Risks Relating to our Search for, Consummation
of or Inability to Consummate, a Business Combination
Our public stockholders may not be
afforded an opportunity to vote on our proposed initial Business Combination, which means we may complete our initial Business
Combination even though a majority of our public stockholders do not support such a combination.
We may not hold a stockholder
vote to approve our initial Business Combination unless the Business Combination would require stockholder approval under applicable
law or stock exchange listing requirements or if we decide to hold a stockholder vote for business or other reasons. Except as
required by applicable law, the decision as to whether we will seek stockholder approval of a proposed Business Combination or
will allow stockholders to sell their shares to us in a tender offer will be made by us, solely in our discretion, and will be
based on a variety of factors, such as the timing of the transaction and whether the terms of the transaction would otherwise require
us to seek stockholder approval under stock exchange listing requirements. Accordingly, we may complete our initial Business Combination
even if holders of a majority of our public shares do not approve of the Business Combination we complete.
If we seek stockholder approval of
our initial Business Combination, our Sponsor, officers and directors have agreed to vote their shares in favor of such initial
Business Combination, regardless of how our public stockholders vote.
Our Sponsor, officers
and directors have agreed to vote any founder shares and any public shares held by them in favor of our initial Business Combination.
As a result, in addition to their founder shares, we would need only 10,350,001, or approximately 37.5% (assuming all outstanding
shares are voted), of the 27,600,000 public shares sold in the Initial Public Offering to be voted in favor of a transaction in
order to have our initial Business Combination approved. However, because we generally only need a majority of the outstanding
shares to be voted in favor of a proposed Business Combination to have such transaction approved, the number of public shares needed
to be voted in favor of any transaction decreases as the overall number of public shares voted decreases. Accordingly, we would
need only 1,725,001, or approximately 6.25%, of the 27,600,000 public shares sold in the Initial Public Offering to be voted in
favor of a transaction if only the minimum number of shares representing a quorum are voted in order to have our initial Business
Combination approved. In addition, as a result of the founder shares and Private Placement Warrants that our Direct Anchor Investors
may hold (directly or indirectly), they may have different interests with respect to a vote on an initial Business Combination
than other public stockholders. Our initial stockholders own shares representing at least 20.0% of our outstanding shares of common
stock immediately following the completion of the Initial Public Offering. Accordingly, if we seek stockholder approval of our
initial Business Combination, it is more likely that the necessary stockholder approval will be received than would be the case
if our Sponsor, officers and directors agreed to vote their founder shares in accordance with the majority of the votes cast by
our public stockholders.
Your only opportunity to affect the
investment decision regarding a potential Business Combination will be limited to the exercise of your right to redeem your shares
from us for cash, unless we seek stockholder approval of the Business Combination.
Since our board of
directors may complete a Business Combination without seeking stockholder approval, public stockholders may not have the right
or opportunity to vote on the Business Combination. Accordingly, if we do not seek stockholder approval, your only opportunity
to affect the investment decision regarding a potential Business Combination may be limited to exercising your redemption rights
in connection with the consummation of an initial Business Combination.
The ability of our public stockholders
to redeem their shares for cash may make our financial condition unattractive to potential target businesses, which may make it
difficult for us to enter into a Business Combination with a target.
We may seek to enter
into a Business Combination transaction agreement with a prospective target that requires as a closing condition that we have a
minimum net worth or a certain amount of cash. If too many public stockholders exercise their redemption rights, we would not be
able to meet such closing condition and, as a result, would not be able to proceed with the Business Combination. Furthermore,
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 do not then become 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 immediately
prior to or upon completion of our initial Business Combination or such greater amount necessary to satisfy a closing condition,
each as described above, we would not proceed with such redemption and the related Business Combination and may instead search
for an alternate Business Combination. Prospective targets will be aware of these risks and, thus, may be reluctant to enter into
a Business Combination transaction with us.
The ability of our public stockholders
to exercise redemption rights with respect to a large number of our shares may not allow us to complete the most desirable Business
Combination, if at all, or optimize our capital structure.
At the time we enter
into an agreement for our initial Business Combination, we will not know how many stockholders may exercise their redemption rights,
and therefore will need to structure the transaction based on our expectations as to the number of shares that will be submitted
for redemption. If our initial Business Combination agreement requires us to use a portion of the cash in the Trust Account to
pay the purchase price, or requires us to have a minimum amount of cash at closing, we will need to reserve a portion of the cash
in the Trust Account to meet such requirements, or arrange for third-party financing. In addition, if a larger number of shares
is submitted for redemption than we initially expected, we may need to restructure the transaction to reserve a greater portion
of the cash in the Trust Account or arrange for third-party financing. Raising additional third-party financing may involve dilutive
equity issuances or the incurrence of indebtedness at higher than desirable levels. The above considerations may limit our ability
to complete the most desirable Business Combination available to us or optimize our capital structure. The amount of the deferred
underwriting commissions payable to the underwriters will not be adjusted for any shares that are redeemed in connection with a
Business Combination. The per-share amount we will distribute to stockholders who properly exercise their redemption rights will
not be reduced by the deferred underwriting commission and after such redemptions, the per-share value of shares held by non-redeeming
stockholders will reflect our obligation to pay the deferred underwriting commissions.
The ability of our public stockholders
to exercise redemption rights with respect to a large number of our shares could increase the probability that our initial Business
Combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your stock.
If our 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 stock in the open market;
however, at such time our stock may trade at a discount to the pro rata amount per share in the Trust Account. In either situation,
you may suffer a material loss on your investment or lose the benefit of funds expected in connection with our redemption until
we liquidate or you are able to sell your stock in the open market.
The requirement that we complete
our initial Business Combination within the prescribed time frame may give potential target businesses leverage over us in negotiating
a Business Combination and may limit the time we have in which to conduct due diligence on potential target businesses, in particular
as we approach our dissolution deadline, which could undermine our ability to complete our initial Business Combination on terms
that would produce value for our stockholders.
Any potential target
business with which we enter into negotiations concerning a Business Combination will be aware that we must complete our initial
Business Combination within 18 months from the closing of the Initial Public Offering. Consequently, such target business
may obtain leverage over us in negotiating a Business Combination, knowing that if we do not complete our initial Business Combination
with that particular target business, we may be unable to complete our initial Business Combination with any target business. This
risk will increase as we get closer to the end of the timeframe described above. In addition, we may have limited time to conduct
due diligence. As a result, we may be forced to enter into an agreement for an initial Business Combination on terms that we would
have rejected had we had more time to complete a transaction.
We may not be able to complete our
initial Business Combination within the prescribed time frame, in which case we would cease all operations except for the purpose
of winding up and we would redeem our public shares and liquidate, in which case our public stockholders may only receive $10.10
per share, or less than such amount in certain circumstances, and our warrants will expire worthless.
Our certificate of
incorporation provides that we must complete our initial Business Combination within 18 months from the closing of the Initial
Public Offering. We may not be able to find a suitable target business and complete our initial Business Combination within such
time period. Our ability to complete our initial Business Combination may be negatively impacted by general market conditions,
volatility in the capital and debt markets and the other risks described herein. If we have not completed our initial Business
Combination within such time period or during any Extension Period, we will: (i) cease all operations except for the purpose
of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares,
at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned
on the funds held in the Trust Account and not previously released to us to pay our taxes (less up to $100,000 of interest to pay
dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public
stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any); 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 in each case to our obligations under Delaware law to provide for claims of creditors
and the requirements of other applicable law. In such case, our public stockholders may only receive $10.10 per share, and our
warrants will expire worthless. In certain circumstances, our public stockholders may receive less than $10.10 per share on the
redemption of their shares. See “—If third parties bring claims against us, the proceeds held in the Trust Account
could be reduced and the per-share redemption amount received by stockholders may be less than $10.10 per share” and other
risk factors in this section.
If we are unable to
complete an initial Business Combination within the 18-month period, we may seek an amendment to our certificate of incorporation
to extend the period of time we have to complete an initial Business Combination beyond 18 months. Our certificate of incorporation
will require that such an amendment be approved by holders of at least 65% of our outstanding common stock.
Our search for a Business Combination,
and any target business with which we ultimately consummate a Business Combination, may be materially adversely affected by the
recent coronavirus (COVID-19) outbreak and other events, and the status of debt and equity markets.
In December 2019,
a novel strain of coronavirus was reported to have surfaced, which has and is continuing to spread throughout the world, including
the United States. On January 30, 2020, the World Health Organization declared the outbreak of the coronavirus disease (COVID-19)
a “Public Health Emergency of International Concern.” On January 31, 2020, the U.S. Health and Human Services
Secretary declared a public health emergency for the United States to aid the U.S. healthcare community in responding to COVID-19,
and on March 11, 2020 the World Health Organization characterized the outbreak as a “pandemic.” The COVID-19 outbreak
has adversely affected, and other events (such as terrorist attacks, natural disasters or a significant outbreak of other infectious
diseases) could adversely affect, 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 concerns relating to COVID-19 continue to restrict travel, limit the ability to have meetings with potential
investors or the target company’s personnel, vendors and services providers are unavailable to negotiate and consummate a
transaction in a timely manner. The extent to which COVID-19 impacts our search for a Business Combination will depend on future
developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity
of COVID-19 and the actions to contain COVID-19 or treat its impact, among others. If the disruptions posed by COVID-19 or other
events (such as terrorist attacks, natural disasters or a significant outbreak of other infectious diseases) continue for an extensive
period of time, our ability to consummate a Business Combination, or the operations of a target business with which we ultimately
consummate a Business Combination, may be materially adversely affected.
In addition, our ability
to consummate a transaction may be dependent on the ability to raise equity and debt financing which may be impacted by COVID-19
and other events (such as terrorist attacks, natural disasters or a significant outbreak of other infectious diseases), including
as a result of increased market volatility, decreased market liquidity in third-party financing being unavailable on terms acceptable
to us or at all.
If we seek stockholder approval of
our initial Business Combination, our initial stockholders, directors, officers, advisors or their affiliates may enter into certain
transactions, including purchasing shares or warrants from the public, which may influence the outcome of a proposed Business Combination
and reduce the public “float” of our securities.
If we seek stockholder
approval of our initial Business Combination and we do not conduct redemptions in connection with our initial Business Combination
pursuant to the tender offer rules, our initial stockholders, directors, officers, advisors or their affiliates may purchase public
shares or public warrants or a combination thereof in privately negotiated transactions or in the open market either prior to or
following the completion of our initial Business Combination, although they are under no obligation to do so.
Such a purchase may
include a contractual acknowledgement that such stockholder, although still the record holder of our shares is no longer the beneficial
owner thereof and therefore agrees not to exercise its redemption rights. In the event that our initial stockholders, directors,
officers, advisors or their affiliates purchase shares in privately negotiated transactions from public stockholders who have already
elected to exercise their redemption rights, such selling stockholders would be required to revoke their prior elections to redeem
their shares. Additionally, at any time at or prior to our initial Business Combination, subject to applicable securities laws
(including with respect to material nonpublic information), our initial stockholders, directors, officers, advisors or their affiliates
may enter into transactions with investors and others to provide them with incentives to acquire public shares, vote their public
shares in favor of our initial Business Combination or not redeem their public shares. However, 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. The
purpose of any such transaction could be to (1) vote such shares in favor of the initial Business Combination and thereby
increase the likelihood of obtaining stockholder approval of the initial Business Combination, (2) reduce the number of public
warrants outstanding or to vote such warrants on any matters submitted to the warrant holders for approval in connection with our
initial Business Combination or (3) 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 Class A common stock or warrants and the number of beneficial holders
of our securities may be reduced, possibly making it difficult to obtain or maintain the quotation, listing or trading of our securities
on a national securities exchange.
If a stockholder fails to receive
notice of our offer to redeem our public shares in connection with our 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 stockholder fails to receive our tender offer or proxy materials, as applicable,
such stockholder may not become aware of the opportunity to redeem its shares. In addition, the 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. For example,
if we hold a stockholder meeting to approve a transaction, 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 up to two business days prior to the vote on the proposal to approve the Business Combination or to deliver
their shares to the transfer agent electronically. In the event that a stockholder fails to comply with these or any other procedures,
its shares may not be redeemed.
You are not entitled to protections
normally afforded to investors of many other blank check companies.
Because we had net
tangible assets in excess of $5,000,000 upon the successful completion of the Initial Public Offering and the Private Placement
and filed a Current Report on Form 8-K, including an audited balance sheet demonstrating this fact, we are exempt from rules promulgated
by the SEC to protect investors in blank check companies, such as Rule 419. Accordingly, investors are not afforded the benefits
or protections of those rules. Among other things, this means we will have a longer period of time to complete our initial Business
Combination than do companies subject to Rule 419. Moreover, if the Initial Public Offering were subject to Rule 419,
that rule would prohibit the release of any interest earned on funds held in the Trust Account to us unless and until the funds
in the Trust Account were released to us in connection with our completion of an initial Business Combination.
If we seek stockholder approval of
our initial Business Combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a “group”
of stockholders are deemed to hold in excess of 15% of our Class A common stock, you will lose the ability to redeem all such
shares in excess of 15% of our Class A common stock.
If we seek stockholder
approval of our initial Business Combination and we do not conduct redemptions in connection with our initial Business Combination
pursuant to the tender offer rules, our certificate of incorporation will provide 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 redeeming its shares with respect to more than an aggregate
of 15% of the shares sold in the Initial Public Offering, without our prior consent. However, our certificate of incorporation
does not restrict our stockholders’ 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 stock in open market transactions, potentially at a loss.
Because of our limited resources
and the significant competition for Business Combination opportunities, it may be more difficult for us to complete our initial
Business Combination. If we are unable to complete our initial Business Combination, our public stockholders may receive only approximately
$10.10 per share on our redemption of our public shares, or less than such amount in certain circumstances, 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 the Initial Public Offering
and the sale of the Private Placement Warrants, our ability to compete with respect to the acquisition of certain target businesses
that are sizable will be limited by our available financial resources. This inherent competitive limitation gives others an advantage
in pursuing the acquisition of certain target businesses.
Furthermore, because
we are obligated to pay cash for the shares of Class A common stock which our public stockholders redeem in connection with
our initial Business Combination, target companies will be aware that this may reduce the resources available to us for our initial
Business Combination. Additionally, our outstanding warrants, and the future dilution they potentially represent, may not be viewed
favorably by target businesses. This may place us at a competitive disadvantage in successfully negotiating and completing an initial
Business Combination. If we are unable to complete our initial Business Combination, our public stockholders may receive only approximately
$10.10 per share on the liquidation of our Trust Account and our warrants will expire worthless. In certain circumstances, our
public stockholders may receive less than $10.10 per share upon our liquidation. See “—If third parties bring claims
against us, the proceeds held in the Trust Account could be reduced and the per-share redemption amount received by stockholders
may be less than $10.10 per share” and other risk factors in this section.
As the number of special purpose
acquisition companies increases, there may be more competition to find an attractive target for an initial Business Combination.
This could increase the costs associated with completing our initial Business Combination and may result in our inability to find
a suitable target for our initial Business Combination.
In recent years, the
number of special purpose acquisition companies that have been formed has increased substantially. Many companies have entered
into Business Combinations with special purpose acquisition companies, and there are still many special purpose acquisition companies
seeking targets for their initial Business Combination, as well as many additional special purpose acquisition companies currently
in registration. As a result, at times, fewer attractive targets may be available, and it may require more time, effort and resources
to identify a suitable target for an initial Business Combination.
In addition, because
there are more special purpose acquisition companies seeking to enter into an initial Business Combination with available targets,
the competition for available targets with attractive fundamentals or business models may increase, which could cause target companies
to demand improved financial terms. Attractive deals could also become scarcer for other reasons, such as economic or industry
sector downturns, geopolitical tensions or increases in the cost of additional capital needed to close Business Combinations or
operate targets post-Business Combination. This could increase the cost of, delay or otherwise complicate or frustrate our ability
to find a suitable target for and/or complete our initial Business Combination.
Changes in the market for directors
and officers liability insurance could make it more difficult and more expensive for us to negotiate and complete an initial Business
Combination.
In recent months, the
market for directors and officers liability insurance for special purpose acquisition companies has changed in ways adverse to
us and our management team. Fewer insurance companies are offering quotes for directors and officers liability coverage, the premiums
charged for such policies have generally increased and the terms of such policies have generally become less favorable. These trends
may continue into the future.
The increased cost
and decreased availability of directors and officers liability insurance could make it more difficult and more expensive for us
to negotiate and complete an initial Business Combination. In order to obtain directors and officers liability insurance or modify
its coverage as a result of becoming a public company, the post-Business Combination entity might need to incur greater expense
and/or accept less favorable terms. Furthermore, any failure to obtain adequate directors and officers liability insurance could
have an adverse impact on the post-Business Combination’s ability to attract and retain qualified officers and directors.
In addition, after
completion of any initial Business Combination, our directors and officers could be subject to potential liability from claims
arising from conduct alleged to have occurred prior to such initial Business Combination. As a result, in order to protect our
directors and officers, the post-Business Combination entity may need to purchase additional insurance with respect to any such
claims (“run-off insurance”). The need for run-off insurance would be an added expense for the post-Business Combination
entity and could interfere with or frustrate our ability to consummate an initial Business Combination on terms favorable to our
investors.
If third parties bring claims against
us, the proceeds held in the Trust Account could be reduced and the per-share redemption amount received by stockholders may be
less than $10.10 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, prospective target businesses or other entities with which we do business execute agreements with us waiving
any right, title, interest or claim of any kind in or to any monies held in the Trust Account for the benefit of our public stockholders,
such parties may not execute such agreements, or even if they execute such agreements they may not be prevented from bringing claims
against the Trust Account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar
claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain 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. Making such a request of potential
target businesses may make our acquisition proposal less attractive to them and, to the extent prospective target businesses refuse
to execute such a waiver, it may limit the field of potential target businesses that we might pursue. Our independent registered
public accounting firm will not execute agreements with us waiving such claims to the monies held in the Trust Account, nor will
the underwriters of the Initial Public Offering.
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 have not completed 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 stockholders could be less than the $10.10 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 third party for services rendered or products sold to us, or by 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) $10.10 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 amount of interest which may be withdrawn to
pay taxes. This liability will not apply with respect to any claims by a third party who executed a waiver of any and all rights
to seek access to the Trust Account and except as to any claims under our indemnity of the underwriters of the Initial Public Offering
against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is
deemed to be unenforceable against a third party, then our Sponsor will not be responsible to the extent of any liability for such
third-party claims. We have not independently verified whether our Sponsor, which is a newly formed entity, has sufficient funds
to satisfy its indemnity obligations and believe that our Sponsor’s only assets are securities of our company. We have not
asked our Sponsor to reserve for such indemnification obligations. Therefore, we believe it is unlikely our Sponsor would be able
to satisfy those obligations. As a result, if any such claims were successfully made against the Trust Account, the funds available
for our initial Business Combination and redemptions could be reduced to less than $10.10 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 public share in connection
with any redemption of your public shares. None of our officers will indemnify us for claims by third parties including, without
limitation, claims by vendors and prospective target businesses.
Our independent directors may decide
not to enforce the indemnification obligations of our Sponsor, resulting in a reduction in the amount of funds in the Trust Account
available for distribution to our public stockholders.
In the event that the
proceeds in the Trust Account are reduced below the lesser of (i) $10.10 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 amount of interest which may be withdrawn to pay taxes, and our Sponsor asserts that
it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, our independent
directors would determine whether to take legal action against our Sponsor to enforce its indemnification obligations.
While we currently
expect that our independent directors would take legal action on our behalf against our Sponsor to enforce its indemnification
obligations to us, it is possible that our independent directors in exercising their business judgment may choose not to do so
if, for example, the cost of such legal action is deemed by the independent directors to be too high relative to the amount recoverable
or if the independent directors determine that a favorable outcome is not likely. If our independent directors choose not to enforce
these indemnification obligations, the amount of funds in the Trust Account available for distribution to our public stockholders
may be reduced below $10.10 per share.
The securities in which we invest
the proceeds held in the Trust Account could bear a negative rate of interest, which could reduce the interest income available
for payment of taxes or reduce the value of the assets held in trust such that the per share redemption amount received by public
stockholders may be less than $10.10 per share.
The proceeds held in
the Trust Account may only be invested in direct U.S. government securities with a maturity of 185 days or less, or in certain
money market funds which invest only in direct U.S. Treasury obligations. While short-term U.S. government treasury obligations
currently yield a positive rate of interest, they have briefly yielded negative interest rates in recent years. Central banks
in Europe and Japan pursued interest rates below zero in recent years, and the Open Market Committee of the Federal Reserve
has not ruled out the possibility that it may in the future adopt similar policies in the United States. In the event of very low
or negative yields, the amount of interest income (which we may withdraw to pay income taxes, if any) would be reduced. In the
event that we are unable to complete our initial Business Combination, our public stockholders are entitled to receive their share
of the proceeds held in the Trust Account, plus any interest income. If the balance of the Trust Account is reduced below $242,400,000
as a result of negative interest rates, the amount of funds in the Trust Account available for distribution to our public stockholders
may be reduced below $10.10 per share.
If, after we distribute the proceeds
in the Trust Account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against
us that is not dismissed, a bankruptcy court may seek to recover such proceeds, and we and our board may be exposed to claims of
punitive damages.
If, after we distribute
the proceeds in the Trust Account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition
is filed against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor
and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a
bankruptcy court could seek to recover some or all amounts received by our stockholders. In addition, our board of directors may
be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith, by paying public stockholders
from the Trust Account prior to addressing the claims of creditors, thereby exposing itself and us to claims of punitive damages.
If, before distributing the proceeds
in the Trust Account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against
us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our stockholders and
the per-share amount that would otherwise be received by our stockholders in connection with our liquidation may be reduced.
If, before distributing
the proceeds in the Trust Account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition
is filed against us that is not dismissed, the proceeds held in the Trust Account could be subject to applicable bankruptcy law,
and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders.
To the extent any bankruptcy claims deplete the Trust Account, the per-share amount that would otherwise be received by our stockholders
in connection with our liquidation may be reduced.
If we are deemed to be an investment
company under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities
may be restricted, which may make it difficult for us to complete our initial Business Combination.
If we are deemed to
be an investment company under the Investment Company Act, our activities may be restricted, including:
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restrictions on the nature of our investments; and
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restrictions on the issuance of securities, each of which may make it difficult for us to complete
our initial Business Combination.
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In addition, we may have imposed upon us
burdensome requirements, including:
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registration as an investment company with the SEC;
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adoption of a specific form of corporate structure; and
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reporting, record keeping, voting, proxy and disclosure requirements and compliance with other
rules and regulations that we are currently not subject to.
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In order not to be
regulated as an investment company under the Investment Company Act, unless we can qualify for an exclusion, we must ensure that
we are engaged primarily in a business other than investing, reinvesting or trading of securities and that our activities do not
include investing, reinvesting, owning, holding or trading “investment securities” constituting more than 40% of our
total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. Our business will be to identify
and complete a Business Combination and thereafter to operate the post-transaction business or assets for the long term. We do
not plan to buy businesses or assets with a view to resale or profit from their resale. We do not plan to buy unrelated businesses
or assets or to be a passive investor. We do not believe that our anticipated principal activities will subject us to the Investment
Company Act. To this end, the proceeds held in the Trust Account may only be invested in United States “government securities”
within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 185 days or less or in money
market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in
direct U.S. government treasury obligations. Pursuant to the trust agreement, the trustee is not permitted to invest in other securities
or assets. By restricting the investment of the proceeds to these instruments, and by having a business plan targeted at acquiring
and growing businesses for the long term (rather than on buying and selling businesses in the manner of a merchant bank or private
equity fund), we intend to avoid being deemed an “investment company” within the meaning of the Investment Company
Act. The Trust Account is intended as a holding place for funds pending the earliest to occur of: (i) the completion of an
initial Business Combination; (ii) the redemption of any public shares properly submitted in connection with a stockholder
vote to amend our certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemption
in connection with our initial Business Combination or to redeem 100% of our public shares if we do not complete our initial Business
Combination within 18 months from the closing of the Initial Public Offering or (B) with respect to any other provisions
relating to stockholders’ rights or pre-initial Business Combination activity; and (iii) absent a Business Combination,
our return of the funds held in the Trust Account to our public stockholders as part of our redemption of the public shares. Stockholders
who do not exercise their rights to the funds in connection with an amendment to our certificate of incorporation would still have
rights to the funds in connection with a subsequent Business Combination. If we do not invest the proceeds as discussed above,
we may be deemed to be subject to the Investment Company Act. If we were deemed to be subject to the Investment Company Act, compliance
with these additional regulatory burdens would require additional expenses for which we have not allotted funds and may hinder
our ability to complete a Business Combination. If we are unable to complete our initial Business Combination, our public stockholders
may receive only approximately $10.10 per share on the liquidation of our Trust Account and our warrants will expire worthless.
In certain circumstances, our public stockholders may receive less than $10.10 per share on the redemption of their shares. See
“—If third parties bring claims against us, the proceeds held in the Trust Account could be reduced and the per-share
redemption amount received by stockholders may be less than $10.10 per share” and other risk factors in this section.
Changes in laws or regulations, or
a failure to comply with any laws and regulations, may adversely affect our business, investments and results of operations.
We are subject to laws
and regulations enacted by national, regional and local governments. In particular, we are required to comply with certain SEC
and other legal requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming
and costly. Those laws and regulations and their interpretation and application may also change from time to time and those changes
could have a material adverse effect on our business, investments and results of operations. In addition, a failure to comply with
applicable laws or regulations, as interpreted and applied, could have a material adverse effect on our business, including our
ability to negotiate and complete our initial Business Combination, and results of operations.
Our stockholders may be held liable
for claims by third parties against us to the extent of distributions received by them upon redemption of their shares.
Under the DGCL, stockholders
may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution.
The pro rata portion of our Trust Account distributed to our public stockholders upon the redemption of our public shares
in the event we do not complete our initial Business Combination within the required time period may be considered a liquidating
distribution under Delaware law. If a corporation complies with certain procedures set forth in Section 280 of the DGCL intended
to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during which any third-party
claims can be brought against the corporation, a 90-day period during which the corporation may reject any claims brought, and
an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability of stockholders
with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim
or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary
of the dissolution. However, it is our intention to redeem our public shares as soon as reasonably possible following the 18th month
from the closing of the Initial Public Offering (or the end of any Extension Period) in the event we do not complete our initial
Business Combination and, therefore, we do not intend to comply with the foregoing procedures.
Because we will not
be complying with Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at
such time that will provide for our payment of all existing and pending claims or claims that may be potentially brought against
us within the 10 years following our dissolution. However, because we are a blank check company, rather than an operating
company, and our operations will be limited to searching for prospective target businesses to acquire, the only likely claims to
arise would be from our vendors (such as lawyers, investment bankers, etc.) or prospective target businesses. If our plan of distribution
complies with Section 281(b) of the DGCL, any liability of stockholders with respect to a liquidating distribution is limited
to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any
liability of the stockholder would likely be barred after the third anniversary of the dissolution. We cannot assure you that we
will properly assess all claims that may be potentially brought against us. As such, our stockholders could potentially be liable
for any claims to the extent of distributions received by them (but no more) and any liability of our stockholders may extend beyond
the third anniversary of such date. Furthermore, if the pro rata portion of our Trust Account distributed to our public stockholders
upon the redemption of our public shares in the event we do not complete our initial Business Combination within the required time
period is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful,
then pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could then be six years
after the unlawful redemption distribution, instead of three years, as in the case of a liquidating distribution.
We may not hold an annual meeting
of stockholders until after the consummation of our initial Business Combination, which could delay the opportunity for our stockholders
to elect directors.
In accordance with
Nasdaq corporate governance requirements, we are not required to hold an annual meeting until no later than one year after our
first fiscal year end following our listing on Nasdaq. Under Section 211(b) of the DGCL, we are, however, required to hold
an annual meeting of stockholders for the purposes of electing directors in accordance with our bylaws unless such election is
made by written consent in lieu of such a meeting. We may not hold an annual meeting of stockholders to elect new directors prior
to the consummation of our initial Business Combination, and thus we may not be in compliance with Section 211(b) of the DGCL,
which requires an annual meeting. Therefore, if our stockholders want us to hold an annual meeting prior to the consummation of
our initial Business Combination, they may attempt to force us to hold one by submitting an application to the Delaware Court of
Chancery in accordance with Section 211(c) of the DGCL. Until we hold an annual meeting of stockholders, public stockholders
may not be afforded the opportunity to discuss company affairs with management. In addition, prior to our Business Combination
(a) as holders of our Class A common stock, our public stockholders will not have the right to vote on the appointment
of our directors and (b) holders of a majority of the outstanding shares of our Class B common stock may remove a member
of our board of directors for any reason.
The grant of registration rights
to our initial stockholders may make it more difficult to complete our initial Business Combination, and the future exercise of
such rights may adversely affect the market price of our Class A common stock.
At or after the time
of our initial Business Combination, our initial stockholders and their permitted transferees can demand that we register the resale
of their founder shares, after those shares convert to shares of our Class A common stock. In addition, holders of our Private
Placement Warrants and their permitted transferees can demand that we register the resale of the Private Placement Warrants and
the shares of Class A common stock issuable upon exercise of the Private Placement Warrants, and holders of warrants that
may be issued upon conversion of working capital loans may demand that we register the resale of such warrants or the Class A
common stock issuable upon exercise of such warrants. We will bear the cost of registering these securities. The registration and
availability of such a significant number of securities for trading in the public market may have an adverse effect on the market
price of our Class A common stock. In addition, the existence of the registration rights may make our initial Business Combination
more costly or difficult to conclude. This is because the shareholders of the target business may increase the equity stake they
seek in the combined entity or ask for more cash consideration to offset the negative impact on the market price of our Class A
common stock that is expected when the common stock owned by our initial stockholders, holders of our Private Placement Warrants
or holders of our working capital loans or their respective permitted transferees are registered for resale.
Because we are not limited to a particular
industry, sector or geographic area nor have we selected any specific target businesses with which to pursue our initial Business
Combination, you will be unable to ascertain the merits or risks of any particular target business’ operations.
We may seek to complete
our initial Business Combination with a target business in any industry, sector or geographic area. However, we will not, under
our certificate of incorporation, be permitted to complete our initial Business Combination solely with another blank check company
or similar company with nominal operations. Because we have not yet selected 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 revenues or earnings, we may be
affected by the risks inherent in the business and operations of a financially unstable or a development stage entity. Although
our officers and directors will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that
we will properly ascertain or assess all the significant risk factors or that we will have adequate time to complete due diligence.
Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that
those risks will adversely impact a target business. We also cannot assure you that an investment in our securities will ultimately
prove to be more favorable to investors than a direct investment, if such opportunity were available, in a target business. Accordingly,
any stockholders or warrant holders who choose to remain a stockholder or warrant holder following our initial Business Combination
could suffer a reduction in the value of their securities. Such security holders are unlikely to have a remedy for such reduction
in value.
We may seek acquisition opportunities
in industries or sectors which may or may not be outside of our management’s area of expertise.
We will consider a
Business Combination outside of our management’s area of expertise if a Business Combination candidate is presented to us
and we determine that such candidate offers an attractive acquisition opportunity for our company. Although our management will
endeavor to evaluate the risks inherent in any particular Business Combination candidate, we cannot assure you that we will adequately
ascertain or assess all the significant risk factors. We also cannot assure you that an investment in our units will not ultimately
prove to be less favorable to investors in the Initial Public Offering than a direct investment, if an opportunity were available,
in a Business Combination candidate. In the event we elect to pursue an acquisition outside of the areas of our management’s
expertise, our management’s expertise may not be directly applicable to its evaluation or operation and our management’s
expertise would not be relevant to an understanding of the business that we elect to acquire. As a result, our management may not
be able to adequately ascertain or assess all the significant risk factors. Accordingly, any stockholders or warrant holders who
choose to remain a stockholder or warrant holder following our initial Business Combination could suffer a reduction in the value
of their securities. Such security holders are unlikely to have a remedy for such reduction in value.
Although we have identified general
criteria and guidelines that we believe are important in evaluating prospective target businesses, we may enter into our initial
Business Combination with a target that does not meet such criteria and guidelines, and as a result, the target business with which
we enter into our initial Business Combination may not have attributes entirely consistent with our general criteria and guidelines.
Although we have identified
general criteria and guidelines for evaluating prospective target businesses, it is possible that a target business with which
we enter into our initial Business Combination will not have all of these positive attributes. If we complete our initial Business
Combination with a target that does not meet some or all of these criteria and guidelines, such combination may not be as successful
as a combination with a business that does meet all of our general criteria and guidelines. In addition, if we announce a prospective
Business Combination with a target that does not meet our general criteria and guidelines, a greater number of stockholders may
exercise their redemption rights, which may make it difficult for us to meet any closing condition with a target business that
requires us to have a minimum net worth or a certain amount of cash. In addition, if stockholder approval of the transaction is
required by applicable law or stock exchange listing requirements, or we decide to obtain stockholder approval for business or
other reasons, it may be more difficult for us to attain stockholder approval of our initial Business Combination if the target
business does not meet our general criteria and guidelines. If we are unable to complete our initial Business Combination, our
public stockholders may receive only approximately $10.10 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 stockholders may receive less than $10.10
per share on the redemption of their shares. See “—If third parties bring claims against us, the proceeds held in the
Trust Account could be reduced and the per-share redemption amount received by stockholders may be less than $10.10 per share”
and other risk factors in this section.
We may seek acquisition opportunities
with an early stage company, a private company, a financially unstable business or an entity lacking an established record of revenue
or earnings, which could subject us to volatile revenues or earnings or difficulty in retaining key personnel.
To the extent we complete
our initial Business Combination with an early stage company, a financially unstable business or an entity lacking an established
record of revenues or earnings, we may be affected by numerous risks inherent in the operations of the business with which we combine.
These risks include investing in a business without a proven business model and with limited historical financial data, 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 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 may also seek to complete our initial Business Combination with a privately held company. Very little public information generally
exists about private companies, and we could be required to make our decision on whether to pursue a potential initial Business
Combination on the basis of limited information, which may result in a Business Combination with a company that is not as profitable
as we suspected, if at all.
We may not obtain an opinion from
an independent valuation provider, and consequently, you may have no assurance from an independent source that our initial Business
Combination is fair to our company from a financial point of view.
Unless we complete
our Business Combination with an affiliated entity, we are not required to obtain an opinion from an independent investment banking
firm or from another independent entity that commonly renders valuation opinions that our initial Business Combination is fair
to our company from a financial point of view. If no opinion is obtained, our stockholders will be relying on the judgment of our
board of directors, who will determine fair market value based on standards generally accepted by the financial community. Such
standards used will be disclosed in our proxy solicitation or tender offer materials, as applicable, related to our initial Business
Combination.
We may issue additional common stock
or preferred stock to complete our initial Business Combination or under an employee incentive plan after completion of our initial
Business Combination. We may also issue shares of Class A common stock upon the conversion of the Class B common stock
at a ratio greater than one-to-one at the time of our initial Business Combination as a result of the anti-dilution provisions
contained in our certificate of incorporation. Any such issuances would dilute the interest of our stockholders and likely present
other risks.
Our certificate of
incorporation authorizes the issuance of up to 200,000,000 shares of Class A common stock, par value $0.0001 per share, 20,000,000
shares of Class B common stock, par value $0.0001 per share, and 2,000,000 shares of preferred stock, par value $0.0001 per
share. As of December 31, 2020, there were 172,400,000 and 13,100,000 authorized but unissued shares of Class A common stock
and Class B common stock, respectively, available for issuance, which amount does not take into account the shares of Class A
common stock reserved for issuance upon exercise of any outstanding warrants or the shares of Class A common stock issuable
upon conversion of Class B common stock. As of December 31, 2020, there were no shares of preferred stock issued and outstanding.
Shares of Class B common stock are convertible into shares of our Class A common stock initially at a one-for-one ratio
but subject to adjustment as set forth herein, including in certain circumstances in which we issue Class A common stock or
equity-linked securities related to our initial Business Combination.
We may issue a substantial
number of additional shares of common or preferred stock to complete our initial Business Combination (including pursuant to a
specified future issuance) or under an employee incentive plan after completion of our initial Business Combination. We may also
issue shares of Class A common stock to redeem the warrants or upon conversion of the Class B common stock at a ratio
greater than one-to-one at the time of our initial Business Combination as a result of the anti-dilution provisions contained in
our certificate of incorporation. Our Class B common stock shall only be convertible at the time of our initial Business Combination.
However, our certificate of incorporation will provide, among other things, that prior to our initial Business Combination, we
may not issue additional securities that would entitle the holders thereof, to (1) receive funds from the Trust Account or
(2) vote as a class with our public shares (a) on any initial Business Combination or (b) to approve an amendment
to our certificate of incorporation. The restriction on issuing additional shares of capital stock described in the prior sentence
will expire upon consummation of our initial Business Combination. The issuance of additional shares of common or preferred stock:
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may significantly dilute the equity interest of investors in the Initial Public Offering, which dilution
would increase if the anti-dilution provisions in the Class B common stock resulted in the issuance of Class A shares
on a greater than one-to-one basis upon conversion of the Class B common stock;
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may subordinate the rights of holders of our common stock if preferred stock is issued with rights
senior to those afforded our common stock;
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could cause a change of control if a substantial number of shares of our common stock is issued, which
may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation
or removal of our present officers and directors;
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may have the effect of delaying or preventing a change of control of us by diluting the stock ownership
or voting rights of a person seeking to obtain control of us;
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may adversely affect prevailing market prices for our Units, Class A common stock and/or
warrants; and
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may not result in adjustment to the exercise price of our warrants.
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Our initial Business Combination
or reincorporation may result in taxes imposed on stockholders or warrant holders.
We may, subject to
requisite stockholder approval by special resolution under the DGCL, effect a Business Combination with a target company in another
jurisdiction, reincorporate in the jurisdiction in which the target company or business is located, or reincorporate in another
jurisdiction. Such transactions may result in tax liability for a stockholder or warrant holder in the jurisdiction in which the
stockholder or warrant holder is a tax resident (or in which its members are resident if it is a tax transparent entity), in which
the target company is located, or in which we reincorporate. In the event of a reincorporation pursuant to our initial Business
Combination, such tax liability may attach prior to any consummation of redemptions. We do not intend to make any cash distributions
to pay such taxes.
Resources could be wasted in researching
acquisitions that are not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge
with another business. If we are unable to complete our initial Business Combination, our public stockholders may receive only
approximately $10.10 per share, or less than such amount in certain circumstances, on the liquidation of our Trust Account and
our warrants will expire worthless.
We anticipate that
the investigation of each specific target business and the negotiation, drafting and execution of relevant agreements, disclosure
documents and other instruments will require substantial management time and attention and substantial costs for accountants, attorneys
and others. If we decide not to complete a specific initial Business Combination, the costs incurred up to that point for the proposed
transaction likely would not be recoverable. Furthermore, if we reach an agreement relating to a specific target business, we may
fail to complete our initial Business Combination for any number of reasons including those beyond our control. Any such event
will result in a loss to us of the related costs incurred which could materially adversely affect subsequent attempts to locate
and acquire or merge with another business. If we are unable to complete our initial Business Combination, our public stockholders
may receive only approximately $10.10 per share on the liquidation of our Trust Account and our warrants will expire worthless.
In certain circumstances, our public stockholders may receive less than $10.10 per share on the redemption of their shares. See
“—If third parties bring claims against us, the proceeds held in the Trust Account could be reduced and the per-share
redemption amount received by stockholders may be less than $10.10 per share” and other risk factors in this section.
Since our Sponsor, officers and directors
will lose their entire investment in us if our Business Combination is not completed, a conflict of interest may arise in determining
whether a particular target business is appropriate for our initial Business Combination.
Our initial stockholders
hold 6,900,000 founder shares as of the date of this Annual Report, including 6,150,000 held by our Sponsor. The founder shares
will be worthless if we do not complete an initial Business Combination. In addition, our Sponsor and Direct Anchor Investors purchased
an aggregate of 10,280,000 Private Placement Warrants, each exercisable for one share of our Class A common stock at $11.50
per share, subject to adjustment, for a purchase price in the aggregate of approximately $10,280,000, or $1.00 per warrant, that
will also be worthless if we do not complete our initial Business Combination within the allocated time period.
In addition, we may
obtain loans from our initial stockholders, officers, directors, or their affiliates. 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. This risk
may become more acute as the deadline for completing our initial Business Combination nears.
We may issue notes or other debt
securities, or otherwise incur substantial debt, to complete a Business Combination, which may adversely affect our leverage and
financial condition and thus negatively impact the value of our stockholders’ investment in us.
We may choose to incur
substantial debt to complete our initial Business Combination. We have agreed that we will not incur any indebtedness unless we
have obtained from the lender a waiver of any right, title, interest or claim of any kind in or to the monies held in the Trust
Account. As such, no issuance of debt will affect the per-share amount available for redemption from the Trust Account. Nevertheless,
the incurrence of debt could have a variety of negative effects, including:
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default and foreclosure on our assets if our operating revenues after an initial Business Combination
are insufficient to repay our debt obligations;
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acceleration of our obligations to repay the indebtedness even if we make all principal and interest
payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a
waiver or renegotiation of that covenant;
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our immediate payment of all principal and accrued interest, if any, if the debt is payable on
demand;
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our inability to obtain necessary additional financing if the debt contains covenants restricting
our ability to obtain such financing while the debt is outstanding;
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our inability to pay dividends on our common stock;
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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 common stock if declared, our ability to pay expenses, make capital expenditures
and acquisitions, and fund 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;
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limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions,
debt service requirements, and execution of our strategy; and
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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 the Initial Public Offering and the sale of the Private Placement Warrants, which will
cause us to be solely dependent on a single business which may have a limited number of products or services. This lack of diversification
may negatively impact our operations and profitability.
We may complete 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 complete
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 developments.
Further, we would not be able to diversify our operations or benefit from the possible spreading of risks or offsetting of losses,
unlike other entities which may have the resources to complete several Business Combinations in different industries or different
areas of a single industry. In addition, we initially intend to focus our search for an initial Business Combination in 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 developments, 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 complete our initial Business Combination with a privately held company. Very little public information
generally exists about private companies, and we could be required to make our decision on whether to pursue a potential initial
Business Combination on the basis of limited information, which may result in a Business Combination with a company that is not
as profitable as we suspected, if at all.
We do not have a specified maximum
redemption threshold. The absence of such a redemption threshold may make it possible for us to complete our initial Business Combination
with which a substantial majority of our stockholders do not agree.
Our certificate of
incorporation will not provide a specified maximum redemption threshold, except 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 (such that we do not then become
subject to the SEC’s “penny stock” rules). As a result, we may be able to complete our initial Business Combination
even though a substantial majority of our public stockholders do not agree with the transaction and have redeemed their shares
or, if we seek stockholder approval of our initial Business Combination and do not conduct redemptions in connection with our Business
Combination pursuant to the tender offer rules, have entered into privately negotiated agreements to sell their shares to our initial
stockholders, officers, directors, advisors or their affiliates. In the event the aggregate cash consideration we would be required
to pay for all shares of Class A common stock that are validly submitted for redemption plus any amount required to satisfy
cash conditions pursuant to the terms of the proposed Business Combination exceed the aggregate amount of cash available to us,
we will not complete the Business Combination or redeem any shares, all shares of Class A common stock submitted for redemption
will be returned to the holders thereof, and we instead may search for an alternate Business Combination.
In order to complete our initial
Business Combination, we may seek to amend our certificate of incorporation or other governing instruments, including our warrant
agreement, in a manner that will make it easier for us to complete our initial Business Combination but that our stockholders or
warrant holders may not support.
In order to complete
a Business Combination, blank check companies have, in the recent past, amended various provisions of their charters and governing
instruments, including their warrant agreements. For example, blank check companies have amended the definition of Business Combination,
increased redemption thresholds, extended the time to consummate an initial Business Combination and, with respect to their warrants,
amended their warrant agreements to require the warrants to be exchanged for cash and/or other securities. We cannot assure you
that we will not seek to amend our certificate of incorporation or other governing instruments, including to extend the time we
have to consummate an initial Business Combination in order to complete our initial Business Combination.
The provisions of our certificate
of incorporation that relate to our pre-Business Combination activity (and corresponding provisions of the agreement governing
the release of funds from our Trust Account) may be amended with the approval of holders of at least 65% of our outstanding common
stock, which is a lower amendment threshold than that of some other blank check companies. It may be easier for us, therefore,
to amend our certificate of incorporation and the trust agreement to facilitate the completion of an initial Business Combination
that some of our stockholders may not support.
Some other blank check
companies have a provision in their charter which prohibits the amendment of certain of its provisions, including those which relate
to a company’s pre-Business Combination activity, without approval by holders of a certain percentage of the company’s
stockholders. In those companies, amendment of these provisions typically requires approval by holders holding between 90% and
100% of the company’s public shares. Our certificate of incorporation will provide that any of its provisions related to
pre-Business Combination activity (including the requirement to deposit proceeds of the Initial Public Offering and the sale of
the Private Placement Warrants into the Trust Account and not release such amounts except in specified circumstances, and to provide
redemption rights to public stockholders as described herein) may be amended if approved by holders of at least 65% of our outstanding
common stock entitled to vote thereon, and corresponding provisions of the trust agreement governing the release of funds from
our Trust Account may be amended if approved by holders of at least 65% of our outstanding common stock entitled to vote thereon;
provided that amendments relating to the appointment or removal of directors prior to our initial Business Combination require
a resolution passed by the holders of a majority of shares of our Class B common stock. In all other instances, our certificate
of incorporation may be amended by holders of a majority of our outstanding common stock entitled to vote thereon, subject to applicable
provisions of the DGCL or applicable stock exchange rules. We may not issue additional securities that would entitle the holders
thereof, prior to our initial Business Combination, to (1) receive funds from the Trust Account or (2) vote as a class
with our public shares (a) on any initial Business Combination or (b) to approve an amendment to our certificate of incorporation.
The restriction on issuing additional securities described in the prior sentence will expire upon consummation of our initial Business
Combination. Our initial stockholders, who collectively beneficially own at least 20.0% of our common stock, may participate in
any vote to amend our certificate of incorporation and/or trust agreement and will have the discretion to vote in any manner they
choose. As a result, we may be able to amend the provisions of our certificate of incorporation which will govern our pre-Business
Combination behavior more easily than some other blank check companies, and this may increase our ability to complete our initial
Business Combination with which you do not agree. Our stockholders may pursue remedies against us for any breach of our certificate
of incorporation.
Our Sponsor, officers,
and directors have agreed, pursuant to a letter agreement with us, that they will not propose any amendment to our certificate
of incorporation (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial
Business Combination or to redeem 100% of our public shares if we do not complete our initial Business Combination within 18 months
from the closing of the Initial Public Offering or (B) with respect to any other provision relating to stockholders’
rights or pre-initial Business Combination activity, unless we provide our public stockholders with the opportunity to redeem their
public shares 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 (which interest shall be net of taxes payable) divided by the number of then outstanding
public shares. Our stockholders are not parties to, or third-party beneficiaries of, these agreements and, as a result, will not
have the ability to pursue remedies against our Sponsor, officers or directors for any breach of these agreements. As a result,
in the event of a breach, our public stockholders would need to pursue a stockholder derivative action, subject to applicable law.
We may be unable to obtain additional
financing to complete our initial Business Combination or to fund the operations and growth of a target business, which could compel
us to restructure or abandon a particular Business Combination.
If the net proceeds
of the Initial Public Offering and the sale of the Private Placement Warrants available to us prove to be insufficient, either
because of the size of our initial Business Combination, the depletion of the available net proceeds in search of a target business,
the obligation to repurchase for cash a significant number of shares from stockholders who elect redemption in connection with
our initial Business Combination or the terms of negotiated transactions to purchase shares in connection with our initial Business
Combination, we may be required to seek additional financing or to abandon the proposed Business Combination. We cannot assure
you that such financing will be available on acceptable terms, if at all. To the extent that additional financing proves to be
unavailable when needed to complete our initial Business Combination, we would be compelled to either restructure the transaction
or abandon that particular Business Combination and seek an alternative target business candidate. 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 stockholders is required to provide any financing
to us in connection with or after our initial Business Combination.
If we are unable to
complete our initial Business Combination, our public stockholders may only receive approximately $10.10 per share on the liquidation
of our Trust Account, and our warrants will expire worthless. In certain circumstances, our public stockholders may receive less
than $10.10 per share on the redemption of their shares. See “—If third parties bring claims against us, the proceeds
held in the Trust Account could be reduced and the per-share redemption amount received by stockholders may be less than $10.10
per share” and other risk factors in this section.
Our initial stockholders will control
the election of our board of directors until consummation of our initial Business Combination and will exert a substantial influence
on actions requiring a stockholder vote, potentially in a manner that you do not support.
Our initial stockholders
own shares representing 20.0% of our issued and outstanding shares of common stock. In addition, prior to our initial Business
Combination, holders of our Class B common stock will have the right to appoint all of our directors and may remove members
of our board of directors for any reason. Holders of our public shares will have no right to vote on the election of directors
during such time. These provisions of our certificate of incorporation may only be amended by a resolution passed by the holders
of a majority of shares of our Class B common stock. As a result, you will not have any influence over the election of directors
prior to our initial Business Combination.
In addition, prior
to the completion of our initial Business Combination, only holders of the Class B common stock have the right to vote on
the election of directors and holders of a majority of the outstanding shares of our Class B common stock may remove members
of our board of directors for any reason. In addition, our board of directors, whose members were elected by certain of our initial
stockholders, is and will be divided into three classes, each of which will generally serve for a term of three years with
only one class of directors being elected in each year. We may not hold an annual meeting of stockholders to elect new directors
prior to the completion of our Business Combination, in which case all of the current directors will continue in office until at
least the completion of the Business Combination. If there is an annual meeting, as a consequence of our “staggered”
board of directors, only a minority of the board of directors will be considered for election and our Sponsor, because of its ownership
position, will have considerable influence regarding the outcome. Accordingly, our initial stockholders will continue to exert
control at least until the completion of our Business Combination.
A provision of our warrant agreement
may make it more difficult for use to consummate an initial Business Combination.
If:
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we issue additional shares or equity-linked securities for capital raising purposes in connection
with the closing of the initial Business Combination at an issue price or effective issue price of less than $9.20 per share, with
such issue price or effective issue price to be determined in good faith by our board of directors and, in the case of any such
issuance to the Sponsor or its affiliates, without taking into account any founder shares held by the Sponsor or such affiliates,
as applicable, prior to such issuance) (the “Newly Issued Price”), and
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the volume weighted average trading price of our Class A ordinary shares during the 20 trading
day period starting on the trading day prior to the day on which we consummate our initial Business Combination (such price, the
“Market Value”) is below $9.20 per share,
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then the exercise price of each warrant
will be adjusted such that the effective exercise price per full share will be equal to 115% of the higher of the Market Value
and the Newly Issued Price, and the $18.00 per-share redemption trigger price applicable to our warrants will be adjusted (to the
nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price, and the $10.00 per-share redemption
trigger price applicable to our warrants will be adjusted (to the nearest cent) to be equal to the higher of the Market Value and
the Newly Issued Price. This may make it more difficult for us to consummate an initial Business Combination with a target business.
Our warrants and founder shares may
have an adverse effect on the market price of our Class A common stock and make it more difficult to complete our initial
Business Combination.
We have issued warrants
to purchase 13,800,000 shares of Class A common stock, as part of the Units and, simultaneously with the closing of the
Initial Public Offering, we issued in the Private Placement an aggregate of 10,280,000 Private Placement Warrants. Our initial
stockholders currently own an aggregate of 6,900,000 founder shares. The founder shares are convertible into shares of Class A
common stock on a one-for-one basis, subject to adjustment as set forth herein. In addition, if our initial stockholders, officers,
directors or their affiliates makes any working capital loans, up to $1,500,000 of such loans may be convertible into warrants,
at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the Private Placement Warrants.
To the extent we issue
shares of Class A common stock to complete a Business Combination, the potential for the issuance of a substantial number
of additional shares of Class A common stock upon exercise of these warrants and conversion rights could make us a less attractive
acquisition vehicle to a target business. Any such issuance will increase the number of issued and outstanding shares of our Class A
common stock and reduce the value of the shares of Class A common stock issued to complete the Business Combination. Therefore,
our warrants and founder shares may make it more difficult to complete a Business Combination or increase the cost of acquiring
the target business.
The Private Placement
Warrants are identical to the warrants sold as part of the units in the Initial Public Offering except that, so long as they
are held by our Sponsor, the Direct Anchor Investors or their permitted transferees, (i) they will not be redeemable by us,
(ii) they (including the Class A common stock issuable upon exercise of these warrants) may not, subject to certain limited
exceptions, be transferred, assigned or sold until 30 days after the completion of our initial Business Combination, (iii) they
may be exercised by the holders on a cashless basis and (iv) the holders thereof (including with respect to the shares of
common stock issuable upon exercise of these warrants) are entitled to registration rights. The Private Placement Warrants will
not vote on any amendments to the warrant agreement.
Because we must furnish our stockholders
with target business financial statements, we may lose the ability to complete an otherwise advantageous initial Business Combination
with some prospective target businesses.
The federal proxy rules
require that a proxy statement with respect to a vote on a Business Combination meeting certain financial significance tests include
target historical and/or pro forma financial statement disclosure. We will include the same financial statement disclosure
in connection with our tender offer documents, whether or not they are required under the tender offer rules. These financial statements
may be required to be prepared in accordance with, or be reconciled to, accounting principles generally accepted in the United
States of America, or GAAP, or international financial reporting standards 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 Public Company Accounting Oversight Board (United States), or PCAOB. These financial statement requirements
may limit the pool of potential target businesses we may acquire because some targets may be unable to provide such financial statements
in time for us to disclose such financial statements in accordance with federal proxy rules and complete our initial Business Combination
within the prescribed time frame.
Compliance obligations under the
Sarbanes-Oxley Act may make it more difficult for us to complete our initial Business Combination, require substantial financial
and management resources, and increase the time and costs of completing an acquisition.
Section 404 of
the Sarbanes-Oxley Act requires that we evaluate and report on our system of internal controls beginning with our Annual Report
on Form 10-K for the year ending December 31, 2021. Only in the event we are deemed to be a large accelerated filer or an
accelerated filer, and no longer qualify as an emerging growth company, will we be required to comply with the independent registered
public accounting firm attestation requirement on our internal control over financial reporting. The fact that we are a blank check
company makes compliance with the requirements of the Sarbanes-Oxley Act particularly burdensome on us as compared to other public
companies because a target business with which we seek to complete our initial Business Combination may not be in compliance with
the provisions of the Sarbanes-Oxley Act regarding adequacy of its internal controls. The development of the internal control of
any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such
acquisition.
If we complete our initial Business
Combination with a company with operations or opportunities outside of the United States, we would be subject to a variety of additional
risks that may negatively impact our operations.
If we complete our initial Business Combination
with a company with operations or opportunities outside of the United States, we would be subject to any special considerations
or risks associated with companies operating in an international setting, including any of the following:
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higher costs and difficulties inherent in managing cross-border business operations and complying
with different commercial and legal requirements of overseas markets;
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rules and regulations regarding currency redemption;
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complex corporate withholding taxes on individuals;
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laws governing the manner in which future Business Combinations may be effected;
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tariffs and trade barriers;
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regulations related to customs and import/export matters;
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longer payment cycles and challenges in collecting accounts receivable;
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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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cultural and language differences;
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employment regulations;
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crime, strikes, riots, civil disturbances, terrorist attacks, natural disasters and wars;
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deterioration of political relations with the United States; and
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government appropriations of assets.
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We may not be able
to adequately address these additional risks. If we were unable to do so, our operations might suffer, which may adversely impact
our results of operations and financial condition.
Risks Relating to the Post-Business
Combination Company
We may face risks related to businesses
in the proprietary network communications technology.
Business combinations with businesses with
proprietary network communications technology entail special considerations and risks. If we are successful in completing a Business
Combination with such a target business, we may be subject to, and possibly adversely affected by, the following risks:
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if we do not develop successful new products or improve existing ones, our business will suffer;
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we may invest in new lines of business that could fail to attract or retain users or generate revenue;
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we will face significant competition and if we are not able to maintain or improve our market share,
our business could suffer;
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the loss of one or more members of our management team, or our failure to attract and retain other
highly qualified personnel in the future, could seriously harm our business;
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if our security is compromised or if our platform is subjected to attacks that frustrate or thwart
our users’ ability to access our products and services, our users, advertisers, and partners may cut back on or stop using
our products and services altogether, which could seriously harm our business;
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mobile malware, viruses, hacking and phishing attacks, spamming, and improper or illegal use of
our products could seriously harm our business and reputation;
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if we are unable to successfully grow our user base and further monetize our products, our business
will suffer;
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if we are unable to protect our intellectual property, the value of our brand and other intangible
assets may be diminished, and our business may be seriously harmed;
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we may be subject to regulatory investigations and proceedings in the future, which could cause
us to incur substantial costs or require us to change our business practices in a way that could seriously harm our business;
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components used in our products may fail as a result of a manufacturing, design, or other defect
over which we have no control, and render our devices inoperable;
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an inability to manage rapid change, increasing consumer expectations and growth;
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an inability to build strong brand identity and improve subscriber or customer satisfaction and
loyalty;
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an inability to deal with our subscribers’ or customers’ privacy concerns;
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an inability to license or enforce intellectual property rights on which our business may depend;
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an inability by us, or a refusal by third parties, to license content to us upon acceptable terms;
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potential liability for negligence, copyright, or trademark infringement
or other claims based on the nature and content of materials that we may distribute;
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competition for the leisure and entertainment time and discretionary spending of subscribers or
customers, which may intensify in part due to advances in technology and changes in consumer expectations and behavior; and
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disruption or failure of our networks, systems or technology as a result of computer viruses, “cyber-attacks,”
misappropriation of data or other malfeasance, as well as outages, natural disasters, terrorist attacks, accidental releases of
information or similar events.
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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 the price of our securities,
which could cause you to lose some or all of your investment.
Even if we conduct
extensive due diligence on a target business with which we combine, we cannot assure you that this diligence will surface all material
issues that may be present with a particular target business, that it would be possible to uncover all material issues through
a customary amount of due diligence, or that factors outside of the target business and outside of our control will not later arise.
As a result of these factors, we may be forced to later write-down or write-off assets, restructure our operations, or incur impairment
or other charges that could result in our reporting losses. Even if our due diligence successfully identifies certain risks, unexpected
risks may arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis. Even
though these charges may be non-cash items and not have an immediate impact on our liquidity, the fact that we report charges of
this nature could contribute to negative market perceptions about us or our securities. In addition, charges of this nature may
cause us to violate net worth or other covenants to which we may be subject as a result of assuming pre-existing debt held by a
target business or by virtue of our obtaining post-combination debt financing. Accordingly, any stockholders or warrant holders
who choose to remain a stockholder or warrant holder following our initial Business Combination could suffer a reduction in the
value of their securities. Such security holders are unlikely to have a remedy for such reduction in value.
After our initial Business Combination,
our results of operations and prospects could be subject, to a significant extent, to the economic, political, social and government
policies, developments and conditions in the country in which we operate.
The economic, political
and social conditions, as well as government policies, of the country in which our operations are located could affect our business.
Economic growth could be uneven, both geographically and among various sectors of the economy and such growth may not be sustained
in the future. If in the future such country’s economy experiences a downturn or grows at a slower rate than expected, there
may be less demand for spending in certain industries. A decrease in demand for spending in certain industries could materially
and adversely affect our ability to find an attractive target business with which to consummate our initial Business Combination
and if we effect our initial Business Combination, the ability of that target business to become profitable.
Our management
may not be able to maintain control of a target business after our initial Business Combination. We cannot provide assurance that,
upon loss of control of a target business, new management will possess the skills, qualifications or abilities necessary to profitably
operate such business.
We may structure our
initial Business Combination so that the post-transaction company in which our public stockholders own or acquire shares will own
less than 100% of the outstanding 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 business sufficient for the post-transaction company 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 outstanding
voting securities of the target, our stockholders prior to our initial Business Combination may collectively own a minority interest
in the post Business Combination company, depending on valuations ascribed to the target and us in our initial Business Combination.
For example, we could pursue a transaction in which we issue a substantial number of new shares of common stock in exchange for
all of the outstanding capital stock of a target, or issue a substantial number of new shares to third-parties in connection with
financing our initial Business Combination. In such cases, we would acquire a 100% interest in the target. However, as a result
of the issuance of a substantial number of new shares of common stock, our stockholders immediately prior to such transaction could
own less than a majority of our outstanding shares of common stock subsequent to such transaction. In addition, other minority
stockholders may subsequently combine their holdings resulting in a single person or group obtaining a larger share of the company’s
stock than we initially acquired. Accordingly, this may make it more likely that our management will not be able to maintain our
control of the target business. We cannot provide assurance that, upon loss of control of a target business, new management will
possess the skills, qualifications or abilities necessary to profitably operate such business.
We may have a limited ability to
assess the management of a prospective target business and, as a result, may complete our initial Business Combination with a target
business whose management may not have the skills, qualifications or abilities to manage a public company, which could, in turn,
negatively impact the value of our stockholders’ investment in us.
When evaluating the
desirability of effecting our initial Business Combination with a prospective target business, our ability to assess the target
business’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 stockholders or warrant holders who choose to remain a stockholder or warrant holder following our initial Business Combination
could suffer a reduction in the value of their securities. Such security holders 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 target business’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.
Risks
Relating to Our Management Team
We are dependent upon our directors
and officers and their departure could adversely affect our ability to operate.
Our operations are
dependent upon a relatively small group of individuals. We believe that our success depends on the continued service of our directors
and officers, at least until we have completed our initial Business Combination. We do not have an employment agreement with, or
key-man insurance on the life of, any of our directors or officers. As a result, our directors and officers may resign before a Business
Combination is completed. 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 complete
our initial Business Combination and to be successful thereafter will be totally dependent upon the efforts of members of our management
team, some of whom may join us following our initial Business Combination. The loss of such people could negatively impact the
operations and profitability of our post-combination business.
Our ability to successfully
complete our Business Combination is dependent upon the efforts of members of our management team. The role of members of our management
team in the target business, however, cannot presently be ascertained. Although some members of our management team may remain
with the target business in senior management or advisory positions following our initial Business Combination, it is likely that
some or all of the management of the target business will remain in place. While we intend to closely scrutinize any individuals
we engage after our initial Business Combination, we cannot assure you that our assessment of these individuals will prove to be
correct. These individuals may be unfamiliar with the requirements of operating a company regulated by the SEC, which could cause
us to have to expend time and resources helping them become familiar with such requirements.
In addition, the officers
and directors of an acquisition candidate may resign upon completion of our initial Business Combination. The departure of a target
business’s key personnel could negatively impact the operations and profitability of our post-combination business. The role
of an acquisition candidate’s key personnel upon the completion of our initial Business Combination cannot be ascertained
at this time. Although we contemplate that certain members of an acquisition candidate’s management team will remain associated
with the acquisition candidate following our initial Business Combination, it is possible that members of the management of an
acquisition candidate will not wish to remain in place. The loss of key personnel could negatively impact the operations and profitability
of our post-combination business.
Members of our management team may
negotiate employment or consulting agreements with a target business in connection with a particular Business Combination. These
agreements may provide for them to receive compensation following our Business Combination and as a result, may cause them to have
conflicts of interest in determining whether a particular Business Combination is the most advantageous.
Members of our management
team 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.
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 members of our management team will remain with us after the completion of our initial
Business Combination. We cannot assure you that any members of our management team will remain in senior management or advisory
positions with us. The determination as to whether any members of our management team will remain with us will be made at the time
of our initial Business Combination.
Our officers and directors may 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.
None of our officers
or directors is required to commit his or her 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, including other business
endeavors for which he or she may be entitled to substantial compensation. We do not intend to have any full-time employees prior
to the completion of our initial Business Combination. Our independent directors also serve as officers or board members for other
entities. If our officers’ and directors’ other business affairs require them to devote substantial amounts of time
to such affairs in excess of their current commitment levels, it could limit their ability to devote time to our affairs, which
may have a negative impact on our ability to complete our initial Business Combination. For a complete discussion of our officers’
and directors’ other business affairs, please see “Item 10. Directors, Executive Officers and Corporate Governance.”
Certain of our officers and directors
are now, and all of them may in the future become, affiliated with entities engaged in business activities similar to those intended
to be conducted by us and, accordingly, may have conflicts of interest in allocating their time and determining to which entity
a particular business opportunity should be presented.
Until we consummate
our initial Business Combination, we intend to engage in the business of identifying and combining with one or more businesses
or entities. Certain of our officers and directors are, and may in the future become, affiliated with entities (such as operating
companies or investment vehicles) that are engaged in a similar business, although our officers and directors (excluding independent
directors) may not participate in the formation of, or become an officer or director of any other special purpose acquisition company
with a class of securities registered under the Exchange Act which has publicly filed a registration statement with the SEC until
we have entered into a definitive agreement regarding our initial Business Combination or we have failed to complete our initial
Business Combination within 18 months after the closing of the Initial Public Offering or during any Extension Period.
Our officers and directors
also may become aware of business opportunities which may be appropriate for presentation to us and the other entities in the future
to which they owe certain fiduciary or contractual duties or otherwise have an interest in any other special purpose acquisition
company in which they may become involved with. Accordingly, they may have conflicts of interest in determining to which entity
a particular business opportunity should be presented. These conflicts may not be resolved in our favor and a potential target
business may be presented to another entity prior to its presentation to us.
For a complete discussion
of our officers’ and directors’ business affiliations and the potential conflicts of interest that you should be aware
of, please see “Item 10. Directors, Executive Officers and Corporate Governance,” “Item 10. Directors, Executive
Officers and Corporate Governance—Conflicts of Interest” and “Item 13.—Certain Relationships and Related
Party Transactions—Administrative Services Agreement.”
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 initial stockholders,
directors or officers, or any of their affiliates. We do not have a policy that expressly prohibits any such persons from engaging
for their own account in business activities of the types conducted by us. Accordingly, such persons or entities may have a conflict
between their interests and ours.
Despite our agreement
that, in the event we seek to complete our initial Business Combination with a company business that is affiliated with our initial
stockholders, officers or directors, or any of their affiliates, we, or a committee of independent directors, will obtain an opinion
from an independent investment banking firm or another independent entity that commonly renders valuation opinions that our initial
Business Combination is fair to us from a financial point of view, potential conflicts of interest still may exist. As a result,
the terms of the Business Combination may not be as advantageous to our company and our public stockholders as they would be absent
any conflicts of interest.
Risks Relating to Our Securities
You will not have any rights or interests
in funds from the Trust Account, except under certain limited circumstances. To liquidate your investment, therefore, you may be
forced to sell your public shares or warrants, potentially at a loss.
Our public stockholders
will be entitled to receive funds from the Trust Account only upon the earliest to occur of: (a) the completion of our initial
Business Combination, and then only in connection with those shares of Class A common stock that such stockholder properly
elected to redeem, subject to the limitations described herein, (b) the redemption of any public shares properly submitted
in connection with a stockholder vote to amend our certificate of incorporation (i) to modify the substance or timing of our
obligation to allow redemption in connection with our initial Business Combination or to redeem 100% of our public shares if we
do not complete our initial Business Combination within 18 months from the closing of the Initial Public Offering or (ii) with
respect to any other provisions relating to stockholders’ rights or pre-initial Business Combination activity and (c) the
redemption of our public shares if we have not completed our initial Business Combination within 18 months from the closing
of the Initial Public Offering, subject to applicable law. Stockholders who do not exercise their rights to the funds in connection
with an amendment to our certificate of incorporation would still have rights to the funds in connection with a subsequent Business
Combination within the allocated time period for any reason, compliance with Delaware law may require that we submit a plan of
dissolution to our then-existing stockholders for approval prior to the distribution of the proceeds held in our Trust Account.
In that case, public stockholders may be forced to wait beyond the end of such period before they receive funds from our Trust
Account. In no other circumstances will a public stockholder have any right or interest of any kind in the Trust Account. Holders
of warrants will not have any right to the proceeds held in the Trust Account with respect to the warrants. Accordingly, to liquidate
your investment, you may be forced to sell your public shares or warrants, potentially at a loss.
Nasdaq may delist our securities
from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject us
to additional trading restrictions.
We cannot assure you
that our securities will continue to be listed on Nasdaq prior to our initial Business Combination. In order to continue listing
our securities on the NYSE prior to our initial Business Combination, we must maintain certain financial, distribution and stock
price levels. In general, we must maintain a minimum amount in stockholders’ equity (generally $2,500,000) and a minimum
of 300 public holders. Additionally, in connection with our initial Business Combination, we will be required to demonstrate compliance
with the applicable exchange’s initial listing requirements, which are more rigorous than continued listing requirements,
in order to continue to maintain the listing of our securities. We cannot assure you that we will be able to meet those initial
listing requirements at that time.
If any of our securities
are delisted from trading on its exchange and we are not able to list our securities on another national securities exchange, we
expect such securities could be quoted on an over-the-counter market. If this were to occur, we could face significant material
adverse consequences, including:
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a limited availability of market quotations for our securities;
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reduced liquidity for our securities;
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a determination that our Class A common stock is a “penny stock” which will require
brokers trading in our Class A common stock to adhere to more stringent rules and possibly result in a reduced level of trading
activity in the secondary trading market for our securities;
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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 pre-empts the states from regulating the sale of certain
securities, which are referred to as “covered securities.” Our Units, Class A common stock and warrants currently
qualify as covered securities under such statute. Although the states are pre-empted from regulating the sale of covered securities,
the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding
of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. While we are not
aware of a state having used these powers to prohibit or restrict the sale of securities issued by blank check companies, other
than the State of Idaho, certain state securities regulators view blank check companies unfavorably and might use these powers,
or threaten to use these powers, to hinder the sale of securities of blank check companies in their states. Further, if we were
no longer listed on Nasdaq, our securities would not qualify as covered securities under such statute and we would be subject to
regulation in each state in which we offer our securities.
You will not be permitted to exercise
your warrants unless we register and qualify the issuance of the underlying shares of Class A common stock or certain exemptions
are available.
Pursuant to terms of
the warrant agreement, we have agreed that as soon as practicable, but in no event later than 20 business days after the closing
of our initial Business Combination, we will use our commercially reasonable efforts to file, and within 60 business days following
our initial Business Combination to have declared effective, a registration statement covering the issuance of the shares of Class A
common stock issuable upon exercise of the warrants. We will use our commercially reasonable efforts to maintain the effectiveness
of such registration statement and a current prospectus relating to those shares of Class A common stock until the warrants
expire or are redeemed. We cannot assure you that we will be able to do so if, for example, any facts or events arise which represent
a fundamental change in the information set forth in the registration statement or prospectus, the financial statements contained
or incorporated by reference therein are not current, complete or correct or the SEC issues a stop order. If the shares issuable
upon exercise of the warrants are not registered under the Securities Act, we will be required to permit holders to exercise their
warrants on a cashless basis. However, no warrant will be exercisable for cash or on a cashless basis, and we will not be obligated
to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered
or qualified under the securities laws of the state of the exercising holder, or an exemption from registration is available. Notwithstanding
the above, if our Class A common stock is at the time of any exercise of a warrant not listed on a national securities exchange
such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we
may, at our option, require holders of public warrants who exercise their warrants to do so on a “cashless basis” in
accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain
in effect a registration statement, but we will be required to use our commercially reasonable efforts to register or qualify the
shares under applicable blue sky laws to the extent an exemption is not available. In no event will we be required to net cash
settle any warrant. 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 shares of Class A common stock included in the Units. There may be a
circumstance where an exemption from registration exists for holders of our Private Placement Warrants to exercise their warrants
while a corresponding exemption does not exist for holders of the public warrants that were included as part of the Units.
In such an instance, the initial purchasers and their permitted transferees (which may include our directors and officers) would
be able to exercise their warrants and sell the common stock underlying their warrants while holders of our public warrants would
not be able to exercise their warrants and sell the underlying common stock. If and when the warrants become redeemable by us,
we may exercise our redemption right even if we are unable to register or qualify the underlying shares of Class A common
stock for sale under all applicable state securities laws. As a result, we may redeem the warrants as set forth above even if the
holders are otherwise unable to exercise their warrants.
We may amend the terms of the warrants
in a manner that may be adverse to holders of public warrants with the approval by the holders of at least 50% of the then-outstanding
public warrants. As a result, the exercise price of your warrants could be increased, the exercise period could be shortened and
the number of shares of our Class A common stock purchasable upon exercise of a warrant could be decreased, all without your
approval.
Our warrants 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 mistake or defective provision, but requires the approval by the holders of at least 50% of the then outstanding
public warrants to make any change that adversely affects the interests of the registered holders of public warrants and, solely
with respect to any amendment to the terms of the Private Placement Warrants or any provision of the warrant agreement with respect
to the Private Placement Warrants, 50% of the number of the then-outstanding Private Placement Warrants. Accordingly, we may amend
the terms of the public warrants in a manner adverse to a holder if holders of at least 50% of the then-outstanding public warrants
approve of such amendment. Although our ability to amend the terms of the public warrants with the consent of at least 50% of the
then-outstanding public warrants is unlimited, examples of such amendments could be amendments to, among other things, increase
the exercise price of the warrants, convert the warrants into cash or stock, shorten the exercise period or decrease the number
of shares of our Class A common stock purchasable upon exercise of a warrant.
We may redeem your unexpired warrants
prior to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless.
We have the ability
to redeem outstanding warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per
warrant, provided that the last reported sales price of our Class A common stock equals or exceeds $18.00 per share for any
20 trading days within a 30 trading-day period ending on the third trading day prior to the date on which we send the notice of
redemption to the warrant holders (the “Reference Value”) and provided certain other conditions are met. If and when
the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying
securities for sale under all applicable state securities laws. As a result, we may redeem the public warrants as set forth above
even if the holders are otherwise unable to exercise the warrants. 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, we expect would be substantially
less than the market value of your warrants.
In addition, unlike
many other similarly structured blank check companies, we have the ability to redeem outstanding warrants 90 days after they
become exercisable for $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that
holders will be able to exercise their warrants prior to redemption for a number of Class A common stock determined based
on the redemption date and the fair market value of our Class A common stock and provided certain other conditions are met.
We would redeem the warrants in this manner when we believe it is in our best interest to update our capital structure to remove
the warrants and pay fair market value to the warrant holders. We can also redeem the warrants for common stock when the Class A
common stock is trading at a price starting at $10.00, which is below the exercise price of $11.50, because it will provide certainty
with respect to our capital structure and cash position while providing warrant holders with fair market value in the form of shares
of Class A common stock. If we choose to redeem the warrants when the Class A common stock is trading at a price below
the exercise price of the warrants, this could result in the warrant holders receiving fewer shares of Class A common stock
than they would have received if they had chosen to wait to exercise their warrants for shares of Class A common stock if
and when the Class A common stock trades at a price higher than the exercise price of $11.50. Any such redemption may have
similar consequences to the redemption described in the above paragraph. In addition, such redemption may occur at a time when
the warrants are “out-of-the-money,” in which case you would lose any potential embedded value from a subsequent increase
in the value of the Class A common stock had your warrants remained outstanding. Finally, this redemption feature provides
a ceiling to the value of your warrants since it locks in the redemption price in the number of Class A common stock to be
received if we choose to redeem the warrants for common stock.
Because each Unit contains one-half
of one redeemable warrant and only a whole warrant may be exercised, the Units may be worth less than Units of other
blank check companies.
Each Unit contains
one-half of one warrant. Because, pursuant to the warrant agreement, the warrants may only be exercised for a whole number of shares,
only a whole warrant may be exercised at any given time. This is different from other offerings similar to ours whose units
include one share of common stock and one whole warrant or a greater fraction of one whole warrant to purchase one whole share.
We have established the components of the Units in this way in order to reduce the dilutive effect of the warrants upon completion
of a Business Combination since the warrants will be exercisable in the aggregate for one-half of the number of shares compared
to Units that each contain a warrant to purchase one whole share, thus making us, we believe, a more attractive Business Combination
partner for target businesses. Nevertheless, this Unit structure may cause our Units to be worth less than if they included
one whole warrant or a greater fraction of one whole warrant to purchase one whole share.
Our warrant agreement designates
the courts of the State of New York or the United States District Court for the Southern District of New York as the sole and exclusive
forum for certain types of actions and proceedings that may be initiated by holders of our warrants, which could limit the ability
of warrant holders to obtain a favorable judicial forum for disputes with our company.
Our warrant agreement
provides that, subject to applicable law, (i) any action, proceeding or claim against us arising out of or relating in any
way to the warrant agreement, including under the Securities Act, will be brought and enforced in the courts of the State of New
York or the United States District Court for the Southern District of New York, and (ii) that we irrevocably submit to such
jurisdiction, which jurisdiction shall be the exclusive forum for any such action, proceeding or claim. We will waive any objection
to such exclusive jurisdiction and that such courts represent an inconvenient forum.
Notwithstanding the
foregoing, these provisions of the warrant agreement do not apply to suits brought to enforce any liability or duty created by
the Exchange Act or any other claim for which the federal district courts of the United States of America are the sole and exclusive
forum. Any person or entity purchasing or otherwise acquiring any interest in any of our warrants shall be deemed to have notice
of and to have consented to the forum provisions in our warrant agreement. If any action, the subject matter of which is within
the scope of the forum provisions of the warrant agreement, is filed in a court other than a court of the State of New York or
the United States District Court for the Southern District of New York (a “NY foreign action”) in the name of any holder
of our warrants, such holder shall be deemed to have consented to: (x) the personal jurisdiction of the state and federal
courts located in the State of New York in connection with any action brought in any such court to enforce the forum provisions
(a “NY enforcement action”), and (y) having service of process made upon such warrant holder in any such NY enforcement
action by service upon such warrant holder’s counsel in the NY foreign action as agent for such warrant holder.
This choice-of-forum
provision may limit a warrant holder’s ability to bring a claim in a judicial forum that it finds favorable for disputes
with our company, which may discourage such lawsuits. Alternatively, if a court were to find this of our warrant agreement inapplicable
or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated
with resolving such matters in other jurisdictions, which could materially and adversely affect our business, financial condition
and results of operations and result in a diversion of the time and resources of our management and board of directors.
Our certificate of incorporation
requires, to the fullest extent permitted by law, that derivative actions brought in our name, actions against our directors, officers,
other employees or stockholders for breach of fiduciary duty and other similar actions may be brought only in the Court of Chancery
in the State of Delaware and, if brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented
to service of process on such stockholder’s counsel, which may have the effect of discouraging lawsuits against our directors,
officers, other employees or stockholders.
Our certificate of
incorporation requires, to the fullest extent permitted by law, that derivative actions brought in our name, actions against our
directors, officers and employees for breach of fiduciary duty and certain other actions may be brought only in the Court of Chancery
in the State of Delaware, except any action (A) as to which the Court of Chancery in the State of Delaware determines that
there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not
consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), (B) which is
vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery or (C) for which the Court of Chancery
does not have subject matter jurisdiction. Any person or entity purchasing or otherwise acquiring any interest in shares of our
capital stock shall be deemed to have notice of and consented to the forum provisions in our certificate of incorporation.
This choice of forum
provision may make it more costly, or limit a stockholder’s ability, to bring a claim in a judicial forum that it finds favorable
for disputes with us or any of our directors, officers or employees, which may discourage lawsuits with respect to such claims.
We cannot be certain that a court will decide that this provision is either applicable or enforceable, and if a court were to find
the choice of forum provision contained in our certificate of incorporation to be inapplicable or unenforceable in an action, we
may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, operating
results and financial condition.
Our certificate of
incorporation provides that the exclusive forum provision will be applicable to the fullest extent permitted by applicable law,
subject to certain exceptions. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought
to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. As a result, the exclusive
forum provision will not apply to suits brought to enforce any duty or liability created by the Exchange Act or any other claim
for which the federal courts have exclusive jurisdiction. In addition, the exclusive forum provision will not apply to actions
brought under the Securities Act, or the rules and regulations thereunder.
By purchasing or otherwise
acquiring any interest in shares of our capital stock and thereby consenting to the forum provisions in our certificate of incorporation,
investors will not be deemed to have waived the Company’s compliance with the federal securities law and the rules and regulations
thereunder.
Any of the foregoing
could have an adverse impact on our operations following a business combination. However, our efforts in identifying prospective
target businesses will not be limited to businesses with proprietary network communications technology. Accordingly, if we acquire
a target business in another industry, these risks we will be subject to risks attendant with the specific industry in which we
operate or target business which we acquire, which may or may not be different than those risks listed above.
Provisions in our certificate of
incorporation and Delaware law may inhibit a takeover of us, which could limit the price investors might be willing to pay in the
future for our Class A common stock and could entrench management.
Our certificate of
incorporation contains provisions that may discourage unsolicited takeover proposals that stockholders may consider to be in their
best interests. These provisions include a staggered board of directors and the ability of the board of directors to designate
the terms of and issue new series of preferred shares and the fact that prior to the completion of our initial Business Combination
only holders of our shares of Class B common stock, which are held by our initial stockholders, are entitled to vote on the
election of directors and holders of a majority of the outstanding shares of our Class B common stock may remove members of
our board of directors for any reason, each of which may make the removal of management more difficult and may discourage transactions
that otherwise could involve payment of a premium over prevailing market prices for our securities.
We are also subject
to anti-takeover provisions under Delaware law, which could delay or prevent a change of control. Together these provisions may
make the removal of management more difficult and may discourage transactions that otherwise could involve payment of a premium
over prevailing market prices for our securities.
General Risk Factors
We are a newly formed company with
no operating history and no operating revenues, and you have no basis on which to evaluate our ability to achieve our business
objective.
We are a newly formed
company with no operating results. Because we lack an operating history, you have no basis upon which to evaluate our ability to
achieve our business objective of completing our initial Business Combination with one or more target businesses. We have no plans,
arrangements or understandings with any prospective target business concerning a Business Combination with our company and may
be unable to complete our initial Business Combination. If we fail to complete our Business Combination, we will never generate
any operating revenues.
Past performance by our management
team and their respective affiliates may not be indicative of future performance of an investment in us.
Information regarding
performance by, or businesses associated with, our management team and their respective affiliates is presented for informational
purposes only. Past performance by our management team and their respective affiliates is not a guarantee either (i) that
we will be able to locate a suitable candidate for our initial Business Combination or (ii) of success with respect to any
Business Combination we may consummate. Our officers and directors have not had management experience with special purpose acquisition
corporations in the past. You should not rely on the historical performance of our management team and their respective affiliates
as an indication of the future performance of an investment in our company or the returns we will, or are likely to, generate going
forward. In addition, an investment in our company is not an investment in any other entities affiliated with our management team.
Furthermore, our Sponsor is a newly formed entity formed for the sole purpose of holding securities of our company with no operational
or historical record.
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 stockholder approval of
any golden parachute payments not previously approved. As a result, our stockholders may not have access to certain information
they may deem important. We could be an emerging growth company for up to five years, although circumstances could cause us
to lose that status earlier, including if the market value of our common stock held by non-affiliates exceeds $700 million
as of the end of any second quarter of a fiscal year, in which case we would no longer be an emerging growth company as of the
end of such fiscal year. We cannot predict whether investors will find our securities less attractive because we will rely on these
exemptions. If some investors find our securities less attractive as a result of our reliance on these exemptions, the trading
prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities
and the trading prices of our securities may be more volatile.
Further, Section 102(b)(1)
of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards
until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not
have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting
standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements
that apply to non-emerging growth companies but any such 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 accounting standards used.
Additionally, we are
a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies
may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited
financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market
value of our common stock held by non-affiliates equals to or exceeds $250 million as of the end of that year’s second
fiscal quarter, or (2) our annual revenues equaled or exceeded $100 million during such completed fiscal year or the
market value of our common stock held by non-affiliates equals or exceeds $700 million as of the end of that year’s
second fiscal quarter. To the extent we take advantage of such reduced disclosure obligations, it may also make comparison of our
financial statements with other public companies difficult or impossible.