initial stockholders will count toward this quorum and have agreed to vote their founder shares and any public shares
purchased during or after our initial public offering in favor of our initial business combination. For purposes of seeking approval of
the majority of our outstanding shares of common stock voted, non-votes will have no effect on the approval of our initial business combination
once a quorum is obtained. As a result, in addition to our initial stockholders’ founder shares, we would need 13,387,501, or 37.5%,
of the 35,700,000 public shares outstanding to be voted in favor of a transaction (assuming all outstanding shares are voted) in order
to have our initial business combination approved. We intend to give approximately 30 days (but not less than 10 days nor more than 60
days) prior written notice of any such meeting, if required, at which a vote shall be taken to approve our initial business combination.
These quorum and voting thresholds, and the voting agreements of our initial stockholders, may make it more likely that we will consummate
our initial business combination. Each public stockholder may elect to redeem its public shares irrespective of whether they vote for
or against the proposed transaction.
Our amended and restated certificate of incorporation
provides that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001
upon consummation of our initial business combination (so that we are not subject to the SEC’s “penny stock” rules)
or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business combination.
For example, the proposed business combination may require: (i) cash consideration to be paid to the target or its owners, (ii) cash to
be transferred to the target for working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions
in accordance with the terms of the proposed business combination. In the event the aggregate cash consideration we would be required
to pay for all shares of Class A common stock that are validly submitted for redemption plus any amount required to satisfy cash conditions
pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the
business combination or redeem any shares, and all shares of Class A common stock submitted for redemption will be returned to the holders
thereof.
Limitation on Redemption
upon Completion of our Initial Business Combination if we Seek Stockholder Approval
Notwithstanding the foregoing, if we seek stockholder
approval of our initial business combination and we do not conduct redemptions in connection with our business combination pursuant to
the tender offer rules, our amended and restated certificate of incorporation provides that a public stockholder, together with any affiliate
of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under
Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 10% of the
shares sold in our initial public offering, which we refer to as the “Excess Shares.” We believe this restriction will discourage
stockholders from accumulating large blocks of shares, and subsequent attempts by such holders to use their ability to exercise their
redemption rights against a proposed business combination as a means to force us or our management to purchase their shares at a significant
premium to the then-current market price or on other undesirable terms. Absent this provision, a public stockholder holding more than
an aggregate of 10% of the shares sold in our initial public offering could threaten to exercise its redemption rights if such holder’s
shares are not purchased by us or our management at a premium to the then-current market price or on other undesirable terms. By limiting
our stockholders’ ability to redeem no more than 10% of the shares sold in our initial public offering, we believe we will limit
the ability of a small group of stockholders to unreasonably attempt to block our ability to complete our business combination, particularly
in connection with a business combination with a target that requires as a closing condition that we have a minimum net worth or a certain
amount of cash. However, we would not be restricting our stockholders’ ability to vote all of their shares (including Excess Shares)
for or against our business combination.
Tendering Stock Certificates
in Connection with a Tender Offer or Redemption Rights
We may require our public stockholders seeking to
exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to either tender
their certificates to our transfer agent prior to the date set forth in the tender offer documents or proxy materials mailed to such holders,
or up to two business days prior to the initially scheduled vote on the proposal to approve the business combination in the event we distribute
proxy materials, or to deliver their shares to the transfer agent electronically using Depository Trust Company’s DWAC (Deposit/Withdrawal
At Custodian) System, at the holder’s option. The proxy solicitation or tender offer materials, as applicable, that we will furnish
to holders of our public shares in connection with our initial business combination will indicate the applicable delivery requirements,
which will include the requirement that a beneficial holder must identify itself in order to validly redeem its shares. Accordingly, a
public stockholder would have from the time we send out our tender offer materials until the close of the tender offer period, or up to
two days prior to the vote on the business combination if we distribute proxy materials, as applicable, to tender its shares if it wishes
to seek to exercise its redemption rights. Given the relatively short exercise period, it is advisable for stockholders to use electronic
delivery of their public shares.
There is a nominal cost associated with the above-referenced
tendering process and the act of certificating the shares or delivering them through the DWAC System. The transfer agent will typically
charge the tendering broker $80.00 and it would be up to the broker whether or not to pass this cost on to the redeeming holder. However,
this fee would be incurred regardless of whether or not we require holders seeking to exercise redemption rights to tender their shares.
The need to deliver shares is a requirement of exercising redemption rights regardless of the timing of when such delivery must be effectuated.
The foregoing is different from the procedures used
by many blank check companies. In order to perfect redemption rights in connection with their business combinations, many blank check
companies would distribute proxy materials for the stockholders’ vote on an initial business combination, and a holder could simply
vote against a proposed business combination and check a box on the proxy card indicating such holder was seeking to exercise his or her
redemption rights. After the business combination was approved, the company would contact such stockholder to arrange for him or her to
deliver his or her certificate to verify ownership. As a result, the stockholder then had an “option window” after the completion
of the business combination during which he or she could monitor the price of the company’s stock in the market. If the price rose
above the redemption price, he or she could sell his or her shares in the open market before actually delivering his or her shares to
the company for cancellation. As a result, the redemption rights, to which stockholders were aware they needed to commit before the stockholder
meeting, would become “option” rights surviving past the completion of the business combination until the redeeming holder
delivered its certificate. The requirement for physical or electronic delivery prior to the meeting ensures that a redeeming holder’s
election to redeem is irrevocable once the business combination is approved.
Any request to redeem such shares, once made, may
be withdrawn at any time up to the date set forth in the tender offer materials or the date of the stockholder meeting set forth in our
proxy materials, as applicable. Furthermore, if a holder of a public share delivered its certificate in connection with an election of
redemption rights and subsequently decides prior to the applicable date not to elect to exercise such rights, such holder may simply request
that the transfer agent return the certificate (physically or electronically). It is anticipated that the funds to be distributed to holders
of our public shares electing to redeem their shares will be distributed promptly after the completion of our business combination.
If our initial business combination is not approved
or completed for any reason, then our public stockholders who elected to exercise their redemption rights would not be entitled to redeem
their shares for the applicable pro rata share of the trust account. In such case, we will promptly return any certificates delivered
by public holders who elected to redeem their shares.
If our initial proposed business combination is
not completed, we may continue to try to complete a business combination with a different target until August 12, 2023.
Redemption of Public Shares
and Liquidation if no Initial Business Combination
Our sponsor, officers and directors have agreed
that if we do not complete our initial business combination by August 12, 2023, we will: (i) cease all operations except for the purpose
of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a
per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest earned on the
funds held in the trust account and not previously released to us to pay up to $1,000,000 of our working capital requirements as well
as to pay our franchise and income taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then
outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the
right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following
such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in
each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There
will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to complete
our business combination by August 12, 2023.
Our sponsor, officers and directors have entered
into a letter agreement with us, pursuant to which they have waived their rights to liquidating distributions from the trust account with
respect to any founder shares held by them if we fail to complete our initial business combination by August 12, 2023. However, if our
initial stockholders acquire public shares after our initial public offering, they will be entitled to liquidating distributions from
the trust account with respect to such public shares if we fail to complete our initial business combination by August 12, 2023.
Our sponsor, officers and directors have agreed,
pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation
that would affect the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business
combination by August 12, 2023 or which adversely affects the rights of holders of our Class A common stock, unless we provide our public
stockholders with the opportunity to redeem their shares of Class A common stock upon approval of any such amendment at a per-share price,
payable in cash, equal to the aggregate amount then on deposit in the trust account including interest earned on the funds held in the
trust account and not previously released to us to pay up to $1,000,000 of our working capital requirements as well as to pay our franchise
and income taxes divided by the number of then outstanding public shares. However, we may not redeem our public shares in an amount that
would cause our net tangible assets to be less than $5,000,001 upon consummation of our initial business combination (so that we are not
subject to the SEC’s “penny stock” rules).
We expect that all costs and expenses associated
with implementing our plan of dissolution, as well as payments to any creditors, will be funded from amounts remaining out of the approximately
$1,000,000 of proceeds held outside the trust account, although we cannot assure you that there will be sufficient funds for such purpose.
However, if those funds are not sufficient to cover the costs and expenses associated with implementing our plan of dissolution, to the
extent that there is any interest accrued in the trust account not required to pay up to $1,000,000 of our working capital requirements
as well as to pay franchise and income taxes on interest income earned on the trust account balance, we may request the trustee to release
to us an additional amount of up to $100,000 of such accrued interest to pay those costs and expenses. The amount of interest available
to us from the trust account may be less than $1,000,000 as a result of the current interest rate environment.
If we were to expend all of the net proceeds of
our initial public offering and the sale of the private placement warrants, other than the proceeds deposited in the trust account, and
without taking into account interest, if any, earned on the trust account, the per-share redemption amount received by stockholders upon
our dissolution would be approximately $10.00. The proceeds deposited in the trust account could, however, become subject to the claims
of our creditors which would have higher priority than the claims of our public stockholders. We cannot assure you that the actual per-share
redemption amount received by stockholders will not be substantially less than $10.00. Under Section 281(b) of the DGCL, our plan
of dissolution must provide for all claims against us to be paid in full or make provision for payments to be made in full, as applicable,
if there are sufficient assets. These claims must be paid or provided for before we make any distribution of our remaining assets to our
stockholders. While we intend to pay such amounts, if any, we cannot assure you that we will have funds sufficient to pay or provide for
all creditors’ claims.
Although we will seek to have all vendors, service
providers (other than our independent registered public accounting firm), prospective target businesses or other entities with which we
do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account
for the benefit of our public stockholders, there is no guarantee that they will execute such agreements or even if they execute such
agreements that they would be prevented from bringing claims against the trust account including but not limited to fraudulent inducement,
breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case
in order to gain an advantage with respect to a claim against our assets, including the funds held in the trust account. If any third
party refuses to execute an agreement waiving such claims to the monies held in the trust account, our management will perform an analysis
of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if management
believes that such third party’s engagement would be significantly more beneficial to us than any alternative. Examples of possible
instances where we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose
particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree
to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver.
In addition, there is no guarantee that such entities
will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements
with us and will not seek recourse against the trust account for any reason. Our sponsor has agreed that it will be liable to us if and
to the extent any claims by a vendor for services rendered or products sold to us, or a prospective target business with which we have
discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below (i) $10.00 per public share
or (ii) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account, due to reductions
in value of the trust assets, in each case net of the amount of 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 our initial public offering against certain liabilities, including liabilities under the Securities Act.
In the event that an executed waiver is deemed to be unenforceable against a third party, then our sponsor will not be responsible to
the extent of any liability for such third party claims. We have not independently verified whether our sponsor has sufficient funds to
satisfy its indemnity obligations and believe that our sponsor’s only assets are securities of our company. We have not asked our
sponsor to reserve for such indemnification obligations. Therefore, we cannot assure you that our sponsor would be able to satisfy those
obligations. As a result, if any such claims were successfully made against the trust account, the funds available for our initial business
combination and redemptions could be reduced to less than $10.00 per public share. In such event, we may not be able to complete our initial
business combination, and you would receive such lesser amount per share in connection with any redemption of your public shares. None
of our officers will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target
businesses.
In the event that the proceeds in the trust account
are reduced below (i) $10.00 per public share or (ii) such lesser amount per public share held in the trust account as of the date of
the liquidation of the trust account, due to reductions in value of the trust assets, in each case net of the amount of interest which
may be withdrawn to pay taxes, and our sponsor asserts that it is unable to satisfy its indemnification obligations or that it has no
indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against
our sponsor to enforce its indemnification obligations. While we currently expect that our independent directors would take legal action
on our behalf against our sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising
their business judgment may choose not to do so if, for example, the cost of such legal action is deemed by the independent directors
to be too high relative to the amount recoverable or if the independent directors determine that a favorable outcome is not likely. We
have not asked our sponsor to reserve for such indemnification obligations and we cannot assure you that our sponsor would be able to
satisfy those obligations. Accordingly, we cannot assure you that due to claims of creditors the actual value of the per-share redemption
price will not be less than $10.00 per public share.
We will seek to reduce the possibility that our
sponsor will have to indemnify the trust account due to claims of creditors by endeavoring to have all vendors, service providers (other
than our independent registered public accounting firm), prospective target businesses or other entities with which we do business execute
agreements with us waiving any right, title, interest or claim of any kind in or to monies held in the trust account. Our sponsor will
also not be liable as to any claims under our indemnity of the underwriters of our initial public offering against certain liabilities,
including liabilities under the Securities Act. We have access to up to approximately $1,000,000 from the proceeds of our initial public
offering with which to pay any such potential claims (including costs and expenses incurred in connection with our liquidation, currently
estimated to be no more than approximately $100,000). In the event that we liquidate and it is subsequently determined that the reserve
for claims and liabilities is insufficient, stockholders who received funds from our trust account could be liable for claims made by
creditors.
Under the DGCL, stockholders may be held liable
for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. The pro rata portion
of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our
business combination by August 12, 2023 may be considered a liquidating distribution under Delaware law. If the corporation complies with
certain procedures set forth in Section 280 of the DGCL intended to ensure that it makes reasonable provision for all claims against it,
including a 60-day notice period during which any third-party claims can be brought against the corporation, a 90-day period during which
the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating distributions are made
to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s
pro rata share of the claim or the amount distributed to the stockholder and any liability of the stockholder would be barred after the
third anniversary of the dissolution.
Furthermore, if the pro rata portion of our trust
account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our business combination
by August 12, 2023, is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful,
then pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful
redemption distribution, instead of three years, as in the case of a liquidating distribution. If we are unable to complete our business
combination within 24 months from the closing of our initial public offering, we will: (i) cease all operations except for the purpose
of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a
per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest earned on the
funds held in the trust account and not previously released to us to pay up to $1,000,000 of our working capital requirements as well
as to pay our franchise and income taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then
outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the
right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following
such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in
each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. Accordingly,
it is our intention to redeem our public shares as soon as reasonably possible following August 12, 2023 and, therefore, we do not intend
to comply with those procedures. As such, our stockholders could potentially be liable for any claims to the extent of distributions received
by them (but no more) and any liability of our stockholders may extend well beyond the third anniversary of such date.
Because we will not be complying with Section 280,
Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that will provide for our payment of all
existing and pending claims or claims that may be potentially brought against us within the subsequent 10 years. However, because we are
a blank check company, rather than an operating company, and our operations will be limited to searching for prospective target businesses
to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment bankers, etc.) or prospective target
businesses. As described above, pursuant to the obligation contained in our underwriting agreement, we will seek to have all vendors,
service providers (other than our independent registered public accounting firm), prospective target businesses or other entities with
which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the
trust account. As a result of this obligation, the claims that could be made against us are significantly limited and the likelihood that
any claim that would result in any liability extending to the trust account is remote. Further, our sponsor may be liable only to the
extent necessary to ensure that the amounts in the trust account are not reduced below (i) $10.00 per public share or (ii) such lesser
amount per public share held in the trust account as of the date of the liquidation of the trust account, due to reductions in value of
the trust assets, in each case net of the amount of interest withdrawn to pay taxes and will not be liable as to any claims under our
indemnity of the underwriters of our initial public offering against certain liabilities, including liabilities under the Securities Act.
In the event that an executed waiver is deemed to be unenforceable against a third party, our sponsor will not be responsible to the extent
of any liability for such third-party claims.
If we file a bankruptcy petition or an involuntary
bankruptcy petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy
law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders.
To the extent any bankruptcy claims deplete the trust account, we cannot assure you we will be able to return $10.00 per share to our
public stockholders. Additionally, if we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is
not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either
a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover
all amounts received by our stockholders. Furthermore, our board may be viewed as having breached its fiduciary duty to our creditors
and/or may have acted in bad faith, and thereby exposing itself and our company to claims of punitive damages, by paying public stockholders
from the trust account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us for
these reasons.
Our public stockholders will be entitled to receive
funds from the trust account only in the event of the redemption of our public shares if we do not complete our business combination by
August 12, 2023 or if they redeem their respective shares for cash upon the completion of the initial business combination. In no other
circumstances will a stockholder have any right or interest of any kind to or in the trust account. In the event we seek stockholder approval
in connection with our initial business combination, a stockholder’s voting in connection with the business combination alone will
not result in a stockholder’s redeeming its shares to us for an applicable pro rata share of the trust account. Such stockholder
must have also exercised its redemption rights described above.
Competition
In identifying, evaluating and selecting a target
business for our business combination, we have encountered, and may continue to encounter intense competition from other entities having
a business objective similar to ours, including other blank check companies, private equity groups and leveraged buyout funds, and operating
businesses seeking strategic acquisitions. Many of these entities are well established and have extensive experience identifying and effecting
business combinations directly or through affiliates. Moreover, many of these competitors possess greater financial, technical, human
and other resources than we do. Our ability to acquire larger target businesses will be limited by our available financial resources.
This inherent limitation gives others an advantage in pursuing the acquisition of a target business. Furthermore, our obligation to pay
cash in connection with our public stockholders who exercise their redemption rights may reduce the resources available to us for our
initial business combination and our outstanding warrants, and the future dilution they potentially represent, may not be viewed favorably
by certain target businesses. Either of these factors may place us at a competitive disadvantage in successfully negotiating an initial
business combination.
Employees
We currently have four officers. Members of our
management team are not obligated to devote any specific number of hours to our matters but they intend to devote as much of their time
as they deem necessary to our affairs until we have completed our initial business combination.
The amount of time that any such person will devote
in any time period will vary based on whether a target business has been selected for our initial business combination and the current
stage of the business combination process.
Periodic Reporting and Financial Information
Our Units, Class A common stock and warrants are
registered under the Exchange Act and we have reporting obligations, including the requirement that we file annual, quarterly and current
reports with the SEC. In accordance with the requirements of the Exchange Act, our annual reports contain financial statements audited
and reported on by our independent registered public accounting firm.
We will provide stockholders with audited financial
statements of the prospective target business as part of the tender offer materials or proxy solicitation materials sent to stockholders
to assist them in assessing the target business. In all likelihood, these financial statements will need to be prepared in accordance
with GAAP. We cannot assure you that any particular target business identified by us as a potential acquisition candidate will have financial
statements prepared in accordance with GAAP or that the potential target business will be able to prepare its financial statements in
accordance with GAAP. To the extent that this requirement cannot be met, we may not be able to acquire the proposed target business. While
this may limit the pool of potential acquisition candidates, we do not believe that this limitation will be material.
We will be required to evaluate our internal controls
over financial reporting procedures for the fiscal year ending December 31, 2022 as required by the Sarbanes-Oxley Act. Only in the event
we are deemed to be a large accelerated filer or an accelerated filer will we be required to have our internal control over financial
reporting procedures audited. A target company may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy
of their internal controls over financial reporting. The development of the internal controls of any such entity to achieve compliance
with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition.
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 shares of our Class A common stock held by non-affiliates
exceeds $250 million as of the prior June 30, and (2) our annual revenues exceeded $100 million during such completed fiscal year or the
market value of shares of our Class A common stock held by non-affiliates exceeds $700 million as of the prior June 30.
Item 1A. 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 Report, including financial statements, before making a decision to invest in our units. 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. In that event, the trading price
of our securities could decline, and you could lose all or part of your investment.
Summary of Risk Factors
| ● | We are a newly formed company with no operating history and
no revenues, and you have no basis on which to evaluate our ability to achieve our business objective. |
| ● | Past performance by our management team, Simply Good Foods,
Advantage, or Centerview Capital or its affiliates, including Centerview Capital Consumer, is not indicative of future performance of
an investment in us. |
| ● | Our public stockholders may not be afforded an opportunity
to vote on our proposed business combination, which means we may complete our initial business combination even though a majority of
our public stockholders do not support such a combination. |
| ● | If we seek stockholder approval of our initial business combination,
our initial stockholders have agreed to vote in favor of such initial business combination, regardless of how our public stockholders
vote. |
| ● | Your only opportunity to affect the investment decision regarding
a potential business combination will be limited to the exercise of your right to redeem your shares from us for cash, unless we seek
stockholder approval of the business combination. |
| ● | The ability of our public stockholders to redeem their shares
for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult for us
to enter into a business combination with a target. |
| ● | The ability of our public stockholders to exercise redemption
rights with respect to a large number of our shares may not allow us to complete the most desirable business combination or optimize
our capital structure. |
| ● | The ability of our public stockholders to exercise redemption
rights with respect to a large number of our shares could increase the probability that our initial business combination would be unsuccessful
and that you would have to wait for liquidation in order to redeem your stock. |
| ● | The requirement that we complete our initial business combination
within the prescribed time frame may give potential target businesses leverage over us in negotiating a business combination and may
decrease our ability to conduct due diligence on potential business combination targets as we approach our dissolution deadline, which
could undermine our ability to complete our business combination on terms that would produce value for our stockholders. |
| ● | Our search for a business combination, and any target business
with which we ultimately consummate a business combination, may be materially adversely affected by the recent coronavirus (COVID-19)
outbreak and the status of debt and equity markets. |
| ● | We may not be able to complete our initial business combination
within the prescribed time frame, in which case we would cease all operations except for the purpose of winding up and we would redeem
our public shares and liquidate, in which case our public stockholders may only receive $10.00 per share, or less than such amount in
certain circumstances, and our warrants will expire worthless. |
| ● | If we seek stockholder approval of our initial business combination,
our sponsor, directors, officers, advisors and their affiliates may elect to purchase shares from public stockholders, which may influence
a vote on a proposed business combination and reduce the public “float” of our Class A common stock. |
| ● | If a stockholder fails to receive notice of our offer to
redeem our public shares in connection with our business combination, or fails to comply with the procedures for tendering its shares,
such shares may not be redeemed. |
| ● | You will not have any rights or interests in funds from the
trust account, except under certain limited circumstances. To liquidate your investment, therefore, you may be forced to sell your public
shares or warrants, potentially at a loss. |
| ● | 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. |
| ● | You will not be entitled to protections normally afforded
to investors of many other blank check companies. |
| ● | If we seek stockholder approval of our initial business combination
and we do not conduct redemptions pursuant to the tender offer rules, and if you or a “group” of stockholders are deemed
to hold in excess of 10% of our Class A common stock, you will lose the ability to redeem all such shares in excess of 10% of our
Class A common stock. |
| ● | Because of our limited resources and the significant competition
for business combination opportunities, it may be more difficult for us to complete our initial business combination. If we are unable
to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share on our redemption
of our public shares, or less than such amount in certain circumstances, and our warrants will expire worthless. |
| ● | As the number of special purpose acquisition companies evaluating
targets increases, attractive targets may become scarcer and there may be more competition for attractive targets. This could increase
the cost of our initial business combination and could even result in our inability to find a target or to consummate an initial business
combination. |
| ● | If the net proceeds of this offering and the sale of the
private placement warrants not being held in the trust account are insufficient, it could limit the amount available to fund our search
for a target business or businesses and complete our initial business combination and we will depend on loans from our sponsor or management
team to fund our search for a business combination, to pay our franchise and income taxes and to complete our initial business combination.
If we are unable to obtain these loans, we may be unable to complete our initial business combination. |
|
● |
We have identified a material weakness in our internal control over financial reporting. This material weakness could continue to adversely affect our ability to report our results of operations and financial condition accurately and in a timely manner. |
| ● | The other risks and uncertainties discussed elsewhere in
this Report. |
Risks Relating to Our
Search for, and Consummation of our Inability to Consummate, a Business Combination
We are a recently formed company with no operating history
and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.
We are a recently formed company with no operating
results. Because we lack an operating history, you have no basis upon which to evaluate our ability to achieve our business objective
of completing our initial business combination with one or more target businesses. We may be unable to complete our business combination.
If we fail to complete our business combination, we will never generate any operating revenues.
Past performance by our management team, Simply
Good Foods, Advantage, or Centerview Capital or its affiliates, including Centerview Capital Consumer, is not indicative of future performance
of an investment in us. Information regarding performance by, or businesses associated with, our management team, Simply Good Foods, Advantage,
Centerview Capital or its affiliates, including Centerview Capital Consumer, is presented for informational purposes only. Any past experience
and performance of our management team, Simply Good Foods, Advantage, Centerview Capital or its affiliates, including Centerview Capital
Consumer, is not a guarantee either: (1) that we will be able to successfully identify a suitable candidate for our initial business
combination; or (2) of any results with respect to any initial business combination we may consummate. You should not rely on the
historical record of the performance of our management team, Simply Good Foods, Advantage, Centerview Capital or its affiliates, including
Centerview Capital Consumer, as being indicative of the future performance of an investment in us or the returns we will, or are likely
to, generate going forward. An investment in us is not an investment in Simply Good Foods, Advantage, or Centerview Capital or its affiliates,
including Centerview Capital Consumer.
Our public stockholders may not be afforded an opportunity
to vote on our proposed business combination, which means we may complete our initial business combination even though a majority of our
public stockholders do not support such a combination.
We may not hold a stockholder vote to approve our
initial business combination unless the business combination would require stockholder approval under applicable law or stock exchange
listing requirements or if we decide to hold a stockholder vote for business or other legal reasons. Except as required by applicable
law or stock exchange requirement, the decision as to whether we will seek stockholder approval of a proposed business combination or
will allow stockholders to sell their shares to us in a tender offer will be made by us, solely in our discretion, and will be based on
a variety of factors, such as the timing of the transaction and whether the terms of the transaction would otherwise require us to seek
stockholder approval. Accordingly, we may complete our initial business combination even if holders of a majority of our public shares
do not approve of the business combination we complete. Please see Part I “Our Company — Stockholders May Not Have the
Ability to Approve Our Initial Business Combination” for additional information.
If we seek stockholder approval of our initial business
combination, our initial stockholders have agreed to vote in favor of such initial business combination, regardless of how our public
stockholders vote. Unlike many other blank check companies in which the initial stockholders agree to vote their founder shares in accordance
with the majority of the votes cast by the public stockholders in connection with an initial business combination, our initial stockholders
have agreed to vote their founder shares, as well as any public shares purchased during or after our initial public offering, in favor
of our initial business combination. As a result, in addition to our initial stockholders’ founder shares, we would need 13,387,501,
or 37.5%, of the 35,700,000 public shares outstanding to be voted in favor of a transaction (assuming all outstanding shares are voted)
in order to have our initial business combination approved. Our initial stockholders own shares representing 20% of our outstanding shares
of common stock. Accordingly, if we seek stockholder approval of our initial business combination, it is more likely that the necessary
stockholder approval will be received than would be the case if our initial stockholders agreed to vote their founder shares in accordance
with the majority of the votes cast by our public stockholders.
Your only opportunity to affect the investment decision
regarding a potential business combination will be limited to the exercise of your right to redeem your shares from us for cash, unless
we seek stockholder approval of the business combination.
At the time of your investment in us, you were not
be provided with an opportunity to evaluate the specific merits or risks of one or more target businesses. Since our board of directors
may complete a business combination without seeking stockholder approval, public stockholders may not have the right or opportunity to
vote on the business combination, unless we seek such stockholder vote. Accordingly, if we do not seek stockholder approval, your only
opportunity to affect the investment decision regarding a potential business combination may be limited to exercising your redemption
rights within the period of time (which will be at least 20 business days) set forth in our tender offer documents mailed to our public
stockholders in which we describe our initial business combination.
The ability of our public stockholders to redeem their
shares for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult for
us to enter into a business combination with a target.
We may seek to enter into a business combination
transaction agreement with a prospective target that requires as a closing condition that we have a minimum net worth or a certain amount
of cash. If too many public stockholders exercise their redemption rights, we would not be able to meet such closing condition and, as
a result, would not be able to proceed with the business combination. Furthermore, in no event will we redeem our public shares in an
amount that would cause our net tangible assets to be less than $5,000,001 upon consummation of our initial business combination (so that
we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which may
be contained in the agreement relating to our initial business combination. Consequently, if accepting all properly submitted redemption
requests would cause our net tangible assets to be less than $5,000,001 upon consummation of our initial business combination or such
greater amount necessary to satisfy a closing condition as described above, we would not proceed with such redemption and the related
business combination and may instead search for an alternate business combination. Prospective targets will be aware of these risks and,
thus, may be reluctant to enter into a business combination transaction with us.
The ability of our public stockholders to exercise redemption
rights with respect to a large number of our shares may not allow us to complete the most desirable business combination or optimize our
capital structure.
At the time we enter into an agreement for our
initial business combination, we will not know how many stockholders may exercise their redemption rights, and therefore will need to
structure the transaction based on our expectations as to the number of shares that will be submitted for redemption. If our business
combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price, or requires us to have
a minimum amount of cash at closing, we will need to reserve a portion of the cash in the trust account to meet such requirements, or
arrange for third party financing. In addition, if a larger number of shares are submitted for redemption than we initially expected,
we may need to restructure the transaction to reserve a greater portion of the cash in the trust account or arrange for third party financing.
Raising additional third party financing may involve
dilutive equity issuances or the incurrence of indebtedness at higher than desirable levels. The above considerations may limit our ability
to complete the most desirable business combination available to us or optimize our capital structure, and may result in substantial dilution
from your purchase of our Class A common stock. The effect of this dilution will be greater for stockholders who do not redeem. 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, which may further dilute your investment. The per-share amount we will distribute to stockholders who properly
exercise their redemption rights will not be reduced by the deferred underwriting commission and after such redemptions, the per-share
value of shares held by non-redeeming stockholders will reflect our obligation to pay the deferred underwriting commissions.
The ability of our public stockholders to exercise redemption
rights with respect to a large number of our shares could increase the probability that our initial business combination would be unsuccessful
and that you would have to wait for liquidation in order to redeem your stock.
If our business combination agreement requires
us to use a portion of the cash in the trust account to pay the purchase price, or requires us to have a minimum amount of cash at closing,
the probability that our initial business combination would be unsuccessful is increased. If our initial business combination is unsuccessful,
you would not receive your pro rata portion of the trust account until we liquidate the trust account. If you are in need of immediate
liquidity, you could attempt to sell your stock in the open market; however, at such time our stock may trade at a discount to the pro
rata amount per share in the trust account. In either situation, you may suffer a material loss on your investment or lose the benefit
of funds expected in connection with our redemption until we liquidate or you are able to sell your stock in the open market.
The requirement that we complete our initial business combination
within the prescribed time frame may give potential target businesses leverage over us in negotiating a business combination and may decrease
our ability to conduct due diligence on potential business combination targets as we approach our dissolution deadline, which could undermine
our ability to complete our business combination on terms that would produce value for our stockholders.
Any potential target business with which we enter
into negotiations concerning a business combination will be aware that we must complete our initial business combination by August 12,
2023. Consequently, such target business may obtain leverage over us in negotiating a business combination, knowing that if we do not
complete our initial business combination with that particular target business, we may be unable to complete our initial business combination
with any target business. This risk will increase as we get closer to the timeframe described above. In addition, we may have limited
time to conduct due diligence and may enter into our initial business combination on terms that we would have rejected upon a more comprehensive
investigation.
Our search for a business combination, and any target business
with which we ultimately consummate a business combination, may be materially adversely affected by the coronavirus (“COVID-19”)
outbreak and the status of debt and equity markets.
In December 2019, a novel strain of coronavirus
was reported to have surfaced in Wuhan, China, which has and is continuing to spread throughout the world, including the United States.
On January 30, 2020, the World Health Organization declared the outbreak of COVID-19 a “Public Health Emergency of International
Concern.” On January 31, 2020, U.S. Health and Human Services Secretary Alex M. Azar II declared a public health emergency for the
United States to aid the U.S. healthcare community in responding to COVID-19, and on March 11, 2020 the World Health Organization
characterized the outbreak as a “pandemic.” The COVID-19 outbreak has resulted and a significant outbreak of other infectious
diseases could result in a widespread health crisis that could adversely affect the economies and financial markets worldwide, and the
business of any potential target business with which we consummate a business combination could be materially and adversely affected.
Furthermore, we may be unable to complete a business combination if continued concerns relating to COVID-19 continue to restrict travel,
limit the ability to have meetings with potential investors or the target company’s personnel, vendors and services providers are
unavailable to negotiate and consummate a transaction in a timely manner. The extent to which COVID-19 impacts our search for a business
combination will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may
emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others. If the disruptions posed
by COVID-19 or other matters of global concern continue for an extensive period of time, our ability to consummate a business combination,
or the operations of a target business with which we ultimately consummate a business combination, may be materially adversely affected.
In addition, our ability to consummate a transaction may be dependent on the ability to raise equity and debt financing which may be impacted
by COVID-19 and other events, including as a result of increased market volatility, decreased market liquidity and third-party financing
being unavailable on terms acceptable to us or at all.
We may not be able to complete our initial business combination
within the prescribed time frame, in which case we would cease all operations except for the purpose of winding up and we would redeem
our public shares and liquidate, in which case our public stockholders may only receive $10.00 per share, or less than such amount in
certain circumstances, and our warrants will expire worthless.
Our sponsor, officers and directors have agreed
that we must complete our initial business combination by August 12, 2023. We may not be able to find a suitable target business and complete
our initial business combination by such date. If we have not completed our initial business combination by such date, we will: (i) cease
all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter,
redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account including
interest earned on the funds held in the trust account and not previously released to us to pay up to $1,000,000 of our working capital
requirements as well as to pay our franchise and income taxes (less up to $100,000 of interest to pay dissolution expenses), divided by
the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders
(including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably
possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate,
subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable
law. In such case, our public stockholders may only receive $10.00 per share, and our warrants will expire worthless. In certain circumstances,
our public stockholders may receive less than $10.00 per share on the redemption of their shares. 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 stockholders
may be less than $10.00 per share” and other risk factors below.
If we are unable to complete an initial business
combination by August 12, 2023, we may seek an amendment to our amended and restated certificate of incorporation to extend the period
of time we have to complete an initial business combination beyond 24 months. Our amended and restated certificate of incorporation will
require that such an amendment be approved by a majority of holders of our outstanding common stock.
If we seek stockholder approval of our initial business
combination, our sponsor, directors, officers, advisors and their affiliates may elect to purchase shares from public stockholders, which
may influence a vote on a proposed business combination and reduce the public “float” of our Class A common stock.
If we seek stockholder approval of our initial
business combination and we do not conduct redemptions in connection with our business combination pursuant to the tender offer rules,
our sponsor, directors, officers, advisors or their affiliates may purchase shares in privately negotiated transactions or in the open
market either prior to or following the completion of our initial business combination, although they are under no obligation to do so.
Such a purchase may include a contractual acknowledgement that such stockholder, although still the record holder of our shares is no
longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that our sponsor, directors,
officers, advisors or their affiliates purchase shares in privately negotiated transactions from public stockholders who have already
elected to exercise their redemption rights, such selling stockholders would be required to revoke their prior elections to redeem their
shares. The purpose of such purchases could be to vote such shares in favor of the business combination and thereby increase the likelihood
of obtaining stockholder approval of the business combination, or to satisfy a closing condition in an agreement with a target that requires
us to have a minimum net worth or a certain amount of cash at the closing of our business combination, where it appears that such requirement
would otherwise not be met. This may result in the completion of our business combination that may not otherwise have been possible.
In addition, if such purchases are made, the public
“float” of our Class A common stock and the number of beneficial holders of our securities may be reduced, possibly making
it difficult to maintain the quotation, listing or trading of our securities on a national securities exchange.
If a stockholder fails to receive notice of our offer to
redeem our public shares in connection with our business combination, or fails to comply with the procedures for tendering its shares,
such shares may not be redeemed.
We will comply with the tender offer rules or proxy
rules, as applicable, when conducting redemptions in connection with our business combination. Despite our compliance with these rules,
if a stockholder fails to receive our tender offer or proxy materials, as applicable, such stockholder may not become aware of the opportunity
to redeem its shares. In addition, the proxy solicitation or tender offer materials, as applicable, that we will furnish to holders of
our public shares in connection with our initial business combination will indicate the applicable delivery requirements, which will include
the requirement that a beneficial holder must identify itself in order to validly redeem its shares. For example, we may require our public
stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,”
to either tender their certificates to our transfer agent prior to the date set forth in the tender offer documents or proxy materials
mailed to such holders, or up to two business days prior to the initially scheduled vote on the proposal to approve the business combination
in the event we distribute proxy materials, or to deliver their shares to the transfer agent electronically. In the event that a stockholder
fails to comply with these or any other procedures, its shares may not be redeemed.
You will not have any rights or interests in funds from
the trust account, except under certain limited circumstances. To liquidate your investment, therefore, you may be forced to sell your
public shares or warrants, potentially at a loss.
Our public stockholders are entitled to receive
funds from the trust account only upon the earliest to occur of: (i) our completion of an initial business combination, (ii) the
redemption of any public shares properly tendered in connection with a stockholder vote to amend our amended and restated certificate
of incorporation (a) to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete
our initial business combination by August 12, 2023, (b) which adversely affects the rights of holders of our Class A common
stock, and (iii) the redemption of our public shares if we are unable to complete an initial business combination within 24 months
from the closing of our initial public offering, subject to applicable law and as further described herein. In addition, if we are unable
to complete an initial business combination by August 12, 2023 for any reason, compliance with Delaware law may require that we submit
a plan of dissolution to our then-existing stockholders for approval prior to the distribution of the proceeds held in our trust account.
In that case, public stockholders may be forced to wait beyond 24 months from the closing of our initial public offering before they receive
funds from our trust account. In no other circumstances will a public stockholder have any right or interest of any kind in the trust
account. Accordingly, to liquidate your investment, you may be forced to sell your public shares or warrants, potentially at a loss.
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.
Our securities are currently listed on Nasdaq.
However, 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 stock price levels. Generally, we must maintain a minimum amount in stockholders’ equity (generally
$2,500,000) and a minimum number of holders of our securities (generally 300 round-lot holders). Additionally, in connection with our
initial business combination, we will be required to demonstrate compliance with Nasdaq’s initial listing requirements, which are
more rigorous than Nasdaq’s continued listing requirements, in order to continue to maintain the listing of our securities on Nasdaq.
For instance, our stock price would generally be required to be at least $4.00 per share and our stockholders’ equity would generally
be required to be at least $5.0 million. We may not be able to meet those initial listing requirements at that time.
If Nasdaq delists our securities from trading on
its exchange and we are not able to list our securities on another national securities exchange, we expect our securities could be quoted
on an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including:
| ● | a limited availability of market quotations for our securities; |
| ● | reduced liquidity for our securities; |
| ● | a determination that our Class A common stock is a “penny stock” which will require brokers trading in our Class A common
stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for
our securities; |
| ● | a limited amount of news and analyst coverage; and |
| ● | a decreased ability to issue additional securities or obtain additional financing in the future. |
The National Securities Markets Improvement Act of 1996,
which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered
securities.” Because our Units, Class A common stock and warrants are covered securities. Although the states are preempted from
regulating the sale of our securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud,
and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular
case. While we are not aware of a state having used these powers to prohibit or restrict the sale of securities issued by blank check
companies, other than the State of Idaho, certain state securities regulators view blank check companies unfavorably and might use these
powers, or threaten to use these powers, to hinder the sale of securities of blank check companies in their states. Further, if we were
no longer listed on Nasdaq, our securities would not be covered securities and we would be subject to regulation in each state in which
we offer our securities. You will not be entitled to protections normally afforded to investors of many other blank check companies.
Since the net proceeds of our initial public offering
and the sale of the private placement warrants are intended to be used to complete an initial business combination with a target business,
we may be deemed to be a “blank check” company under the United States securities laws. However, because we have net tangible
assets in excess of $5,000,000, we are exempt from rules promulgated by the Commission to protect investors in blank check companies,
such as Rule 419. Accordingly, investors will not be afforded the benefits or protections of those rules. Among other things, this means
that we will have a longer period of time to complete our business combination than do companies subject to Rule 419. Moreover, if our
initial public offering were subject to Rule 419, that rule would prohibit the release of any interest earned on funds held in the trust
account to us unless and until the funds in the trust account were released to us in connection with our completion of an initial business
combination.
If we seek stockholder approval of our initial business
combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a “group” of stockholders
are deemed to hold in excess of 10% of our Class A common stock, you will lose the ability to redeem all such shares in excess of 10%
of our Class A common stock.
If we seek stockholder approval of our initial
business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer
rules, our amended and restated certificate of incorporation provides that a public stockholder, together with any affiliate of such stockholder
or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange
Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 10% of the shares sold in our initial
public offering, which we refer to as the “Excess Shares.” However, we would not be restricting our stockholders’ ability
to vote all of their shares (including Excess Shares) for or against our business combination. Your inability to redeem the Excess Shares
will reduce your influence over our ability to complete our business combination and you could suffer a material loss on your investment
in us if you sell Excess Shares in open market transactions. Additionally, you will not receive redemption distributions with respect
to the Excess Shares if we complete our business combination. And as a result, you will continue to hold that number of shares exceeding
10% and, in order to dispose of such shares, would be required to sell your stock in open market transactions, potentially at a loss.
Because of our limited resources and the significant competition
for business combination opportunities, it may be more difficult for us to complete our initial business combination. If we are unable
to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share on our redemption
of our public shares, or less than such amount in certain circumstances, and our warrants will expire worthless.
We have encountered and 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 are relatively
limited when contrasted with those of many of these competitors. While we believe there are numerous target businesses we could potentially
acquire with the net proceeds of our initial public offering and the sale of the private placement warrants, our ability to compete with
respect to the acquisition of certain target businesses that are sizable is limited by our available financial resources. This inherent
competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses. Furthermore, because we are
obligated to pay cash for the shares of Class A common stock which our public stockholders redeem in connection with our initial business
combination, target companies will be aware that this may reduce the resources available to us for our initial business combination. This
may place us at a competitive disadvantage in successfully negotiating a business combination. If we are unable to complete our initial
business combination, our public stockholders may receive only approximately $10.00 per share on the liquidation of our trust account
and our warrants will expire worthless. In certain circumstances, our public stockholders may receive less than $10.00 per share upon
our liquidation. 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 stockholders may be less than $10.00 per share” and other risk factors below.
As the number of special purpose acquisition companies evaluating
targets increases, attractive targets may become scarcer and there may be more competition for attractive targets. This could increase
the cost of our initial business combination and could even result in our inability to find a target or to consummate an initial business
combination.
In recent years, the number of special purpose acquisition
companies that have been formed has increased substantially. Many potential targets for special purpose acquisition companies have already
entered into an initial business combination, and there are still many special purpose acquisition companies preparing for an initial
public offering, as well as many such companies currently in registration. As a result, at times, fewer attractive targets may be available
to consummate an initial business combination.
In addition, because there are more special purpose
acquisition companies seeking to enter into an initial business combination with available targets, the competition for available targets
with attractive fundamentals or business models may increase, which could cause target companies to demand improved financial terms. Attractive
deals could also become scarcer for other reasons, such as economic or industry sector downturns, geopolitical tensions or increases in
the cost of additional capital needed to close business combinations or operate targets post-business combination. This could increase
the cost of, delay or otherwise complicate or frustrate our ability to find and consummate an initial business combination, and may result
in our inability to consummate an initial business combination on terms favorable to our investors altogether.
If the net proceeds of our initial public offering and
the sale of the private placement warrants not being held in the trust account are insufficient to allow us to operate until August 12,
2023, we may be unable to complete our initial business combination, in which case our public stockholders may only receive $10.00 per
share, or less than such amount in certain circumstances, and our warrants will expire worthless.
The funds available to us outside of the trust
account may not be sufficient to allow us to operate until August 12, 2023, assuming that our initial business combination is not completed
during that time. We believe that the funds available to us outside of the trust account are sufficient to allow us to operate until August
12, 2023; however, we cannot assure you that our estimate is accurate. Of the funds available to us, we could use a portion of the funds
available to us to pay fees to consultants to assist us with our search for a target business. We could also use a portion of the funds
as a down payment or to fund a “no-shop” provision (a provision in letters of intent designed to keep target businesses from
“shopping” around for transactions with other companies on terms more favorable to such target businesses) with respect to
a particular proposed business combination, 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 are unable to complete our initial business combination, our public stockholders may receive only approximately
$10.00 per share on the liquidation of our trust account and our warrants will expire worthless. In certain circumstances, our public
stockholders may receive less than $10.00 per share upon our liquidation. 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 stockholders may be less than
$10.00 per share” and other risk factors below.
If the net proceeds of our initial public offering and
the sale of the private placement warrants not being held in the trust account are insufficient, it could limit the amount available to
fund our search for a target business or businesses and complete our initial business combination and we will depend on loans from our
sponsor or management team to fund our search for a business combination, to pay our franchise and income taxes and to complete our initial
business combination. If we are unable to obtain these loans, we may be unable to complete our initial business combination.
Of the net proceeds of our initial public offering
and the sale of the private placement warrants, only $1,547,800 (as of December 31, 2021) is available to us outside the trust account
to fund our working capital requirements. If we are required to seek additional capital, we would need to borrow funds from our sponsor,
management team or other third parties to operate or may be forced to liquidate. Neither our sponsor, members of our management team nor
any of their affiliates is under any obligation to advance funds to us in such circumstances. Any such advances would be repaid only from
funds held outside the trust account or from funds released to us upon completion of our initial business combination. We do not expect
to seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties will be willing to
loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account. If we are unable to obtain
these loans, we may be unable to complete our initial business combination. If we are unable to complete our initial business combination
because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the trust account. Consequently,
our public stockholders may only receive approximately $10.00 per share on our redemption of our public shares, and our warrants will
expire worthless. In certain circumstances, our public stockholders may receive less than $10.00 per share on the redemption of their
shares. 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 stockholders may be less than $10.00 per share” and other risk factors below.
Subsequent to our completion of our initial business combination,
we may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative
effect on our financial condition, results of operations and our stock price, which could cause you to lose some or all of your investment.
Even if we conduct extensive due diligence on a
target business with which we combine, we cannot assure you that this diligence will surface all material issues that may be present inside
a particular target business, that it would be possible to uncover all material issues through a customary amount of due diligence, or
that factors outside of the target business and outside of our control will not later arise. As a result of these factors, we may be forced
to later write-down or write-off assets, restructure our operations, or incur impairment or other charges that could result in our reporting
losses. Even if our due diligence successfully identifies certain risks, unexpected risks may arise and previously known risks may materialize
in a manner not consistent with our preliminary risk analysis. Although these charges may be non-cash items and not have an immediate
impact on our liquidity, the fact that we report charges of this nature could contribute to negative market perceptions about us or our
securities. In addition, charges of this nature may cause us to violate net worth or other covenants to which we may be subject as a result
of assuming pre-existing debt held by a target business or by virtue of our obtaining post-combination debt financing. Accordingly, any
stockholders who choose to remain stockholders following the business combination could suffer a reduction in the value of their shares.
Such stockholders are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction
was due to the breach by our officers or directors of a duty of care or other fiduciary duty owed to such stockholders, or if they are
able to successfully bring a private claim under securities laws that the tender offer materials or proxy statement related to our initial
business combination contained an actionable material misstatement or material omission.
If third parties bring claims against us, the proceeds
held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00 per share.
Our placing of funds in the trust account may not
protect those funds from third-party claims against us. Although we will seek to have all vendors, service providers (other than our independent
registered public accounting firm), prospective target businesses or other entities with which we do business execute agreements with
us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public
stockholders, such parties may not execute such agreements, or even if they execute such agreements they may not be prevented from bringing
claims against the trust account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar
claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim
against our assets, including the funds held in the trust account. If any third party refuses to execute an agreement waiving such claims
to the monies held in the trust account, our management will perform an analysis of the alternatives available to it and will only enter
into an agreement with a third party that has not executed a waiver if management believes that such third party’s engagement would
be significantly more beneficial to us than any alternative.
Examples of possible instances where we may engage
a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular expertise or skills
are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases
where management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities
will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements
with us and will not seek recourse against the trust account for any reason. Upon redemption of our public shares, if we are unable to
complete our business combination within the prescribed timeframe, or upon the exercise of a redemption right in connection with our business
combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought against us within
the 10 years following redemption. Accordingly, the per-share redemption amount received by public stockholders could be less than the
$10.00 per share initially held in the trust account, due to claims of such creditors. Our sponsor has agreed that it will be liable to
us if and to the extent any claims by a vendor for services rendered or products sold to us, or a prospective target business with which
we have discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below (i) $10.00 per public
share or (ii) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account due
to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes. This liability will
not apply with respect to any claims by a third party who executed a waiver of any and all rights to seek access to the trust account
and except as to any claims under our indemnity of the underwriters of our initial public offering against certain liabilities, including
liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party,
then our sponsor will not be responsible to the extent of any liability for such third party claims. We have not independently verified
whether our sponsor has sufficient funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are securities
of our company. We have not asked our sponsor to reserve for such indemnification obligations. Therefore, our sponsor may not be able
to satisfy those obligations. As a result, if any such claims were successfully made against the trust account, the funds available for
our initial business combination and redemptions could be reduced to less than $10.00 per public share. In such event, we may not be able
to complete our initial business combination, and you would receive such lesser amount per share in connection with any redemption of
your public shares. None of our officers will indemnify us for claims by third parties including, without limitation, claims by vendors
and prospective target businesses.
Our directors may decide not to enforce the indemnification
obligations of our sponsor, resulting in a reduction in the amount of funds in the trust account available for distribution to our public
stockholders.
In the event that the proceeds in the trust account
are reduced below the lesser of (i) $10.00 per public share or (ii) such lesser amount per share held in the trust account as of the date
of the liquidation of the trust account due to reductions in the value of the trust assets, in each case net of the interest which may
be withdrawn to pay taxes, and our sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations
related to a particular claim, our independent directors would determine whether to take legal action against our sponsor to enforce its
indemnification obligations.
While we currently expect that our independent
directors would take legal action on our behalf against our sponsor to enforce its indemnification obligations to us, it is possible that
our independent directors in exercising their business judgment may choose not to do so if, for example, the cost of such legal action
is deemed by the independent directors to be too high relative to the amount recoverable or if the independent directors determine that
a favorable outcome is not likely. If our independent directors choose not to enforce these indemnification obligations, the amount of
funds in the trust account available for distribution to our public stockholders may be reduced below $10.00 per share.
If, after we distribute the proceeds in the trust account
to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed,
a bankruptcy court may seek to recover such proceeds, and we and our board may be exposed to claims of punitive damages.
If, after we distribute the proceeds in the trust
account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not
dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either
a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover
all amounts received by our stockholders. In addition, our board of directors may be viewed as having breached its fiduciary duty to our
creditors and/or having acted in bad faith, thereby exposing itself and us to claims of punitive damages, by paying public stockholders
from the trust account prior to addressing the claims of creditors.
If, before distributing the proceeds in the trust account
to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed,
the claims of creditors in such proceeding may have priority over the claims of our stockholders and the per-share amount that would otherwise
be received by our stockholders in connection with our liquidation may be reduced.
If, before distributing the proceeds in the trust
account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not
dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included in our bankruptcy
estate and subject to the claims of third parties with priority over the claims of our stockholders. To the extent any bankruptcy claims
deplete the trust account, the per-share amount that would otherwise be received by our stockholders in connection with our liquidation
may be reduced.
If we are deemed to be an investment company under the
Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted, which
may make it difficult for us to complete our business combination.
If we are deemed to be an investment company under
the Investment Company Act, our activities may be restricted, including:
| ● | restrictions on the nature of our investments; and |
| ● | restrictions on the issuance of securities, each of which may make it difficult for us to complete our business combination. |
In addition, we may have imposed upon us burdensome
requirements, including:
| ● | registration as an investment company; |
| ● | adoption of a specific form of corporate structure; and |
| ● | reporting, record keeping, voting, proxy and disclosure requirements and other rules and regulations. |
In order not to be regulated as an investment company
under the Investment Company Act, unless we can qualify for an exclusion, we must ensure that we are engaged primarily in a business other
than investing, reinvesting or trading in securities and that our activities do not include investing, reinvesting, owning, holding or
trading “investment securities” constituting more than 40% of our total assets (exclusive of U.S. government securities and
cash items) on an unconsolidated basis. Our business is to identify and complete a business combination and thereafter to operate the
post-transaction business or assets for the long term. We do not plan to buy businesses or assets with a view to resale or profit from
their resale. We do not plan to buy unrelated businesses or assets or to be a passive investor.
We do not believe that our anticipated principal
activities will subject us to the Investment Company Act. To this end, the proceeds held in the trust account may only be invested in
United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity
of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which
invest only in direct U.S. government treasury obligations. Pursuant to the trust agreement, the trustee is not permitted to invest in
other securities or assets. By restricting the investment of the proceeds to these instruments, and by having a business plan targeted
at acquiring and growing businesses for the long term (rather than on buying and selling businesses in the manner of a merchant bank or
private equity fund), we intend to avoid being deemed an “investment company” within the meaning of the Investment Company
Act. The trust account is intended as a holding place for funds pending the earliest to occur of: (i) the completion of our primary business
objective, which is a business combination; (ii) the redemption of any public shares properly tendered in connection with a stockholder
vote to amend our amended and restated certificate of incorporation (a) to modify the substance or timing of our obligation to redeem
100% of our public shares if we do not complete our initial business combination by August 12, 2023, or (b) which adversely affects the
rights of holders of our Class A common stock; or (iii) absent a business combination, our return of the funds held in the trust account
to our public stockholders as part of our redemption of the public shares. If we do not invest the proceeds as discussed above, we may
be deemed to be subject to the Investment Company Act. If we were deemed to be subject to the Investment Company Act, compliance with
these additional regulatory burdens would require additional expenses for which we have not allotted funds and may hinder our ability
to complete a business combination. If we are unable to complete our initial business combination, our public stockholders may receive
only approximately $10.00 per share on the liquidation of our trust account and our warrants will expire worthless.
Changes in laws or regulations, or a failure to comply
with any laws and regulations, may adversely affect our business, investments and results of operations.
We are subject to laws and regulations enacted
by national, regional and local governments. In particular, we are required to comply with certain SEC and other legal requirements. Compliance
with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly.
Those laws and regulations and their interpretation
and application may also change from time to time and those changes could have a material adverse effect on our business, investments
and results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could have
a material adverse effect on our business and results of operations.
Our stockholders may be held liable for claims by third
parties against us to the extent of distributions received by them upon redemption of their shares.
Under the DGCL, stockholders may be held liable
for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. The pro rata portion
of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our
initial business combination by August 12, 2023 may be considered a liquidating distribution under Delaware law. If a corporation complies
with certain procedures set forth in Section 280 of the DGCL intended to ensure that it makes reasonable provision for all claims against
it, including a 60-day notice period during which any third-party claims can be brought against the corporation, a 90-day period during
which the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating distributions are
made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s
pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the
third anniversary of the dissolution. However, it is our intention to redeem our public shares as soon as reasonably possible following
August 12, 2023 in the event we do not complete our business combination and, therefore, we do not intend to comply with the foregoing
procedures.
Because we will not be complying with Section 280,
Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that will provide for our payment of all
existing and pending claims or claims that may be potentially brought against us within the 10 years following our dissolution. However,
because we are a blank check company, rather than an operating company, and our operations will be limited to searching for prospective
target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment bankers, etc.) or
prospective target businesses. If our plan of distribution complies with Section 281(b) of the DGCL, any liability of stockholders with
respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed
to the stockholder, and any liability of the stockholder would likely be barred after the third anniversary of the dissolution. We cannot
assure you that we will properly assess all claims that may be potentially brought against us. As such, our stockholders could potentially
be liable for any claims to the extent of distributions received by them (but no more) and any liability of our stockholders may extend
beyond the third anniversary of such date. Furthermore, if the pro rata portion of our trust account distributed to our public stockholders
upon the redemption of our public shares in the event we do not complete our initial business combination by August 12, 2023 is not considered
a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful, then pursuant to Section 174
of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead
of three years, as in the case of a liquidating distribution.
We may not hold an annual meeting of stockholders until
after the consummation of our initial business combination, which could delay the opportunity for our stockholders to elect directors.
In accordance with Nasdaq corporate governance
requirements, we are not required to hold an annual meeting until one year after our first fiscal year end following our listing on Nasdaq.
Under Section 211(b) of the DGCL, we are, however, required to hold an annual meeting of stockholders for the purposes of electing directors
in accordance with our bylaws unless such election is made by written consent in lieu of such a meeting. We may not hold an annual meeting
of stockholders to elect new directors prior to the consummation of our initial business combination, and thus we may not be in compliance
with Section 211(b) of the DGCL, which requires an annual meeting. Therefore, if our stockholders want us to hold an annual meeting prior
to the consummation of our initial business combination, they may attempt to force us to hold one by submitting an application to the
Delaware Court of Chancery in accordance with Section 211(c) of the DGCL.
Holders of Class A common stock will not be entitled to vote
on any election of directors we hold prior to our initial business combination.
Prior to our initial business combination, only
holders of our founder shares will have the right to vote on the election of directors. Holders of our public shares will not be entitled
to vote on the election of directors during such time. In addition, prior to the completion of an initial business combination, holders
of a majority of our founder shares may remove a member of the board of directors for any reason. Accordingly, you may not have any say
in the management of our company prior to the consummation of an initial business combination.
The grant of registration rights to our initial stockholders
may make it more difficult to complete our initial business combination, and the future exercise of such rights may adversely affect the
market price of our Class A common stock.
Pursuant to an agreement entered into concurrently
with the issuance and sale of the securities in our initial public offering, our initial stockholders and their permitted transferees
can demand that we register the private placement warrants and the shares of Class A common stock issuable upon exercise of the founder
shares and the private placement warrants held by them and holders of warrants that may be issued upon conversion of working capital loans
may demand that we register such warrants or the Class A common stock issuable upon exercise of such warrants. We will bear the cost of
registering these securities. The registration and availability of such a significant number of securities for trading in the public market
may have an adverse effect on the market price of our Class A common stock. In addition, the existence of the registration rights may
make our initial business combination more costly or difficult to conclude. This is because the stockholders of the target business may
increase the equity stake they seek in the combined entity or ask for more cash consideration to offset the negative impact on the market
price of our Class A common stock that is expected when the securities owned by our initial stockholders or holders of working capital
loans or their respective permitted transferees are registered.
We have identified a material weakness in our internal control
over financial reporting. This material weakness could continue to adversely affect our ability to report our results of operations and
financial condition accurately and in a timely manner.
Our management is responsible for establishing
and maintaining adequate internal control over financial reporting designed to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Our management is likewise
required, on a quarterly basis, to evaluate the effectiveness of our internal controls and to disclose any changes and material weaknesses
identified through such evaluation in those internal controls. A material weakness is a deficiency, or a combination of deficiencies,
in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or
interim financial statements will not be prevented or detected on a timely basis.
Our management and our audit committee also concluded
that it was appropriate to restate the unaudited interim financial statements included in the Company’s Quarterly Report on Form
10-Q for the quarterly period ended September 30, 2021 and restate the audited balance sheet as of August 12, 2021 included in Amendment
No. 1 to our Form 8-K originally filed on August 18, 2021.
As described elsewhere in this Report, we have
identified a material weakness in our internal control over financial reporting related to the Company’s application of ASC 480-10-S99-3A
to its accounting classification of the public shares. As a result of this material weakness, our management has concluded that our internal
control over financial reporting was not effective as of December 31, 2021. The Company had previously classified a portion of its Class
A common stock in permanent equity, or total stockholders’ equity. Although the Company did not specify a maximum redemption threshold,
its charter currently provides that the Company will not redeem its public shares in an amount that would cause its net tangible assets
to be less than $5,000,001. Previously, the Company did not consider redeemable stock classified as temporary equity as part of net tangible
assets. Pursuant to the Company’s re-evaluation of the Company’s application of ASC 480-10-S99-3A to its accounting classification
of its Class A common stock subject to possible redemption, the Company’s management has determined that the Class A common stock include certain provisions that require classification of all of the Class A common stock as temporary equity regardless of
the net tangible assets redemption limitation contained in the charter. For a discussion of management’s consideration of the material
weakness identified related to the Company’s application of ASC 480-10-S99-3A to its accounting classification of the Class A common stock subject to possible redemption, see “Part II, Item 9A: Controls and Procedures” included in this Report.
To respond to this material weakness, we have
devoted, and plan to continue to devote, significant effort and resources to the remediation and improvement of our internal control over
financial reporting. While we have processes to identify and appropriately apply applicable accounting requirements, we plan to enhance
these processes to better evaluate our research and understanding of the nuances of the complex accounting standards that apply to our
financial statements. Our plans at this time include providing enhanced access to accounting literature, research materials and documents
and increased communication among our personnel and third-party professionals with whom we consult regarding complex accounting applications.
The elements of our remediation plan can only be accomplished over time, and we can offer no assurance that these initiatives will ultimately
have the intended effects.
Any failure to maintain such internal control
could adversely impact our ability to report our financial position and results from operations on a timely and accurate basis. If our
financial statements are not accurate, investors may not have a complete understanding of our operations. Likewise, if our financial statements
are not filed on a timely basis, we could be subject to sanctions or investigations by the stock exchange on which our common stock
is listed, the SEC or other regulatory authorities. In either case, there could result a material adverse effect on our business. Failure
to timely file will cause us to be ineligible to utilize short form registration statements on Form S-3 or Form S-4, which may impair
our ability to obtain capital in a timely fashion to execute our business strategies or issue shares to effect an acquisition. Ineffective
internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect
on the trading price of our stock.
We can give no assurance that the measures we have
taken and plan to take in the future will remediate the material weakness identified or that any additional material weaknesses or restatements
of financial results will not arise in the future due to a failure to implement and maintain adequate internal control over financial
reporting or circumvention of these controls. In addition, even if we are successful in strengthening our controls and procedures, in
the future those controls and procedures may not be adequate to prevent or identify irregularities or errors or to facilitate the fair
presentation of our financial statements.
Because we are not limited to a particular industry, sector
or any specific target businesses with which to pursue our initial business combination, you will be unable to ascertain the merits or
risks of any particular target business’ operations.
Although we expect to focus our search for a target
business in the consumer sector, we may seek to complete a business combination with an operating company in any industry or sector. However,
we are not, under our amended and restated certificate of incorporation, permitted to effectuate our business combination with another
blank check company or similar company with nominal operations. Because we have not yet entered into a definitive agreement with any specific
target business with respect to a business combination, there is no basis to evaluate the possible merits or risks of any particular target
business’s operations, results of operations, cash flows, liquidity, financial condition or prospects. To the extent we complete
our business combination, we may be affected by numerous risks inherent in the business operations with which we combine. For example,
if we combine with a financially unstable business or an entity lacking an established record of revenues or earnings, we may be affected
by the risks inherent in the business and operations of a financially unstable or a development stage entity. Although our officers and
directors will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain
or assess all of the significant risk factors or that we will have adequate time to complete due diligence. Furthermore, some of these
risks may be outside of our control and leave us with no ability to control or reduce the chances that those risks will adversely impact
a target business. We also cannot assure you that an investment in our securities will ultimately prove to be more favorable to investors
than a direct investment, if such opportunity were available, in a business combination target. Accordingly, any stockholders who choose
to remain stockholders following the business combination could suffer a reduction in the value of their shares. Such stockholders are
unlikely to have a remedy for such reduction in value.
We may seek acquisition opportunities in industries or
sectors which may or may not be outside of our management’s area of expertise.
We will consider a business combination outside
of our management’s area of expertise if a business combination candidate is presented to us and we determine that such candidate
offers an attractive acquisition opportunity for our company. Although our management will endeavor to evaluate the risks inherent in
any particular business combination candidate, we cannot assure you that we will adequately ascertain or assess all of the significant
risk factors. We also cannot assure you that an investment in our securities will not ultimately prove to be less favorable to investors
in our initial public offering than a direct investment, if an opportunity were available, in a business combination candidate. In the
event we elect to pursue an acquisition outside of the areas of our management’s expertise, our management’s expertise may
not be directly applicable to its evaluation or operation, and the information contained herein regarding the areas of our management’s
expertise would not be relevant to an understanding of the business that we elect to acquire. As a result, our management may not be able
to adequately ascertain or assess all of the significant risk factors. Accordingly, any stockholders who choose to remain stockholders
following our business combination could suffer a reduction in the value of their shares. Such stockholders are unlikely to have a remedy
for such reduction in value.
Although we have identified general criteria and guidelines
that we believe are important in evaluating prospective target businesses, we may enter into our initial business combination with a target
that does not meet such criteria and guidelines, and as a result, the target business with which we enter into our initial business combination
may not have attributes entirely consistent with our general criteria and guidelines.
Although we have identified general criteria and
guidelines for evaluating prospective target businesses, it is possible that a target business with which we enter into our initial business
combination will not have all of these positive attributes. If we complete our initial business combination with a target that does not
meet some or all of these guidelines, such combination may not be as successful as a combination with a business that does meet all of
our general criteria and guidelines. In addition, if we announce a prospective business combination with a target that does not meet our
general criteria and guidelines, a greater number of stockholders may exercise their redemption rights, which may make it difficult for
us to meet any closing condition with a target business that requires us to have a minimum net worth or a certain amount of cash. In addition,
if stockholder approval of the transaction is required by law, or we decide to obtain stockholder approval for business or other legal
reasons, it may be more difficult for us to attain stockholder approval of our initial business combination if the target business does
not meet our general criteria and guidelines. If we are unable to complete our initial business combination, our public stockholders may
receive only approximately $10.00 per share on the liquidation of our trust account and our warrants will expire worthless.
We may seek acquisition opportunities with a financially
unstable business or an entity lacking an established record of revenue or earnings, which could subject us to volatile revenues or earnings
or difficulty in retaining key personnel.
To the extent we complete our initial business
combination with a financially unstable business or an entity lacking an established record of revenues or earnings, we may be affected
by numerous risks inherent in the operations of the business with which we combine. These risks include volatile revenues or earnings
and difficulties in obtaining and retaining key personnel. Although our officers and directors will endeavor to evaluate the risks inherent
in a particular target business, we may not be able to properly ascertain or assess all of the significant risk factors and we may not
have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our control and leave us with no ability
to control or reduce the chances that those risks will adversely impact a target business.
We are not required to obtain an opinion from an independent
investment banking firm or from an independent accounting firm, and consequently, you may have no assurance from an independent source
that the price we are paying for the business is fair to our company from a financial point of view.
Unless we complete our business combination with
an affiliated entity or our board cannot independently determine the fair market value of the target business or businesses, we are not
required to obtain an opinion from an independent investment banking firm that is a member of FINRA or from an independent accounting
firm that the price we are paying is fair to our company from a financial point of view. If no opinion is obtained, our stockholders will
be relying on the judgment of our board of directors, who will determine fair market value based on standards generally accepted by the
financial community. Such standards used will be disclosed in our tender offer documents or proxy solicitation materials, as applicable,
related to our initial business combination.
We may issue additional common stock or preferred stock
to complete our initial business combination or under an employee incentive plan after completion of our initial business combination.
We may also issue shares of Class A common stock upon the conversion of the Class B common stock at a ratio greater than one-to-one at
the time of our initial business combination as a result of the anti-dilution provisions contained in our amended and restated certificate
of incorporation. Any such issuances would dilute the interest of our stockholders and likely present other risks.
Our amended and restated certificate of incorporation
authorizes the issuance of up to 500,000,000 shares of Class A common stock, par value $0.0001 per share, 50,000,000 shares of Class B
common stock, par value $0.0001 per share, and 1,000,000 shares of preferred stock, par value $0.0001 per share. There are currently 464,300,000
and 41,075,000 authorized but unissued shares of Class A common stock and Class B common stock, respectively, available for issuance,
which amount takes into account the shares of Class A common stock reserved for issuance upon exercise of outstanding warrants but not
the shares of Class A common stock issuable upon conversion of Class B common stock, which amount is not currently determinable. There
are no shares of preferred stock issued and outstanding. Shares of Class B common stock are convertible into shares of our Class A common
stock initially at a one-for-one ratio but subject to adjustment as set forth herein, including in certain circumstances in which we issue
Class A common stock or equity-linked securities related to our initial business combination. Shares of Class B common stock are also
convertible at the option of the holder at any time.
We may issue a substantial number of additional
shares of common or preferred stock to complete our initial business combination (including pursuant to a specified future issuance) or
under an employee incentive plan after completion of our initial business combination. The number of authorized shares of the Class A
common stock or preferred stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative
vote of the holders of a majority in voting power of the stock of the corporation entitled to vote thereon irrespective of the provisions
of Section 242(b)(2) of the DGCL (or any successor provision thereto), and no vote of the holders of any of the Class A common stock or
the preferred stock voting separately as a class shall be required therefor, unless a vote of any such holder is required pursuant to
our amended and restated certificate of incorporation (including any certificate of designation relating to any series of preferred stock).
The holders of Class B common stock are entitled to vote as a separate class to increase the authorized number of shares of Class B common
stock.
We may also issue shares of Class A common stock
upon conversion of the Class B common stock at a ratio greater than one-to-one at the time of our initial business combination as a result
of the anti-dilution provisions contained in our amended and restated certificate of incorporation. However, our amended and restated
certificate of incorporation provides, among other things, that prior to our initial business combination, we may not issue additional
shares of capital stock that would entitle the holders thereof to (i) receive funds from the trust account or (ii) vote on any initial
business combination. The issuance of additional shares of common or preferred stock:
| ● | may significantly dilute the equity interest of investors in our initial public offering; |
| ● | may subordinate the rights of holders of common stock if preferred stock is issued with rights senior to those afforded our common
stock; |
| ● | could cause a change of control if a substantial number of shares of our common stock are issued, which may affect, among other things,
our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers
and directors; and |
| ● | may adversely affect prevailing market prices for our Units, Class A common stock and/or warrants. |
Resources could be wasted in researching acquisitions that
are not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If
we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share, or
less than such amount in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless.
We anticipate that the investigation of each specific
target business and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require
substantial management time and attention and substantial costs for accountants, attorneys and others. If we decide not to complete a
specific initial business combination, the costs incurred up to that point for the proposed transaction likely would not be recoverable.
Furthermore, if we reach an agreement relating to a specific target business, we may fail to complete our initial business combination
for any number of reasons including those beyond our control. Any such event will result in a loss to us of the related costs incurred
which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we are unable to
complete our initial business combination, our public stockholders may receive only approximately $10.00 per share on the liquidation
of our trust account and our warrants will expire worthless.
Our ability to successfully effect our initial business
combination and to be successful thereafter will be totally dependent upon the efforts of our key personnel, some of whom may join us
following our initial business combination. The loss of key personnel could negatively impact the operations and profitability of our
post-combination business.
Our ability to successfully effect our business
combination is dependent upon the efforts of our key personnel. The role of our key personnel in the target business, however, cannot
presently be ascertained. Although some of our key personnel may remain with the target business in senior management or advisory positions
following our business combination, it is likely that some or all of the management of the target business will remain in place. While
we intend to closely scrutinize any individuals we engage after our initial business combination, we cannot assure you that our assessment
of these individuals will prove to be correct. These individuals may be unfamiliar with the requirements of operating a company regulated
by the SEC, which could cause us to have to expend time and resources helping them become familiar with such requirements.
In addition, the officers and directors of an acquisition
candidate may resign upon completion of our initial business combination. The departure of a business combination target’s key personnel
could negatively impact the operations and profitability of our post-combination business. The role of an acquisition candidate’s
key personnel upon the completion of our initial business combination cannot be ascertained at this time. Although we contemplate that
certain members of an acquisition candidate’s management team will remain associated with the acquisition candidate following our
initial business combination, it is possible that members of the management of an acquisition candidate will not wish to remain in place.
The loss of key personnel could negatively impact the operations and profitability of our post-combination business.
Our key personnel may negotiate employment or consulting
agreements with a target business in connection with a particular business combination. These agreements may provide for them to receive
compensation following our business combination and as a result, may cause them to have conflicts of interest in determining whether a
particular business combination is the most advantageous.
Our key personnel may be able to remain with the
company after the completion of our business combination only if they are able to negotiate employment or consulting agreements in connection
with the business combination. Such negotiations would take place simultaneously with the negotiation of the business combination and
could provide for such individuals to receive compensation in the form of cash payments and/or our securities for services they would
render to us after the completion of the business combination. The personal and financial interests of such individuals may influence
their motivation in identifying and selecting a target business. However, we believe the ability of such individuals to remain with us
after the completion of our business combination will not be the determining factor in our decision as to whether or not we will proceed
with any potential business combination. There is no certainty, however, that any of our key personnel will remain with us after the completion
of our business combination. We cannot assure you that any of our key personnel will remain in senior management or advisory positions
with us. The determination as to whether any of our key personnel will remain with us will be made at the time of our initial business
combination. In addition, pursuant to an agreement entered into concurrently with the issuance and sale of the securities in our initial
public offering, our sponsor, upon consummation of an initial business combination, will be entitled to nominate three individuals for
election to our board of directors.
We may have a limited ability to assess the management
of a prospective target business and, as a result, may affect our initial business combination with a target business whose management
may not have the skills, qualifications or abilities to manage a public company, which could, in turn, negatively impact the value of
our stockholders’ investment in us.
When evaluating the desirability of effecting our
initial business combination with a prospective target business, our ability to assess the target business’ management may be limited
due to a lack of time, resources or information. Our assessment of the capabilities of the target’s management, therefore, may prove
to be incorrect and such management may lack the skills, qualifications or abilities we suspected. Should the target’s management
not possess the skills, qualifications or abilities necessary to manage a public company, the operations and profitability of the post-combination
business may be negatively impacted. Accordingly, any stockholders who choose to remain stockholders following the business combination
could suffer a reduction in the value of their shares. Such stockholders are unlikely to have a remedy for such reduction in value.
Risks Relating to Our
Sponsor and Management Team
Our officers and directors will allocate their time to
other businesses thereby causing conflicts of interest in their determination as to how much time to devote to our affairs. This conflict
of interest could have a negative impact on our ability to complete our initial business combination.
Our officers and directors are not required to,
and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our operations
and our search for a business combination and their other businesses. We do not intend to have any full-time employees prior to the completion
of our initial business combination. Each of our officers is engaged in several other business endeavors for which he may be entitled
to substantial compensation and our officers are not obligated to contribute any specific number of hours per week to our affairs. In
particular, certain of our officers and directors are employed by Centerview Capital Consumer, which is an investment manager to various
private investment funds, which make investments in securities or other interests of or relating to companies in industries we may target
for our initial business combination. Certain of our officers serve as directors of Simply Good Foods and Advantage. Our independent directors
also serve as officers or board members for other entities. If our officers’ and directors’ other business affairs require
them to devote substantial amounts of time to such affairs in excess of their current commitment levels, it could limit their ability
to devote time to our affairs which may have a negative impact on our ability to complete our initial business combination. For a complete
discussion of our officers’ and directors’ other business affairs, please see Part III, Item 10 “Directors, Executive
Officers and Corporate Governance” and Part III, Item 13 “Certain Relationships and Related Transactions, and Director Independence.”
Certain of our officers and directors are now, and all
of them may in the future become, affiliated with entities engaged in business activities similar to those intended to be conducted by
us and, accordingly, may have conflicts of interest in allocating their time and determining to which entity a particular business opportunity
should be presented.
Until we consummate our initial business combination,
we will continue to engage in the business of identifying and combining with one or more businesses. Our sponsor and officers and directors
are, and may in the future become, affiliated with entities that are engaged in a similar business. In fact, we expect that members of
our management team and our board, as well as Centerview Capital and Centerview Partners, are likely to sponsor, form or participate in
other blank check companies during the period in which we are seeking an initial business combination. As a result, all of the entities
described in Part III, Item 13 “Directors, Executive Officers and Corporate Governance,” and Part III, Item 13 “Certain
Relationships and Related Transactions, and Director Independence,” as well as any future blank check company that members of our
management team, our board and/or Centerview Capital, may be affiliated with, may compete with us for acquisition opportunities.
Our officers and directors also may become aware
of business opportunities which may be appropriate for presentation to us and the other entities to which they owe certain fiduciary or
contractual duties.
Accordingly, they may have conflicts of interest
in determining to which entity a particular business opportunity should be presented. These conflicts may not be resolved in our favor
and a potential target business may be presented to another entity prior to its presentation to us. Our amended and restated certificate
of incorporation provides that we renounce our interest in any corporate opportunity offered to any of our directors or officers unless
such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company and such opportunity
is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue. Accordingly, if any
of our executive officers or directors becomes aware of a business combination opportunity which is suitable for any of the above entities,
or any blank check company our executive officers or directors may be affiliated with in the future, and to which he or she has current
or future fiduciary or contractual obligations, and such opportunity was not presented to such individual solely in their capacity as
a director or officer of our company, we would expect that he or she will honor his or her fiduciary or contractual obligations to present
such business combination opportunity to such entity, and only present it to us if such entity rejects the opportunity. Conversely, if
such individual was presented an opportunity solely in their capacity as a director or officer of our company, and our company is legally
and contractually permitted to undertake, and it would otherwise be reasonable for us to pursue, such opportunity, we would expect he
or she will honor his or her fiduciary or contractual obligations to present such business combination opportunity to our company and
only present it to such other entities for which he or she has fiduciary or contractual obligations if we reject the opportunity. Finally,
if such individual was presented or made aware of a business combination opportunity not in their capacity as a director or officer of
our company or any other entity to which they have fiduciary or contractual obligations, such individual would have discretion as to which
entity it would present such business combination opportunity.
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 13 “Certain
Relationships and Related Transactions, and Director Independence.”
Our officers, directors, security holders and their respective
affiliates may have competitive pecuniary interests that conflict with our interests.
We have not adopted a policy that expressly prohibits
our directors, officers, security holders or affiliates from having a direct or indirect pecuniary or financial interest in any investment
to be acquired or disposed of by us or in any transaction to which we are a party or have an interest. In fact, we may enter into a business
combination with a target business that is affiliated with our sponsor, our directors or officers, although we do not intend to do so,
or we may acquire a target business through an Affiliated Joint Acquisition with one or more affiliates of Centerview Capital and/or one
or more investors in funds managed by Centerview Capital. We do not have a policy that expressly prohibits any such persons from engaging
for their own account in business activities of the types conducted by us. Accordingly, such persons or entities may have a conflict between
their interests and ours.
In particular, Centerview Capital Consumer is focused
on investments in the consumer sector. 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.
We may engage in a business combination with one or more
target businesses that have relationships with entities that may be affiliated with our sponsor, officers, directors or existing holders
which may raise potential conflicts of interest.
In light of the involvement of our sponsor, officers
and directors with other entities, we may decide to acquire one or more businesses affiliated with our sponsor, officers or directors.
Our directors also serve as officers and board members for other entities, including, without limitation, those described under Item 13
“Certain Relationships and Related Transactions, and Director Independence.”. Such entities may compete with us for business
combination opportunities. Our sponsor, officers and directors are not currently aware of any specific opportunities for us to complete
our business combination with any entities with which they are affiliated, and there have been no preliminary discussions concerning a
business combination with any such entity or entities. Although we are not specifically focusing on, or targeting, any transaction with
any affiliated entities, we would pursue such a transaction if we determined that such affiliated entity met our criteria for a business
combination as set forth in Item 1 “Business - Selection of a Target Business and Structuring of our Initial Business Combination”
and such transaction was approved by a majority of our disinterested directors. Despite our agreement to obtain an opinion from an independent
investment banking firm 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 officers,
directors or existing holders, potential conflicts of interest still may exist and, as a result, the terms of the business combination
may not be as advantageous to our public stockholders as they would be absent any conflicts of interest.
We may acquire a target business through an Affiliated
Joint Acquisition with one or more affiliates of Centerview Capital and/or one or more investors in funds managed by Centerview Capital.
This may result in conflicts of interest as well as dilutive issuances of our securities.
We may, at our option, pursue an Affiliated Joint
Acquisition opportunity with an entity affiliated with Centerview Capital and/or one or more investors in funds managed by Centerview
Capital. Any such parties may co-invest with us in the target business at the time of our initial business combination, or we could raise
additional proceeds to complete the acquisition by making a specified future issuance to any such parties. Accordingly, such persons or
entities may have a conflict between their interests and ours.
In addition, any specified future issuance in connection
with an Affiliated Joint Acquisition would trigger the anti-dilution provisions of our Class B common stock, which, unless waived, would
result in an adjustment to the conversion ratio of our Class B common stock such that our initial stockholders and their permitted transferees,
if any, would retain their aggregate percentage ownership at 20% of the sum of the total number of all shares of common stock currently
outstanding plus all shares issued in the specified future issuances. If such adjustment is not waived, the specified future issuance
would not reduce the percentage ownership of holders of our Class B common stock, but would reduce the percentage ownership of holders
of our Class A common stock.
Since our sponsor, officers and directors will lose their
entire investment in us if our business combination is not completed, and because our sponsor, officers and directors who have an interest
in founder shares may profit substantially from a business combination even under circumstances where our public stockholders would experience
losses in connection with their investment, a conflict of interest may arise in determining whether a particular business combination
target is appropriate for our initial business combination.
In
March 2021, our sponsor purchased an aggregate of 10,062,500 founder shares for an aggregate purchase price of $25,000, or approximately
$0.002 per share. In June 2021, our sponsor transferred 25,000 founder shares to each of Mses. Herman and Karch and Messrs. Kash and Klein,
our independent directors. With partial exercise of the over-allotment option on August 24,
2021 and subsequent expiration of the over-allotment option on September 23, 2021, 8,925,000 founder shares were outstanding
as of December 31, 2021 with 1,137,500 founder shares forfeited. The
number of founder shares issued was determined based on the expectation that such founder shares would represent 20% of the outstanding
shares after our initial public offering. The founder shares will be worthless if we do not complete an initial business combination.
In addition, simultaneously with our initial public offering, our sponsor purchased an aggregate of 6,666,667 private
placement warrants for a purchase price of $10,000,000, or $1.50 per whole warrant, and, simultaneously with the partial exercise of the
over-allotment option on August 24, 2021, purchased 93,333 additional private placement warrants for a purchase price of $140,000,
or $1.50 per whole warrant, resulting in a total of 6,760,000 private placement
warrants owned by our sponsor, each exercisable for one share of our Class A common stock at $11.50 per share, that will also be worthless
if we do not complete a business combination. Holders of founder shares have agreed (A) to vote any shares owned by them in favor of any
proposed business combination and (B) not to redeem any founder shares in connection with a stockholder vote to approve a proposed initial
business combination. In addition, we may obtain loans from our sponsor, affiliates of our sponsor or an officer or director. The personal
and financial interests of our officers and directors may influence their motivation in identifying and selecting a target business combination,
completing an initial business combination and influencing the operation of the business following the initial business combination.
The personal and financial interests of the holders
of our founder shares and our officers and directors may influence their motivation in identifying and selecting a target business combination,
completing an initial business combination and influencing the operation of the business following the initial business combination and
may result in a misalignment of interests between the holders of our founder shares and our officers and directors, on the one hand, and
our public stockholders, on the other. In particular, because the founder shares were purchased at approximately $0.002 per share, the
holders of our founder shares (including members of our management team that directly or indirectly own founder shares) could make a substantial
profit after our initial business combination even if our public stockholders lose money on their investment as a result of a decrease
in the post-combination value of their shares of Class A common stock (after accounting for any adjustments in connection with an
exchange or other transaction contemplated by the business combination). For example, a holder of 1,000 founder shares would have paid
approximately $2.00 to obtain such shares. At the time of an initial business combination, such holder would be able to convert such founder
shares into 1,000 shares of our Class A common stock, and would receive the same consideration in connection with our initial business
combination as a public stockholder for the same number of shares of our Class A common stock. If the value of the shares of our
Class A common stock on a post-combination basis (after accounting for any adjustments in connection with an exchange or other transaction
contemplated by the business combination) were to decrease to $5.00 per share of our Class A common stock, the holder of our founder
shares would obtain a profit of approximately $4,998 on account of the 1,000 founder shares that the holder had converted into shares
of Class A common stock in connection with the initial business combination. By contrast, a public stockholder holding 1,000 shares
of Class A common stock would lose approximately $5,000.00 in connection with the same transaction.
Further, each of our officers and directors may
have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers
and directors were to be included by a target business as a condition to any agreement with respect to our initial business combination.
We may issue notes or other debt securities, or otherwise
incur substantial debt, to complete a business combination, which may adversely affect our leverage and financial condition and thus negatively
impact the value of our stockholders’ investment in us.
Although we have no commitments as of the date
of this Report to issue any notes or other debt securities, or to otherwise incur outstanding debt, we may choose to incur substantial
debt to complete our business combination. We have agreed that we will not incur any indebtedness unless we have obtained from the lender
a waiver of any right, title, interest or claim of any kind in or to the monies held in the trust account. As such, no issuance of debt
will affect the per-share amount available for redemption from the trust account. Nevertheless, the incurrence of debt could have a variety
of negative effects, including:
| ● | default
and foreclosure on our assets if our operating revenues after an initial business combination
are insufficient to repay our debt obligations; |
| ● | 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; |
| ● | our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand; |
| ● | our inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain such
financing while the debt security is outstanding; |
| ● | our inability to pay dividends on our common stock; |
| ● | using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for
dividends on our common stock if declared, our ability to pay expenses, make capital expenditures and acquisitions, and fund other general
corporate purposes; |
| ● | limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate; |
| ● | increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government
regulation; |
| ● | limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements,
and execution of our strategy; and |
| ● | other disadvantages compared to our competitors who have less debt. |
We may only be able to complete one business combination
with the proceeds of the initial public offering and the sale of the private placement warrants, which will cause us to be solely dependent
on a single business which may have a limited number of products or services. This lack of diversification may negatively impact our operations
and profitability.
Of the net proceeds from our initial public offering
and the sale of the private placement warrants, $344,511,796 is available to complete our initial business combination and pay related
fees and expenses (which includes up to $12,495,000, for the payment of deferred underwriting commissions).
We may effectuate our business combination with
a single target business or multiple target businesses simultaneously or within a short period of time. However, we may not be able to
effectuate our business combination with more than one target business because of various factors, including the existence of complex
accounting issues and the requirement that we prepare and file pro forma financial statements with the SEC that present operating results
and the financial condition of several target businesses as if they had been operated on a combined basis. By completing our initial business
combination with only a single entity, our lack of diversification may subject us to numerous economic, competitive and regulatory developments.
Further, we would not be able to diversify our operations or benefit from the possible spreading of risks or offsetting of losses, unlike
other entities which may have the resources to complete several business combinations in different industries or different areas of a
single industry. In addition, we focus our search for an initial business combination in a single industry. Accordingly, the prospects
for our success may be:
| ● | solely dependent upon the performance of a single business, property or asset, or |
| ● | dependent upon the development or market acceptance of a single or limited number of products, processes or services. |
This lack of diversification may subject us to
numerous economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact upon the particular
industry in which we may operate subsequent to our business combination.
We may attempt to simultaneously complete business combinations
with multiple prospective targets, which may hinder our ability to complete our business combination and give rise to increased costs
and risks that could negatively impact our operations and profitability.
If we determine to simultaneously acquire several
businesses that are owned by different sellers, we will need for each of such sellers to agree that our purchase of its business is contingent
on the simultaneous closings of the other business combinations, which may make it more difficult for us, and delay our ability, to complete
our initial business combination. With multiple business combinations, we could also face additional risks, including additional burdens
and costs with respect to possible multiple negotiations and due diligence investigations (if there are multiple sellers) and the additional
risks associated with the subsequent assimilation of the operations and services or products of the acquired companies in a single operating
business. If we are unable to adequately address these risks, it could negatively impact our profitability and results of operations.
We may attempt to complete our initial business combination
with a private company about which little information is available, which may result in a business combination with a company that is
not as profitable as we suspected, if at all.
In pursuing our acquisition strategy, we may seek
to effectuate our initial business combination with a privately held company. By definition, very little public information exists about
private companies, and we could be required to make our decision on whether to pursue a potential initial business combination on the
basis of limited information, which may result in a business combination with a company that is not as profitable as we suspected, if
at all.
Our management may not be able to maintain control of a
target business after our initial business combination.
We may structure a business combination so that
the post-transaction company in which our public stockholders own shares will own less than 100% of the equity interests or assets of
a target business, but we will only complete such business combination if the post-transaction company owns or acquires 50% or more of
the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for us not to be
required to register as an investment company under the Investment Company Act. We will not consider any transaction that does not meet
such criteria. Even if the post-transaction company owns 50% or more of the voting securities of the target, our stockholders prior to
the business combination may collectively own a minority interest in the post business combination company, depending on valuations ascribed
to the target and us in the business combination transaction. For example, we could pursue a transaction in which we issue a substantial
number of new shares of Class A common stock in exchange for all of the outstanding capital stock of a target. In this case, we would
acquire a 100% interest in the target. However, as a result of the issuance of a substantial number of new shares of common stock, our
stockholders immediately prior to such transaction could own less than a majority of our outstanding shares of common stock subsequent
to such transaction. In addition, other minority stockholders may subsequently combine their holdings resulting in a single person or
group obtaining a larger share of the company’s stock than we initially acquired. Accordingly, this may make it more likely that
our management will not be able to maintain our control of the target business. We cannot provide assurance that, upon loss of control
of a target business, new management will possess the skills, qualifications or abilities necessary to profitably operate such business.
We do not have a specified maximum redemption threshold.
The absence of such a redemption threshold may make it possible for us to complete a business combination with which a substantial majority
of our stockholders do not agree.
Our amended and restated certificate of incorporation
does not provide a specified maximum redemption threshold, except that in no event will we redeem our public shares in an amount that
would cause our net tangible assets to be less than $5,000,001 upon consummation of our initial business combination (such that we are
not subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which may be contained
in the agreement relating to our initial business combination. As a result, we may be able to complete our business combination even though
a substantial majority of our public stockholders do not agree with the transaction and have redeemed their shares or, if we seek stockholder
approval of our initial business combination and do not conduct redemptions in connection with our business combination pursuant to the
tender offer rules, have entered into privately negotiated agreements to sell their shares to our sponsor, officers, directors, advisors
or their affiliates. In the event the aggregate cash consideration we would be required to pay for all shares of Class A common stock
that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business
combination exceed the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares, all
shares of Class A common stock submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate
business combination.
The exercise price for the public warrants is higher than
in many similar blank check company offerings in the past, and, accordingly, the warrants are more likely to expire worthless.
The exercise price of the public warrants is higher
than is typical in many similar blank check companies in the past. Historically, the exercise price of a warrant was generally a fraction
of the purchase price of the Units in the initial public offering. The exercise price for our public warrants is $11.50 per share. As
a result, the warrants are less likely to ever be in the money and more likely to expire worthless.
In order to effectuate our initial business combination,
we may seek to amend our amended and restated certificate of incorporation or governing instruments in a manner that will make it easier
for us to complete our initial business combination but that our stockholders may not support.
In order to effectuate a business combination,
blank check companies have, in the recent past, amended various provisions of their charters and modified governing instruments. For example,
blank check companies have amended the definition of business combination, increased redemption thresholds and changed industry focus.
We cannot assure you that we will not seek to amend our charter or governing instruments or change our industry focus in order to effectuate
our initial business combination.
The provisions of our amended and restated certificate
of incorporation that relate to our pre-business combination activity (and corresponding provisions of the agreement governing the release
of funds from our trust account) may be amended with the approval of holders of a majority of our common stock, which is a lower amendment
threshold than that of some other blank check companies. It may be easier for us, therefore, to amend our amended and restated certificate
of incorporation and the trust agreement to facilitate the completion of an initial business combination that some of our stockholders
may not support.
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 a certain percentage of the company’s stockholders. In those companies, amendment of these
provisions sometimes requires approval by between 90% and 100% of the company’s public stockholders. Our amended and restated certificate
of incorporation provides that any of its provisions related to pre-business combination activity (including the requirement to deposit
proceeds of our initial public offering and the private placement of warrants into the trust account and not release such amounts except
in specified circumstances, and to provide redemption rights to public stockholders as described herein) may be amended if approved by
holders of a majority of our common stock entitled to vote thereon, and corresponding provisions of the trust agreement governing the
release of funds from our trust account may be amended if approved by holders of a majority of our common stock entitled to vote thereon.
In all other instances, our amended and restated certificate of incorporation may be amended by holders of a majority of our outstanding
common stock entitled to vote thereon, subject to applicable provisions of the DGCL or applicable stock exchange rules. Our initial stockholders,
who collectively beneficially own up to 20% of our common stock, will participate in any vote to amend our amended and restated certificate
of incorporation and/or trust agreement and will have the discretion to vote in any manner they choose. As a result, we may be able to
amend the provisions of our amended and restated certificate of incorporation which govern our pre-business combination behavior more
easily than some other blank check companies, and this may increase our ability to complete a business combination with which you do not
agree. Our stockholders may pursue remedies against us for any breach of our amended and restated certificate of incorporation.
Our sponsor, officers and directors have agreed,
pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation
that would affect the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business
combination by August 12, 2023, or which adversely affects the rights of holders of our Class A common stock, unless we provide our public
stockholders with the opportunity to redeem their shares of Class A common stock upon approval of any such amendment at a per-share price,
payable in cash, equal to the aggregate amount then on deposit in the trust account, divided by the number of then outstanding public
shares. These agreements are contained in a letter agreement that we have entered into with our sponsor, officers and directors. Our stockholders
are not parties to, or third-party beneficiaries of, these agreements and, as a result, will not have the ability to pursue remedies against
our sponsor, officers or directors for any breach of these agreements. As a result, in the event of a breach, our stockholders would need
to pursue a stockholder derivative action, subject to applicable law.
We may be unable to obtain additional financing to complete
our initial business combination or to fund the operations and growth of a target business, which could compel us to restructure or abandon
a particular business combination.
Although we believe that the net proceeds of our
initial public offering and the sale of the private placement warrants are sufficient to allow us to complete our initial business combination,
because we have not yet entered into a definitive agreement with any prospective target business we cannot ascertain the capital requirements
for any particular transaction. If the net proceeds of our initial public offering and the sale of the private placement warrants 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 repurchase for cash a significant number of shares from stockholders who elect redemption in connection
with our initial business combination or the terms of negotiated transactions to purchase shares in connection with our initial business
combination, we may be required to seek additional financing or to abandon the proposed business combination. We cannot assure you that
such financing will be available on acceptable terms, if at all. To the extent that additional financing proves to be unavailable when
needed to complete our initial business combination, we would be compelled to either restructure the transaction or abandon that particular
business combination and seek an alternative target business candidate. If we are unable to complete our initial business combination,
our public stockholders may receive only approximately $10.00 per share plus any pro rata interest earned on the funds held in the trust
account and not previously released to us to pay our working capital requirements (up to $1,000,000 in the aggregate) as well as franchise
and income taxes on the liquidation of our trust account and our warrants will expire worthless. In addition, even if we do not need additional
financing to complete our business combination, we may require such financing to fund the operations or growth of the target business.
The failure to secure additional financing could have a material adverse effect on the continued development or growth of the target business.
None of our officers, directors or stockholders is required to provide any financing to us in connection with or after our initial business
combination. If we are unable to complete our initial business combination, our public stockholders may only receive approximately $10.00
per share on the liquidation of our trust account, and our warrants will expire worthless.
Our initial stockholders may exert a substantial influence
on actions requiring a stockholder vote, potentially in a manner that you do not support.
Our initial stockholders own shares representing
20% of our issued and outstanding shares of common stock. Accordingly, they may exert a substantial influence on actions requiring a stockholder
vote, potentially in a manner that you do not support, including amendments to our amended and restated certificate of incorporation and
approval of major corporate transactions. If our initial stockholders purchase any additional shares of common stock in the aftermarket
or in privately negotiated transactions, this would increase their control. Factors that would be considered in making such additional
purchases would include consideration of the current trading price of our Class A common stock. In addition, our board of directors, whose
members were elected by our initial stockholders, is and will be divided into three classes, each of which will generally serve for a
term of three years with only one class of directors being elected in each year. We may not hold an annual meeting of stockholders to
elect new directors prior to the completion of our business combination, in which case all of the current directors will continue in office
until at least the completion of the business combination. If there is an annual meeting, as a consequence of our “staggered”
board of directors, only a minority of the board of directors will be considered for election and our initial stockholders, because of
their ownership position, will have considerable influence regarding the outcome. In addition, prior to the completion of an initial business
combination, holders of a majority of our founder shares may remove a member of the board of directors for any reason. Accordingly, our
initial stockholders will continue to exert control at least until the completion of our business combination.
The value of the founder shares following completion of our initial
business combination is likely to be substantially higher than the nominal price paid for them, even if the trading price of our common
shares at such time is substantially less than $10.00 per share.
As
of December 31, 2021, our sponsor invested an aggregate of $10,165,000 in us, comprised of the $25,000 purchase price for the founder
shares and the $10,140,000 purchase price for the private placement warrants. Assuming a trading price of $10.00 per share upon consummation
of our initial business combination, the 8,925,000
founder shares would have an aggregate implied value of $89,250,000. Even if the trading price of our common shares were as low as $1.15
per share, and the private placement warrants are worthless, the value of the founder shares would be equal to the sponsor’s initial
investment in us. As a result, our sponsor is likely to be able to make a substantial profit on its investment in us at a time when our
public shares have lost significant value. Accordingly, our management team, members of which own interests in our sponsor, may be more
willing to pursue a business combination with a riskier or less-established target business than would be the case if our sponsor had
paid the same per share price for the founder shares as our public stockholders paid for their public shares.
The nominal purchase price paid by our sponsor for the founder
shares may result in significant dilution to the implied value of your public shares upon the consummation of our initial business combination.
We
are offered our Units at an offering price of $10.00 per Unit and the amount in our trust account is $10.00 per public share, implying
an initial value of $10.00 per public share. However, prior to the initial public offering, our sponsor paid a nominal aggregate purchase
price of $25,000 for the founder shares, or approximately $0.002 per share. As a result, the value of your public shares may be significantly
diluted upon the consummation of our initial business combination, when the founder shares are converted into public shares. For example,
the following table shows the dilutive effect of the founder shares on the implied value of the public shares upon the consummation of
our initial business combination assuming that our equity value at that time is $357,000,000, which is the amount we have for our initial
business combination in the trust account as of December 31, 2021, no interest is earned on the funds held in the trust account, and no
public shares are redeemed in connection with our initial business combination, and without taking into account any other potential impacts
on our valuation at such time, such as the trading price of our public shares, the business combination transaction costs (including payment
of $12,495,000 of deferred underwriting commissions), any equity issued
or cash paid to the target’s sellers or other third parties, or the target’s business itself, including its assets, liabilities,
management and prospects, as well as the value of our public and private warrants. At such valuation, each of our common shares would
have an implied value of $8.00 per share upon consummation of our initial business combination, which is a 20% decrease as compared to
the initial implied value per public share of $10.00.
Public shares | |
| 35,700,000 | |
Founder shares | |
| 8,925,000 | |
Total shares | |
| 44,625,000 | |
Total funds in trust available for initial business combination | |
$ | 357,000,000 | |
Initial implied value per public share | |
$ | 10.00 | |
Implied value per share upon consummation of initial business combination | |
$ | 8.00 | |
We may amend the terms of the warrants in a manner that
may be adverse to holders with the approval by the holders of at least a majority of the then outstanding public warrants. As a result,
the exercise price of your warrants could be increased, the exercise period could be shortened and the number of shares of our Class A
common stock purchasable upon exercise of a warrant could be decreased, all without your approval.
Our warrants are 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 warrant holder to cure any ambiguity or correct any defective provision,
but requires the approval by the holders of at least a majority of the then outstanding public warrants (which may include public warrants
acquired by our sponsor or its affiliates in our initial public offering
or thereafter in the open market) to make any change that adversely affects the interests of the registered holders. Accordingly, we may
amend the terms of the public warrants in a manner adverse to a holder if holders of at least a majority of the then outstanding public
warrants approve of such amendment. Although our ability to amend the terms of the public warrants with the consent of at least a majority
of the then outstanding public warrants is unlimited, examples of such amendments could be amendments to, among other things, increase
the exercise price of the warrants, shorten the exercise period or decrease the number of shares of our Class A common stock purchasable
upon exercise of a warrant.
We may redeem your unexpired warrants prior to their exercise
at a time that is disadvantageous to you, thereby making your warrants worthless.
We have the ability to redeem outstanding warrants
at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the last reported
sales price of our Class A common stock equals or exceeds $18.00 per share for any 20 trading days within a 30 trading-day period ending
on the third trading day prior to the date on which we give proper notice of such redemption and provided certain other conditions are
met. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify
the underlying securities for sale under all applicable state securities laws. Redemption of the outstanding warrants could force you
(i) to exercise your warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) to sell
your warrants at the then-current market price when you might otherwise wish to hold your warrants or (iii) to accept the nominal redemption
price which, at the time the outstanding warrants are called for redemption, is likely to be substantially less than the market value
of your warrants. None of the private placement warrants will be redeemable by us so long as they are held by the sponsor or its permitted
transferees.
Our warrants and founder shares may have an adverse effect
on the market price of our Class A common stock and make it more difficult to effectuate our business combination.
We issued warrants to purchase 11,900,000
shares of Class A common stock as part of the Units sold in our initial public offering and partial exercise of the over-allotment option
and, simultaneously with the closing of our initial public offering and partial exercise of the over-allotment option, we issued in a
private placement warrants to purchase an aggregate of 6,760,000 shares of Class A common stock at $11.50 per share. Prior to our initial
public offering, our sponsor purchased an aggregate of 10,062,500 founder shares in a private
placement (1,137,500 founder shares have been forfeited following the partial exercise of
the underwriters’ over-allotment option). The founder shares are convertible into shares of Class A common stock on a one-for-one
basis, subject to adjustment as set forth herein. In addition, if our sponsor makes any working capital loans, up to $2,000,000 of such
loans may be converted into warrants, at the price of $1.50 per warrant at the option of the lender. Such warrants would be identical
to the private placement warrants, including as to exercise price, exercisability and exercise period.
To the extent we issue shares of Class A common
stock to effectuate a business combination, the potential for the issuance of a substantial number of additional shares of Class A common
stock upon exercise of these warrants and conversion rights could make us a less attractive acquisition vehicle to a target business.
Any such issuance will increase the number of issued and outstanding shares of our Class A common stock and reduce the value of the shares
of Class A common stock issued to complete the business combination. Therefore, our warrants and founder shares may make it more difficult
to effectuate a business combination or increase the cost of acquiring the target business.
The private placement warrants are identical to
the warrants sold as part of the Units in our initial public offering except that, so long as they are held by our sponsor or its permitted
transferees, (i) they will not be redeemable by us, (ii) they (including the Class A common stock issuable upon exercise of these warrants)
may not, subject to certain limited exceptions, be transferred, assigned or sold by our sponsor until 30 days after the completion of
our initial business combination and (iii) they may be exercised by the holders on a cashless basis.
Our private placement warrants are accounted for as derivative
liabilities and are recorded at fair value upon issuance with changes in fair value each period reported in earnings, which may have an
adverse effect on the market price of our Class A common stock or may make it more difficult for us to consummate an initial business
combination.
As
of December 31, 2021, we have accounted for the 6,760,000 private
placement warrants in accordance with the guidance contained in ASC 815-40. Such guidance provides that because the private placement
warrants do not meet the criteria for equity treatment thereunder, each private placement warrant must be recorded as a liability. Accordingly,
we have classified each of the private placement warrants as a liability at its fair value as determined by us based upon a valuation
report obtained from an independent third party valuation firm. At each reporting period (1) the accounting treatment of the private
placement warrants is re-evaluated for proper accounting treatment as a liability or equity and (2) the fair value of the liability
of the private placement warrants is remeasured and the change in the fair value of the liability will be recorded as other income (expense)
in our income statement. Changes in the inputs and assumptions for the valuation model we use to determine the fair value of such liability
may have a material impact on the estimated fair value of the embedded derivative liability. The share price of our Class A common
stock represents the primary underlying variable that impacts the value of the derivative instruments. Additional factors that impact
the value of the derivative instruments include the volatility of our stock price, discount rates and stated interest rates. As a result,
our consolidated financial statements and results of operations will fluctuate quarterly, based on various factors, such as the share
price of our Class A common stock, many of which are outside of our control. In addition, we may change the underlying assumptions
used in our valuation model, which could in result in significant fluctuations in our results of operations. If our stock price is volatile,
we expect that we will recognize non-cash gains or losses on our private placement warrants or any other similar derivative instruments
each reporting period and that the amount of such gains or losses could be material. The impact of changes in fair value on earnings may
have an adverse effect on the market price of our Class A common stock.
Any due diligence in connection with an initial business combination
may not reveal all relevant considerations or liabilities of a target business, which could have a material adverse effect on our business,
financial condition, results of operations and prospects.
We intend to conduct such due diligence as we deem
reasonably practicable and appropriate based on the target business and the facts and circumstances applicable to the proposed transaction
prior to any initial business combination. The objective of the due diligence process will be to identify material issues which might
affect the decision to proceed with an initial business combination or the consideration payable in connection with such initial business
combination. We also intend to use information provided during the due diligence process to formulate our business and operational planning
for, and valuation of, any target company or business. While conducting due diligence and assessing a potential target business, we will
rely on publicly available information (if any), information provided by the relevant target business to the extent provided and, in some
circumstances, third-party studies.
The due diligence undertaken with respect to a potential
initial business combination may not reveal all relevant facts that may be necessary to evaluate such transaction or to formulate a business
strategy. Furthermore, the information provided during due diligence may not be adequate or accurate. As part of the due diligence process,
we will also make subjective judgments regarding the results of operations, financial condition and prospects of a potential initial business
combination, and these judgments may be inaccurate.
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.
Due diligence conducted in connection with an initial
business combination may not result in the initial business combination being successful. If the due diligence investigation fails to
identify material information regarding an opportunity, or if we consider such material risks to be commercially acceptable relative to
the opportunity, and we proceed with an initial business combination, our company may subsequently incur substantial impairment charges
or other losses. In addition, following an initial business combination, we may be subject to significant, previously undisclosed liabilities
of the acquired business that were not identified during due diligence and which could have a material adverse effect on our business,
financial condition, results of operations and prospects.
Because each Unit contains one-third of one warrant and
only a whole warrant may be exercised, the Units may be worth less than Units of other blank check companies.
Each Unit contains one-third of one warrant. Because,
pursuant to the warrant agreement, the warrants may only be exercised for a whole number of shares, only a whole warrant may be exercised
at any given time. This is different from other offerings similar to ours whose Units include one share of common stock and one warrant
to purchase one whole share. We have established the components of the Units in this way in order to reduce the dilutive effect of the
warrants upon completion of a business combination since the warrants will be exercisable in the aggregate for one-third of the number
of shares compared to Units that each contain a warrant to purchase one whole share, thus making us, we believe, a more attractive merger
partner for target businesses. Nevertheless, this Unit structure may cause our Units to be worth less than if they included a warrant
to purchase one whole share.
The requirements of being a public company may strain our
resources and divert management’s attention.
As a public company, we are subject to the reporting
requirements of the Exchange Act, the Sarbanes Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements
of Nasdaq and other applicable securities rules and regulations. Compliance with these rules and regulations increase our legal and financial
compliance costs, make some activities more difficult, time-consuming or costly and increase demand on our systems and resources, particularly
after we are no longer an “emerging growth company.” The Sarbanes-Oxley Act requires, among other things, that we maintain
effective disclosure controls and procedures and internal control over financial reporting. In order to maintain and, if required, improve
our disclosure controls and procedures and internal control over financial reporting to meet this standard, significant resources and
management oversight may be required. As a result, management’s attention may be diverted from other business concerns, which could
adversely affect our business and operating results. We may need to hire more employees in the future or engage outside consultants to
comply with these requirements, which will increase our costs and expenses.
A market for our securities may not develop, which would
adversely affect the liquidity and price of our securities.
The price of our securities may vary significantly
due to one or more potential business combinations and general market or economic conditions. Furthermore, an active trading market for
our securities may never develop or, if developed, it may not be sustained. You may be unable to sell your securities unless a market
can be established and sustained.
Because we must furnish our stockholders with target business
financial statements, we may lose the ability to complete an otherwise advantageous initial business combination with some prospective
target businesses.
The federal proxy rules require that a proxy statement
with respect to a vote on 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, or GAAP, or international
financial reporting standards, or IFRS, depending on the circumstances and the historical financial statements may be required to be audited
in accordance with the standards of the Public Company Accounting Oversight Board (United States), or PCAOB. These financial statements
may also be required to be prepared in accordance with GAAP in connection with our current report on Form 8-K announcing the closing our
initial business combination within four business days following such closing. These financial statement requirements may limit the pool
of potential target businesses we may acquire because some targets may be unable to provide such financial statements in time for us to
disclose such statements in accordance with federal proxy rules and complete our initial business combination within the prescribed time
frame.
We are an emerging growth company and a smaller reporting
company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available
to emerging growth companies or smaller reporting companies, this could make our securities less attractive to investors and may make
it more difficult to compare our performance with other public companies.
We are an “emerging growth company”
within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from various reporting
requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being
required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations
regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding
advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. As a result,
our stockholders may not have access to certain information they may deem important. We could be an emerging growth company for up to
five years, although circumstances could cause us to lose that status earlier, including if the market value of our Class A common stock
held by non-affiliates exceeds $700 million as of any June 30 before that time, in which case we would no longer be an emerging growth
company as of the following December 31. We cannot predict whether investors will find our securities less attractive because we will
rely on these exemptions. If some investors find our securities less attractive as a result of our reliance on these exemptions, the trading
prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities and the
trading prices of our securities may be more volatile.
Further, Section 102(b)(1) of the JOBS Act exempts
emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that
is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered
under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company
can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but
any such an election to opt out is irrevocable. We have elected not to opt out of such extended transition period, which means that when
a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company,
can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our
financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has
opted out of using the extended transition period difficult or impossible because of the potential differences in accountant 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 shares of our Class A common stock held by non-affiliates
exceeds $250 million as of the prior June 30, and (2) our annual revenues exceeded $100 million during such completed fiscal year
or the market value of shares of our Class A common stock held by non-affiliates exceeds $700 million as of the prior June 30. 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.
Members of our management team and our board of directors and
their respective affiliated companies have been, and may from time to time be, involved in legal proceedings or governmental investigations
unrelated to our business.
Members of our management team and our board of
directors have been involved in a wide variety of businesses. Such involvement has, and may lead to, media coverage and public awareness.
As a result of such involvement, members of our management team and our board of directors and their respective affiliated companies have
been, and may from time to time be, involved in legal proceedings or governmental investigations unrelated to our business. Any such proceedings
or investigations may be detrimental to our reputation and could negatively affect our ability to identify and complete an initial business
combination and may have an adverse effect on the price of our securities.
We may issue our shares to investors in connection with our initial
business combination at a price which approximates the per-share amounts in our trust account at such time or at a price lower than that
amount.
In connection with our initial business combination,
we may issue shares to investors in private placement transactions (so-called PIPE transactions) at a price which approximates the per-share
amounts in our trust account at such time or at a price lower than that amount. The purpose of such issuances will be to enable us to
provide sufficient liquidity to the post-business combination entity. The price of the shares we issue may therefore be less, and potentially
significantly less, than the market price for our shares at such time.
Since only holders of our founder shares will have the right
to vote on the election of directors, the Nasdaq considers us to be a “controlled company” within the meaning of the Nasdaq
rules and, as a result, we qualify for exemptions from certain corporate governance requirements.
Until the completion of our initial business combination,
only holders of our founder shares have the right to vote on the appointment of directors. As a result, Nasdaq considers us to be a “controlled
company” within the meaning of Nasdaq corporate governance standards. Under Nasdaq corporate governance standards, a company of
which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may
elect not to comply with certain corporate governance requirements, including the requirements that:
| ● | we have a board that includes a majority of “independent
directors,” as defined under the rules of Nasdaq; and |
| ● | we have a compensation committee of our board that is comprised
entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities. |
We do not currently utilize these exemptions and
intend to continue complying with the corporate governance requirements of Nasdaq. However, if we determine in the future to utilize some
or all of these exemptions, you will not have the same protections afforded to shareholders of companies that are subject to all of Nasdaq’s
corporate governance requirements.
Compliance obligations under the Sarbanes-Oxley Act may
make it more difficult for us to effectuate our initial business combination, require substantial financial and management resources,
and increase the time and costs of completing an acquisition.
Section 404 of the Sarbanes-Oxley Act requires
that we evaluate and report on our system of internal controls over financial reporting beginning with our Annual Report on Form 10-K
for the year ending December 31, 2022. Only in the event we are deemed to be a large accelerated filer or an accelerated filer will we
be required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial
reporting. Further, for as long as we remain an emerging growth company, we will not be required to comply with the independent registered
public accounting firm attestation requirement on our internal control over financial reporting. The fact that we are a blank check company
makes compliance with the requirements of the Sarbanes-Oxley Act particularly burdensome on us as compared to other public companies because
a target company with which we seek to complete our business combination may not be in compliance with the provisions of the Sarbanes-Oxley
Act regarding adequacy of its internal controls. The development of the internal control over financial reporting of any such entity to
achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition.
Provisions in our amended and restated certificate of incorporation
and Delaware law may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for our Class
A common stock and could entrench management.
Our amended and restated certificate of incorporation
contains provisions that may discourage unsolicited takeover proposals that stockholders may consider to be in their best interests. These
provisions include a staggered board of directors and the ability of the board of directors to designate the terms of and issue new series
of preferred shares, which may make the removal of management more difficult and may discourage transactions that otherwise could involve
payment of a premium over prevailing market prices for our securities.
We are also subject to anti-takeover provisions
under Delaware law, which could delay or prevent a change of control. Together these provisions may make the removal of management more
difficult and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities.
Our amended and restated certificate of incorporation will designate
the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be
initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with
our company or our company’s directors, officers or other employees.
Our amended and restated certificate of incorporation
provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall,
to the fullest extent permitted by law, be the sole and exclusive forum for any (1) derivative action or proceeding brought on behalf
of our company, (2) action asserting a claim of breach of a fiduciary duty owed by any director, officer, employee or agent of our company
to our company or our stockholders, or any claim for aiding and abetting any such alleged breach, (3) action asserting a claim against
our company or any director, officer or employee of our company arising pursuant to any provision of the DGCL or our amended and restated
certificate of incorporation or our bylaws, or (4) action asserting a claim against us or any director, officer or employee of our company
governed by the internal affairs doctrine except for, as to each of (1) through (4) above, any claim (a) as to which the Court of Chancery
determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party
does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), (b) which is vested
in the exclusive jurisdiction of a court or forum other than the Court of Chancery, or (c) arising under the federal securities laws,
including the Securities Act, as to which the Court of Chancery and the federal district court for the District of Delaware shall concurrently
be the sole and exclusive forums. Notwithstanding the foregoing, the provisions of this paragraph will not apply to suits brought to enforce
any liability or duty created by the Exchange Act or any other claim for which the federal district courts of the United States of America
shall be the sole and exclusive forum. Any person or entity purchasing or otherwise acquiring any interest in any shares of our capital
stock shall be deemed to have notice of and to have consented to the forum provisions in our amended and restated certificate of incorporation.
If any action the subject matter of which is within the scope the forum provisions is filed in a court other than a court located within
the State of Delaware (a “foreign action”) in the name of any stockholder, such stockholder shall be deemed to have consented
to: (x) the personal jurisdiction of the state and federal courts located within the State of Delaware in connection with any action brought
in any such court to enforce the forum provisions (an “enforcement action”), and (y) having service of process made upon such
stockholder in any such enforcement action by service upon such stockholder’s counsel in the foreign action as agent for such stockholder.
This choice-of-forum provision may limit a stockholder’s
ability to bring a claim in a judicial forum that it finds favorable for disputes with our company or its directors, officers or other
employees, which may discourage such lawsuits. Alternatively, if a court were to find this provision of our amended and restated certificate
of incorporation inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur
additional costs associated with resolving such matters in other jurisdictions, which could materially and adversely affect our business,
financial condition and results of operations and result in a diversion of the time and resources of our management and board of directors.
If we effect our initial business combination with a company
with operations or opportunities outside of the United States, we would be subject to a variety of additional risks that may negatively
impact our operations.
If we effect our initial business combination with
a company with operations or opportunities outside of the United States, we would be subject to any special considerations or risks associated
with companies operating in an international setting, including any of the following:
| ● | higher
costs and difficulties inherent in managing cross-border business operations and complying
with different commercial and legal requirements of overseas markets; |
| ● | rules
and regulations regarding currency redemption; |
| ● | complex
corporate withholding taxes on individuals; |
| ● | laws
governing the manner in which future business combinations may be effected; |
| ● | tariffs
and trade barriers; |
| ● | regulations
related to customs and import/export matters; |
| ● | longer
payment cycles and challenges in collecting accounts receivable; |
| ● | tax
issues, such as tax law changes and variations in tax laws as compared to the United States; |
| ● | currency
fluctuations and exchange controls; |
| ● | cultural
and language differences; |
| ● | crime,
strikes, riots, civil disturbances, terrorist attacks, natural disasters and wars; |
| ● | deterioration
of political relations with the United States; and |
| ● | government
appropriations of assets. |
We
may not be able to adequately address these additional risks. If we were unable to do so, our operations might suffer, which may adversely
impact our results of operations and financial condition.
We
may face risks related to consumer sector companies.
Business
combinations with companies in the consumer sector 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:
| ● | An
inability to compete effectively in a highly competitive environment with many incumbents
having substantially greater resources; |
| ● | An
inability to manage rapid change, increasing consumer expectations and growth; |
| ● | An
inability to build strong brand identity and improve customer satisfaction and loyalty; |
| ● | Limitations
on a target business’ ability to protect its intellectual property rights, including
its trade secrets, that could cause a loss in revenue and any competitive advantage; |
| ● | The
high cost or unavailability of materials, equipment, supplies and personnel that could adversely
affect our ability to execute our operations on a timely basis; |
| ● | An
inability to attract and retain customers; |
| ● | An
inability to license or enforce intellectual property rights on which our business may depend; |
| ● | Seasonality
and weather conditions that may cause our operating results to vary from quarter to quarter; |
| ● | An
inability by us to successfully anticipate changing consumer preferences and buying trends
and manage our product line and inventory commensurate with customer demand; |
| ● | Potential
liability for negligence, copyright, or trademark infringement or other claims based on the
nature and content of materials that we may distribute; |
| ● | Dependence
of our operations upon third-party suppliers whose failure to perform adequately could disrupt
our business; |
| ● | Our
operating results may be adversely affected by changes in the cost or availability of raw
materials and energy; |
| ● | We
may be subject to production-related risks which could jeopardize our ability to realize
anticipated sales and profits; |
| ● | Changes
in the retail industry and markets for consumer products affecting our customers or retailing
practices could negatively impact customer relationships and our results of operations; and |
| ● | Our
business could involve the potential for product recalls, product liability and other claims
against us, which could affect our earnings and financial condition. |
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 consumer sector. Accordingly, if we acquire a target business in another industry, these risks will likely not affect us and we
will be subject to other risks attendant with the specific industry in which we operate or target business which we acquire, none of which
can be presently ascertained.