Item 1. BUSINESS
Company Profile
Greencity Acquisition Corporation
is a blank check company incorporated in 2018 as a Cayman Islands exempted company and incorporated for the purpose of effecting a merger,
share exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses, which
we refer to throughout this Annual Report on Form 10-K as our initial business combination. To date, we have not selected any specific
business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly,
with any business combination target.
The registration statement for
our initial public offering was declared effective by the Securities and Exchange Commission on July 23, 2020. We completed our
initial public offering on July 28, 2020. In our initial public offering, we sold units at an offering price of $10.00 and consisting
of one ordinary share and one redeemable warrant. Each warrant entitles the holder thereof to purchase one-half of one ordinary share.
We will not issue fractional shares in connection with the exercise of the warrants. As a result, a warrant holder must exercise warrants
in multiples of two warrants, at a price of $11.50 per full share, subject to adjustment as described in our prospectus dated as of July 23,
2020 as filed with the Securities and Exchange Commission on July 24, 2020. Each warrant will become exercisable on the later of
the completion of an initial business combination and 12 months from July 23, 2020, and will expire five years after the completion
of an initial business combination, or earlier upon redemption.
In connection with our initial public offering,
we sold 4,000,000 units, generating gross proceeds of $40,000,000. Simultaneously with the closing of the IPO, pursuant to the Private
Placement Units Purchase Agreement by and between the Company and our sponsor, Cynthia Management Corporation, a British Virgin Islands
company, the Company completed the private sale of an aggregate of 260,000 units (the “Private Placement Units”) to
the Sponsor at a purchase price of $10.00 per Private Placement Unit, generating gross proceeds to the Company of $2,600,000. The Private
Placement Units are identical to the Units in the IPO, except that the Sponsor has agreed not to transfer, assign or sell any of the
Private Placement Units (except to certain permitted transferees) until 30 days after the completion of the Company’s initial business
combination. No underwriting discounts or commissions were paid with respect to such sale. The issuance of the Private Placement Units
was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended.
Transaction costs amounted to $2,646,665, consisting
of $1,000,000 of underwriting fees, $1,000,000 of deferred underwriting fees and $646,665 of other offering costs .A total of $40,600,000,
comprised of $38,000,000 of the proceeds from the IPO (which amount includes up to $1,000,000 of the underwriter’s deferred discount)
and $2,600,000 of the proceeds of the sale of the Private Placement Units, was placed in a U.S.-based trust account, maintained by Continental
Stock Transfer & Trust Company, acting as trustee. Except with respect to interest earned on the funds in the trust account
that may be released to the Company to pay its taxes, the funds held in the trust account will not be released from the trust account
until the earliest of (i) the completion of the Company’s initial business combination, (ii) the redemption of any of
the Company’s public shares properly tendered in connection with a shareholder vote to amend the Company’s amended and restated
memorandum and articles of association to (A) modify the substance or timing of its obligation to redeem 100% of the Company’s
public shares if it does not complete its initial business combination within 12 months from the closing of the IPO (or up to 21 months
from the closing of the IPO if we extend the period of time to consummate a business combination), or (B) with respect to any other
provision relating to shareholders’ rights or pre-business combination activity, and (iii) the redemption of the Company’s
public shares if it is unable to complete its initial business combination within 12 months from the closing of the IPO (or up to 21
months from the closing of the IPO if we extend the period of time to consummate a business combination.
At December 31, 2020, cash of $473,945 was
held outside of the Trust Account (as defined below) and is available for working capital purposes.
The Company’s units are listed on The Nasdaq
Capital Market (“Nasdaq”) and commenced trading under the ticker symbol “GRCYU” on July 24, 2020. Each unit
consists of one ordinary share of the Company and one warrant, each warrant entitling the holder thereof to purchase one-half of one
ordinary share of the Company at a price of $11.50 per whole share. The units begin separate trading effective August 28, 2020 and the
ordinary shares and warrants commenced trading on Nasdaq under the symbols “GRCY” and “GRCYW,” respectively.
Since our IPO, our sole business activity has
been identifying and evaluating suitable acquisition transaction candidates and engaging in non-binding discussions with potential target
entities. To date we have not entered into any binding agreement with any target entity. We presently have no revenue and have had losses
since inception from incurring formation and operating costs since completion of our IPO.
Acquisition Strategy and Management Business Combination Experience
Our efforts in identifying prospective
target businesses will not be limited to a particular geographic region, although we intend to focus on businesses that have a connection
to the Asian market. We believe that we will add value to these businesses primarily by providing them with access to the U.S. capital
markets.
We will seek to capitalize on
the strength of our management team. Our team consists of experienced professionals and senior operating executives. Collectively, our
officers and directors have decades of experience in mergers and acquisitions, and operating companies, in Asia. We believe we will benefit
from their accomplishments, and specifically their current and recent activities with companies that have a connection to the Asian market,
in identifying attractive acquisition opportunities. However, there is no assurance that we will complete a business combination. Our
officers and directors have no prior experience consummating a business combination for a “blank check” company.
Investment Criteria
Our management team intends to
focus on creating shareholder value by leveraging its experience in the management, operation and financing of businesses to improve
the efficiency of operations while implementing strategies to scale revenue organically and/or through acquisitions. We have identified
the following general criteria and guidelines, which we believe are important in evaluating prospective target businesses. While we intend
to use these criteria and guidelines in evaluating prospective businesses, we may deviate from these criteria and guidelines should we
see justification to do so.
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Middle-Market Growth Business. We will primarily
seek to acquire one or more growth businesses with a total enterprise value of between $150,000,000
and $300,000,000. We believe that there are a substantial number of potential target businesses
within this valuation range that can benefit from new capital for scalable operations to
yield significant revenue and earnings growth. We currently do not intend to acquire either
a start-up company (a company that has not yet established commercial operations) or a company
with negative cash flow.
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Companies in Business Segments that are Strategically Significant
to the Asian Markets. We will seek to acquire those businesses that are currently
strategically significant in the Asian markets. Such sectors include: Internet and high technology,
financial technology (including technology applied in financial services or used to help
companies manage the financial aspects of their business), logistics, clean energy, health
care, consumer and retail, energy and resources, food processing, manufacturing and education.
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Business with Revenue and Earnings Growth Potential. We
will seek to acquire one or more businesses that have the potential for significant revenue
and earnings growth through a combination of both existing and new product development, increased
production capacity, expense reduction and synergistic follow-on acquisitions resulting in
increased operating leverage.
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Companies with Potential for Strong Free Cash Flow Generation.
We will seek to acquire one or more businesses that have the potential to generate
strong, stable and increasing free cash flow. We intend to focus on one or more businesses
that have predictable revenue streams and definable low working capital and capital expenditure
requirements. We may also seek to prudently leverage this cash flow in order to enhance shareholder
value.
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Benefit from Being a Public Company. We intend to
only acquire a business or businesses that will benefit from being publicly traded and which
can effectively utilize access to broader sources of capital and a public profile that are
associated with being a publicly traded company.
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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 sponsor and management team may deem relevant.
In the event that we decide to enter into an 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 shareholder communications related
to our initial business combination, which would be in the form of proxy solicitation or tender offer materials, as applicable, that
we would file with the United States Securities and Exchange Commission, or the SEC. In evaluating a prospective target business, we
expect to conduct a due diligence review which may encompass, among other things, meetings with incumbent ownership, management and employees,
document reviews, interviews of customers and suppliers, inspections of facilities, as well as reviewing financial and other information
which will be made available to us.
Our management team continues to actively source
target candidates where they believe will be attractive candidates for acquisition, utilizing their deal-making track record, professional
relationships, and capital markets expertise to enhance the growth potential and value of a target business and provide opportunities
for an attractive return to our stockholders.
Sourcing of Potential Business Combination Targets
Our management team has developed
a broad network of contacts and corporate relationships. We believe that the network of contacts and relationships of our management
team and our sponsor will provide us with an important source of business combination opportunities. In addition, we anticipate that
target business candidates will be brought to our attention from various unaffiliated sources, including investment banking firms, private
equity firms, consultants, accounting firms and business enterprises. We are not prohibited from pursuing an initial business combination
with a company that is affiliated with our sponsor, officers or directors, or completing the business combination through a joint venture
or other form of shared ownership with our sponsor, officers or directors.
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 then-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.
Unless we complete our initial
business combination with an affiliated entity, or our Board of Directors 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, another independent
firm that commonly renders valuation opinions for the type of company we are seeking to acquire or from an independent accounting firm
that the price we are paying for a target is fair to our company from a financial point of view. If no opinion is obtained, our shareholders
will be relying on the business judgment of our Board of Directors, which will have significant discretion in choosing the standard used
to establish the fair market value of the target or targets, and different methods of valuation may vary greatly in outcome from one
another. Such standards used will be disclosed in our tender offer documents or proxy solicitation materials, as applicable, related
to our initial business combination.
Members of our management team
may directly or indirectly own our ordinary shares and/or private placement units following our initial public offering, 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. 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.
Each of our directors and officers
presently has, and in the future any of our directors and our officers may have additional, fiduciary or contractual obligations to other
entities pursuant to which such officer or director is or will be required to present acquisition opportunities to such entity. Accordingly,
subject to his or her fiduciary duties under Cayman Islands law, if any of our officers or directors becomes aware of an acquisition
opportunity which is suitable for an entity to which he or she has then current fiduciary or contractual obligations, he or she will
need to honor his or her fiduciary or contractual obligations to present such acquisition opportunity to such entity, and only present
it to us if such entity rejects the opportunity. Our amended and restated memorandum and articles of association will provide that, subject
to his or her fiduciary duties under Cayman Islands law, we renounce our interest in any corporate opportunity offered to any officer
or director 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. We do not believe, however, that any fiduciary duties or contractual obligations of our directors or officers would materially
undermine our ability to complete our business combination.
Our officers and directors are
not prohibited from becoming an officer or director of another special purpose acquisition company with a class of securities registered
under the Securities Exchange Act of 1934, as amended.
Competition
In identifying, evaluating and
selecting a target business for our initial business combination, we may encounter intense competition from other entities having a business
objective similar to ours, including other blank check companies, private equity groups and leveraged buyout funds, 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 us. 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 shareholders 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.
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 our shares or for a combination of our shares 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. Once
public, we believe the target business would then have greater access to capital and an additional means of providing management incentives
consistent with shareholders’ interests. It can offer further benefits by augmenting a company’s profile among potential
new customers and vendors and aid in attracting talented employees.
While we believe that our structure and our management
team’s backgrounds will make us an attractive business partner, some potential target businesses may have a negative view of us
since we are a blank check company, without an operating history, and there is uncertainty relating to our ability to obtain shareholder
approval of our proposed initial business combination and retain sufficient funds in our trust account in connection therewith.
Initial Business Combination Timeframe and Nasdaq
Rules
We will have until 12 months
from July 28, 2020 (the closing of our IPO) to consummate our initial business combination. However, if we anticipate that we may
not be able to consummate our initial business combination within 12 months, we may, by resolution of our board if requested by our sponsor,
extend the period of time to consummate a business combination up to nine times, each by an additional month (for a total of up to 21
months to complete a business combination), subject to the sponsor depositing additional funds into the trust account as set out below.
Pursuant to the terms of our memorandum and articles of association and the trust agreement entered into between us and Continental Stock
Transfer & Trust Company in connection with our IPO, in order for the time available for us to consummate our initial business
combination to be extended, our sponsor or its affiliates or designees, upon five days advance notice prior to the applicable deadline,
must deposit into the trust account $133,334, ($0.033 per public share ), up to an aggregate of $1,200,000, or $0.30 per public share,
on or prior to the date of the applicable deadline, for each monthly extension. In the event that we receive notice from our sponsor
five days prior to the applicable deadline of its wish for us to effect an extension, we intend to issue a press release announcing such
intention at least three days prior to the applicable deadline. In addition, we intend to issue a press release the day after the applicable
deadline announcing whether or not the funds had been timely deposited. Our sponsor and its affiliates or designees are not obligated
to fund the trust account to extend the time for us to complete our initial business combination. If we are unable to consummate our
initial business combination within the applicable time period, we will, as promptly as reasonably possible but not more than ten business
days thereafter, redeem the public shares for a pro rata portion of the funds held in the trust account and as promptly as reasonably
possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, dissolve and liquidate,
subject in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable
law. In such event, the warrants will be worthless.
The NASDAQ rules require
that our initial business combination must be with one or more target businesses that together have an aggregate fair market value equal
to at least 80% of the balance in the trust account (less any deferred underwriting commissions and taxes payable on interest earned)
at the time of our signing a definitive agreement in connection with our initial business combination. If our Board of Directors 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 or another independent firm that commonly renders valuation opinions for the type of company we are seeking to
acquire or an independent accounting firm. We do not intend to purchase multiple businesses in unrelated industries in conjunction with
our initial business combination. Additionally, pursuant to NASDAQ rules, any initial business combination must be approved by a majority
of our independent directors.
We anticipate structuring our
initial business combination so that the post-transaction company in which our public shareholders 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 shareholders or for other reasons, 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 it not to be required to register as an investment company under the Investment Company
Act of 1940, as amended, or the Investment Company Act. Even if the post-transaction company owns or acquires 50% or more of the voting
securities of the target, our shareholders 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 shareholders 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 our initial 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.
Summary Information Related to Our Securities, Redemption Rights
and Liquidation
We are a Cayman Islands exempted
company (company number 337092) and our affairs are governed by our amended and restated memorandum and articles of association, the
Companies Law and common law of the Cayman Islands. Pursuant to our amended and restated memorandum and articles of association which
will be adopted upon the consummation of our initial public offering, we will be authorized to issue 100,000,000 ordinary shares, $0.0001
par value each, and 1,000,000 undesignated preference shares, $0.0001 par value each. The information provided below is a summary only
and we refer you to our prospectus dated as of July 23, 2020, our amended and restated memorandum and articles of association and
our warrant agreement with Continental Stock Transfer & Trust Company as warrant agent for additional important and material
information.
As stated elsewhere in this Report
on Form 10-K, we completed our initial public offering on July 28, 2020. In our initial public offering, we sold units at an
offering price of $10.00 and consisting of one ordinary share and one redeemable warrant. Each warrant entitles the holder thereof to
purchase one-half of one ordinary share. We will not issue fractional shares in connection with the exercise of the warrants. As a result,
a warrant holder must exercise warrants in multiples of two warrants, at a price of $11.50 per full share, subject to adjustment. Each
warrant will become exercisable on the later of the completion of an initial business combination and 12 months from July 23, 2020,
and will expire five years after the completion of an initial business combination, or earlier upon redemption. Effective August 28,2020,
the component parts of the units began trading separately.
As of March 30, 2021, there
were 5,260,000 ordinary shares issued and outstanding. Ordinary shareholders of record are entitled to one vote for each share held on
all matters to be voted on by shareholders and vote together as a single class, except as required by law. Unless specified in the Companies
Law, our amended and restated memorandum and articles of association or applicable stock exchange rules, the affirmative vote of a majority
of our ordinary shares that are voted is required to approve any such matter voted on by our shareholders.
As of March 30, 2021, there
are warrants outstanding to acquire and aggregate of 2,130,000 ordinary shares. We will not be obligated to deliver any ordinary shares
pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration statement under
the Securities Act with respect to the ordinary shares underlying the warrants is then effective and a prospectus relating thereto is
current, subject to our satisfying our obligations described below with respect to registration. No warrant will be exercisable for cash
or on a cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance
of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption
is available. In the event that the conditions in the two immediately preceding sentences are not satisfied with respect to a warrant,
the holder of such warrant will not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In
the event that a registration statement is not effective for the exercised warrants, the purchaser of a unit containing such warrant
will have paid the full purchase price for the unit solely for the ordinary share underlying such unit.
Once the warrants become exercisable,
we may call the warrants for redemption (excluding the private placement warrants but including any outstanding warrants issued upon
exercise of the unit purchase option issued to the underwriters or their designees):
• in
whole and not in part;
• at
a price of $0.01 per warrant;
• upon
not less than 30 days’ prior written notice of redemption (the “30-day redemption period”) to each warrant holder;
and
• if,
and only if, the reported last sale price of the ordinary shares equal or exceed $16.50 per share (as adjusted for share splits, share
capitalizations, rights issuances, subdivisions, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading
day period ending on the third trading day prior to the date we send to the notice of redemption to the warrant holders.
We will provide our public shareholders
with the opportunity to redeem all or a portion of their ordinary shares upon the completion of our initial business combination either
(i) in connection with a shareholder meeting called to approve the business combination or (ii) by means of a tender offer.
The decision as to whether we will seek shareholder 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 such as the timing of the transaction, whether the terms of
the transaction would require us to seek shareholder approval under the law or stock exchange listing requirement or whether we were
deemed to be a foreign private issuer (which would require that we conduct a tender offer under SEC rules rather than seeking shareholder
approval). Under NASDAQ rules, asset acquisitions and stock purchases would not typically require shareholder approval while direct mergers
with our company where we do not survive and any transactions where we issue more than 20% of our issued and outstanding ordinary shares
(unless we are deemed to be a foreign private issuer at such time) or seek to amend our amended and restated memorandum and articles
of association would require shareholder approval. We intend to conduct redemptions without a shareholder vote pursuant to the tender
offer rules of the SEC unless shareholder approval is required by law or stock exchange listing requirement or we choose to seek
shareholder approval for business or other legal reasons. So long as we obtain and maintain a listing for our securities on the NASDAQ,
we will be required to comply with NASDAQ rules.
We will provide our public shareholders
with the opportunity to redeem all or a portion of their ordinary shares 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 (which interest shall be net of taxes payable) divided by the
number of then issued and outstanding public shares, subject to the limitations described herein. The amount in the trust account is
initially anticipated to be approximately $è0.15 per public share (subject to increase of up to an additional $0.30 per public
share in the event that our sponsor elects to extend the period of time to consummate a business combination,). 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. 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 their founder shares, private placement shares and any public shares they may
hold in connection with the completion of our initial business combination.
Our amended and restated memorandum
and articles of association 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 either immediately prior to or upon consummation of our initial business combination (so that we are
not subject to the SEC’s “penny stock” rules). Redemptions of our public shares may also be subject to a higher net
tangible asset test or cash requirement pursuant to an 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 ordinary shares that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant
to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the business
combination or redeem any shares, and all ordinary shares submitted for redemption will be returned to the holders thereof.
Our
sponsor, officers and directors have agreed that we will have only 12 months from the closing
of our initial public offering (July 28, 2020) (or up to 21 months from the closing
of our initial public offering if we extend the period of time to consummate a business combination,)
to complete our initial business combination. If we are unable to complete our initial business
combination within such 12-month (or up to 21-month) time period, we will: (i) cease
all operations except for the purpose of winding up, (ii) as promptly as reasonably
possible but not more than ten business days thereafter, redeem the public shares, at a per-share
price, payable in cash, equal to the aggregate amount then on deposit in the trust account,
including interest (less up to $50,000 of interest to pay dissolution expenses (which interest
shall be net of taxes payable) divided by the number of then issued and outstanding public
shares, which redemption will completely extinguish public shareholders’ rights as
shareholders (including the right to receive further liquidation distributions, if any),
subject to applicable law, and (iii) as promptly as reasonably possible following such
redemption, subject to the approval of our remaining shareholders and our Board of Directors,
liquidate and dissolve, subject in each case to our obligations under Cayman Islands law
to provide for claims of creditors and the requirements of other applicable law. There will
be no redemption rights or liquidating distributions with respect to our warrants, which
will expire worthless if we fail to complete our initial business combination within the
12-month (or up to 21- month) time period.
Corporate Information
We are an “emerging growth
company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, or the Securities Act, as modified by
the Jumpstart Our Business Startups Act of 2012, or 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 of 2002, or 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 shareholder 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.
0We will remain an emerging growth
company until the earlier of (1) the last day of the fiscal year following the fifth anniversary of the completion of our IPO, (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 ordinary shares 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.
References herein to “emerging growth company” shall have the meaning associated with it in the JOBS Act.
Additionally, we are a “smaller
reporting company” as defined in Rule 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain
reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain
a smaller reporting company until the last day of the fiscal year in which (1) the market value of our ordinary shares held by non-affiliates
exceeds $250 million as of the prior June 30th, or (2) our annual revenues exceed $100 million during such completed fiscal
year and the market value of our ordinary shares held by non-affiliates exceeds $700 million as of the prior June 30.
We are currently a “foreign
private issuer” as defined in Rule 405, but are voluntarily choosing to register and report using domestic forms. We are required
to determine our status as a foreign private issuer for the 2021 fiscal year as of the last day of our second quarter, or June 30,
2021. On such date, if we no longer qualify as a “foreign private issuer” (as set forth in Rule 3b-4 of the Exchange
Act), we will then become subject to the U.S. domestic issuer rules as of the first day of our 2021 fiscal year, or January 1,
2022. As a result, should we determine on June 30, 2021 that we are no longer a “foreign private issuer,” after December 31,
2021 we will be subject to the U.S. domestic issuer rules and we will have the option of conducting redemptions like other blank
check companies in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules.
For so long as we are deemed to be a foreign private issuer, we will conduct redemptions in accordance with the SEC’s tender offer
rules.
Exempted companies are Cayman
Islands companies wishing to conduct business outside the Cayman Islands and, as such, are exempted from complying with certain provisions
of the Companies Law. As an exempted company, we have received a tax exemption undertaking from the Cayman Islands government that, in
accordance with Section 6 of the Tax Concessions Law (2018 Revision) of the Cayman Islands, for a period of 20 years from the date
of the undertaking, no law which is enacted in the Cayman Islands imposing any tax to be levied on profits, income, gains or appreciations
shall apply to us or our operations and, in addition, that no tax to be levied on profits, income, gains or appreciations or which is
in the nature of estate duty or inheritance tax shall be payable (i) on or in respect of our shares, debentures or other obligations
or (ii) by way of the withholding in whole or in part of a payment of dividend or other distribution of income or capital by us
to our shareholders or a payment of principal or interest or other sums due under a debenture or other obligation of us.
We are a Cayman Islands exempted
company incorporated on May 14, 2018. Our executive offices are located at 505 Eshan Road, Floor 6, Pudong New District, Shanghai,
200120, and our telephone number is (86) 21-2025 7919.
Item 1A RISK FACTORS
We are a blank check company with no operating
history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.
We are a blank check company
established under the laws of the Cayman Islands with no operating results, and we will not commence operations until obtaining funding
through our initial public offering. 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 have no plans, arrangements
or understandings with any prospective target business concerning a business combination and may be unable to complete our initial business
combination. If we fail to complete our initial business combination, we will never generate any operating revenues.
Our independent registered public accounting firm’s report
contains an explanatory paragraph that expresses substantial doubt about our ability to continue as a “going concern.”
As
of December 31, 2020, we had $473,945 in cash and working capital of $98,126. Further, we expect to incur significant costs in pursuit
of our financing and acquisition plans. The Company has until July 28, 2021 to consummate a Business Combination. However,
if the Company anticipates that it may not be able to consummate a Business Combination by July 28, 2021, the Company may extend
the period of time to consummate a Business Combination up to nine times, each by an additional month (for a total of 21 months
to complete a Business Combination (the “Combination Period”). In order to extend the time available for the Company to consummate
a Business Combination, the Sponsor or its affiliate or designees must deposit into the Trust Account $133,334, up to an aggregate of
$1,200,000, or $0.30 per Public Share, on or prior to the date of the applicable deadline, for each monthly extension. Our Sponsor is
not required to fund any such extensions. Our plans to raise additional capital and to consummate our initial business combination may
not be successful. These factors, among others, raise substantial doubt about our ability to continue as a going concern. The financial
statements contained elsewhere in this prospectus do not include any adjustments that might result from our inability to consummate this
offering or our inability to continue as a going concern.
Our search for a business combination, and any
target business with which we ultimately consummate a business combination, may be materially adversely affected by the recent coronavirus
(COVID-19) pandemic.
The COVID-19 pandemic has resulted
in a widespread health crisis that has adversely affected the economies and financial markets worldwide, and the business of any potential
target business with which we consummate a business combination could be materially and adversely affected. Furthermore, we may be unable
to complete a business combination if continued concerns relating to COVID-19 restrict travel, limit the ability to have meetings with
potential investors or the target company’s personnel, vendors and services providers are unavailable to negotiate and consummate
a transaction in a timely manner. The extent to which COVID-19 impacts our search for a business combination will depend on future developments,
which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and
the actions to contain COVID-19 or treat its impact, among others. If the disruptions posed by COVID-19 or other matters of global concern
continue for an extensive period of time, our ability to consummate a business combination, or the operations of a target business with
which we ultimately consummate a business combination, may be materially adversely affected.
The occurrence of natural disasters may adversely
affect our business, financial condition and results of operations following our business combination.
The occurrence of natural disasters,
including hurricanes, floods, earthquakes, tornadoes, fires and pandemic disease may adversely affect our business, financial condition
or results of operations following our business combination. The potential impact of a natural disaster on our results of operations
and financial position is speculative, and would depend on numerous factors. The extent and severity of these natural disasters will
determine their effect on a given economy. Although the long term effect of diseases such as the H5N1 “avian flu,” or H1N1,
the swine flu, cannot currently be predicted, previous occurrences of avian flu and swine flu had an adverse effect on the economies
of those countries in which they were
most prevalent. An outbreak of a communicable disease
could adversely affect our business, financial condition and results of operations following our business combination. We cannot assure
you that natural disasters will not occur in the future or that its business, financial condition and results of operations will not
be adversely affected.
U.S. laws in the future may restrict or eliminate
our ability to complete a business combination with certain companies.
Future developments in U.S. laws
may restrict our ability or willingness to complete certain business combinations with companies. For instance, the federal government
has recently proposed legislation that would restrict our ability to consummate a business combination with a target business unless
that business met certain standards of the Public Company Accounting Oversight Board (United States), or PCAOB, and would require delisting
of a company from national securities exchanges if it failed to retain an accounting firm that the PCAOB has inspected to the satisfaction
of the SEC. Such proposed legislation would also require public companies to disclose whether they are owned or controlled by a foreign
government, specifically those based in China. We may not be able to consummate a business combination with a favored target business
due to these laws. Furthermore, the documentation we may be required to submit to the SEC proving certain beneficial ownership requirements
and establishing that we are not owned or controlled by a foreign government in the event that we use a foreign public accounting firm
not subject to inspection by the PCAOB or where the PCAOB is unable to completely inspect or investigate our accounting practices or
financial statements because of a position taken by an authority in the foreign jurisdiction could be onerous and time consuming to prepare.
Our public shareholders may not be afforded
an opportunity to vote on our proposed business combination, which means we may complete our initial business combination even though
a majority of our public shareholders does not support such a combination.
We may not hold a shareholder
vote to approve our initial business combination unless we are no longer a foreign private issuer and the business combination would
require shareholder approval under applicable Cayman Islands law or the rules of the NASDAQ or if we decide to hold a shareholder
vote for business or other reasons. Examples of transactions that would not ordinarily require shareholder approval include asset acquisitions
and share purchases, while transactions such as direct mergers with our company or transactions where we issue more than 20% of our outstanding
shares would require shareholder. For instance, the NASDAQ rules currently allow us to engage in a tender offer in lieu of a shareholder
meeting but would still require us to obtain shareholder approval if we were not a foreign private issuer and were seeking to issue more
than 20% of our outstanding shares to a target business as consideration in any business combination. Therefore, if we were structuring
a business combination that required us to issue more than 20% of our outstanding shares and we were not a foreign private issuer, we
would seek shareholder approval of such business combination. Except as required by law or NASDAQ rules, the decision as to whether we
will seek shareholder approval of a proposed business combination or will allow shareholders to sell their shares to us in a tender offer
will be made by us, solely in our discretion, and will be based on a variety of factors, such as the timing of the transaction, whether
the terms of the transaction would otherwise require us to seek shareholder approval or whether we were deemed to be a foreign private
issuer (which would require that we conduct a tender offer under SEC rules rather than seeking shareholder approval). Accordingly,
we may consummate our initial business combination even if holders of a majority of the issued and outstanding ordinary shares do not
approve of the business combination we consummate.
If we seek shareholder approval of our initial
business combination, our sponsor, officers and directors have agreed to vote in favor of such initial business combination, regardless
of how our public shareholders vote.
Unlike
other blank check companies in which the initial shareholders agree to vote their founder
shares in accordance with the majority of the votes cast by the public shareholders in connection
with an initial business combination, our sponsor, officers and directors have agreed (and
their permitted transferees will agree), pursuant to the terms of a letter agreement entered
into with us, to vote any founder shares and private placement shares held by them, as well
as any public shares purchased during or after our initial public offering, in favor of our
initial business combination. We expect that our sponsor and its permitted transferees will
own approximately 24.0% of our issued and outstanding ordinary shares at the time of any
such shareholder vote (assuming it does not purchase units in our initial public offering,
and taking into account ownership of the private placement units). As a result, in addition
to our initial shareholder’s founder shares, we would need only 1,370,001, or approximately
34.3%, of the 4,000,000 public shares sold in our initial public offering to be voted in
favor of a transaction (assuming all outstanding shares are voted) in order to have our initial
business combination approved. Accordingly, if we seek shareholder approval of our initial
business combination, it is more likely that the necessary shareholder approval will be received
than would be the case if such persons agreed to vote their founder shares in accordance
with the majority of the votes cast by our public shareholders.
Shareholders only opportunity to affect the
investment decision regarding a potential business combination will be limited to the exercise of your right to redeem your shares from
us for cash, unless we seek shareholder approval of the business combination.
At the time of your investment
in us, you will 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 shareholder approval, public shareholders may not have the
right or opportunity to vote on the business combination, unless we seek such shareholder approval. Accordingly, if we do not seek shareholder
approval, shareholders only opportunity to affect the investment decision regarding a potential business combination may be limited to
exercising your redemption rights within the period of time (which will be at least 20 business days) set forth in our tender offer documents
mailed to our public shareholders in which we describe our initial business combination.
The ability of our public
shareholders to redeem their shares for cash may make our financial condition unattractive to potential business combination targets,
which may make it difficult for us to enter into a business combination with a target.
We may seek to enter into a business
combination transaction agreement with a prospective target that requires as a closing condition that we have a minimum net worth or
a certain amount of cash. If too many public shareholders exercise their redemption rights, we would not be able to meet such closing
condition and, as a result, would not be able to proceed with the business combination. Furthermore, in no event will we redeem our public
shares in an amount that would cause our net tangible assets, after payment of the deferred underwriting commissions, to be less than
$5,000,001 either immediately prior to or 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 either immediately prior to or 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 shareholders to exercise
redemption rights with respect to a large number of our shares may not allow us to complete the most desirable business combination or
optimize our capital structure.
At the time we enter into an
agreement for our initial business combination, we will not know how many shareholders may exercise their redemption rights, and therefore
we will need to structure the transaction based on our expectations as to the number of shares that will be submitted for redemption.
If our initial business combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price,
or requires us to have a minimum amount of cash at closing, we will need to reserve a portion of the cash in the trust account to meet
such requirements, or arrange for third party financing. In addition, if a larger number of shares 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.
The ability of our public shareholders to exercise
redemption rights with respect to a large number of our shares could increase the probability that our initial business combination would
be unsuccessful and that you would have to wait for liquidation in order to redeem your shares.
If our initial business combination
agreement requires us to use a portion of the cash in the trust account to pay the purchase price, or requires us to have a minimum amount
of cash at closing, the probability that our initial business combination would be unsuccessful 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 shares in the open market; however, at such time our shares may
trade at a discount to the pro rata amount per share in the trust account. In either situation, you may suffer a material loss on your
investment or lose the benefit of funds expected in connection with our redemption until we liquidate or you are able to sell your shares
in the open market.
The requirement that we complete our initial
business combination within the prescribed time frame may give potential target businesses leverage over us in negotiating a business
combination and may decrease our ability to conduct due diligence on potential business combination targets as we approach our dissolution
deadline, which could undermine our ability to complete our initial business combination on terms that would produce value for our shareholders.
Any potential target business
with which we enter into negotiations concerning a business combination will be aware that we must complete our initial business combination
within 12 months from the closing of our initial public offering (or up to 21 months from the closing of our initial public offering
if we extend the period of time to consummate a business combination. 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.
We may not be able to complete our initial business
combination within the prescribed time frame, in which case we would cease all operations except for the purpose of winding up and we
would redeem our public shares and liquidate, in which case our public shareholders may only receive $10.15 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
within 12 months from the closing of our initial public offering (or up to 21 months from
the closing of our initial public offering if we extend the period of time to consummate
a business combination,). We may not be able to find a suitable target business and complete
our initial business combination within such time period. If we have not completed our initial
business combination within such time period, we will: (i) cease all operations except
for the purpose of winding up, (ii) as promptly as reasonably possible but not more
than ten business days thereafter, redeem the public shares, at a per-share price, payable
in cash, equal to the aggregate amount then on deposit in the trust account, including interest
(which interest shall be net of taxes payable, and less up to $50,000 of interest to pay
dissolution expenses) divided by the number of then issued and outstanding public shares,
which redemption will completely extinguish public shareholders’ rights as shareholders
(including the right to receive further liquidation distributions, if any), subject to applicable
law, and (iii) as promptly as reasonably possible following such redemption, subject
to the approval of our remaining shareholders and our Board of Directors, liquidate and dissolve,
subject in each case to our obligations under Cayman Islands law to provide for claims of
creditors and the requirements of other applicable law. In such case, our public shareholders
may only receive $10.15 per share, and our warrants will expire worthless. In certain circumstances,
our public shareholders may receive less than $10.15 per share on the redemption of their
shares.
Our sponsor may decide not
to extend the term we have to consummate our initial business combination, in which case we would cease all operations except for the
purpose of winding up and we would redeem our public shares and liquidate, and the warrants will be worthless.
We
will have until 12 months from the closing of our initial public offering to consummate our initial business combination. However, if
we anticipate that we may not be able to consummate our initial business combination within 12 months, we may, by resolution of our board
if requested by our sponsor, extend the period of time to consummate a business combination up to nine times, each by an additional month
(for a total of up to 21 months to complete a business combination), subject to the sponsor depositing additional funds into the trust
account as set out below. In order for the time available for us to consummate our initial business combination to be extended, our sponsor
or its affiliates or designees must deposit into the trust account $133,334 ($0.033 per public share), up to an aggregate of $1,200,000,
or $0.30 per public share, on or prior to the date of the applicable deadline, for each monthly extension. Any such payments would be
made in the form of a loan. The terms of the promissory note to be issued in connection with any such loans have not yet been negotiated.
Our
sponsor and its affiliates or designees are not obligated to fund the trust account to extend the time for us to complete our initial
business combination. If we are unable to consummate our initial business combination within the applicable time period, we will, as
promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares for a pro rata portion of the
funds held in the trust account and as promptly as reasonably possible following such redemption, subject to the approval of our remaining
shareholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Cayman Islands law to
provide for claims of creditors and the requirements of other applicable law. In such event, the warrants will be worthless.
If we seek shareholder approval of our initial
business combination, our sponsor, directors, officers, advisors and their affiliates may elect to purchase shares from public shareholders,
which may influence a vote on a proposed business combination and reduce the public “float” of our ordinary shares.
If we seek shareholder approval
of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to
the tender offer rules, our 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. Please see “Proposed Business — Permitted purchases of our securities” for a description of how such persons
will determine which shareholders to seek to acquire shares from. Such a purchase may include a contractual acknowledgement that such
shareholder, 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 shareholders who have already elected to exercise their redemption rights, such selling shareholders
would be required to revoke their prior elections to redeem their shares. The price per share paid in any such transaction may be different
from the amount per share a public shareholder would receive if it elected to redeem its shares in connection with our initial business
combination. The purpose of such purchases could be to vote such shares in favor of the business combination and thereby increase the
likelihood of obtaining shareholder 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 initial business combination, where it
appears that such requirement would otherwise not be met. This may result in the completion of our initial business combination that
may not otherwise have been possible.
In addition,
if such purchases are made, the public “float” of our ordinary shares and the number of beneficial holders of our securities
may be reduced, possibly making it difficult to maintain or obtain the quotation, listing or trading of our securities on a national
securities exchange.
If a shareholder fails
to receive notice of our offer to redeem our public shares in connection with our initial business combination, or fails to comply with
the procedures for tendering its shares, such shares may not be redeemed.
We will comply with the tender
offer rules or proxy rules, as applicable, when conducting redemptions in connection with our initial business combination. Despite
our compliance with these rules, if a shareholder fails to receive our tender offer or proxy materials, as applicable, such shareholder
may not become aware of the opportunity to redeem its shares. In addition, the tender offer documents or proxy materials, as applicable,
that we will furnish to holders of our public shares in connection with our initial business combination will describe the various procedures
that must be complied with in order to validly tender or redeem public shares. In the event that a shareholder fails to comply with these
procedures, its shares may not be redeemed.
You 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 shareholders will be entitled to receive funds from the trust account only upon the
earlier to occur of: (i) the completion of our initial business combination, (ii) the
redemption of any public shares properly tendered in connection with a shareholder vote to
amend our amended and restated memorandum and articles of association to (A) modify
the substance or timing of our obligation to redeem 100% of our public shares if we do not
complete our initial business combination within 12 months from the closing of our initial
public offering (or up to 21 months from the closing of our initial public offering if we
extend the period of time to consummate a business combination,) or (B) with respect
to any other provision relating to shareholders’ rights or pre-business combination
activity and (iii) the redemption of all of our public shares if we are unable to complete
our initial business combination within 12 months from the closing of our initial public
offering (or up to 21 months from the closing of our initial public offering if we extend
the period of time to consummate a business combination), subject to applicable law and as
further described herein. In no other circumstances will a public shareholder 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 units, ordinary shares and
warrants are listed on the NASDAQ. We cannot guarantee 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 shareholders’
equity (generally $2,500,000) and a minimum number of holders of our securities (generally 300 public holders). Additionally, in connection
with our initial business combination, we will be required to demonstrate compliance with NASDAQ’s initial listing requirements,
which are more rigorous than NASDAQ’s continued listing requirements, in order to continue to maintain the listing of our securities
on NASDAQ. For instance, our stock price would generally be required to be at least $4.00 per share, our shareholders’ equity would
generally be required to be at least $5.0 million and we would be required to have a minimum of 300 round lot holders of our securities
(with at least 50% of such round lot holders holding securities with a market value of at least $2,500). We cannot assure you that we
will be able to meet those initial listing requirements at that time.
If NASDAQ delists our securities
from trading on its exchange and we are not able to list our securities on another national securities exchange, we expect our securities
could be quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including:
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a limited availability of market quotations for our securities;
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reduced liquidity for our securities;
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a determination that our ordinary shares is a “penny stock”
which will require brokers trading in our ordinary shares to adhere to more stringent rules and
possibly result in a reduced level of trading activity in the secondary trading market for
our securities;
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a limited amount of news and analyst coverage; and
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a decreased ability to issue additional securities or obtain additional
financing in the future.
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The National Securities Markets
Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities,
which are referred to as “covered securities.” Because we expect that our units and eventually our ordinary shares and warrants
will be listed on NASDAQ, our units, ordinary shares and warrants will be covered securities. Although the states are preempted from
regulating the sale of our securities, the federal statute does allow the states to investigate companies if there is a suspicion of
fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular
case. While we are not aware of a state having used these powers to prohibit or restrict the sale of securities issued by blank check
companies, other than the State of Idaho, certain state securities regulators view blank check companies unfavorably and might use these
powers, or threaten to use these powers, to hinder the sale of securities of blank check companies in their states. Further, if we were
no longer listed on NASDAQ, our securities would not be covered securities and we would be subject to regulation in each state in which
we offer our securities, including in connection with our initial business combination.
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 units are intended to be used to complete an initial business combination
with a target business that has not been identified, we may be deemed to be a “blank check” company under the United States
securities laws. However, because we will have net tangible assets in excess of $5,000,000 upon the successful completion of our initial
public offering and the sale of the private placement units and will file a Current Report on Form 8-K, including an audited balance
sheet demonstrating this fact, we are exempt from rules promulgated by the SEC to protect investors in blank check companies, such
as Rule 419. Accordingly, investors will not be afforded the benefits or protections of those rules. Among other things, this means
our units will be immediately tradable and we may have a longer period of time to complete our initial 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 shareholder approval of our initial
business combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a “group” of shareholders
are deemed to hold in excess of 15% of the ordinary shares sold in our initial public offering, you will lose the ability to redeem all
such shares in excess of 15% of our ordinary shares sold in our initial public offering.
If
we seek shareholder approval of our initial business combination and we do not conduct redemptions
in connection with our initial business combination pursuant to the tender offer rules, our
amended and restated memorandum and articles of association will provide that a public shareholder,
together with any affiliate of such shareholder or any other person with whom such shareholder
is acting in concert or as a “group” (as defined under Section 13 of the
Exchange Act), will be restricted from seeking redemption rights with respect to more than
an aggregate of 15% of the shares sold in our initial public offering, which we refer to
throughout this Form 10-K as the “Excess Shares.” However, we would not be restricting
our shareholders’ ability to vote all of their shares (including Excess Shares) for
or against our initial business combination. Your inability to redeem the Excess Shares will
reduce your influence over our ability to complete our initial business combination and you
could suffer a material loss on your investment in us if you sell Excess Shares in open market
transactions. Additionally, you will not receive redemption distributions with respect to
the Excess Shares if we complete our initial business combination. And as a result, you will
continue to hold that number of shares exceeding 15% and, in order to dispose of such shares,
would be required to sell your shares in open market transactions, potentially at a loss.
Because of our limited resources and the significant
competition for business combination opportunities, it may be more difficult for us to complete our initial business combination. If
we are unable to complete our initial business combination, our public shareholders may receive only approximately $10.15 per share,
or less in certain circumstances, on our redemption, and our warrants will expire worthless.
We expect to encounter intense
competition from other entities having a business objective similar to ours, including private investors (which may be individuals or
investment partnerships), other blank check companies and other entities, domestic and international, competing for the types of businesses
we intend to acquire. Many of these individuals and entities are well-established and have extensive experience in identifying and effecting,
directly or indirectly, acquisitions of companies operating in or providing services to various industries. Many of these competitors
possess greater technical, human and other resources or more local industry knowledge than we do and our financial resources will be
relatively limited when contrasted with those of many of these competitors. 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 units, our ability
to compete with respect to the acquisition of certain target businesses that are sizable will be limited by our available financial resources.
This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses. Furthermore,
if we are obligated to pay cash for the ordinary shares redeemed and, in the event we seek shareholder approval of our initial business
combination, we make purchases of our ordinary shares, potentially reducing the resources available to us for our initial business combination.
Any of these obligations may place us at a competitive disadvantage in successfully negotiating a business combination. If we are unable
to complete our initial business combination, our public shareholders may receive only approximately $10.15 per share (or less in certain
circumstances) on the liquidation of our trust account and our warrants will expire worthless. In certain circumstances, our public shareholders
may receive less than $10.15 per share on the redemption of their shares.
If the net proceeds of our initial public offering
not being held in the trust account are insufficient to allow us to operate for at least the next 4 months (or up to 21 months from the
closing of our initial public offering if we extend the period of time to consummate a business combination,), we may be unable to complete
our initial business combination.
The funds available to us outside
of the trust account may not be sufficient to allow us to operate for at least the next 4 months (or up to 21 months from the closing
of our initial public offering if we extend the period of time to consummate a business combination,), assuming that our initial business
combination is not completed during that time. We expect to incur significant costs in pursuit of our acquisition plans. However, our
affiliates are not obligated to make loans to us in the future, and we may not be able to raise additional financing from unaffiliated
parties necessary to fund our expenses. Any such event in the future may negatively impact the analysis regarding our ability to continue
as a going concern at such time.
We believe that, upon the closing
of our initial public offering, the funds available to us outside of the trust account, will be sufficient to allow us to operate for
at least the next 4 months (or up to 21 months from the closing of our initial public offering if we extend the period of time to consummate
a business combination,); 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 shareholders
may receive only approximately $10.15 per share (or less in certain circumstances) on the liquidation of our trust account and our warrants
will expire worthless. In such case, our public shareholders may only receive $10.15 per share, and our warrants will expire worthless.
In certain circumstances, our public shareholders may receive less than $10.15 per share on the redemption of their shares.
If the net proceeds of our initial public offering
and the sale of the private placement units not being held in the trust account are insufficient, it could limit the amount available
to fund our search for a target business or businesses and complete our initial business combination and we will depend on loans from
our sponsor or management team to fund our search, to pay our taxes and to complete our initial business combination.
Of the net proceeds of our initial
public offering and the sale of the private placement units, only approximately $768,280 was available to us initially outside the trust
account to fund our working capital requirements. To date, we have utilized approximately $294,335. 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. 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 shareholders may
only receive approximately $10.15 per share (or less in certain circumstances) on our redemption of our public shares, and our warrants
will expire worthless. In such case, our public shareholders may only receive $10.15 per share, and our warrants will expire worthless.
In certain circumstances, our public shareholders may receive less than $10.15 per share on the redemption of their shares.
Subsequent to the completion of our initial
business combination, we may be required to take write-downs or write-offs, restructuring and impairment or other charges that could
have a significant negative effect on our financial condition, results of operations and our share 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. Even though these charges may be
non-cash items and not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to
negative market perceptions about our securities or us. 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 shareholders who choose to remain shareholders following the business combination could
suffer a reduction in the value of their shares. Such shareholders are unlikely to have a remedy for such reduction in value.
If third parties bring claims against us, the
proceeds held in the trust account could be reduced and the per-share redemption amount received by shareholders may be less than $10.15
per share.
Our placing of funds in the trust account may
not protect those funds from third-party claims against us. Although we will seek to have all vendors, service providers (other than
our independent auditors), prospective target businesses 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 shareholders,
such parties may not execute such agreements, or even if they execute such agreements they may not be prevented from bringing claims
against the trust account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar
claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim
against our assets, including the funds held in the trust account. If any third party refuses to execute an agreement waiving such claims
to the monies held in the trust account, our management will perform an analysis of the alternatives available to it and will 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 initial
business combination within the prescribed timeframe, or upon the exercise of a redemption right in connection with our initial business
combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought against us within
the 10 years following redemption. Accordingly, the per-share redemption amount received by public shareholders could be less than the
$10.15 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 (other than our independent auditors) for services rendered or products
sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amount of
funds in the trust account to below (i) $10.15 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, 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. Moreover, in the event that an executed waiver is deemed
to be unenforceable against a third party, our sponsor will not be responsible to the extent of any liability for such third party claims.
We have not independently verified whether our sponsor has sufficient funds to satisfy their indemnity obligations and believe that our
sponsor’s only assets are securities of our company. Our sponsor may not have sufficient funds available to satisfy those obligations.
We have not asked our sponsor to reserve for such obligations, and therefore, no funds are currently set aside to cover any such obligations.
As a result, if any such claims were successfully made against the trust account, the funds available for our initial business combination
and redemptions could be reduced to less than $10.15 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 or directors will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective
target businesses.
Our directors may decide not to enforce the
indemnification obligations of our sponsor, resulting in a reduction in the amount of funds in the trust account available for distribution
to our public shareholders.
In the event that the proceeds
in the trust account are reduced below the lesser of (i) $10.15 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 in any particular instance. If our independent directors choose
not to enforce these indemnification obligations, the amount of funds in the trust account available for distribution to our public shareholders
may be reduced below $10.15 per share.
If, after we distribute the proceeds in the
trust account to our public shareholders, 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 the members of our Board of Directors may be viewed as having
breached their fiduciary duties to our creditors, thereby exposing the members of our Board of Directors and us to claims of punitive
damages.
If, after we distribute the proceeds
in the trust account to our public shareholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against
us that is not dismissed, any distributions received by shareholders 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 shareholders. In addition, our Board of Directors may be viewed as having breached its fiduciary
duty to our creditors and/or having acted in bad faith, thereby exposing itself and us to claims of punitive damages, by paying public
shareholders from the trust account prior to addressing the claims of creditors.
If, before distributing the proceeds in the
trust account to our public shareholders, 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 shareholders and the per-share
amount that would otherwise be received by our shareholders in connection with our liquidation may be reduced.
If, before distributing the proceeds
in the trust account to our public shareholders, we file a 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 shareholders. To the extent any
bankruptcy claims deplete the trust account, the per-share amount that would otherwise be received by our shareholders in connection
with our liquidation may be reduced.
If we are deemed to be an investment company
under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted,
which may make it difficult for us to complete our initial business combination.
If we are deemed to be an investment
company under the Investment Company Act, our activities may be restricted, including:
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restrictions on the nature of our investments; and
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restrictions on the issuance of securities;
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each of which may make it difficult
for us to complete our initial business combination. In addition, we may have imposed upon us burdensome requirements, including:
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registration as an investment company;
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adoption of a specific form of corporate structure; and
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reporting, record keeping, voting, proxy and disclosure requirements
and other rules and regulations.
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We do not believe that our anticipated
principal activities will subject us to the Investment Company Act. The proceeds held in the trust account may be invested by the trustee
only in United States government treasury bills with a maturity of 180 days or less or in money market funds investing solely in United
States Treasuries and meeting certain conditions under Rule 2a-7 under the Investment Company Act. Because the investment of the
proceeds will be restricted to these instruments, we believe we will meet the requirements for the exemption provided in Rule 3a-1
promulgated under the Investment Company Act. If we were deemed to be subject to the Investment Company Act, compliance with these additional
regulatory burdens would require additional expenses for which we have not allotted funds and may hinder our ability to complete a business
combination. If we are unable to complete our initial business combination, our public shareholders may receive only approximately $10.15
per share, or less in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless.
Changes in laws or regulations, or a failure
to comply with any laws and regulations, may adversely affect our business, investments and results of operations.
We are subject to laws and regulations
enacted by national, regional and local governments. In particular, we will be required to comply with certain SEC and other legal requirements.
Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations
and their interpretation and application may also change from time to time and those changes could have a material adverse effect on
our business, investments and results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted
and applied, could have a material adverse effect on our business and results of operations.
If we are unable to consummate our initial business
combination within the next 4 months (or up to 21 months from the closing of our initial public offering if we extend the period of time
to consummate a business combination, ) of the closing of our initial public offering, our public shareholders may be forced to wait
beyond such 4 months (or up to 21 months) before redemption from our trust account.
If we are unable to consummate
our initial business combination within the next 4 months (or up to 21 months from the closing of our initial public offering if we extend
the period of time to consummate a business combination,), we will distribute the aggregate amount then on deposit in the trust account
(less up to $50,000 of the net interest earned thereon to pay dissolution expenses), pro rata to our public shareholders by way of redemption
and cease all operations except for the purposes of winding up of our affairs, as further described herein. Any redemption of public
shareholders from the trust account shall be effected automatically by function of our amended and restated memorandum and articles of
association prior to any voluntary winding up. If we are required to windup, liquidate the trust account and distribute such amount therein,
pro rata, to our public shareholders, as part of any liquidation process, such winding up, liquidation and distribution must comply with
the applicable provisions of the Companies Law. In that case, investors may be forced to wait beyond the initial 12 months (or up to
21 months) before the redemption proceeds of our trust account become available to them and they receive the return of their pro rata
portion of the proceeds from our trust account. We have no obligation to return funds to investors prior to the date of our redemption
or liquidation unless we consummate our initial business combination prior thereto and only then in cases where investors have sought
to redeem their ordinary shares. Only upon our redemption or any liquidation will public shareholders be entitled to distributions if
we are unable to complete our initial business combination.
Our shareholders may be held liable for claims
by third parties against us to the extent of distributions received by them upon redemption of their shares.
If we are forced to enter into
an insolvent liquidation, any distributions received by shareholders could be viewed as an unlawful payment if it was proved that immediately
following the date on which the distribution was made, we were unable to pay our debts as they fall due in the ordinary course of business.
As a result, a liquidator could seek to recover all amounts received by our shareholders. Furthermore, our directors may be viewed as
having breached their fiduciary duties to us or our creditors and/or may have acted in bad faith, and thereby exposing themselves and
our company to claims, by paying public shareholders from the trust account prior to addressing the claims of creditors. We cannot assure
you that claims will not be brought against us for these reasons. We and our directors and officers who knowingly and willfully authorized
or permitted any distribution to be paid out of our share premium account while we were unable to pay our debts as they fall due in the
ordinary course of business would be guilty of an offence and may be liable to a fine of $18,292.68 and to imprisonment for five years
in the Cayman Islands.
We may not hold an annual meeting of shareholders
until after the consummation of our initial business combination.
In accordance with NASDAQ corporate
governance requirements, we are required to hold an annual meeting no later than one year after our first fiscal year end following our
listing on NASDAQ, unless we continue to be a foreign private issuer. There is no requirement under the Cayman Islands’ Companies
Law for us to hold annual or general meetings or elect directors. Until we hold an annual meeting of shareholders, public shareholders
may not be afforded the opportunity to discuss company affairs with management.
We are not registering the ordinary shares issuable
upon exercise of the warrants under the Securities Act or any state securities laws at this time, and such registration may not be in
place when an investor desires to exercise warrants, thus precluding such investor from being able to exercise its warrants except on
a cashless basis and potentially causing such warrants to expire worthless.
We are not registering the ordinary shares issuable
upon exercise of the warrants under the Securities Act or any state securities laws at this time. However, under the terms of the warrant
agreement, we have agreed that as soon as practicable, but in no event later than 15 business days after the closing of our initial business
combination, we will use our best efforts to file, and within 60 business days following our initial business combination to have declared
effective, a registration statement covering such shares and maintain a current prospectus relating to the ordinary shares issuable upon
exercise of the warrants, until the expiration of the warrants in accordance with the provisions of the warrant agreement. We cannot
assure you that we will be able to do so if, for example, any facts or events arise which represent a fundamental change in the information
set forth in the registration statement or prospectus, the financial statements contained or incorporated by reference therein are not
current or correct or the SEC issues a stop order. If the shares issuable upon exercise of the warrants are not registered under the
Securities Act, we will be required to permit holders to exercise their warrants on a cashless basis. However, no warrant will be exercisable
for cash or on a cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise their warrants, unless
the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder,
or an exemption is available.
Notwithstanding the foregoing, if a registration statement covering the ordinary shares issuable upon exercise
of the warrants is not effective within a specified period following the consummation of our initial business combination, warrant holders
may, until such time as there is an effective registration statement and during any period when we shall have failed to maintain an effective
registration statement, exercise warrants on a cashless basis pursuant to the exemption provided by Section 3(a)(9) of the
Securities Act, provided that such exemption is available. If that exemption, or another exemption, is not available, holders will not
be able to exercise their warrants on a cashless basis. We will use our best efforts to register or qualify the shares under applicable
blue sky laws to the extent an exemption is not available. In no event will we be required to net cash settle any warrant, or issue securities
or other compensation in exchange for the warrants in the event that we are unable to register or qualify the shares underlying the warrants
under applicable state securities laws and no exemption is available. If the issuance of the shares upon exercise of the warrants is
not so registered or qualified or exempt from registration or qualification, the holder of such warrant shall not be entitled to exercise
such warrant and such warrant may have no value and expire worthless. In such event, holders who acquired their warrants as part of a
purchase of units will have paid the full unit purchase price solely for the ordinary shares included in the units. If and when the warrants
become redeemable by us, we may not exercise our redemption right if the issuance of shares upon exercise of the warrants is not exempt
from registration or qualification under applicable state blue sky laws or we are unable to effect such registration or qualification.
We will use our best efforts to register or qualify such shares under the blue sky laws of the state of residence in those states in
which the warrants were offered by us in our initial public offering.
The grant of registration rights to our sponsor
and holders of our private placement units 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 ordinary shares.
Pursuant to an agreement to be
entered into concurrently with the issuance and sale of the securities in our initial public offering, our sponsor and its permitted
transferees can demand that we register their founder shares. In addition, holders of our private placement units and their permitted
transferees can demand that we register the private placement units and their underlying securities, holders of the shares, and the shares
underlying the warrants, underlying the unit purchase option being issued to the underwriters of our initial public offering can demand
that we register such securities, and holders of units that may be issued upon conversion of working capital loans, may demand that we
register such units and their underlying securities. 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 ordinary
shares. In addition, the existence of the registration rights may make our initial business combination more costly or difficult to conclude.
This is because the shareholders of the target business may increase the equity stake they seek in the combined entity or ask for more
cash consideration to offset the negative impact on the market price of our ordinary shares that is expected when the ordinary shares
owned by our sponsor, holders of our private placement units or holders of our working capital loans or their respective permitted transferees
are registered.
Because we are not limited to a particular industry
or any specific target businesses with which to pursue our initial business combination, you will be unable to ascertain the merits or
risks of any particular target business’s operations.
We may seek to complete a business
combination with an operating company in any industry or sector. However, we will not, under our amended and restated memorandum and
articles of association, be permitted to effectuate our initial business combination with another blank check company or similar
company with nominal operations. Because we have not yet identified or approached 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 initial
business combination, we may be affected by numerous risks inherent in the business operations with which we combine. For example,
if we combine with a financially unstable business or an entity lacking an established record of sales or earnings, we may be
affected by the risks inherent in the business and operations of a financially unstable 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 units 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 shareholders who choose to remain shareholders following the business combination could suffer a reduction in the value of their
shares. Such shareholders are unlikely to have a remedy for such reduction in value.
Past performance by our management team and
their respective affiliates may not be indicative of future performance of an investment in us.
Information regarding performance
by, or businesses associated with, our management team and their affiliates is presented for informational purposes only. Past performance
by our management team, including their affiliates’ past performance, is not a guarantee either (i) of success with respect
to any business combination we may consummate or (ii) that we will be able to locate a suitable candidate for our initial business
combination. You should not rely on the historical record of our management team and their affiliates as indicative of our future performance.
Additionally, in the course of their respective careers, members of our management team have been involved in businesses and deals that
were unsuccessful.
We may seek acquisition opportunities in industries
or sectors that may be outside of our management’s areas of expertise.
We will consider a business combination
outside of our management’s areas of expertise if a business combination candidate is presented to us and we determine that such
candidate offers an attractive acquisition opportunity for our company. In the event we elect to pursue an acquisition outside of the
areas of our management’s expertise, our management’s expertise may not be directly applicable to its evaluation or operations.
As a result, our management may not be able to adequately ascertain or assess all of the significant risk factors. Accordingly, any shareholders
who choose to remain shareholders following our initial business combination could suffer a reduction in the value of their shares. Such
shareholders 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 shareholders may exercise their redemption rights, which
may make it difficult for us to meet any closing condition with a target business that requires us to have a minimum net worth or a certain
amount of cash. In addition, if we are no longer a foreign private issuer and shareholder approval of the transaction is required by
law, or we decide to obtain shareholder approval for business or other legal reasons, it may be more difficult for us to attain shareholder
approval of our initial business combination if the target business does not meet our general criteria and guidelines. If we are unable
to complete our initial business combination, our public shareholders may receive only approximately $10.15 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.
To the extent we complete our
initial business combination with a financially unstable business or an entity lacking an established record of sales or earnings, we
may be affected by numerous risks inherent in the operations of the business with which we combine. These risks include 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 initial
business combination with an affiliated entity, or our Board of Directors 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, another independent
firm that commonly renders valuation opinions for the type of company we are seeking to acquire or from an independent accounting firm
that the price we are paying for a target is fair to our company from a financial point of view. If no opinion is obtained, our shareholders
will be relying on the business judgment of our Board of Directors, which will have significant discretion in choosing the standard used
to establish the fair market value of the target or targets, and different methods of valuation may vary greatly in outcome from one
another. Such standards used will be disclosed in our tender offer documents or proxy solicitation materials, as applicable, related
to our initial business combination. However, if our Board of Directors is unable to determine the fair value of an entity with which
we seek to complete an initial business combination based on such standards, we will be required to obtain an opinion as described above.
We may issue additional ordinary or preference
shares to complete our initial business combination or under an employee incentive plan after completion of our initial business combination.
Any such issuances would dilute the interest of our shareholders and likely present other risks.
Our amended and restated memorandum
and articles of association will authorize the issuance of up to 100,000,000 ordinary shares, par value $0.0001 per share, and 1,000,000
undesignated preference shares, par value $0.0001 per share. Immediately after our initial public offering, there will be 92,250,000
authorized but unissued ordinary shares available for issuance, which amount takes into account shares reserved for issuance upon exercise
of outstanding warrants and issuance of shares pursuant to the exercise of the unit purchase option.
Immediately after our initial
public offering, there will be no preference shares issued and outstanding.
We may issue a substantial number
of additional ordinary shares, and may issue preference shares, in order to complete our initial business combination or under an employee
incentive plan after completion of our initial business combination. However, our amended and restated memorandum and articles of association
will provide, among other things, that prior to our initial business combination, we may not issue additional ordinary shares that would
entitle the holders thereof to (i) receive funds from the trust account or (ii) vote on any initial business combination. The
issuance of additional ordinary shares or preference shares:
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may significantly dilute the equity interest of investors in our
initial public offering;
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may subordinate the rights of holders of ordinary shares if preference
shares are issued with rights senior to those afforded our ordinary shares;
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could cause a change in control if a substantial number of ordinary
shares 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
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may adversely affect prevailing market prices for our units, ordinary
shares and/or warrants.
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We may be a passive foreign investment company,
or “PFIC,” which could result in adverse U.S. federal income tax consequences to U.S. investors.
If we are a PFIC for any taxable
year (or portion thereof) that is included in the holding period of a U.S. Holder (as defined in the section of this prospectus captioned
“Income Tax Considerations — Certain U.S. Federal Income Tax Considerations — U.S. Holders”) of our ordinary
shares or warrants, the U.S. Holder may be subject to adverse U.S. federal income tax consequences and may be subject to additional reporting
requirements. Our PFIC status for our current and subsequent taxable years may depend on whether we qualify for the PFIC start-up exception
(see the section of this prospectus captioned “Income Tax Considerations — Certain U.S. Federal Income Tax Considerations
— U.S. Holders — Passive Foreign Investment Company Rules”). Depending on the particular circumstances the application
of the start-up exception may be subject to uncertainty, and there cannot be any assurance that we will qualify for the start-up exception.
Accordingly, there can be no assurances with respect to our status as a PFIC for our current taxable year or any subsequent taxable year.
Our actual PFIC status for any taxable year, however, will not be determinable until after the end of such taxable year. Moreover, if
we determine we are a PFIC for any taxable year, we will endeavor to provide to a U.S. Holder such information as the Internal Revenue
Service (“IRS”) may require, including a PFIC annual information statement, in order to enable the U.S. Holder to make and
maintain a “qualified electing fund” election, but there can be no assurance that we will timely provide such required information,
and such election would be unavailable with respect to our warrants in all cases. We urge U.S. Holders to consult their own tax advisors
regarding the possible application of the PFIC rules to holders of our ordinary shares and warrants.
We may reincorporate in another jurisdiction
in connection with our initial business combination and such reincorporation may result in taxes imposed on shareholders.
We may, in connection with our
initial business combination and subject to requisite shareholder approval under the Companies Law, reincorporate in the jurisdiction
in which the target company or business is located. The transaction may require a shareholder to recognize taxable income in the jurisdiction
in which the shareholder is a tax resident or in which its members are resident if it is a tax transparent entity. We do not intend to
make any cash distributions to shareholders to pay such taxes. Shareholders may be subject to withholding taxes or other taxes with respect
to their ownership of us after the reincorporation.
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 shareholders may receive only approximately $10.15 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 shareholders may receive only approximately $10.15 per share on the liquidation
of our trust account and our warrants will expire worthless.
We are dependent upon our officers and directors
and their departure could adversely affect our ability to operate.
Our operations are dependent
upon a relatively small group of individuals and, in particular, our officers and directors. We believe that our success depends on the
continued service of our officers and directors, at least until we have completed our initial business combination. In addition, our
officers and directors 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, including identifying potential business combinations and monitoring
the related due diligence. We do not have an employment agreement with, or key-man insurance on the life of, any of our directors or
officers. The unexpected loss of the services of one or more of our directors or officers could have a detrimental effect on us.
Our ability to successfully effect our initial
business combination and to be successful thereafter will be totally dependent upon the efforts of our key personnel, some of whom may
join us following our initial business combination. The loss of key personnel could negatively impact the operations and profitability
of our post-combination business.
Our ability to successfully effect
our initial business combination is dependent upon the efforts of our key personnel. The role of our key personnel in the target business,
however, cannot presently be ascertained. Although some of our key personnel may remain with the target business in senior management
or advisory positions following our initial business combination, it is likely that some or all of the management of the target business
will remain in place. While we intend to closely scrutinize any individuals we 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.
Our key personnel may negotiate employment or
consulting agreements with a target business in connection with a particular business combination. These agreements may provide for them
to receive compensation following our initial business combination and as a result, may cause them to have conflicts of interest in determining
whether a particular business combination is the most advantageous.
Our key personnel may be able
to remain with the company after the completion of our initial business combination only if they are able to negotiate employment or
consulting agreements in connection with the business combination. Such negotiations would take place simultaneously with the negotiation
of the business combination and could provide for such individuals to receive compensation in the form of cash payments and/or our securities
for services they would render to us after the completion of the business combination. The personal and financial interests of such individuals
may influence their motivation in identifying and selecting a target business, subject to his or her fiduciary duties under Cayman Islands
law. However, we believe the ability of such individuals to remain with us after the completion of our initial business combination will
not be the determining factor in our decision as to whether or not we will proceed with any potential business combination. There is
no certainty, however, that any of our key personnel will remain with us after the completion of our initial business combination. We
cannot assure you that any of our key personnel will remain in senior management or advisory positions with us. The determination as
to whether any of our key personnel will remain with us will be made at the time of our initial business combination.
We may have a limited ability to assess the
management of a prospective target business and, as a result, may effect our initial business combination with a target business whose
management may not have the skills, qualifications or abilities to manage a public company.
When evaluating the desirability
of effecting our initial business combination with a prospective target business, our ability to assess the target business’s management
may be limited due to a lack of time, resources or information. Our assessment of the capabilities of the target’s management,
therefore, may prove to be incorrect and such management may lack the skills, qualifications or abilities we suspected. Should the target’s
management not possess the skills, qualifications or abilities necessary to manage a public company, the operations and profitability
of the post-combination business may be negatively impacted. Accordingly, any shareholders who choose to remain shareholders following
the business combination could suffer a reduction in the value of their shares. Such shareholders are unlikely to have a remedy for such
reduction in value.
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.
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 or she may be entitled to substantial compensation and our officers are not obligated to contribute any specific number
of hours per week to our affairs. Our independent directors also serve as officers and board members for other entities. If our officers’
and directors’ other business affairs require them to devote substantial amounts of time to such affairs in excess of their current
commitment levels, it could limit their ability to devote time to our affairs which may have a negative impact on our ability to complete
our initial business combination.
Certain of our officers and directors are now,
and all of them may in the future become, affiliated with entities engaged in business activities similar to those intended to be conducted
by us and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should be presented.
Following the completion of our
initial public offering and until we consummate our initial business combination, we intend to engage in the business of identifying
and combining with one or more businesses. Our sponsor and officers and directors are, or may in the future become, affiliated with other
blank check companies like ours or other entities (such as operating companies or investment vehicles) that are engaged in making and
managing investments in a similar business.
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
other entities prior to its presentation to us, subject to his or her fiduciary duties under Cayman Islands law.
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. Nor do we have a policy that expressly prohibits any such persons from engaging for their own account
in business activities of the types conducted by us. Accordingly, such persons or entities may have a conflict between their interests
and ours.
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 and directors. Our officers and directors also serve as officers and board members for other entities. Such entities may compete
with us for business combination opportunities. Our sponsor, officers and directors are not currently aware of any specific opportunities
for us to complete our initial business combination with any entities with which they are affiliated, and there have been no preliminary
discussions concerning a business combination with any such entity or entities. Although we will not be specifically focusing on, or
targeting, any transaction with any affiliated entities, we would pursue such a transaction if we determined that such affiliated entity
met our criteria for a business combination and such transaction was approved by a majority of our disinterested directors. Despite our
agreement to obtain an opinion from an independent investment banking firm or another independent firm that commonly renders valuation
opinions for the type of company we are seeking to acquire or 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 shareholders as they would be absent any conflicts of interest.
Since our sponsor, officers and directors will
lose their entire investment in us if our initial business combination is not completed, a conflict of interest may arise in determining
whether a particular business combination target is appropriate for our initial business combination.
In February 2019, our sponsor
purchased an aggregate of 1,150,000 founder shares for an aggregate purchase price of $25,000, or approximately $0.02 per share. Prior
to the initial investment in the company of $25,000 by our sponsor, the company had no assets, tangible or intangible. As such, our sponsor
will own approximately 24.0% of our issued and outstanding shares after our initial public offering (assuming it does not purchase units
in our initial public offering and taking into account ownership of the private placement units). If we increase or decrease the size
of the offering, we will effect a capitalization or share surrender or redemption or other appropriate mechanism, as applicable, immediately
prior to the consummation of the offering in such amount as to maintain the ownership of our sponsor prior to our initial public offering
at 20% of our issued and outstanding ordinary shares upon the consummation of our initial public offering (assuming it does not purchase
units in our initial public offering and not taking into account ownership of the private placement units). The founder shares will be
worthless if we do not complete an initial business combination. In addition, our sponsor has committed to purchase an aggregate of 260,000
private placement units, for a purchase price of $2,600,000 in the aggregate, or $10.00 per unit, that will also be worthless if we do
not complete a business combination.
Each private placement unit consists
of one private placement share and one private placement warrant. Each private placement warrant may be exercised for one-half of one
ordinary share at a price of $11.50 per whole share, subject to adjustment as provided herein.
The founder shares are identical
to the ordinary shares included in the units being sold in our initial public offering except that (i) the founder shares are subject
to certain transfer restrictions and (ii) our sponsor, officers and directors have entered into a letter agreement with us, pursuant
to which they have agreed (A) to waive their redemption rights with respect to their founder shares, private placement shares and
public shares in connection with the completion of our initial business combination, (B) to waive their redemption rights with respect
to any founder shares, private placement shares and public shares held by them in connection with a stockholder vote to approve an amendment
to our amended and restated memorandum and articles of association (x) to modify the substance or timing of our obligation to provide
for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if
we have not consummated our initial business combination within the timeframe set forth therein or with respect to any other provision
relating to stockholders’ rights or pre-initial business combination activity and (C) to waive their rights to liquidating
distributions from the trust account with respect to their founder shares and private placement shares if we fail to complete our initial
business combination within 12 months from the closing of our initial public offering (or up to 21 months from the closing of our initial
public offering if we extend the period of time to consummate a business combination, as described in more detail in this prospectus)
(although they will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we
fail to complete our initial business combination within the prescribed time frame).
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.
Since our sponsor, officers and directors may
not be eligible to be reimbursed for their out-of-pocket expenses if our initial business combination is not completed, a conflict of
interest may arise in determining whether a particular business combination target is appropriate for our initial business combination.
At the closing of our initial
business combination, our sponsor, officers and directors, or any of their respective affiliates, will be reimbursed for any out-of-pocket
expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence
on suitable business combinations. There is no cap or ceiling on the reimbursement of out-of-pocket expenses incurred in connection with
activities on our behalf. These financial interests of our sponsor, officers and directors may influence their motivation in identifying
and selecting a target business combination and completing an initial business combination.
We may issue notes or other debt securities,
or otherwise incur substantial debt, to complete a business combination, which may adversely affect our leverage and financial condition
and thus negatively impact the value of our shareholders’ investment in us.
Although we have no commitments
as of the date of this prospectus to issue any notes or other debt securities, or to otherwise incur outstanding debt following our initial
public offering, we may choose to incur substantial debt to complete our initial business combination. We have agreed that we will not
incur any indebtedness unless we have obtained from the lender a waiver of any right, title, interest or claim of any kind in or to the
monies held in the trust account. As such, no issuance of debt will affect the per-share amount available for redemption from the trust
account. Nevertheless, the incurrence of debt could have a variety of negative effects, including:
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default and foreclosure on our assets if our operating revenues
after an initial business combination are insufficient to repay our debt obligations;
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acceleration of our obligations to repay the indebtedness even
if we make all principal and interest payments when due if we breach certain covenants that
require the maintenance of certain financial ratios or reserves without a waiver or renegotiation
of that covenant;
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our immediate payment of all principal and accrued interest, if
any, if the debt security is payable on demand;
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our inability to obtain necessary additional financing if the
debt security contains covenants restricting our ability to obtain such financing while the
debt security is outstanding;
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our inability to pay dividends on our ordinary shares;
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using a substantial portion of our cash flow to pay principal
and interest on our debt, which will reduce the funds available for dividends on our ordinary
shares if declared, expenses, capital expenditures, acquisitions and other general corporate
purposes;
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limitations on our flexibility in planning for and reacting to
changes in our business and in the industry in which we operate;
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increased vulnerability to adverse changes in general economic,
industry and competitive conditions and adverse changes in government regulation; and
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limitations on our ability to borrow additional amounts for expenses,
capital expenditures, acquisitions, debt service requirements, execution of our strategy
and other purposes and other disadvantages compared to our competitors who have less debt.
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We may only be able to complete one business
combination with the proceeds of our initial public offering and the sale of the private placement units, 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 units, $40,600,000 was available to complete our business combination and
pay related fees and expenses (which includes up to approximately $1,000,000 for the payment of deferred underwriting commissions).
We may effectuate our initial
business combination with a single target business or multiple target businesses simultaneously or within a short period of time. However,
we may not be able to effectuate our initial business combination with more than one target business because of various factors, including
the existence of complex accounting issues and the requirement that we prepare and file pro forma financial statements with the SEC that
present operating results and the financial condition of several target businesses as if they had been operated on a combined basis.
By completing our initial business combination with only a single entity our lack of diversification may subject us to numerous economic,
competitive and regulatory risks. Further, we would not be able to diversify our operations or benefit from the possible spreading of
risks or offsetting of losses, unlike other entities which may have the resources to complete several business combinations in different
industries or different areas of a single industry.
Accordingly, the prospects for
our success may be:
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solely dependent upon the performance of a single business, property
or asset; or
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dependent upon the development or market acceptance of a single
or limited number of products, processes or services.
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This lack
of diversification may subject us to numerous economic, competitive and regulatory risks, any or all of which may have a substantial
adverse impact upon the particular industry in which we may operate subsequent to our initial business combination.
We may attempt to simultaneously complete business
combinations with multiple prospective targets, which may hinder our ability to complete our initial business combination and give rise
to increased costs and risks that could negatively impact our operations and profitability.
If we determine to simultaneously
acquire several businesses that are owned by different sellers, we will need for each of such sellers to agree that our purchase of its
business is contingent on the simultaneous closings of the other business combinations, which may make it more difficult for us, and
delay our ability, to complete our initial business combination. With multiple business combinations, we could also face additional risks,
including additional burdens and costs with respect to possible multiple negotiations and due diligence investigations (if there are
multiple sellers) and the additional risks associated with the subsequent assimilation of the operations and services or products of
the acquired companies in a single operating business. If we are unable to adequately address these risks, it could negatively impact
our profitability and results of operations.
We may attempt to complete our initial business
combination with a private company about which little information is available, which may result in a business combination with a company
that is not as profitable as we suspected, if at all.
In pursuing our acquisition strategy,
we may seek to effectuate our initial business combination with a privately held company. Very little public information generally exists
about private companies, and we could be required to make our decision on whether to pursue a potential initial business combination
on the basis of limited information, which may result in a business combination with a company that is not as profitable as we suspected,
if at all.
Our management may not be able to maintain control
of a target business after our initial business combination. We cannot provide assurance that, upon loss of control of a target business,
new management will possess the skills, qualifications or abilities necessary to profitably operate such business.
We may structure a business combination
so that the post-transaction company in which our public shareholders own shares will own less than 100% of the equity interests or assets
of a target business, but we will 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 shareholders 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 ordinary shares 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 ordinary shares, our shareholders
immediately prior to such transaction could own less than a majority of our issued and outstanding ordinary shares subsequent to such
transaction. In addition, other minority shareholders may subsequently combine their holdings resulting in a single person or group obtaining
a larger share of the company’s 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 do not have a specified maximum redemption
threshold. The absence of such a redemption threshold may make it possible for us to complete a business combination with which a substantial
majority of our shareholders do not agree.
Our amended and restated memorandum
and articles of association will 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, after payment of the deferred underwriting commissions, to be less than
$5,000,001 either immediately prior to or 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 initial business combination even though a
substantial majority of our public shareholders do not agree with the transaction and have redeemed their shares or, if we are no longer
a foreign private issuer and we seek shareholder approval of our initial business combination and do not conduct redemptions in connection
with our initial business combination pursuant to the tender offer rules, have entered into privately negotiated agreements to sell their
shares to our sponsor, officers, directors, advisors or their affiliates. In the event the aggregate cash consideration we would be required
to pay for all ordinary shares that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant
to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the business
combination or redeem any shares, all ordinary shares submitted for redemption will be returned to the holders thereof, and we instead
may search for an alternate business combination.
Investors may view our units as less attractive
than those of other blank check companies.
Unlike other blank check companies
that sell units comprised of shares and warrants each to purchase one full share in their initial public offerings, we are selling units
comprised of ordinary shares and warrants to purchase one-half (½) of one ordinary share. The warrants will not have any voting
rights and will expire and be worthless if we do not consummate an initial business combination. Furthermore, no fractional shares will
be issued upon exercises of the warrants. As a result, unless you acquire at least two warrants, you will not be able to receive a share
upon exercise of your warrants. Accordingly, investors in our initial public offering will not be issued the same securities as part
of their investment as they may have in other blank check company offerings, which may have the effect of limiting the potential upside
value of your investment in our company.
In order to effectuate an initial business combination,
blank check companies have, in the recent past, amended various provisions of their charters and modified governing instruments. We cannot
assure you that we will not seek to amend our amended and restated memorandum and articles of association or governing instruments in
a manner that will make it easier for us to complete our initial business combination that our shareholders may not support.
In order to effectuate a business
combination, blank check companies have, in the 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 extended
the period of time in which it had to consummate a business combination. We cannot assure you that we will not seek to amend our amended
and restated memorandum and articles of association or governing instruments or extend the time in which we have to consummate a business
combination through amending our amended and restated memorandum and articles of association will require a special resolution of our
shareholders as a matter of Cayman Islands law.
The provisions of our amended and restated memorandum
and articles of association that relate to our pre-initial business combination activity (and corresponding provisions of the agreement
governing the release of funds from our trust account), including an amendment to permit us to withdraw funds from the trust account
such that the per share amount investors will receive upon any redemption or liquidation is substantially reduced or eliminated, may
be amended with the approval of holders of at least two-thirds of our ordinary shares who attend and vote in a general meeting, which
is a lower amendment threshold than that of some other blank check companies. It may be easier for us, therefore, to amend our amended
and restated memorandum and articles of association and the trust agreement to facilitate the completion of an initial business combination
that some of our shareholders may not support.
Some other blank check companies
have a provision in their charter which prohibits the amendment of certain of its provisions, including those which relate to a company’s
pre-initial business combination activity, without approval by a certain percentage of the company’s shareholders. In those companies,
amendment of these provisions requires approval by between 90% and 100% of the company’s public shareholders. Our amended and restated
memorandum and articles of association will provide that any of its provisions, including those related to pre-initial 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 shareholders
as described herein and in our amended and restated memorandum and articles of association or an amendment to permit us to withdraw funds
from the trust account such that the per share amount investors will receive upon any redemption or liquidation is substantially reduced
or eliminated), but excluding the provision of the articles relating to the appointment of directors, may be amended if approved by holders
of at least two-thirds of our ordinary shares who attend and vote in a general meeting, and corresponding provisions of the trust agreement
governing the release of funds from our trust account may be amended if approved by holders of 65% of our ordinary shares. We may not
issue additional securities that can vote on amendments to our amended and restated memorandum and articles of association. Our sponsor,
which will beneficially own approximately 24.0% of our ordinary shares upon the closing of our initial public offering (assuming it does
not purchase units in our initial public offering and taking into account ownership of the private placement units), will participate
in any vote to amend our amended and restated memorandum and articles of association and/or trust agreement and will have the discretion
to vote in any manner it chooses. As a result, we may be able to amend the provisions of our amended and restated memorandum and articles
of association which govern our pre-business combination behavior more easily than some other blank check companies, and this may increase
our ability to complete a business combination with which you do not agree. Our shareholders may pursue remedies against us for any breach
of our amended and restated memorandum and articles of association.
Certain agreements related to our initial public
offering may be amended without shareholder approval.
Certain agreements, including
the underwriting agreement relating to our initial public offering, the investment management trust agreement between us and Continental
Stock Transfer & Trust Company, the letter agreement among us and our sponsor, officers, directors and director nominees, the
registration rights agreement among us and our sponsor and the administrative services agreement between us and our sponsor, may be amended
without shareholder approval. These agreements contain various provisions that our public shareholders might deem to be material. For
example, the underwriting agreement related to our initial public offering contains a covenant that the target company that we acquire
must have a fair market value equal to at least 80% of the balance in the trust account at the time of signing the definitive agreement
for the transaction with such target business (excluding the deferred underwriting commissions and taxes payable on the income earned
on the trust account) so long as we obtain and maintain a listing for our securities on the NASDAQ. While we do not expect our board
to approve any amendment to any of these agreements prior to our initial business combination, it may be possible that our board, in
exercising its business judgment and subject to its fiduciary duties, chooses to approve one or more amendments to any such agreement
in connection with the consummation of our initial business combination. Any such amendment may have an adverse effect on the value of
an investment in our securities.
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 units will be sufficient to allow us to complete our
initial business combination, because we have not yet identified 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 units prove
to be insufficient, either because of the size of our initial business combination, the depletion of the available net proceeds in search
of a target business, the obligation to redeem for cash a significant number of shares from shareholders who elect redemption in connection
with our initial business combination or the terms of negotiated transactions to purchase shares in connection with our initial business
combination, we may be required to seek additional financing or to abandon the proposed business combination. We cannot assure you that
such financing will be available on acceptable terms, if at all. To the extent that additional financing proves to be unavailable when
needed to complete our initial business combination, we would be compelled to either restructure the transaction or abandon that particular
business combination and seek an alternative target business candidate. In addition, even if we do not need additional financing to complete
our initial business combination, we may require such financing to fund the operations or growth of the target business. The failure
to secure additional financing could have a material adverse effect on the continued development or growth of the target business. None
of our officers, directors or shareholders 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 shareholders may only receive approximately $10.15
per share on the liquidation of our trust account, and our warrants will expire worthless. In certain circumstances, our public shareholders
may receive less than $10.15 per share on the redemption of their shares.
We may amend the terms of the warrants in a
manner that may be adverse to holders of public warrants with the approval by the holders of a majority of the then issued and outstanding
warrants.
Our warrants will be issued in
registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. The
warrant agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct
any defective provision, but requires the approval by the holders of a majority of the then issued and outstanding warrants (including
private warrants) to make any change that adversely affects the interests of the registered holders of warrants. Accordingly, we may
amend the terms of the warrants in a manner adverse to a holder if holders of a majority of the then issued and outstanding warrants
(including private warrants) approve of such amendment. Although our ability to amend the terms of the public warrants with the consent
of a majority of the then issued and outstanding 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 ordinary shares 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 ordinary shares equal or exceed $16.50 per share (as adjusted for share splits, share capitalizations,
rights issuances, subdivisions, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 trading-day period
ending on the third trading day prior to the date we send the notice of redemption to the warrant holders. If and when the warrants become
redeemable by us, we may not exercise our redemption right if the issuance of shares upon exercise of the warrants is not exempt from
registration or qualification under applicable state blue sky laws or we are unable to effect such registration or qualification. We
will use our best efforts to register or qualify such shares under the blue sky laws of the state of residence in those states in which
the warrants were offered by us in our initial public offering. 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 our sponsor or its permitted transferees.
Our management’s ability to require holders
of our warrants to exercise such warrants on a cashless basis will cause holders to receive fewer ordinary shares upon their exercise
of the warrants than they would have received had they been able to exercise their warrants for cash.
If we call our public warrants
for redemption after the redemption criteria described elsewhere in this prospectus have been satisfied, our management will have the
option to require any holder that wishes to exercise his warrant (including any warrants held by our sponsor, officers or directors,
other purchasers of our founders’ units, or their permitted transferees) to do so on a “cashless basis.” If our management
chooses to require holders to exercise their warrants on a cashless basis, the number of ordinary shares received by a holder upon exercise
will be fewer than it would have been had such holder exercised his warrant for cash. This will have the effect of reducing the potential
“upside” of the holder’s investment in our company.
Our warrants and founder shares may have an adverse effect on
the market price of our ordinary shares and make it more difficult to effectuate our initial business combination.
We have issued, as part of the units offered
in our IPO and, simultaneously with the closing of our initial public offering, an aggregate of 4,260,000 public and private
placement units. In each case, the warrants are exercisable to purchase one-half of one ordinary share at a price of $11.50 per
whole share, subject to adjustment as provided herein. Prior to our initial public offering, our sponsor purchased an aggregate of
1,150,000 founder shares in a private placement. In addition, if our sponsor makes any working capital loans, up to $1,500,000 of
such loans may be converted into units, at the price of $10.00 per unit (which, for example, would result in the holders being
issued 150,000 ordinary shares if $1,500,000 of notes were so converted, as well as 150,000 warrants to purchase 75,000 shares) at
the option of the lender. Such units would be identical to the private placement units. To the extent we issue ordinary shares to
effectuate a business transaction, the potential for the issuance of a substantial number of additional ordinary shares upon
exercise of these warrants could make us a less attractive acquisition vehicle to a target business. Any such issuance will increase
the number of issued and outstanding ordinary shares and reduce the value of the ordinary shares issued to complete the business
transaction. 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 units are
identical to the units sold in our initial public offering except that, so long as the warrants underlying such units are held by our
sponsor or its permitted transferees, (i) they will not be redeemable by us, (ii) they (including the ordinary shares issuable
upon exercise of these warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by the 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.
A provision of our warrant agreement may make
it more difficult for us to consummate an initial business combination.
Unlike some other blank check companies, if
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we issue additional ordinary shares or equity-linked securities for
capital raising purposes in connection with the closing of our initial business combination
at a Newly Issued Price of less than $9.20 per share;
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(ii)
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the aggregate gross proceeds from such issuances represent more than
60% of the total equity proceeds, and interest thereon, available for the funding of our
initial business combination on the date of the consummation of our initial business combination
(net of redemptions), and
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(iii)
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the Market Value is below $9.20 per share,
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then the exercise price of the warrants will be adjusted
to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $16.50 per share redemption trigger price will
be adjusted (to the nearest cent) to be equal to 165% of the higher of the Market Value and the Newly Issued Price. This may make it
more difficult for us to consummate an initial business combination with a target business.
The determination of the offering price of our
units and the size of our initial public offering is more arbitrary than the pricing of securities and size of an offering of an operating
company in a particular industry. You may have less assurance, therefore, that the offering price of our units properly reflects the
value of such units than you would have in a typical offering of an operating company.
Prior to our initial public offering
there has been no public market for any of our securities. The public offering price of the units and the terms of the warrants were
negotiated between the underwriters and us. In determining the size of our initial public offering, management held customary organizational
meetings with representatives of the underwriters, both prior to our inception and thereafter, with respect to the state of capital markets,
generally, and the amount the underwriters believed they reasonably could raise on our behalf. Factors considered in determining the
size of our initial public offering, prices and terms of the units, including the ordinary shares and warrants underlying the units,
include:
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the history and prospects of companies whose principal business
is the acquisition of other companies;
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prior offerings of those companies;
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our prospects for acquiring an operating business at attractive
values;
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a review of debt to equity ratios in leveraged transactions;
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an assessment of our management and their experience in identifying
operating companies;
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general conditions of the securities markets at the time of our
initial public offering; and
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other factors as were deemed relevant.
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Although these factors were considered,
the determination of our offering price is more arbitrary than the pricing of securities of an operating company in a particular industry
since we have no historical operations or financial results.
There is currently no market for our securities
and a market for our securities may not develop, which would adversely affect the liquidity and price of our securities.
There is currently no market
for our securities. Shareholders therefore have no access to information about prior market history on which to base their investment
decision. Following our initial public offering, 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 shareholders with
target business financial statements, we may lose the ability to complete an otherwise advantageous initial business combination with
some prospective target businesses.
The federal proxy rules require
that a proxy statement with respect to a vote on a business combination meeting certain financial significance tests include historical
and/or pro forma financial statement disclosure in periodic reports. We will include the same financial statement disclosure in connection
with our tender offer documents, whether or not they are required under the tender offer rules. These financial statements may be required
to be prepared in accordance with, or be reconciled to, accounting principles generally accepted in the United States of America, or
U.S. GAAP, or international financing reporting standards as issued by the International Accounting Standards Board, or IFRS, depending
on the circumstances and the historical financial statements may be required to be audited in accordance with the standards of the PCAOB.
These financial statement requirements may limit the pool of potential target businesses we may acquire because some targets may be unable
to provide such 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 and smaller reporting companies, this could make our securities less attractive to investors and
may make it more difficult to compare our performance with other public companies.
We are an “emerging growth
company” within the meaning of the 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 shareholder approval of any golden parachute payments
not previously approved. As a result, our shareholders may not have access to certain information they may deem important. We could be
an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier, including if the
market value of our ordinary shares held by non-affiliates exceeds $700 million as of 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 Rule 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain
reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain
a smaller reporting company until the last day of the fiscal year in which (1) the market value of our ordinary shares held by non-affiliates
exceeds $250 million as of the end of the prior June 30th, or (2) our annual revenues exceeded $100 million during such completed
fiscal year and the market value of our ordinary shares held by non-affiliates exceeds $700 million as of the prior June 30th. To
the extent we take advantage of such reduced disclosure obligations, it may also make comparison of our financial statements with other
public companies difficult or impossible.
Compliance obligations under the Sarbanes-Oxley
Act may make it more difficult for us to effectuate our initial business combination, require substantial financial and management resources,
and increase the time and costs of completing an acquisition.
Section 404 of the Sarbanes-Oxley
Act requires that we evaluate and report on our system of internal controls beginning with our Annual Report on Form 10-K for the
year ending December 31, 2021. Only in the event we are deemed to be a large accelerated filer or an accelerated filer will we be
required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial
reporting. Further, for as long as we remain an emerging growth company, we will not be required to comply with the independent registered
public accounting firm attestation requirement on our internal control over financial reporting. The fact that we are a blank check company
makes compliance with the requirements of the Sarbanes-Oxley Act particularly burdensome on us as compared to other public companies
because a target company with which we seek to complete our initial business combination may not be in compliance with the provisions
of the Sarbanes-Oxley Act regarding adequacy of its internal controls. The development of the internal control of any such entity to
achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition.
Because we are incorporated under the laws of
the Cayman Islands, you may face difficulties in protecting your interests, and your ability to protect your rights through the U.S.
Federal courts may be limited.
We are an
exempted company incorporated under the laws of the Cayman Islands. As a result, it may be difficult for investors to effect service
of process within the United States upon our directors or officers, or enforce judgments obtained in the United States courts against
our directors or officers.
Our corporate affairs are governed
by our amended and restated memorandum and articles of association, the Companies Law (as the same may be supplemented or amended from
time to time) and the common law of the Cayman Islands. The rights of shareholders to take action against the directors, actions by minority
shareholders and the fiduciary responsibilities of our directors to us under Cayman Islands law are to a large extent governed by the
common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent
in the Cayman Islands as well as from English common law, the decisions of whose courts are of persuasive authority, but are not binding
on a court in the Cayman Islands. The rights of our shareholders and the fiduciary responsibilities of our directors under Cayman Islands
law are different from what they would be under statutes or judicial precedent in some jurisdictions in the United States. In particular,
the Cayman Islands has a different body of securities laws as compared to the United States, and certain states, such as Delaware, may
have more fully developed and judicially interpreted bodies of corporate law. In addition, Cayman Islands companies may not have standing
to initiate a shareholders derivative action in a Federal court of the United States.
We have been advised by our Cayman
Islands legal counsel that the courts of the Cayman Islands are unlikely (i) to recognize or enforce against us judgments of courts
of the United States predicated upon the civil liability provisions of the federal securities laws of the United States or any state;
and (ii) in original actions brought in the Cayman Islands, to impose liabilities against us predicated upon the civil liability
provisions of the federal securities laws of the United States or any state, so far as the liabilities imposed by those provisions are
penal in nature. In those circumstances, although there is no statutory enforcement in the Cayman Islands of judgments obtained in the
United States, the courts of the Cayman Islands will recognize and enforce a foreign money judgment of a foreign court of competent jurisdiction
without retrial on the merits based on the principle that a judgment of a competent foreign court imposes upon the judgment debtor an
obligation to pay the sum for which judgment has been given provided certain conditions are met. For a foreign judgment to be enforced
in the Cayman Islands, such judgment must be final and conclusive and for a liquidated sum, and must not be in respect of taxes or a
fine or penalty, inconsistent with a Cayman Islands judgment in respect of the same matter, impeachable on the grounds of fraud or obtained
in a manner, or be of a kind the enforcement of which is, contrary to natural justice or the public policy of the Cayman Islands (awards
of punitive or multiple damages may well be held to be contrary to public policy). A Cayman Islands Court may stay enforcement proceedings
if concurrent proceedings are being brought elsewhere.
As a result of all of the above,
public shareholders may have more difficulty in protecting their interests in the face of actions taken by management, members of the
Board of Directors or controlling shareholders than they would as public shareholders of a United States company.
Provisions in our amended and restated memorandum
and articles of association may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future
for our ordinary shares and could entrench management.
Our amended and restated memorandum
and articles of association will contain provisions that may discourage unsolicited takeover proposals that shareholders may consider
to be in their best interests. These provisions include two-year director terms and the ability of the Board of Directors to designate
the terms of and issue new series of preference shares, which may make more difficult the removal of management and may discourage transactions
that otherwise could involve payment of a premium over prevailing market prices for our securities.
After our initial business combination, it is
possible that a majority of our directors and officers will live outside the United States and all of our assets will be located outside
the United States; therefore investors may not be able to enforce federal securities laws or their other legal rights.
It is possible that after our
initial business combination, a majority of our directors and officers will reside outside of the United States and all of our assets
will be located outside of the United States. As a result, it may be difficult, or in some cases not possible, for investors in the United
States to enforce their legal rights, to effect service of process upon all of our directors or officers or to enforce judgments of United
States courts predicated upon civil liabilities and criminal penalties on our directors and officers under United States laws.
There
are uncertainties under the PRC Securities Law relating to the procedures and time requirement for the U.S. securities regulatory agencies
to bring about investigations and evidence collection within the territory of the PRC.
On December 28, 2019, the
newly amended Securities Law of the PRC (the “PRC Securities Law”) was promulgated, which became effective on March 1,
2020. According to Article 177 of the PRC Securities Law (the “Article 177”), the securities regulatory authority
of the State Council may establish a regulatory cooperation mechanism with securities regulatory authorities of another country or region
for the implementation of cross-border supervision and administration. Article 177 further provides that overseas securities regulatory
authorities shall not engage in activities pertaining to investigating or obtaining evidence directly within the territories of the PRC,
and that no Chinese entities or individuals shall provide documents and information in connection with securities business activities
to any organizations and/or persons aboard without the prior consent of the securities regulatory authority of the State Council and
the competent departments of the State Council. As of the date of this prospectus, we are not aware of any implementing rules or
regulations which have been published regarding application of the Article 177.
We believe that Article 177
is only applicable in circumstances related to direct investigation or evidence collection conducted by overseas authorities within the
territory of the PRC. Our principal business operation is conducted in the PRC. In the event that the U.S. securities regulatory agencies
carry out an investigation on us, such as an enforcement action by the Department of Justice, the SEC or other authorities, and there
is a need to conduct investigation or collect evidence within the territory of the PRC, the U.S. securities regulatory agencies may consider
cross-border cooperation with the securities regulatory authority of the PRC by way of judicial assistance, diplomatic channels or regulatory
cooperation mechanism established with the securities regulatory authority of the PRC. However, there is no assurance that the U.S. securities
regulatory agencies will succeed in establishing such cross-border cooperation in a specific case or establish such cooperation in a
timely manner.
Furthermore, as the Article 177
is a recently promulgated provision and, as the date of this prospectus, there have not been implementing rules or regulations regarding
the application of the Article 177, it remains unclear how it will be interpreted, implemented or applied by the Chinese Securities
Regulatory Commission or other relevant government authorities. As such, there are uncertainties as to the procedures and time requirement
for the U.S. securities regulatory agencies to conduct investigations and evidence collection within the territory of the PRC. If U.S.
securities regulatory agencies are unable to conduct such investigations, they may determine to suspend or de-register our registration
with the SEC and our securities may also be delisted from Nasdaq or other applicable trading market.
In addition, our security holders
could face hurdles in bringing an original action in foreign courts to enforce liabilities based on the U.S. federal securities laws
against our officers.
Risks Associated with Acquiring and Operating a
Business Outside of the United States
If we effect our initial business combination
with a company located 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 located outside of the United States, we would be subject to any special considerations or risks associated
with companies operating in the target business’ home jurisdiction, including any of the following:
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rules and regulations or currency redemption or corporate
withholding taxes on individuals;
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laws governing the manner in which future business combinations
may be effected;
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tariffs and trade barriers;
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regulations related to customs and import/export matters;
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tax issues, such as tax law changes and variations in tax laws
as compared to the United States;
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currency fluctuations and exchange controls;
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challenges in collecting accounts receivable;
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cultural and language differences;
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employment regulations;
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crime, strikes, riots, civil disturbances, terrorist attacks and
wars; and
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deterioration of political relations with the United States which
could result in any number of difficulties, both normal course such as above or extraordinary
such as sanctions being imposed. We may not be able to adequately address these additional
risks. If we were unable to do so, our operations might suffer.
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If our management following our initial business
combination is unfamiliar with United States securities laws, they may have to expend time and resources becoming familiar with such
laws, which could lead to various regulatory issues.
Following our initial business
combination, any or all of our management could resign from their positions as officers of the Company, and the management of the target
business at the time of the business combination will remain in place. Management of the target business may not be familiar with United
States securities laws. If new management is unfamiliar with United States securities laws, they may have to expend time and resources
becoming familiar with such laws. This could be expensive and time-consuming and could lead to various regulatory issues which may adversely
affect our operations.
If we effect a business combination with a company
located outside of the United States, the laws applicable to such company will likely govern all of our material agreements and we may
not be able to enforce our legal rights.
If we effect a business combination
with a company located outside of the United States, the laws of the country in which such company operates will govern almost all of
the material agreements relating to its operations. We cannot assure you that the target business will be able to enforce any of its
material agreements or that remedies will be available in this new jurisdiction. The system of laws and the enforcement of existing laws
in such jurisdiction may not be as certain in implementation and interpretation as in the United States. The inability to enforce or
obtain a remedy under any of our future agreements could result in a significant loss of business, business opportunities or capital.
Additionally, if we acquire a company located outside of the United States, it is likely that substantially all of our assets would be
located outside of the United States and some of our officers and directors might reside outside of the United States. As a result, it
may not be possible for investors in the United States to enforce their legal rights, to effect service of process upon our directors
or officers or to enforce judgments of United States courts predicated upon civil liabilities and criminal penalties of our directors
and officers under Federal securities laws.
Because of the costs and difficulties inherent
in managing cross-border business operations after we acquire it, our results of operations may be negatively impacted following a business
combination.
Managing a business, operations,
personnel or assets in another country is challenging and costly.
Management of the target business
that we may hire (whether based abroad or in the U.S.) may be inexperienced in cross-border business practices and unaware of significant
differences in accounting rules, legal regimes and labor practices. Even with a seasoned and experienced management team, the costs and
difficulties inherent in managing cross-border business operations, personnel and assets can be significant (and much higher than in
a purely domestic business) and may negatively impact our financial and operational performance.
Many countries, and especially those in emerging
markets, have difficult and unpredictable legal systems and underdeveloped laws and regulations that are unclear and subject to corruption
and inexperience, which may adversely impact our results of operations and financial condition.
Our ability to seek and enforce
legal protections, including with respect to intellectual property and other property rights, or to defend ourselves with regard to legal
actions taken against us in a given country, may be difficult or impossible, which could adversely impact our operations, assets or financial
condition.
Rules and regulations in
many countries, including some of the emerging markets within the regions we will initially focus, are often ambiguous or open to differing
interpretation by responsible individuals and agencies at the municipal, state, regional and federal levels. The attitudes and actions
of such individuals and agencies are often difficult to predict and inconsistent.
Delay with respect to the enforcement
of particular rules and regulations, including those relating to customs, tax, environmental and labor, could cause serious disruption
to operations abroad and negatively impact our results.
After our initial business combination, substantially
all of our assets may be located in a foreign country and substantially all of our revenue may be derived from our operations in such
country. Accordingly, our results of operations and prospects will be subject, to a significant extent, to the economic, political and
legal policies, developments and conditions in the country in which we operate.
The economic, political and social
conditions, as well as government policies, of the country in which our operations are located could affect our business. The economies
in developing markets we will initially focus on differ from the economies of most developed countries in many respects. Such economic
growth has been uneven, both geographically and among various sectors of the economy and such growth may not be sustained in the future.
If in the future such country’s economy experiences a downturn or grows at a slower rate than expected, there may be less demand
for spending in certain industries. A decrease in demand for spending in certain industries could materially and adversely affect our
ability to find an attractive target business with which to consummate our initial business combination and if we effect our initial
business combination, the ability of that target business to become profitable.
Exchange rate fluctuations and currency policies
may cause a target business’ ability to succeed in the international markets to be diminished.
In the event we acquire a non-U.S.
target, all revenues and income would likely be received in a foreign currency, the dollar equivalent of our net assets and distributions,
if any, could be adversely affected by reductions in the value of the local currency. The value of the currencies in our target regions
fluctuate and are affected by, among other things, changes in political and economic conditions. Any change in the relative value of
such currency against our reporting currency may affect the attractiveness of any target business or, following consummation of our initial
business combination, our financial condition and results of operations. Additionally, if a currency appreciates in value against the
dollar prior to the consummation of our initial business combination, the cost of a target business as measured in dollars will increase,
which may make it less likely that we are able to consummate such transaction.
Because our business objective
includes the possibility of acquiring one or more operating businesses with primary operations in emerging markets we will focus on,
changes in the exchange rate between the U.S. dollar and the currency of any relevant jurisdiction may affect our ability to achieve
such objective. For instance, the exchange rates between the Turkish lira or the Indian rupee and the U.S. dollar has changed substantially
in the last two decades and may fluctuate substantially in the future. If the U.S. dollar declines in value against the relevant currency,
any business combination will be more expensive and therefore more difficult to complete. Furthermore, we may incur costs in connection
with conversions between U.S. dollars and the relevant currency, which may make it more difficult to consummate a business combination.
Because foreign law could govern almost all
of our material agreements, we may not be able to enforce our rights within such jurisdiction or elsewhere, which could result in a significant
loss of business, business opportunities or capital.
Foreign law could govern almost
all of our material agreements. The target business may not be able to enforce any of its material agreements or that remedies will be
available outside of such foreign jurisdiction’s legal system. The system of laws and the enforcement of existing laws and contracts
in such jurisdiction may not be as certain in implementation and interpretation as in the United States. Judiciaries in such jurisdiction
may also be relatively inexperienced in enforcing corporate and commercial law, leading to a higher than usual degree of uncertainty
as to the outcome of any litigation. As a result, the inability to enforce or obtain a remedy under any of our future agreements could
result in a significant loss of business and business opportunities.
Corporate governance standards in foreign countries
may not be as strict or developed as in the United States and such weakness may hide issues and operational practices that are detrimental
to a target business.
General corporate governance
standards in some countries are weak in that they do not prevent business practices that cause unfavorable related party transactions,
over-leveraging, improper accounting, family company interconnectivity and poor management. Local laws often do not go far to prevent
improper business practices. Therefore, shareholders may not be treated impartially and equally as a result of poor management practices,
asset shifting, conglomerate structures that result in preferential treatment to some parts of the overall company, and cronyism. The
lack of transparency and ambiguity in the regulatory process also may result in inadequate credit evaluation and weakness that may precipitate
or encourage financial crisis. In our evaluation of a business combination we will have to evaluate the corporate governance of a target
and the business environment, and in accordance with United States laws for reporting companies take steps to implement practices that
will cause compliance with all applicable rules and accounting practices. Notwithstanding these intended efforts, there may be endemic
practices and local laws that could add risk to an investment we ultimately make and that result in an adverse effect on our operations
and financial results.
Companies in foreign countries
may be subject to accounting, auditing, regulatory and financial standards and requirements that differ, in some cases significantly,
from those applicable to public companies in the United States, which may make it more difficult or complex to consummate a business
combination. In particular, the assets and profits appearing on the financial statements of a foreign company may not reflect its financial
position or results of operations in the way they would be reflected had such financial statements been prepared in accordance with U.S.
GAAP and there may be substantially less publicly available information about companies in certain jurisdictions than there is about
comparable United States companies. Moreover, foreign companies may not be subject to the same degree of regulation as are United States
companies with respect to such matters as insider trading rules, tender offer regulation, shareholder proxy requirements and the timely
disclosure of information.
Legal principles relating to
corporate affairs and the validity of corporate procedures, directors’ fiduciary duties and liabilities and shareholders’
rights for foreign corporations may differ from those that may apply in the U.S., which may make the consummation of a business combination
with a foreign company more difficult. We therefore may have more difficulty in achieving our business objective.
A slowdown in economic
growth in the markets that our business target operates in may adversely affect our business, financial condition, results of operations,
the value of its equity shares and the trading price of our shares following our business combination.
Following the business combination,
our results of operations and financial condition may be dependent on, and may be adversely affected by, conditions in financial markets
in the global economy, and, particularly in the markets where the business operates. The specific economy could be adversely affected
by various factors such as political or regulatory action, including adverse changes in liberalization policies, business corruption,
social disturbances, terrorist attacks and other acts of violence or war, natural calamities, interest rates, inflation, commodity and
energy prices and various other factors which may adversely affect our business, financial condition, results of operations, value of
our equity shares and the trading price of our shares following the business combination.
Regional hostilities, terrorist attacks, communal
disturbances, civil unrest and other acts of violence or war may result in a loss of investor confidence and a decline in the value of
our equity shares and trading price of our shares following our business combination.
Terrorist attacks, civil unrest
and other acts of violence or war may negatively affect the markets in which we may operates our business following our business combination
and also adversely affect the worldwide financial markets. In addition, the countries we will focus on, have from time to time experienced
instances of civil unrest and hostilities among or between neighboring countries. Any such hostilities and tensions may result in investor
concern about stability in the region, which may adversely affect the value of our equity shares and the trading price of our shares
following our business combination. Events of this nature in the future, as well as social and civil unrest, could influence the economy
in which our business target operates, and could have an adverse effect on our business, including the value of equity shares and the
trading price of our shares following our business combination.
Any downgrade of credit
ratings of the country in which the company we acquire does business may adversely affect our ability to raise debt financing following
our business combination.
No assurance can be given that
any rating organization will not downgrade the credit ratings of the sovereign foreign currency long-term debt of the country in which
our business target operates, which reflect an assessment of the overall financial capacity of the government of such country to pay
its obligations and its ability to meet its financial commitments as they become due. Any downgrade could cause interest rates and borrowing
costs to rise, which may negatively impact both the perception of credit risk associated with our future variable rate debt and our ability
to access the debt markets on favorable terms in the future. This could have an adverse effect on our financial condition following our
business combination.
Returns on investment in foreign companies may
be decreased by withholding and other taxes.
Our investments will incur tax
risk unique to investment in developing economies. Income that might otherwise not be subject to withholding of local income tax under
normal international conventions may be subject to withholding of income tax in a developing economy. Additionally, proof of payment
of withholding taxes may be required as part of the remittance procedure. Any withholding taxes paid by us on income from our investments
in such country may or may not be creditable on our income tax returns. We intend to seek to minimize any withholding tax or local tax
otherwise imposed. However, there is no assurance that the foreign tax authorities will recognize application of such treaties to achieve
a minimization of such tax. We may also elect to create foreign subsidiaries to effect the business combinations to attempt to limit
the potential tax consequences of a business combination.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING
STATEMENTS
Some statements contained in
this prospectus are forward-looking in nature. Our forward-looking statements include, but are not limited to, statements regarding our
or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements
that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions,
are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,”
“estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,”
“potential,” “predict,” “project,” “should,” “would” and similar expressions
may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking
statements in this prospectus may include, for example, statements about:
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our ability to complete our initial business combination;
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our success in retaining or recruiting, or changes required in,
our officers, key employees or directors following our initial business combination;
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our officers and directors allocating
their time to other businesses and potentially having conflicts of interest with our business
or in approving our initial business combination, as a result of which they would then receive
expense reimbursements;
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our potential ability to obtain additional financing to complete
our initial business combination;
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our pool of prospective target businesses;
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the ability of our officers and directors to generate a number
of potential acquisition opportunities;
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our public securities’ potential liquidity and trading;
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the lack of a market for our securities;
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the use of proceeds not held in the trust account or available
to us from interest income on the trust account balance; or
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our financial performance following our initial public offering.
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The forward-looking statements
contained in this prospectus are based on our current expectations and beliefs concerning future developments and their potential effects
on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking
statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual
results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and
uncertainties include, but are not limited to, those factors described under the heading “Risk Factors”. Should one or more
of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects
from those projected in these forward-looking statements. We undertake no obligation to update or revise any
forward-looking statements, whether as a result of
new information, future events or otherwise, except as may be required under applicable securities laws.