We are an early stage blank check company
incorporated as a Delaware corporation and formed for the purpose of effecting an initial business combination. Since our initial
public offering (as described below), we have focused our search for an initial business combination on businesses that may provide
significant opportunities for attractive investor returns. Our efforts to identify a prospective target business are not limited
to a particular industry or geographic region, although we expect to focus on a target in an industry where we believe our management
team’s and founders’ expertise provides us with a competitive advantage, including the healthcare industry, with a
focus on digital and telehealth, life sciences, innovative medical devices, and healthcare technology.
Initial Public Offering
On January 20, 2021,
we consummated our initial public offering of 27,500,000 units, including 3,500,000 units issued pursuant to the partial exercise
of the underwriters’ over-allotment option. Each unit consists of one share of Class A common stock of the company, par value
$0.0001 per share, and one-half of one redeemable warrant of the company, with each warrant entitling the holder thereof to purchase
one share of Common Stock for $11.50 per whole share. The units were sold at a price of $10.00 per unit, generating gross proceeds
to the company of $275,000,000.
Simultaneously with
the closing of our initial public offering, we completed the private sale of an aggregate of 6,800,000 warrants to our sponsor
at a purchase price of $1.00 per private placement warrant, generating gross proceeds of $6,800,000.
A
total of $275,000,000, comprised of $268,200,000 of the proceeds from the initial public offering and $6,800,000
of the proceeds of the sale of the private placement warrants was
placed in the trust account maintained by Continental, acting as trustee.
Our units, Class A
common stock and warrants are each traded on the Nasdaq Capital Market under the symbols “HCCCU”, “HCCC”
and “HCCCW”, respectively. Our units commenced public trading on January 14, 2021, and our Class A common stock and
warrants commenced separate public trading on March 8, 2021.
Business Strategy
Our business strategy
is to identify and complete our initial business combination utilizing the extensive experience of our management team and advisors,
leveraging their collective knowledge and extensive relationships in the global healthcare industry. Our team understands the various
significant challenges faced by the industry and the related opportunities for emerging enterprises that deliver solutions. Our
target selection process leverages our team’s skills in sourcing opportunities, evaluating problems and raising capital for
healthcare enterprises. Our team’s industry-wide global network and experience provide a differentiated advantage to
our platform with the following:
|
●
|
Sourcing Capabilities: deep relationships with venture capitalists,
private equity firms, management teams of private and public companies, consultants, and intermediaries.
|
|
●
|
Capital Raising: expertise
in capital raising for innovative technologies from early growth stages, particularly where traditional capital markets do not
provide efficient solutions.
|
|
●
|
Creative Transaction Structuring: expertise in developing creative
transaction solutions that align incentives for business owners, investors and management teams.
|
|
●
|
Partnership Assessment and Approach: expertise in providing ongoing
support to public company management following business combinations in areas including strategy, business development, technology,
research and development, capital raising and networking to help such public company management achieve growth and shareholder
value creation plans.
|
Our management team
follows a disciplined and systematic approach towards reviewing and pursuing potential opportunities.
We believe that our
team is well positioned to succeed in the healthcare industry at a time when the recognition and awareness for human creativity
and innovative solutions are high. Our objective is to complete a business combination with a company or companies that will serve
a key role in improving patient care, lowering costs and improving outcomes in healthcare, while serving as a public company platform
for future organic and acquisitive growth in the U.S. and global markets.
Market Opportunity
While we may pursue
an initial business combination with any business in any industry, commercial sector or location, our initial focus is on identifying
acquisition opportunities in the healthcare industry globally. The healthcare sector is one of the largest sectors in developed
country economies. In the U.S. health expenditure was $3.6 trillion in 2018 (a 4.6% increase from 2017) and accounted for
17.7% of U.S. Gross Domestic Product (GDP). The Centers for Medicare & Medicaid Services projects that U.S.
healthcare expenditure to grow at a rate of 1.1 percentage points faster than GDP and will reach $6.2 trillion by 2028. Trends
supporting the secular growth in the healthcare industry include population aging, rise in chronic diseases and a growing consumer
role in care options. The U.S. healthcare industry is characterized by a high level of complexity arising from the distinct roles
and evolving practices of medical providers and health insurance claim payers. U.S. federal and state government regulations exert
a significant influence on the delivery and pricing of healthcare related products and services, thus adding additional complexity
to the healthcare industry. The demands from regulators to provide reforms has been widely recognized. Secular growth trends and
regulatory reforms have created new and significant opportunities for innovative companies in areas such as care delivery, medical
science technology and data analysis.
Additionally, the COVID-19 global
pandemic has broadly affected sectors within the healthcare industry in positive and negative ways and these changes are expected
to persist into the future. Notably, medical providers have rapidly responded to consumer acceptance of telehealth encounters for
a broad array of services. This has created opportunities for the delivery of superior care to more patients at reduced costs and
with lower risks. As patient willingness to use telehealth increases, innovation will be necessary within life sciences, medical
devices and imaging, and remote diagnostics and monitoring, among other areas.
While the U.S. healthcare
industry alone has over 200,000 small and mid-size private entities, we believe there are over 5,000 potential business combination
candidates in the global healthcare industry. We are concentrating our efforts on small and medium sized businesses operating in
the following areas within the healthcare industry:
|
●
|
Digital health including telehealth providers: The telehealth industry
continues to enjoy significant growth, due to support from regulators, insurance companies and medical providers. Reduced cost
and risk along with increased patient preference for fewer in-person medical provider visits will continue to drive telehealth
adoption.
|
|
●
|
Life sciences including pharma and biopharma: Trends that fuel growth
in these sectors include a rise in chronic diseases, regulatory changes, shift towards preventative care and demand for medicine
in emerging economies. Further transforming these sectors are artificial intelligence (AI) and machine learning integration, accelerating
the pace of drug discovery and development in a cost-effective manner.
|
|
●
|
Diagnostic and therapeutic devices, and related medical technologies: The
need for accurate diagnostic testing and monitoring continues to drive growth within innovative medical devices. Additionally,
consumers are demanding a superior experience, as smart devices and internet connected devices find new means to solve patient
problems. New healthcare technologies are reshaping the diagnosis, care, and management of illness and chronic disease.
|
|
●
|
Healthcare technology for payers and providers: Health organizations
need to continue to update technology to optimize the healthcare delivery process and meet government regulations. This sector
includes technology and services that support providers and payers with deployment of alternative payment models to drive efficiency
and superior care outcomes.
|
It is important to note
that the COVID-19 pandemic has had an impact on each of our sectors of interest, leading to an acceleration of several existing
trends as well as a creation of new opportunities.
Acquisition Criteria
Our general criteria
and guidelines that we believe are important in evaluating prospective target businesses to acquire, are listed below. However,
we may decide to enter into our initial business combination with a target business that only meets some but not all of these criteria
and guidelines. We currently are looking to acquire growth orientated healthcare businesses that serve a critical role and are
family or founder owned, venture backed or are corporate divestitures that no longer fit their corporate strategy. We will acquire
a company or companies that:
|
●
|
have demonstrated growth and scalable platform attributes;
|
|
●
|
participate in areas of the healthcare industry that are resilient in light of quickly evolving
business models;
|
|
●
|
have developed innovative services and / or product offerings;
|
|
●
|
can benefit from being a public company with public recognition and access to capital;
|
|
●
|
are led by strong management teams with a demonstrated track record;
|
|
●
|
can benefit from our team’s expertise and experience in clinical work, academia, regulatory
affairs, research, technology development and operations management; and
|
|
●
|
are willing to transact at valuation levels that will provide attractive returns for public investors.
|
The above key criteria
and guidelines 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 criteria and guidelines as well as other considerations, factors, criteria
and guidelines that our team may deem relevant. In the event that we decide to enter into our initial business combination with
a target business that only meets some but not all of the above criteria and guidelines, we will disclose that the target business
does not meet the above criteria and guidelines in our shareholder communications related to our initial business combination in
the form of tender offer documents or proxy solicitation materials that we would file with the SEC.
In addition to any potential
business candidates we identify on our own, other target business candidates are brought to our attention from various unaffiliated
sources, including investment market participants, private equity funds and businesses seeking to divest non-core assets or
divisions
Competitive Strengths
We believe that our
team’s ability to source deals, evaluate businesses and technologies, execute on transactions and create value through the
business combination process and beyond differentiate us as we embark upon the search for potential business combination targets.
Our competitive strengths include:
|
●
|
Track Record of Success: demonstrated success in developing innovating
solutions and building scale towards maximizing impact.
|
|
●
|
Deep Subject Matter Knowledge and Expertise: deep knowledge and insight
into all aspects of the complex healthcare system, including expertise in clinical work, academia, regulatory affairs, research,
technology development and operations management.
|
|
●
|
Market and Industry Access: the relationships that our team brings
is one of our greatest assets that we will utilize and channel towards our target search. Our team brings deep relationships with
influential veterans globally within small and large healthcare businesses, hospital systems, financial institutions, governments
and regulatory bodies.
|
|
●
|
Breadth of Experience: members of our team have been involved in
relevant activities across the spectrum of the healthcare industry — development pharmaceutical drugs, investing in early
to late stage businesses and technologies, taking companies public, serving as officers and directors within global healthcare
companies, teaching at renowned universities and practicing medicine at the finest medical institutions globally.
|
Our Management Team
Members of our management
team and our advisors have founded innovative companies in Israel and possess extensive market knowledge, public and private financial
experience, M&A experience, identifying buyers and sellers of private companies, experience executing local IPOs and debt and
equity experience. Israel’s high standards of health services, top-quality medical resources, research and development
and high innovation earns the ranking of number 10 in the world’s healthiest Countries, ahead of the U.S., which is ranked
as number 35. Israel is known as being the “Start-up nation” and our team has the privilege of having roots in
Israel to extend our global capabilities.
Three members of our
team have affiliations with Value Base, a leading investment bank in Israel, having in-depth knowledge of the Israeli business
landscape and long-standing relationships across all industries.
Value Base has extensive
experience in supporting private and public companies in strategic and financial transactions for the sale of control to local
and global investors, and is an exclusive member of Global M&A Partners™ with over 200 active dealmakers supported by
over 100 analysts transacting in 30 countries across five continents and growing.
We are working together
with Value Base and its subsidiaries to find high quality private companies that can provide long term compounded growth. Our goal
in addition to finding a business combination is to reduce concerns about the deal closing by reducing uncertainties with raising
additional private capital alongside the public.
Members of our management
team are not obligated to devote any specific number of hours to our matters but they devote as much of their time as they deem
necessary to our affairs until we have completed our initial business combination. The amount of time that any member of our management
team devotes in any time period varies based on the current stage of the business combination process. We believe our management
team’s and our advisors’ operating and transaction experience and relationships with companies provide us with a substantial
number of potential business combination targets. Over the course of their careers, the members of our management team have developed
a broad network of contacts and corporate relationships in many industries. This network has grown through the activities of our
management team sourcing, acquiring and financing businesses, our management team’s relationships with sellers, financing
sources and target management teams and the experience of our management team in executing transactions under varying economic
and financial market conditions.
Status as a Public Company
We believe our structure
makes us an attractive business combination partner to target businesses. As a public company, we offer a target business an alternative
to the traditional initial public offering through a merger or other business combination with us. Following an initial business
combination, we believe the target business would have greater access to capital and additional means of creating management incentives
that are better aligned with stockholders’ interests than it would as a private company. A target business can further benefit
by augmenting its profile among potential new customers and vendors and aid in attracting talented employees. In a business combination
transaction with us, the owners of the target business may, for example, exchange their shares of stock in the target business
for our shares of Class A common stock (or shares of a new holding company) or for a combination of our shares of Class A
common stock and cash, allowing us to tailor the consideration to the specific needs of the sellers.
Although there are various
costs and obligations associated with being a public company, we believe target businesses will find this method a more expeditious
and cost-effective method to becoming a public company than the typical initial public offering. The typical initial public
offering process takes a significantly longer period of time than the typical business combination transaction process, and there
are significant expenses in the initial public offering process, including underwriting discounts and commissions, marketing and
road show efforts that may not be present to the same extent in connection with an initial business combination with us.
Furthermore, once a
proposed initial business combination is completed, the target business will have effectively become public, whereas an initial
public offering is always subject to the underwriters’ ability to complete the offering, as well as general market conditions,
which could delay or prevent the offering from occurring or could have negative valuation consequences. Following an initial business
combination, we believe the target business would then have greater access to capital and an additional means of providing management
incentives consistent with stockholders’ interests and the ability to use its shares as currency for acquisitions. Being
a public company can offer further benefits by augmenting a company’s profile among potential new customers and vendors and
aid in attracting talented employees.
While we believe that
our structure and our management team’s backgrounds make us an attractive business partner, some potential target businesses
may view our status as a blank check company, such as our lack of an operating history and our ability to seek stockholder approval
of any proposed initial business combination, negatively.
We are an “emerging
growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As such, we are eligible
to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that
are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements
of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic
reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation
and stockholder approval of any golden parachute payments not previously approved. If some investors find our securities less attractive
as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile.
In addition, Section 107
of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in
Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging
growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private
companies. We will take advantage of the benefits of this extended transition period. We will remain an emerging growth company
until the earlier of (1) the last day of the fiscal year (a) following January 20, 2026, the fifth anniversary of the
completion of our initial public offering, (b) in which we have total annual gross revenue of at least $1.07 billion,
or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Class A common stock
that is held by non-affiliates exceeds $700 million as of the prior June 30th, and (2) the date on which
we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period. References
herein to “emerging growth company” 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 shares held by non-affiliates exceeds $250 million as of the prior June 30, or (2) our annual revenues
exceeded $100 million during such completed fiscal year and the market value of our shares held by non-affiliates exceeds
$700 million as of the prior June 30.
Financial Position
With funds available for an initial business combination initially
in the amount of $265,620,000, assuming no redemptions and after payment of $10,325,000 of deferred underwriting fees, in each case before
fees and expenses associated with our initial business combination, we offer a target business a variety of options such as creating a
liquidity event for its owners, providing capital for the potential growth and expansion of its operations or strengthening its balance
sheet by reducing its debt or leverage ratio. Because we are able to complete our initial business combination using our cash, debt or
equity securities, or a combination of the foregoing, we have the flexibility to use the most efficient combination that will allow us
to tailor the consideration to be paid to the target business to fit its needs and desires. However, we have not taken any steps to secure
third party financing and there can be no assurance it will be available to us.
Effecting Our Initial Business Combination
We will effectuate our initial business
combination using cash from the proceeds of our initial public offering and the private placement of the private placement warrants,
the proceeds of the sale of our shares in connection with our initial business combination (pursuant to forward purchase agreements
or backstop agreements we may enter into following the consummation of our initial public offering or otherwise), shares issued
to the owners of the target, debt issued to bank or other lenders or the owners of the target, or a combination of the foregoing.
We may seek to complete our initial business combination with a company or business that may be financially unstable or in its
early stages of development or growth, which would subject us to the numerous risks inherent in such companies and businesses.
If our initial business
combination is paid for using equity or debt securities, or not all of the funds released from the trust account are used for payment
of the consideration in connection with our initial business combination or used for redemptions of our Class A common stock,
we may apply the balance of the cash released to us from the trust account for general corporate purposes, including for maintenance
or expansion of operations of the post-transaction company, the payment of principal or interest due on indebtedness incurred
in completing our initial business combination, to fund the purchase of other companies or for working capital.
We may seek to raise
additional funds through a private offering of debt or equity securities in connection with the completion of our initial business
combination, and we may effectuate our initial business combination using the proceeds of such offering rather than using the amounts
held in the trust account. In addition, we are targeting businesses larger than we could acquire with the net proceeds of our initial
public offering and the sale of the private placement warrants, and may as a result be required to seek additional financing to
complete such proposed initial business combination. Subject to compliance with applicable securities laws, we would expect to
complete such financing only simultaneously with the completion of our initial business combination. In the case of an initial
business combination funded with assets other than the trust account assets, our proxy materials or tender offer documents disclosing
the initial business combination would disclose the terms of the financing and, only if required by law, we would seek stockholder
approval of such financing. There are no prohibitions on our ability to raise funds privately or through loans in connection with
our initial business combination. At this time, we are not a party to any arrangement or understanding with any third party with
respect to raising any additional funds through the sale of securities or otherwise.
We have not engaged
or retained any agent or other representative to identify or locate any suitable acquisition candidate, to conduct any research
or take any measures, directly or indirectly, to locate or contact a target business. Although our management will assess the risks
inherent in a particular target business with which we may combine, we cannot assure you that this assessment will result in our
identifying all risks that a target business may encounter. Furthermore, some of those risks may be outside of our control, meaning
that we can do nothing to control or reduce the chances that those risks will adversely impact a target business.
Sources of Target Businesses
Target business candidates
are brought to our attention from various unaffiliated sources, including investment bankers and investment professionals. Target businesses
are also brought to our attention by such unaffiliated sources as a result of being solicited by us by calls or mailings. These sources
may also introduce us to target businesses in which they think we may be interested on an unsolicited basis, since many of these sources
will have read the prospectus of our initial public offering and know what types of businesses we are targeting. Our officers and directors,
as well as our sponsor and their affiliates, may also bring to our attention target business candidates that they become aware of through
their business contacts as a result of formal or informal inquiries or discussions they may have, as well as attending trade shows or
conventions. In addition, we expect to receive a number of proprietary deal flow opportunities that would not otherwise necessarily be
available to us as a result of the business relationships of our officers and directors and our sponsor and their respective industry
and business contacts as well as their affiliates. While we have not and do not anticipate engaging the services of professional firms
or other individuals that specialize in business acquisitions on any formal basis, we may engage these firms or other individuals in
the future, in which event we may pay a finder’s fee, consulting fee, advisory fee or other compensation to be determined in an
arm’s length negotiation based on the terms of the transaction. We will engage a finder only to the extent our management determines
that the use of a finder may bring opportunities to us that may not otherwise be available to us or if finders approach us on an unsolicited
basis with a potential transaction that our management determines is in our best interest to pursue. Payment of finder’s fees is
customarily tied to completion of a transaction, in which case any such fee will be paid out of the funds held in the trust account.
In no event, however, will our sponsor or any of our existing officers or directors, or any entity with which our sponsor or officers
are affiliated, be paid any finder’s fee, reimbursement, consulting fee, monies in respect of any payment of a loan or other compensation
by the company prior to, or in connection with any services rendered for any services they render in order to effectuate, the completion
of our initial business combination (regardless of the type of transaction that it is). Although none of our sponsor, executive officers
or directors, or any of their respective affiliates, will be allowed to receive any compensation, finder’s fees or consulting fees
from a prospective business combination target in connection with a contemplated initial business combination, we do not have a policy
that prohibits our sponsor, executive officers or directors, or any of their respective affiliates, from negotiating for the reimbursement
of out-of-pocket expenses by a target business. We have agreed to pay our sponsor a total of $10,000 per month for business and
administrative support services support and to reimburse our sponsor for any out-of-pocket expenses related to identifying, investigating
and completing an initial business combination. Some of our officers and directors and advisors may enter into employment or consulting
agreements with the post-transaction company following our initial business combination. The presence or absence of any such fees
or arrangements will not be used as a criterion in our selection process of an initial business combination candidate.
We are not prohibited
from pursuing an initial business combination with an initial business combination target that is affiliated with our sponsor,
officers, directors or advisors or making the initial business combination through a joint venture or other form of shared ownership
with our sponsor, officers or directors. In the event we seek to complete our initial business combination with an initial business
combination that is affiliated with our sponsor, officers, directors or advisors, we, or a committee of independent directors,
would obtain an opinion from an independent investment banking firm or from another independent entity that commonly renders valuation
opinions that such an initial business combination is fair to our company from a financial point of view. We are not required to
obtain such an opinion in any other context.
If any of our officers
or directors becomes aware of an initial business combination opportunity that falls within the line of business of any entity
to which he or she has pre-existing fiduciary or contractual obligations, he or she may be required to present such business
combination opportunity to such entity prior to presenting such business combination opportunity to us. Our officers and directors
currently have certain relevant fiduciary duties or contractual obligations that may take priority over their duties to us.
Selection of a Target Business and Structuring
of our Initial Business Combination
Nasdaq rules require
that we must complete one or more business combinations having an aggregate fair market value of at least 80% of the value of the
assets held in the trust account (excluding the deferred underwriting commissions and taxes payable on the interest earned on the
trust account) at the time of our signing a definitive agreement in connection with our initial business combination. The fair
market value of our initial business combination will be determined by our board of directors based upon one or more standards
generally accepted by the financial community, such as discounted cash flow valuation, a valuation based on trading multiples of
comparable public businesses or a valuation based on the financial metrics of M&A transactions of comparable businesses. If
our board of directors is not able to independently determine the fair market value of our initial business combination, we will
obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions
with respect to the satisfaction of such criteria. While we consider it unlikely that our board of directors will not be able to
make an independent determination of the fair market value of our initial business combination, it may be unable to do so if it
is less familiar or experienced with the business of a particular target or if there is a significant amount of uncertainty as
to the value of a target’s assets or prospects. We will not purchase multiple businesses in unrelated industries in conjunction
with our initial business combination. Subject to this requirement, our management will have virtually unrestricted flexibility
in identifying and selecting one or more prospective target businesses, although we will not be permitted to effectuate our initial
business combination with another blank check company or a similar company with nominal operations. 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 either (i) in such a way so that the post-transaction company in which our public stockholders
own shares will own or acquire 100% of the equity interests or assets of the target business or businesses, or (ii) in such
a way so that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business
in order to meet certain objectives of the target management team or stockholders. However, we will only complete an initial business
combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target
or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company
under the Investment Company Act. Even if the post-transaction company owns or acquires 50% or more of the voting securities
of the target, our stockholders prior to the initial business combination may collectively own a minority interest in the post-transaction company,
depending on valuations ascribed to the target and us in the initial business combination. For example, we could pursue a transaction
in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock of a target. In this
case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number
of new shares, our stockholders immediately prior to our initial business combination could own less than a majority of our outstanding
shares subsequent to our initial business combination. If less than 100% of the equity interests or assets of a target business
or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned
or acquired is what will be taken into account for purposes of Nasdaq’s 80% fair market value test. If the initial business
combination involves more than one target business, the 80% fair market value test will be based on the aggregate value of all
of the transactions and we will treat the target businesses together as the initial business combination for purposes of a tender
offer or for seeking stockholder approval, as applicable.
To the extent we effect
our initial business combination with a company or business that may be financially unstable or in its early stages of development
or growth we may be affected by numerous risks inherent in such company or business. Although our management will endeavor to evaluate
the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all significant
risk factors.
In evaluating a prospective
business target, we conduct a thorough due diligence review, which encompasses, among other things, meetings with incumbent management
and employees, document reviews, interviews of customers and suppliers, inspection of facilities, as well as a review of financial
and other information that will be made available to us.
The time required to
select and evaluate a target business and to structure and complete our initial business combination, and the costs associated
with this process, are not currently ascertainable with any degree of certainty. Any costs incurred with respect to the identification
and evaluation of a prospective target business with which our initial business combination is not ultimately completed will result
in our incurring losses and will reduce the funds we can use to complete another business combination.
Lack of Business Diversification
For an indefinite period
of time after the completion of our initial business combination, the prospects for our success may depend entirely on the future
performance of a single business. Unlike other entities that have the resources to complete business combinations with multiple
entities in one or several industries, it is probable that we will not have the resources to diversify our operations and mitigate
the risks of being in a single line of business. In addition, are focusing our search for an initial business combination in a
single industry. By completing our initial business combination with only a single entity, our lack of diversification may:
|
●
|
subject us to negative economic, competitive and regulatory developments, any or all of which may
have a substantial adverse impact on the particular industry in which we operate after our initial business combination, and
|
|
●
|
cause us to depend on the marketing and sale of a single product or limited number of products
or services.
|
Limited Ability to Evaluate the Target’s
Management Team
Although we closely
scrutinize the management of a prospective target business when evaluating the desirability of effecting our initial business combination
with that business, our assessment of the target business’ management may not prove to be correct. In addition, the future
management may not have the necessary skills, qualifications or abilities to manage a public company. Furthermore, the future role
of members of our management team, if any, in the target business cannot presently be stated with any certainty. The determination
as to whether any of the members of our management team will remain with the combined company will be made at the time of our initial
business combination. While it is possible that one or more of our directors will remain associated in some capacity with us following
our initial business combination, it is unlikely that any of them will devote their full efforts to our affairs subsequent to our
initial business combination. Moreover, we cannot assure you that members of our management team will have significant experience
or knowledge relating to the operations of the particular target business.
We cannot assure you
that any of our key personnel will remain in senior management or advisory positions with the combined company. The determination
as to whether any of our key personnel will remain with the combined company will be made at the time of our initial business combination.
Following an initial
business combination, we may seek to recruit additional managers to supplement the incumbent management of the target business.
We cannot assure you that we will have the ability to recruit additional managers, or that additional managers will have the requisite
skills, knowledge or experience necessary to enhance the incumbent management.
Stockholders May Not Have the Ability
to Approve Our Initial Business Combination
We may conduct redemptions
without a stockholder vote pursuant to the tender offer rules of the SEC. However, we will seek stockholder approval if it is required
by law or applicable stock exchange rule, or we may decide to seek stockholder approval for business or other legal reasons. Presented
in the table below is a graphic explanation of the types of initial business combinations we may consider and whether stockholder
approval is currently required under Delaware law for each such transaction.
Type of Transaction
|
|
Whether
Stockholder
Approval is
Required
|
Purchase of assets
|
|
No
|
Purchase of stock of target not involving a merger with the company
|
|
No
|
Merger of target into a subsidiary of the company
|
|
No
|
Merger of the company with a target
|
|
Yes
|
Under Nasdaq’s
listing rules, stockholder approval would be required for our initial business combination if, for example:
|
●
|
we issue shares of Class A common stock that will be equal to or in excess of 20% of the number
of shares of our Class A common stock then outstanding;
|
|
●
|
any of our directors, officers or substantial stockholders (as defined by Nasdaq rules) has a 5%
or greater interest (or such persons collectively have a 10% or greater interest), directly or indirectly, in the target business
or assets to be acquired or otherwise and the present or potential issuance of common stock could result in an increase in outstanding
common shares or voting power of 5% or more; or
|
|
●
|
the issuance or potential issuance of common stock will result in our undergoing a change of control.
|
Permitted Purchases of our Securities
If we seek stockholder
approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination
pursuant to the tender offer rules, our sponsor, initial stockholders, directors, officers, advisors or their affiliates may purchase
shares or public warrants in privately negotiated transactions or in the open market either prior to or following the completion
of our initial business combination. There is no limit on the number of shares our initial stockholders, directors, officers, advisors
or their affiliates may purchase in such transactions, subject to compliance with applicable law and Nasdaq rules. However, they
have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions
for any such transactions. If they engage in such transactions, they will not make any such purchases when they are in possession
of any material nonpublic information not disclosed to the seller or if such purchases are prohibited by Regulation M under the
Exchange Act. We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender
offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange
Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers
will comply with such rules. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange
Act to the extent such purchasers are subject to such reporting requirements. None of the funds held in the trust account will
be used to purchase shares or public warrants in such transactions prior to completion of our initial business combination.
The purpose of any such
purchases of shares could be to vote such shares in favor of the initial business combination and thereby increase the likelihood
of obtaining stockholder approval of the initial business combination or to satisfy a closing condition in an agreement with a
target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination,
where it appears that such requirement would otherwise not be met. The purpose of any such purchases of public warrants could be
to reduce the number of public warrants outstanding or to vote such warrants on any matters submitted to the warrantholders for
approval in connection with our initial business combination. Any such purchases of our securities may result in the completion
of our initial business combination that may not otherwise have been possible. In addition, if such purchases are made, the public
“float” of our shares of Class A common stock or warrants may be reduced and the number of beneficial holders
of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities
on a national securities exchange.
Our sponsor, officers,
directors, advisors and/or their affiliates anticipate that they may identify the stockholders with whom our sponsor, officers,
directors, advisors or their affiliates may pursue privately negotiated purchases by either the stockholders contacting us directly
or by our receipt of redemption requests submitted by stockholders following our mailing of proxy materials in connection with
our initial business combination. To the extent that our sponsor, officers, directors, advisors or their affiliates enter into
a private purchase, they would identify and contact only potential selling stockholders who have expressed their election to redeem
their shares for a pro rata share of the trust account or vote against our initial business combination, whether or not such stockholder
has already submitted a proxy with respect to our initial business combination. Our sponsor, officers, directors, advisors or their
affiliates will only purchase shares if such purchases comply with Regulation M under the Exchange Act and the other federal securities
laws.
Any purchases by our
sponsor, officers, directors, advisors and/or their affiliates who are affiliated purchasers under Rule 10b-18 under
the Exchange Act will only be made to the extent such purchases are able to be made in compliance with Rule 10b-18, which
is a safe harbor from liability for manipulation under Section 9(a)(2) and Rule 10b-5 of the Exchange Act. Rule 10b-18 has
certain technical requirements that must be complied with in order for the safe harbor to be available to the purchaser. Our sponsor,
officers, directors, advisors and/or their affiliates will not make purchases of common stock if the purchases would violate Section 9(a)(2)
or Rule 10b-5 of the Exchange Act. Any such purchases will be reported pursuant to Section 13 and Section 16
of the Exchange Act to the extent such purchases are subject to such reporting requirements.
Redemption Rights for Public Stockholders
upon Completion of our Initial Business Combination
We will provide our
public stockholders with the opportunity to redeem all or a portion of their shares of Class A common stock upon the completion
of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in
the trust account as of two business days prior to the consummation of the initial business combination including interest earned
on the funds held in the trust account and not previously released to us to pay our taxes, divided by the number of then outstanding
public shares, subject to the limitations described herein. As of January 20, 2021, the amount in the trust account was approximately
$10.00 per public share. The per-share amount we will distribute to investors who properly redeem their shares will not be
reduced by the deferred underwriting commissions we will pay to Cantor. Our sponsor, officers and directors have entered into a
letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares
and any public shares held by them in connection with the completion of our initial business combination.
Manner of Conducting Redemptions
We will provide our
public stockholders with the opportunity to redeem all or a portion of their shares of Class A common stock upon the completion
of our initial business combination either (i) in connection with a stockholder meeting called to approve the initial business
combination or (ii) by means of a tender offer. The decision as to whether we will seek stockholder approval of a proposed
initial business combination or conduct a tender offer will be made by us, solely in our discretion, and will be based on a variety
of factors such as the timing of the transaction and whether the terms of the transaction would require us to seek stockholder
approval under the law or stock exchange listing requirement. Under Nasdaq rules, asset acquisitions and stock purchases would
not typically require stockholder approval while direct mergers with our company where we do not survive and any transactions where
we issue more than 20% of our outstanding common stock or seek to amend our amended and restated certificate of incorporation would
require stockholder approval. If we structure an initial business combination with a target company in a manner that requires stockholder
approval, we will not have discretion as to whether to seek a stockholder vote to approve the proposed initial business combination.
We may conduct redemptions without a stockholder vote pursuant to the tender offer rules of the SEC unless stockholder approval
is required by law or stock exchange listing requirements or we choose to seek stockholder approval for business or other legal
reasons. So long as we obtain and maintain a listing for our securities on Nasdaq, we will be required to comply with such rules.
If a stockholder vote
is not required and we do not decide to hold a stockholder vote for business or other legal reasons, we will, pursuant to our amended
and restated certificate of incorporation:
|
●
|
conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act,
which regulate issuer tender offers, and
|
|
●
|
file tender offer documents with the SEC prior to completing our initial business combination which
contain substantially the same financial and other information about the initial business combination and the redemption rights
as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies.
|
Upon the public announcement
of our initial business combination, we or our sponsor will terminate any plan established in accordance with Rule 10b5-1 to
purchase shares of our Class A common stock in the open market if we elect to redeem our public shares through a tender offer,
to comply with Rule 14e-5 under the Exchange Act.
In the event we conduct
redemptions pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance
with Rule 14e-1(a) under the Exchange Act, and we will not be permitted to complete our initial business combination until
the expiration of the tender offer period. In addition, the tender offer will be conditioned on public stockholders not tendering
more than a specified number of public shares which are not purchased by our sponsor, which number will be based on the requirement
that we will only redeem our public shares so long as (after such redemption) our net tangible assets will be at least $5,000,001
either immediately prior to or upon consummation of our initial business combination and after payment of underwriters’ fees
and commissions (so that we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset
or cash requirement which may be contained in the agreement relating to our initial business combination. If public stockholders
tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete the initial business combination.
If, however, stockholder
approval of the transaction is required by law or stock exchange listing requirement, or we decide to obtain stockholder approval
for business or other legal reasons, we will, pursuant to our amended and restated certificate of incorporation:
|
●
|
conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of
the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules, and
|
|
●
|
file proxy materials with the SEC.
|
In the event that we
seek stockholder approval of our initial business combination, we will distribute proxy materials and, in connection therewith,
provide our public stockholders with the redemption rights described above upon completion of the initial business combination.
If we seek stockholder
approval, we will complete our initial business combination only if a majority of the outstanding shares of common stock voted
are voted in favor of the initial business combination. A quorum for such meeting will consist of the holders present in person
or by proxy of shares of outstanding capital stock of the company representing a majority of the voting power of all outstanding
shares of capital stock of the company entitled to vote at such meeting. Our initial stockholders will count toward this quorum
and pursuant to the letter agreement, our sponsor, officers and directors have agreed to vote their founder shares and any public
shares purchased during or after our initial public offering (including in open market and privately negotiated transactions) in
favor of our initial business combination. For purposes of seeking approval of the majority of our outstanding shares of common
stock voted, non-votes will have no effect on the approval of our initial business combination once a quorum is obtained..
We will give approximately 30 days (but not less than 10 days nor more than 60 days) prior written notice of any
such meeting, if required, at which a vote shall be taken to approve our initial business combination. These quorum and voting
thresholds, and the voting agreements of our initial stockholders, may make it more likely that we will consummate our initial
business combination. Each public stockholder may elect to redeem its public shares irrespective of whether they vote for or against
the proposed transaction. Our amended and restated certificate of incorporation provides that we will only redeem our public shares
so long as (after such redemption) our net tangible assets will be at least $5,000,001 either immediately prior to or upon consummation
of our initial business combination and after payment of underwriters’ fees and commissions (so that we are not subject to
the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in
the agreement relating to our initial business combination. For example, the proposed initial business combination may require:
(i) cash consideration to be paid to the target or its owners, (ii) cash to be transferred to the target for working
capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions in accordance with
the terms of the proposed initial business combination. In the event the aggregate cash consideration we would be required to pay
for all shares of Class A common stock that are validly submitted for redemption plus any amount required to satisfy cash
conditions pursuant to the terms of the proposed initial business combination exceed the aggregate amount of cash available to
us, we will not complete the initial business combination or redeem any shares, and all shares of Class A common stock submitted
for redemption will be returned to the holders thereof.
Limitation on Redemption upon Completion
of our Initial Business Combination if we Seek Stockholder Approval
Notwithstanding the
foregoing, if we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection
with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation
provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder
is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from
seeking redemption rights with respect to more than an aggregate of 15% of the shares sold in our initial public offering, which
we refer to as the “Excess Shares.” Such restriction shall also be applicable to our affiliates. We believe this restriction
will discourage stockholders from accumulating large blocks of shares, and subsequent attempts by such holders to use their ability
to exercise their redemption rights against a proposed initial business combination as a means to force us or our management to
purchase their shares at a significant premium to the then-current market price or on other undesirable terms. Absent this
provision, a public stockholder holding more than an aggregate of 15% of the shares sold in our initial public offering could threaten
to exercise its redemption rights if such holder’s shares are not purchased by us or our management at a premium to the then-current market
price or on other undesirable terms. By limiting our stockholders’ ability to redeem no more than 15% of the shares sold
in our initial public offering without our prior consent, we believe we will limit the ability of a small group of stockholders
to unreasonably attempt to block our ability to complete our initial business combination, particularly in connection with an initial
business combination with a target that requires as a closing condition that we have a minimum net worth or a certain amount of
cash. However, we would not be restricting our stockholders’ ability to vote all of their shares (including Excess Shares)
for or against our initial business combination.
Tendering Stock Certificates in Connection
with Redemption Rights
We may require our public
stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street
name,” to either tender their certificates to our transfer agent prior to the meeting held to approve a proposed initial
business combination by a date set forth in the proxy materials mailed to such holders or to deliver their shares to the transfer
agent electronically using the DWAC System, at the holder’s option. The proxy materials that we will furnish to holders of
our public shares in connection with our initial business combination will indicate whether we are requiring public stockholders
to satisfy such delivery requirements. Accordingly, a public stockholder would have from the time we send out our proxy materials
until the date set forth in such proxy materials to tender its shares if it wishes to seek to exercise its redemption rights. Given
the relatively short exercise period, it is advisable for stockholders to use electronic delivery of their public shares.
There is a nominal cost
associated with the above-referenced tendering process and the act of certificating the shares or delivering them through
the DWAC System. The transfer agent will typically charge the tendering broker $80.00 and it would be up to the broker whether
or not to pass this cost on to the redeeming holder. However, this fee would be incurred regardless of whether or not we require
holders seeking to exercise redemption rights to tender their shares. The need to deliver shares is a requirement of exercising
redemption rights regardless of the timing of when such delivery must be effectuated.
The foregoing is different
from the procedures used by many blank check companies. In order to perfect redemption rights in connection with their business
combinations, many blank check companies would distribute proxy materials for the stockholders’ vote on an initial business
combination, and a holder could simply vote against a proposed initial business combination and check a box on the proxy card indicating
such holder was seeking to exercise his or her redemption rights. After the initial business combination was approved, the company
would contact such stockholder to arrange for him or her to deliver his or her certificate to verify ownership. As a result, the
stockholder then had an “option window” after the completion of the initial business combination during which he or
she could monitor the price of the company’s stock in the market. If the price rose above the redemption price, he or she
could sell his or her shares in the open market before actually delivering his or her shares to the company for cancellation. As
a result, the redemption rights, to which stockholders were aware they needed to commit before the stockholder meeting, would become
“option” rights surviving past the completion of the initial business combination until the redeeming holder delivered
its certificate. The requirement for physical or electronic delivery prior to the meeting ensures that a redeeming holder’s
election to redeem is irrevocable once the initial business combination is approved.
Any request to redeem
such shares, once made, may be withdrawn at any time up to the date set forth in the proxy materials. Furthermore, if a holder
of a public share delivered its certificate in connection with an election of redemption rights and subsequently decides prior
to the applicable date not to elect to exercise such rights, such holder may simply request that the transfer agent return the
certificate (physically or electronically). It is anticipated that the funds to be distributed to holders of our public shares
electing to redeem their shares will be distributed promptly after the completion of our initial business combination.
If our initial business
combination is not approved or completed for any reason, then our public stockholders who elected to exercise their redemption
rights would not be entitled to redeem their shares for the applicable pro rata share of the trust account. In such case, we will
promptly return any certificates delivered by public holders who elected to redeem their shares.
If our initial proposed
initial business combination is not completed, we may continue to try to complete an initial business combination with a different
target until January 20, 2023.
Redemption of Public Shares and Liquidation
if no Initial Business Combination
Our amended and restated
certificate of incorporation provides that we will have only until January 20, 2023 to complete our initial business combination.
If we are unable to complete our initial business combination by January 20, 2023, we will: (i) cease all operations except
for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem
the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account
including interest earned on the funds held in the trust account and not previously released to us to pay our taxes (less up to
$100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will
completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions,
if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the
approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations
under Delaware law to provide for claims of creditors and the requirements of other applicable law. 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 24-month time period.
Our sponsor, officers
and directors have entered into a letter agreement with us, pursuant to which they have waived their rights to liquidating distributions
from the trust account with respect to any founder shares held by them if we fail to complete our initial business combination
by January 20, 2023. However, if our sponsor, officers or directors acquire public shares in or after our initial public offering,
they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to complete
our initial business combination by January 20, 2023.
Our sponsor, officers
and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and
restated certificate of incorporation (i) to modify the substance or timing of our obligation to redeem 100% of our public
shares on a business combination if we do not complete our initial business combination by January 20, 2023 or certain amendments
to our charter prior thereto or (ii) with respect to any other provision relating to stockholders’ rights or pre-initial business
combination activity, unless we provide our public stockholders with the opportunity to redeem their shares of Class A common
stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit
in the trust account including interest earned on the funds held in the trust account and not previously released to us to pay
our taxes divided by the number of then outstanding public shares. However, we will only redeem our public shares so long as (after
such redemption) our net tangible assets will be at least $5,000,001 either immediately prior to or upon consummation of our initial
business combination and after payment of underwriters’ fees and commissions (so that we are not subject to the SEC’s
“penny stock” rules). If this optional redemption right is exercised with respect to an excessive number of public
shares such that we cannot satisfy the net tangible asset requirement (described above), we would not proceed with the amendment
or the related redemption of our public shares at such time.
We expect that all
costs and expenses associated with implementing our plan of dissolution, as well as payments to any creditors, will be funded from
amounts remaining out of the approximately $1,683,960 held outside the trust account as of January 20, 2021, although we cannot
assure you that there will be sufficient funds for such purpose. We will depend on sufficient interest being earned on the proceeds
held in the trust account to pay any tax obligations we may owe. However, if those funds are not sufficient to cover the costs
and expenses associated with implementing our plan of dissolution, to the extent that there is any interest accrued in the trust
account not required to pay taxes on interest income earned on the trust account balance, we may request the trustee to release
to us an additional amount of up to $100,000 of such accrued interest to pay those costs and expenses.
If we were to expend
all of the net proceeds of our initial public offering and the sale of the private placement warrants, other than the proceeds
deposited in the trust account, and without taking into account interest, if any, earned on the trust account, the per-share redemption
amount received by stockholders upon our dissolution would be approximately $10.00. The proceeds deposited in the trust account
could, however, become subject to the claims of our creditors which would have higher priority than the claims of our public stockholders.
We cannot assure you that the actual per-share redemption amount received by stockholders will not be substantially less than
$10.00. Under Section 281(b) of the DGCL, our plan of dissolution must provide for all claims against us to be paid in full
or make provision for payments to be made in full, as applicable, if there are sufficient assets. These claims must be paid or
provided for before we make any distribution of our remaining assets to our stockholders. While we will pay such amounts, if any,
we cannot assure you that we will have funds sufficient to pay or provide for all creditors’ claims.
Although we seek to
have all vendors, service providers, prospective target businesses or other entities with which we do business execute agreements
with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of
our public stockholders, there is no guarantee that they will execute such agreements or even if they execute such agreements that
they would be prevented from bringing claims against the trust account including but not limited to fraudulent inducement, breach
of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case
in order to gain an advantage with respect to a claim against our assets, including the funds held in the trust account. If any
third party refuses to execute an agreement waiving such claims to the monies held in the trust account, our management will perform
an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed
a waiver if management believes that such third party’s engagement would be significantly more beneficial to us than any
alternative. Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement
of a third-party consultant whose particular expertise or skills are believed by management to be significantly superior to
those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider
willing to execute a waiver. Marcum, our independent registered public accounting firm, and the underwriters of our initial public
offering would not execute agreements with us waiving such claims to the monies held in the trust account.
In addition, there is
no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any
negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason. Our sponsor
has agreed that it will be liable to us if and to the extent any claims by a third party for services rendered or products sold
to us, or a prospective target business with which we have entered into a written letter of intent, confidentiality or similar
agreement or business combination agreement, reduce the amount of funds in the trust account to below the lesser of (i) $10.00
per public share and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of
the trust account, if less than $10.00 per share due to reductions in the value of the trust assets, less taxes payable, provided
that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and
all rights to the monies held in the trust account (whether or not such waiver is enforceable) nor will it apply to any claims
under our indemnity of the underwriters of our initial public offering against certain liabilities, including liabilities under
the Securities Act. However, we have not asked our sponsor to reserve for such indemnification obligations, nor have we independently
verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and believe that our sponsor’s only
assets are securities of our company. Therefore, we cannot assure you that our sponsor would be able to satisfy those obligations.
None of our officers or directors will indemnify us for claims by third parties including, without limitation, claims by vendors
and prospective target businesses.
In the event that the
proceeds in the trust account are reduced below (i) $10.00 per public share or (ii) such lesser amount per public share held
in the trust account as of the date of the liquidation of the trust account, due to reductions in value of the trust assets, in
each case net of the amount of interest which may be withdrawn to pay taxes, and our sponsor asserts that it is unable to satisfy
its indemnification obligations or that it has no indemnification obligations related to a particular claim, our independent directors
would determine whether to take legal action against our sponsor to enforce its indemnification obligations. While we currently
expect that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification
obligations to us, it is possible that our independent directors in exercising their business judgment may choose not to do so
if, for example, the cost of such legal action is deemed by the independent directors to be too high relative to the amount recoverable
or if the independent directors determine that a favorable outcome is not likely. We have not asked our sponsor to reserve for
such indemnification obligations and we cannot assure you that our sponsor would be able to satisfy those obligations. Accordingly,
we cannot assure you that due to claims of creditors the actual value of the per-share redemption price will not be less than
$10.00 per public share.
We seek to reduce the
possibility that our sponsor will have to indemnify the trust account due to claims of creditors by endeavoring to have all vendors,
service providers, prospective target businesses or other entities with which we do business execute agreements with us waiving
any right, title, interest or claim of any kind in or to monies held in the trust account. Our sponsor will also not be liable
as to any claims under our indemnity of the underwriters of our initial public offering against certain liabilities, including
liabilities under the Securities Act. We have access to the amounts held outside the trust account ($1,683,960 as of January 20,
2021) with which to pay any such potential claims (including costs and expenses incurred in connection with our liquidation, currently
estimated to be no more than approximately $100,000). In the event that we liquidate and it is subsequently determined that the
reserve for claims and liabilities is insufficient, stockholders who received funds from our trust account could be liable for
claims made by creditors.
Under the DGCL, stockholders
may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution.
The pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the
event we do not complete our initial business combination by January 20, 2023 may be considered a liquidating distribution under
Delaware law. If the corporation complies with certain procedures set forth in Section 280 of the DGCL intended to ensure
that it makes reasonable provision for all claims against it, including a 60-day notice period during which any third-party claims
can be brought against the corporation, a 90-day period during which the corporation may reject any claims brought, and an
additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability of stockholders
with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or
the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of
the dissolution.
Furthermore, if the
pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event
we do not complete our initial business combination by January 20, 2023, is not considered a liquidating distribution under Delaware
law and such redemption distribution is deemed to be unlawful (potentially due to the imposition of legal proceedings that a party
may bring or due to other circumstances that are currently unknown), then pursuant to Section 174 of the DGCL, the statute
of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years,
as in the case of a liquidating distribution. If we are unable to complete our initial business combination by January 20, 2023,
we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not
more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate
amount then on deposit in the trust account including interest earned on the funds held in the trust account and not previously
released to us to pay our taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding
public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right
to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible
following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate,
subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable
law. Accordingly, it is our intention to redeem our public shares as soon as reasonably possible following our 24th month
and, therefore, we will not comply with those procedures. As such, our stockholders could potentially be liable for any claims
to the extent of distributions received by them (but no more) and any liability of our stockholders may extend well beyond the
third anniversary of such date.
Because we will not
be complying with Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at
such time that will provide for our payment of all existing and pending claims or claims that may be potentially brought against
us within the subsequent 10 years. However, because we are a blank check company, rather than an operating company, and our
operations will be limited to searching for prospective target businesses to acquire, the only likely claims to arise would be
from our vendors (such as lawyers, investment bankers, etc.) or prospective target businesses. As described above, pursuant to
the obligation contained in our underwriting agreement, we seek to have all vendors, service providers, prospective target businesses
or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind
in or to any monies held in the trust account. As a result of this obligation, the claims that could be made against us are significantly
limited and the likelihood that any claim that would result in any liability extending to the trust account is remote. Further,
our sponsor may be liable only to the extent necessary to ensure that the amounts in the trust account are not reduced below (i)
$10.00 per public share or (ii) such lesser amount per public share held in the trust account as of the date of the liquidation
of the trust account, due to reductions in value of the trust assets, in each case net of the amount of interest withdrawn to pay
taxes and will not be liable as to any claims under our indemnity of the underwriters of our initial public offering against certain
liabilities, including liabilities under the Securities Act. In the event that an executed waiver is deemed to be unenforceable
against a third party, our sponsor will not be responsible to the extent of any liability for such third-party claims.
If we file a bankruptcy
petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the proceeds held in the trust account
could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third
parties with priority over the claims of our stockholders. To the extent any bankruptcy claims deplete the trust account, we cannot
assure you we will be able to return $10.00 per share to our public stockholders. Additionally, if we file a bankruptcy petition
or an involuntary bankruptcy petition is filed against us that is not dismissed, any distributions received by stockholders could
be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent
conveyance.” As a result, a bankruptcy court could seek to recover some or all amounts received by our stockholders. Furthermore,
our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or may have acted in bad faith,
thereby exposing itself and our company to claims of punitive damages, by paying public stockholders from the trust account prior
to addressing the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons.
Our public stockholders
will be entitled to receive funds from the trust account only upon the earlier to occur of: (i) the completion of our initial
business combination, (ii) the redemption of any public shares properly tendered in connection with a stockholder vote to
amend any provisions of our amended and restated certificate of incorporation (A) to modify the substance or timing of our
obligation to redeem 100% of our public shares on a business combination if we do not complete our initial business combination
by January 20, 2023 or certain amendments to our charter prior thereto or (B) with respect to any other provision relating
to stockholders’ rights or pre-initial business combination activity, and (iii) the redemption of all of our public
shares if we are unable to complete our business combination by January 20, 2023, subject to applicable law. Stockholders who do
not exercise their redemption rights in connection with an amendment to our certificate of incorporation would still be able to
exercise their redemption rights in connection with a subsequent business combination. In no other circumstances will a stockholder
have any right or interest of any kind to or in the trust account. In the event we seek stockholder approval in connection with
our initial business combination, a stockholder’s voting in connection with the initial business combination alone will not
result in a stockholder’s redeeming its shares to us for an applicable pro rata share of the trust account. Such stockholder
must have also exercised its redemption rights as described above. These provisions of our amended and restated certificate of
incorporation, like all provisions of our amended and restated certificate of incorporation, may be amended with a stockholder
vote.
Competition
In identifying, evaluating
and selecting a target business for our initial business combination, we may encounter 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 business combinations. Many of these entities are well established and have extensive experience
identifying and effecting business combinations directly or through affiliates. Moreover, many of these competitors possess greater
financial, technical, human and other resources than we do. Our ability to acquire larger target businesses will be limited by
our available financial resources. This inherent limitation gives others an advantage in pursuing the initial business combination
of a target business. Furthermore, our obligation to pay cash in connection with our public stockholders who exercise their redemption
rights may reduce the resources available to us for our initial business combination and our outstanding warrants, and the future
dilution they potentially represent, may not be viewed favorably by certain target businesses. Either of these factors may place
us at a competitive disadvantage in successfully negotiating an initial business combination.
Facilities
Our executive offices
are located at 301 North Market Street, Suite 1414, Wilmington, DE 19801 and our telephone number is (561) 810-0031. Our executive
offices are provided to us by our sponsor. We pay our sponsor a total of $10,000 per month for business and administrative support
services. We consider our current office space adequate for our current operations.
Employees
We have two officers.
These individuals are not obligated to devote any specific number of hours to our matters but they devote as much of their time
as they deem necessary to our affairs until we have completed our initial business combination. The amount of time our officers
devote in any time period varies based on the stage of the initial business combination process we are in. We will not have any
full-time employees prior to the completion of our initial business combination.
Periodic Reporting and Financial Information
We have registered our
units, Class A common stock and warrants are registered under the Exchange Act and have reporting obligations, including the
requirement that we file annual, quarterly and current reports with the SEC. In accordance with the requirements of the Exchange
Act, our annual reports will contain financial statements audited and reported on by our independent registered public accountants.
We will provide stockholders
with audited financial statements of the prospective target business as part of the tender offer materials or proxy solicitation
materials sent to stockholders to assist them in assessing the target business. In all likelihood, these financial statements will
need to be prepared in accordance with, or reconciled to, GAAP, 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 targets we may conduct an initial business combination with 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 cannot assure you that any particular target business identified by us
as a potential business combination candidate will have financial statements prepared in accordance with GAAP or that the potential
target business will be able to prepare its financial statements in accordance with the requirements outlined above. To the extent
that these requirements cannot be met, we may not be able to acquire the proposed target business. While this may limit the pool
of potential business combination candidates, we do not believe that this limitation will be material.
We will be required
to evaluate our internal control procedures for the fiscal year ending December 31, 2022 as required by the Sarbanes-Oxley Act.
Only in the event we are deemed to be a large accelerated filer or an accelerated filer, and no longer qualify as an emerging growth
company, will we be required to have our internal control procedures audited. A target company may not be in compliance with the
provisions of the Sarbanes-Oxley Act regarding adequacy of their internal controls. The development of the internal controls
of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete
any such business combination. We have filed a Registration Statement on Form 8-A with the SEC to voluntarily register
our securities under Section 12 of the Exchange Act. As a result, we are subject to the rules and regulations promulgated
under the Exchange Act. We have no current intention of filing a Form 15 to suspend our reporting or other obligations under
the Exchange Act prior or subsequent to the consummation of our initial business combination.
We will remain an emerging
growth company until the earlier of (1) the last day of the fiscal year (a) following January 20, 2026, the fifth anniversary
of the completion of our initial public offering, (b) in which we have total annual gross revenue of at least $1.07 billion,
or (c) in which we are deemed to be a large accelerated filer, which means the market value of our shares of Class A
common stock that are 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 during the prior three-year period.
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 shares held by non-affiliates exceeds $250 million as of the prior June 30, or (2) our annual revenues
exceeded $100 million during such completed fiscal year and the market value of our shares held by non-affiliates exceeds
$700 million as of the prior June 30.