In
this Annual Report on Form 10-K (the “Form 10-K”), references to “Pine Island” or the “Company”
and to “we,” “us” and “our” refer to Pine Island Acquisition Corp.
Company
Overview
We
are a blank check company incorporated in Delaware on August 21, 2020 for the purpose of effecting a merger, capital stock exchange,
asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (the “Business
Combination”). Our Sponsor is Pine Island Sponsor LLC, a Delaware limited liability company (the “Sponsor”).
The
registration statement for our initial public offering (the “Initial Public Offering”) was declared effective on November
16, 2020. On November 19, 2020, we consummated the Initial Public Offering of 20,000,000 units (“Units” and, with
respect to the Class A common stock included in the Units being offered, the “Public Shares”), at $10.00 per Unit,
generating gross proceeds of $200.0 million, and incurring offering costs of approximately $11.7 million, inclusive of $7 million
in deferred underwriting commissions. On November 20, 2020, the underwriters partially exercised the over-allotment option and
on November 24, 2020, purchased an additional 1,838,800 Units (the “Over-Allotment Units”), generating gross proceeds
of approximately $18.4 million, and incurred additional offering costs of approximately $1.0 million in underwriting fees (inclusive
of approximately $644,000 in deferred underwriting fees) (the “Over-Allotment”).
Simultaneously
with the closing of the Initial Public Offering, we consummated the private placement (“Private Placement”) of 4,000,000
warrants at a price of $1.50 per warrant (“Private Placement Warrants”) to the Sponsor, generating gross proceeds
of approximately $6.0 million. Simultaneously with the closing of the Over-Allotment on November 24, 2020, the Company consummated
the second closing of the Private Placement, resulting in the purchase of an aggregate of an additional 245,173 Private Placement
Warrants by the Sponsor, generating gross proceeds to the Company of approximately $368,000.
Upon
the closing of the Initial Public Offering and the Private Placement on November 19, 2020, $200.0 million ($10.00 per Unit) of
the net proceeds of the sale of the Units in the Initial Public Offering and the Private Placement were placed in a trust account
(“Trust Account”) located in the United States with Continental Stock Transfer & Trust Company acting as trustee,
and invested only in U.S. “government securities,” within the meaning of Section 2(a)(16) of the Investment Company
Act of 1940, as amended (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, as determined by the Company, until the earlier of: (i) the completion of a Business Combination and (ii)
the distribution of the Trust Account as described below. Upon the closing of the Over-Allotment on November 24, 2020, an additional
amount of approximately $18.4 million was deposited to the Trust Account, for a total of approximately $218.4 million.
If
we have not completed a Business Combination within 24 months from the closing of the Initial Public Offering, or November 19,
2022, 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 its 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 the remaining stockholders and our board of directors, liquidate and dissolve, subject in each case
to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.
Pine
Island Capital Partners
Our
sponsor is an entity affiliated with Pine Island Capital Partners. Pine Island Capital Partners is a private equity firm founded
in 2018 by John A. Thain and Philip A. Cooper on the idea that a talented group of accomplished, highly respected, commercially-savvy
and long-tenured former government and military officials, when fully aligned and engaged, could enable a first-class investment
team with better access, better information, better expertise and better management skills than those typically found in private
equity firms. The team took more than two years to construct, focusing on only those compatible individuals with exceptional character,
networks and relevant experience who were willing to devote time, energy and resources to build a new firm. The result is a team
that is unique in the industry in both composition and operations. Pine Island Capital Partners’ team includes four former
senators, a former House Majority Leader and longstanding board member of a large aerospace company, a former Chairman of the
Joint Chiefs of Staff, a former U.S. Chief of Protocol, a former U.S. Ambassador to the United Nations for Special Political Affairs
and a former Under Secretary of Defense.
Although
Pine Island Capital Partners is a generalist firm, given the background of its team, Pine Island Capital Partners spends the majority
of its time focused in the aerospace, defense and government services sectors, where Pine Island Capital Partners believes it
has extensive connections to industry leaders, unusual access to information, and often unique insights into specific companies,
programs and overall market dynamics. Pine Island Capital Partners has made two acquisitions in the past six months: the acquisition
of Precinmac, a precision machining business with significant exposure to aerospace and defense end markets, and InVeris Training
Solutions (formerly Meggitt Training Systems), a global leader in weapons safety, judgment and tactical training solutions for
military and law enforcement customers.
Pine
Island Capital Partners operates as a single, unified team where former leaders and commanders work with proven investment professionals
across sourcing, information gathering and analysis, and operational execution. In managing the investment firm and its activities,
Pine Island Capital Partners brings to bear its collective skills, knowledge and judgment to develop a unique lens through which
it evaluates targets, makes investment decisions, and manages businesses. All of the Pine Island Capital Partners team members
are highly engaged with the firm: all of the team members are each individually investors in the firm and will be investors in
our sponsor. Our sponsor will utilize the entire Pine Island Capital Partners platform to help effect a business combination including
the firm’s resources in sourcing, research, analytics, diligence, underwriting, structuring and execution.
We
believe that with our access, network and expertise, we are well-suited to take advantage of the current and future opportunities
present in the aerospace, defense and government services industries. Further, we believe the ability to assess and recruit top
talent is a competitive strength of Pine Island Capital Partners and we plan to augment our team as necessary to further strengthen
our capabilities and expertise as we pursue an initial business combination. Pine Island Capital Partners has a powerful network
in our target industries and we expect to be able to source, diligence and execute an attractive business combination for our
investors. Additionally, we believe that the reputations and networks of Pine Island Capital Partners’ team, both individually
and collectively, will ensure exposure to a significant number of proprietary opportunities. We are seeking to make an investment
in a business or businesses where our team can help create substantial value for all stakeholders and attractive returns for our
investors. We expect that our target will have strong cash flow generating capabilities, a defensible competitive position, multiple
avenues for growth, and will benefit from the involvement of our team.
Our
Management Team
John
A. Thain, our Chairman of the Board, is a co-founder of Pine Island Capital Partners and is the Chairman of the firm’s Investment
Committee. Mr. Thain has 40 years of experience in the financial services sector and has held multiple senior leadership positions
at some of the world’s largest financial institutions. Most recently, from 2010 to 2016, he served as CEO and Chairman of
CIT Group where he successfully led the firm out of bankruptcy protection, lowered the firm’s funding costs, improved returns
and grew CIT substantially. Prior to CIT, Mr. Thain was the last CEO and Chairman of Merrill Lynch & Co., Inc. before orchestrating
a sale to Bank of America at the height of the financial crisis. He was also CEO of the New York Stock Exchange, where he led
the NYSE through successful mergers with Archipelago Holdings and Euronext to create the world’s largest and most liquid
exchange group, and spent nearly 25 years at Goldman Sachs, where he served as President, Co-COO, CFO, and Head of Operations,
Technology and Finance. Mr. Thain currently serves as a member of the board of directors at Uber Technologies and as a member
of the Supervisory Board of Deutsche Bank AG. He earned his BS from MIT and an MBA from Harvard Business School.
Philip
A. Cooper, our Chief Executive Officer and director, is a co-founder and managing partner of Pine Island Capital Partners. Mr.
Cooper has over 40 years of experience in private equity as an entrepreneur, principal investor, fund investor, and secondary
investor. Mr. Cooper was previously a Partner at Goldman Sachs, where he helped conceive, found and lead the Goldman Sachs Private
Equity Group and, as chief investment officer, oversaw hundreds of investments in companies, funds and secondaries. He implemented
innovative portfolio construction and risk control methods for private equity, direct and secondary investing funds, and designed
and managed the Vintage Funds — one of the industry’s largest secondary funds. While at Goldman Sachs,
Mr. Cooper served on the Goldman Sachs Asset Management Risk Committee, Operating Committee, and Goldman Sachs Technology Committee.
Since retiring as a Goldman Sachs Partner in 2004, Mr. Cooper has served as a Partner or Special Partner at several private equity
firms and was a Senior Lecturer in private equity at MIT’s Sloan School of Business. He also served as Vice Chairman of
the Forsyth Institute Investment Committee and served on the Children’s Hospital (Boston) Endowment Investment Committee.
Mr. Cooper earned his BA from Syracuse University and an MBA from MIT, where he was an Alfred Sloan Fellow.
Charles
G. Bridge, Jr., our Chief Financial Officer and Secretary, has 30 years of broad experience and knowledge in finance, private
equity, fund administration and compliance, having served in executive positions for venture capital and private equity partnerships,
fund of funds and operating companies. Mr. Bridge gained his private equity experience as both a General Partner and CFO. He began
his private equity career in 2000 at Boston Capital Ventures, which specialized in emerging growth and information technologies
investing. Following Boston Capital Ventures, in 2003, Mr. Bridge helped found Brooke Private Equity Associates, growing the firm
meaningfully. After Brooke Private Equity, Mr. Bridge served as CFO of MPM Capital from September 2010 to October 2011. Most recently,
Mr. Bridge served as CFO of WAVE Equity Partners from 2011 through August 2020. Mr. Bridge also owns Godding Capital, LLC, a family
office founded in 2018. Mr. Bridge holds an MBA from Northeastern University and a BS in Business Administration from the University
of Maine.
Our
Directors and the Pine Island Capital Partners Team
Directors
Our
management team’s experience is complemented by our directors and the Pine Island Capital Partners team, who bring invaluable
insight into the industry landscape, deep knowledge of the industry and unparalleled defense and government experience. In addition
to John A. Thain and Philip A. Cooper, who are directors, the following individuals are or will serve as our directors.
Ambassador
Stuart W. Holliday has served on our board of directors since 2020. Ambassador Holliday joined the Pine Island Capital Partners
team in 2018 and served as U.S. Ambassador for Special Political Affairs at the United Nations and Coordinator (Assistant Secretary)
of the U.S. International Information Programs. Previously, Ambassador Holliday was Special Assistant to the President at the
White House coordinating all executive branch appointments in foreign policy, defense national security and intelligence, and
homeland security. He also served as Policy Advisor to then Governor of Texas on economic development, international trade, technology
and military issues. Since 2006, Ambassador Holliday has served as President and CEO of Meridian International Center, a leading
non-partisan institution that seeks to advance global security and prosperity through effective leadership and diplomacy. Ambassador
Holliday also served as an intelligence officer in the U.S. Navy during Operation Desert Storm and is a regular contributor to
CNN and Fox News. Ambassador Holliday earned a BSFS from Georgetown University and a master’s degree from the London School
of Economics.
Ambassador
Capricia P. Marshall has served on our board of directors since 2020. Ms. Marshall joined the Pine Island Capital Partners team
in 2018 and previously served as Chief of Protocol of the United States from 2009 to 2013, setting the stage for diplomacy at
the highest levels. From 1997 to 2001, Ms. Marshall also served as Deputy Assistant to the President and White House Social Secretary.
Ms. Marshall’s book on cultural diplomacy was published in 2020 by Harper Collins division ECCO, advising readers on the
use of protocol as a tool for leveraging influence. Ms. Marshall currently serves as Ambassador-in-Residence at the Atlantic Council
in Washington, DC and as President of Global Engagement Strategies, which advises international public and private clients on
issues relating to the nexus of business and politics. Ms. Marshall is also on the Case Western University International Advisory
Board, the Boards of Trustees for the Blair House Restoration Fund and the Sibley Memorial Hospital, and is a member of the Council
of American Ambassadors. Ms. Marshall earned her BA from Purdue University and a JD from Case Western Reserve University School
of Law.
Michael
E. Roemer has served on our board of directors since 2020. Mr. Roemer previously served as Chief Compliance Officer for Wells
Fargo from January 2018 through August 2020. Prior to joining Wells Fargo, Mr. Roemer was the group head of compliance at Barclays
PLC in London, United Kingdom from 2014 through 2017. He was a member of the executive committee and also served as the co-chair
of Barclays’ executive diversity and inclusion committee. Mr Roemer was the Chief Internal Audit Executive at Barclays from
2012 through 2013. Prior to his time at Barclays, Mr. Roemer served as chief auditor at CIT Group Inc., reporting directly to
the board audit committee with global responsibility for the internal audit function. Prior to CIT Group, he was the chief audit
executive at AIG from 2005 to 2009. Prior to AIG, he spent 23 years at JP Morgan Chase and its predecessor organizations. Mr.
Roemer serves on the board of directors of the Ronald McDonald House of New York and is the audit committee chair. Previously,
he served on the advisory board of Make-A-Wish Foundation of Metro New York and was their audit committee chair. He also served
on the audit committee of the Roman Catholic Diocese of Rockville Centre in New York. Mr. Roemer earned his bachelor’s degree
in accounting from St. John’s University, and he completed the Tuck Executive Program at the Tuck School of Dartmouth College.
Pine
Island Capital Partners Team
In
addition to the management team and board of directors described above, the Pine Island Capital Partners team will devote their
time and expertise to the pursuit and execution of an initial business combination. These team members include:
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U.S.
Senator Saxby Chambliss
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U.S.
Senator Tom Daschle
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U.S.
Senator Byron L. Dorgan
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Under
Secretary of Defense for Policy Michéle A. Flournoy
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Representative
Richard Gephardt
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Admiral
Michael Mullen, Retired
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U.S.
Senator Don Nickles
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Senator
Saxby Chambliss joined the Pine Island Capital Partners team in 2018 and is a former two-term U.S. Senator (Georgia) and four-term
member of the U.S. House of Representatives. Senator Chambliss is the former Vice Chairman of the Senate Select Committee on Intelligence
and the former Chairman of the House Intelligence Subcommittee on Terrorism and Homeland Security. He is currently a partner at
the global law firm, DLA Piper. Senator Chambliss also served as a member of the Senate Armed Services Committee, the Senate Rules
Committee and was Chair of the Senate Committee on Agriculture, Nutrition and Forestry. Senator Chambliss currently serves as
Chairman of the board of directors of InVeris Training Solutions and is a member of the board of directors of Primerica, Inc.
He earned his BA from the University of Georgia and a JD from the University of Tennessee College of Law.
Senator
Tom Daschle joined the Pine Island Capital Partners team in 2018 and served as the U.S. Senator from South Dakota from 1987 to
2005. He is one of only two senators to have served twice as both Senate Majority and Minority Leader. Senator Daschle is a leading
thinker on climate change, food security and renewable energy policy and has authored several books on historic economic and national
security challenges. He is the founder and CEO of the Daschle Group, a Public Policy Advisory arm of Baker Donelson, and is a
co-founder of the Bipartisan Policy Center. Senator Daschle also serves as Chair of the board of directors of the Center for American
Progress and as Vice-Chair of the National Democratic Institute. He is a member of the Health Policy and Management Executive
Council at the Harvard Kennedy School. He earned his BA from South Dakota State University.
Senator
Byron L. Dorgan joined the Pine Island Capital Partners team in 2018 and served as the U.S. Senator from North Dakota from 1992
to 2011. Before that, he served as U.S. Representative from North Dakota from 1981 to 1992. During his time in the U.S. Senate,
Senator Dorgan served as Assistant Democratic Floor Leader and then as Chairman of the Democratic Policy Committee from 1999 to
2011. He was Chairman of Senate Committees and Subcommittees on the issues of Energy, Aviation, Appropriations, Water Policy and
Indian Affairs. Senator Dorgan is now a Senior Policy Advisor at Arent Fox LLP, Senior Fellow at the Bipartisan Policy Center
in Washington, D.C. and founder and Chairman of the Center for Native American Youth, at the Aspen Institute, an organization
dedicated to improving the lives of young people on Indian Reservations. Senator Dorgan also spent five years as an Adjunct Visiting
Professor at Georgetown University’s Public Policy Institute. He earned a BS from the University of North Dakota and an
MBA from the University of Denver.
Lucas
Evans joined Pine Island Capital Partners in 2018 and is a member of the firm’s Investment Committee. Mr. Evans was previously
a Principal in the Private Equity Group at Ares Management, a leading global alternative asset manager. Prior to joining Ares,
Mr. Evans spent nine years as a Partner at NRDC Equity Partners and its successor, the Hudson’s Bay Company, where he led
or co-led all mergers and acquisitions, capital markets, treasury and investor relations activities. During his tenure, Mr. Evans
played an instrumental role in growing the firm and generating significant returns for its investors. Mr. Evans currently sits
on the board of directors for InVeris Training Solutions and is a board observer for Precinmac. Mr. Evans holds a BS in Finance
from Georgetown University, an MPS in Real Estate from Cornell University and an MBA from INSEAD.
Michèle
A. Flournoy joined the Pine Island Capital Partners team in 2019 and previously served as the Under Secretary of Defense for Policy
from 2009 to 2012. Prior to that, Ms. Flournoy co-founded and served as President of the Center for a New American Security from
2007 to 2009; she also served as its CEO from 2014 to 2017. In the mid-1990s, Ms. Flournoy served as Principal Deputy Assistant
Secretary of Defense for Strategy and Threat Reduction and Deputy Assistant Secretary of Defense for Strategy. Ms. Flournoy is
also a former member of the President’s Intelligence Advisory Board, the Defense Policy Board and the CIA Director’s
External Advisory Board. She is a co-founder and Managing Partner of WestExec Advisors (a strategic advisory firm), a Senior Fellow
at Harvard’s Belfer Center for Science and International Affairs and serves on the boards of directors of Booz Allen Hamilton,
Amida Technology Solutions, The Mission Continues, Spirit of America and CARE. Ms. Flournoy earned her BA from Harvard University
and a master’s degree from Balliol College, Oxford University.
Representative
Richard Gephardt joined the Pine Island Capital Partners team in 2018 and served as the U.S. Representative from Missouri from
1977 to 2005. Representative Gephardt served as House Democratic Leader for over 14 years, first as House Majority Leader from
1989 to 1995 and then as House Minority Leader from 1995 to 2003. While in Congress, he also served on the House Ways and Means
and Budget Committees. In his role as House Democratic Leader, Representative Gephardt emerged as the chief architect to landmark
reforms in healthcare, pensions, education, energy independence and trade policy. He has also facilitated multiple negotiations
between corporate leaders and the union movement, including assisting to facilitate the landmark acquisition of Spirit Aerosystems
on behalf of Onex. Representative Gephardt serves on the boards of directors of Spirit Aerosystems and Centene Corporation and
previously served on the boards of directors of Ford Motor Company, CenturyLink and United States Steel Corporation. He is the
President and CEO of Gephardt Group, which provides strategic counsel on federal government relations and domestic and international
labor relations issues. Representative Gephardt earned his BS from Northwestern University and a JD from the University of Michigan.
Robert
Knox is an advisor to Pine Island Capital Partners and is a member of the firm’s Investment Committee. Mr. Knox is the co-founder
and senior managing director of Cornerstone Equity Investors, L.L.C., a private equity firm. Cornerstone has funded over 120 companies
through buyouts and growth equity financing in healthcare services and products, business services, technology and consumer products.
Portfolio investments have included Dell Computers, Health Management Associates, Linear Technology, Micron Technology, Centurion,
Team Health, and True Temper Sports. He has served on the boards of more than 30 private and public companies, including as the
lead independent director and chair of the compensation committee of Health Management Associates, Inc. (NYSE: HMA) prior to its
acquisition by Community Health Systems. Prior to forming Cornerstone, Mr. Knox designed and executed the initial Alternative
Asset investment strategy at Prudential Financial beginning in 1981 and was Chairman and Chief Executive Officer of Prudential
Equity Investors, the private equity subsidiary of Prudential. Mr. Knox has been a Trustee of Boston University for over twenty
years, and served as Chairman of the Board of Trustees from 2008 to 2016. Mr. Knox holds a BA in Economics and an MBA, both from
Boston University.
Matthew
Levine was previously a Partner at EQT Partners, a global investment firm with over €46 billion in assets under management,
and served on the Investment Committee of the EQT US Mid Market Fund. Mr. Levine’s responsibilities spanned all aspects
of the investment function, including acting as a co-lead to the fundraise of the ~$700 Million fund, hiring the local investment
team, developing and executing the go-to-market strategy and building a network of executives to drive a differentiated deal sourcing,
due diligence and value creation platform. Mr. Levine’s investment activity focused on long-term sustainable business models
with significant growth dynamics, including software, industrial technology and tech-enabled services, culminating in the investments
of Dorner, Innovyze and FocusVision. Prior to joining EQT, Mr. Levine spent 15 years with American Securities, a US private equity
firm with over $23 billion in assets under management. Prior to American Securities, Mr. Levine was in the Financial Entrepreneurs
Group at Salomon Smith Barney. Mr. Levine holds a BS in Economics, cum laude, from the University of Pennsylvania’s Wharton
School of Business and an MBA, with honors, from Columbia University.
Wm.
Russell Mann is a co-founder of Pine Island Capital Partners and serves on its Investment Committee. Mr. Mann was previously a
consultant for institutional investors. His expertise is in the creation, management, and analysis of sophisticated investment
products, strategies, and portfolios, both in the private and public markets. In a direct investment management capacity, he served
for three years as Portfolio Manager at StratiFi, designing and managing customized option strategies. Mr. Mann has previously
served in a risk management role for multiple hedge funds, and in the private equity space, has over his career consulted with
both private equity managers and private equity-focused institutional investors, as well as portfolio companies as a consultant
and an investor. Mr. Mann earned an AB from Princeton University, a master’s degree from University of Cambridge as a Churchill
Scholar, and a PhD from Harvard University in Mathematics as a Putnam Fellow.
Admiral
Michael Mullen, Ret. joined the Pine Island Capital Partners team in 2018 and is a retired U.S. Navy Admiral who served as Chairman
of the Joint Chiefs of Staff from 2007 to 2011. As top military advisor to both Presidents George W. Bush and Barack Obama, Admiral
Mullen is widely respected as an “honest broker” by policymakers, members of Congress and senior military officers.
Admiral Mullen oversaw the end of the combat mission in Iraq and the development of a new military strategy for Afghanistan, while
promoting international partnerships, new technologies and new counter-terrorism tactics. A 1968 graduate from the U.S. Naval
Academy, Admiral Mullen sought challenging positions including command at every level to develop his leadership skills during
his naval career. He rose to be Chief of Naval Operations prior to assuming duties as Chairman, Joint Chiefs of Staff. He currently
serves as Chairman of the Board of Precinmac, is a member of the board of directors of Bloomberg Philanthropies and the board
of trustees of Caltech, and was formerly a member of the boards of directors at General Motors and Sprint Nextel Corp. He also
teaches at the U.S. Naval Academy. Admiral Mullen earned his BS from the U.S. Naval Academy and his MS in operations research
from the Naval Postgraduate School, and is a member of the National Academy of Engineering. He is also a Distinguished Alumni
of Harvard Business School and serves on the Harvard Business School board of advisors.
Senator
Don Nickles joined the Pine Island Capital Partners team in 2018 and served as the U.S. Senator from Oklahoma from 1981 to 2005.
During his time on the U.S. Senate, Senator Nickles was elected by his peers to several leadership positions, including Assistant
Majority Leader, Chairman of the Senate Budget Committee and was a senior member of the Senate Finance and Energy Committees.
Over his 24 years in the U.S. Senate, Senator Nickles championed economic growth and free enterprise. Among many legislative achievements,
Senator Nickles successfully fought to repeal inheritance tax on surviving spouses, cut dividend and capital gains taxes, and
repeal the Windfall Profits Tax. He also was a staunch advocate to eliminate onerous regulations, especially in the natural gas
markets. Prior to his time in the U.S. Senate, Senator Nickles served in the Oklahoma State Senate and worked for family-owned
Nickles Machine Corporation. He currently serves on the boards of directors of Valero Energy Corporation and Washington Mutual
Investors Fund and previously served on the board of directors of the Chesapeake Energy Corporation. He is the Chairman and CEO
of The Nickles Group, a firm he founded in 2005. He earned his BA from Oklahoma State University.
Clyde
Tuggle is a co-founder of Pine Island Capital Partners and is a member of the firm’s Investment Committee. Mr. Tuggle previously
spent 30 years at the Coca-Cola Company, where he was a member of Coca-Cola’s Executive Committee and managed the company’s
corporate productivity activity. Mr. Tuggle held multiple senior management roles at Coca-Cola and was most recently Senior Vice
President and Chief Public Affairs and Communications Officer, where he managed Coca-Cola’s global public affairs and reported
directly to the Chairman and CEO. He was also President of the Russia, Ukraine and Belarus Division, Senior Vice President of
Worldwide Public Affairs and Communication, Deputy Division President of Central Europe and Executive Assistant (chief of staff)
to former CEO Roberto C. Goizueta. Mr. Tuggle currently serves as a member of the board of directors at the Georgia Power Company
and at Oxford Industries, Inc. He earned his BA from Hamilton College and a master’s degree from Yale University. He also
studied at the Ludwig-Maximillian Universität in Munich, Germany and the University of Virginia’s Darden Business School.
David
Wajsgras joined the Pine Island Capital Partners team in 2020. He previously served as president of the Intelligence, Information
and Services (IIS) business at the former defense industry leader, Raytheon Company, now part of Raytheon Technologies. The IIS
business delivers world class systems and solutions in defense, intelligence, space, cybersecurity and training. While president
of IIS, Wajsgras increased sales, meaningfully outpacing industry growth rates, and significantly improved profitability and margins
through focused pricing strategies, cost reduction initiatives, and successfully executing a digital transformation strategy for
program execution. Previously, Wajsgras was Senior Vice President and CFO at Raytheon and led the company’s overall financial
and mergers and acquisitions strategy. Raytheon provides state-of-the-art electronics, mission systems integration, command and
control products and services, sensing, effects, and mission support. Before joining Raytheon, he was Executive Vice President
and CFO at Lear Corporation, in addition to having direct profit and loss responsibility for the manufacturing division. In 2019
and 2020, WashingtonExec named Wajsgras to its top 25 list of executives for leading change in uncertain times, in addition to
naming him Intelligence Industry Executive of the Year in 2019. Wajsgras has appeared on Executive Mosaic’s Wash100 list
of influential leaders in government contracting for six consecutive years, and was selected as Federal Computer Week’s
prestigious Industry Eagle Award winner in 2018. As Raytheon’s CFO, he was named one of the Wall Street Journal’s
25 Best CFOs among larger companies. Wajsgras currently serves on the Board of Directors for Parsons Corporation, Martin Marietta
Materials, Inc., Dreamscape Immersive and Altamira Technologies Corporation. He earned his BS at the University of Maryland and
an MBA from American University.
Competitive
Strengths
We
believe that the combined capabilities of Mr. Thain, Mr. Cooper, Mr. Bridge, and the entire Pine Island Capital Partners partnership
position our team to source and execute an attractive initial business combination for our stockholders. Our team has broad and
meaningful relationships with domestic and international corporations, industry leaders, defense and security agencies, governments
and other influential people and organizations that would enable a potential target to gain and/or expand access to customers
and key decision makers worldwide. Our competitive strengths include the following:
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Carefully
constructed team with significant industry, leadership and board of directors experience
in both public and private companies, that is directly applicable to our stated investment
objectives
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Excellent
reputations and unique networks make us a preferred partner in certain situations
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Ability
to develop domestic and international insights, relationships and opportunities through
extensive sourcing and information network
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Management
and advisor teams with substantial collective investing experience in both deal structuring
and execution
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Strong
operational and management expertise
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Experience
in public and private sector commerce and in-depth understanding of the connectivity
between the two
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Ability
to assess and recruit top talent which is a key differentiator in our target sectors
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Business
Strategy and Market Opportunity
We
intend to search for an acquisition in the defense, government service and aerospace industries, where we believe our team has
extensive access, insight, expertise and management skill. We believe that we understand the suppliers and the domestic and international
customers in these industries exceptionally well: we understand which programs and technologies are priorities, we understand
the critical components of the supply chains, and we have an ability to assess and recruit top talent on an as needed basis to
improve our probability of success. With respect to the specific industries, below is a brief characterization of how we view
the marketplace:
Defense
We
believe there will be increased demand in the U.S. defense market for advanced electronics, communications, sensor and detection
processing and other technologies that enhance the modernization efforts of the Department of Defense’s (“DoD”)
military readiness. We believe this demand represents strong growth that our management team is uniquely positioned to capitalize
on given our combined investment experience and deeply connected partner group of former U.S. defense and government officials.
In the near term, we believe the defense market is well positioned for secular growth as geopolitical tensions, and a rogue nation
and terrorist threat environment continues to be present. We believe this market demand for advanced defense and security technologies
will persist due to the sector’s muted economic sensitivity and the inherent structure of long-cycle contracts which have
been unaffected by the current pandemic.
As
the DoD continues to focus on modernizing its key capabilities, we believe it will prioritize rapid technological advancements
across cybersecurity, space exploitation, directed energy, photonics, defense electronics, mission-critical computing, artificial
intelligence, secure communications and specialized high-precision critical infrastructure manufacturing. In government fiscal
year (“GFY”) 2010 through fiscal year 2015, based on current dollars, DoD spending declined approximately 4% on an
annualized basis as resources were shifted away from major conflicts in Iraq and Afghanistan. While DoD spending in research,
development, testing, evaluation (“RDT&E”) and procurement declined over this time period, new long-term strategic
threats emerged as China, North Korea and Russia developed new combat, weapons, and cyber capabilities. The DoD stated in the
2018 U.S. National Defense Strategy that it aims to combat these new threats by emphasizing development in commercial and classified
technology while rationalizing resources for existing conflicts. As a result, based on current dollars, U.S. government spending
on RDT&E and procurement grew at an annualized rate of approximately 8% while DoD spending, excluding RDT&E and procurement,
grew at an annualized rate of approximately 4% between GFY 2017 through 2020, with a similar growth rate estimated for GFY 2021,
when limits from the Budget Control Act of 2011 expire. We believe the defense end markets will remain healthy in the near-term
despite a flattening in expected DoD outlays and considering other U.S. government priorities such as mitigating the economic
impact of COVID- 19. While the overall defense budget may not experience the substantial growth of the last three years (approximately
6% CAGR from GFY 2017 to 2020), the rapidly evolving threat environment will continue to demand technologically advanced and connected
battlefields and we believe the DoD will continue to have ongoing support from the U.S. government for the related modernization
and innovation initiatives.
The
following charts represent the total obligation authority (TOA) as set forth therein.
Source:
DoD “Green Book”. National Defense Budget Estimates for Government Fiscal Year (GFY) 2021. TOA represents Total Obligational
Authority.
To
combat the new global threats from State and Non-State actors and maintain combat superiority and operational security,
the DoD will continue to prioritize new and fast growing technologies including advanced computing, “big data” analytics,
artificial intelligence, augmented reality and robotics which are expected to fortify national security initiatives such as posture
resilience, electronic warfare and Command & Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance
(“C4ISR”). C4ISR has become a cornerstone of DoD combat readiness superiority against new threats and as it has been
a key focus of modernization and space-based resiliency spending. According to Frost & Sullivan, DoD spending on C4ISR is
forecast to grow approximately two times the annualized rate of total DoD RDT&E, procurement and operation and maintenance
outlays from GFY 2018 through GFY 2024. According to Frost & Sullivan, from 2021 through 2024, the DoD is forecasted to spend
approximately $230 billion on C4ISR. The DoD C4ISR market is also largely fragmented. According to Frost & Sullivan, in 2018,
the top ten C4ISR suppliers to the DoD captured approximately 50% of the market. We believe that as the C4ISR DoD market matures,
there will be opportunities to acquire a platform for consolidation and leverage our domestic and international networks to support
expansion into other markets and customers. The C4ISR framework is used across several platforms including unmanned and autonomous
vehicles, space-based communications, command and control systems, telemetry and navigation systems, fix-ground assets, planes,
ships and weapons. The complexity of data generated by intelligence, surveillance, reconnaissance and targeting (“ISR&T”)
applications is demanding advances in real-time analysis (edge computing), secure data processing, robust space-based platforms
and electronic warfare and there are numerous newer technologies and smaller growth companies being established to address this
demand as a result.
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Source:
Frost & Sullivan U.S. DoD C4ISR Market, Forecast to 2024
Government
Services
In
alignment with U.S. and NATO defense modernization strategies to respond to evolving future threats, we expect increased spending
on IT services to support mid-term growth for the National Security IT services providers especially on space, hypersonics, artificial
intelligence, cloud computing and enterprise IT. The largest customer for government services globally is the U.S. government,
with the DoD and intelligence communities (“IC”) awarding the vast majority of contracts. The U.S. government’s
total spending for GFY 2019 was $4.45 trillion, an 8% increase over GFY 2018 spend of $4.11 trillion. The customer, and long-term
nature of its contracts, provides high backlog visibility and also resilience in economic downturns.
We
further believe COVID-19 will be a tail wind for the sector in the long-term as federal, state and local governments implement
new tools and services that heavily depend on inter-agency connectivity while constrained budgets will benefit from operational
efficiency and automation, for which government services are well positioned to deliver. The increased demand for more complex
and customized solutions has led to a wave of consolidation in the market, with operators looking for scale and niche technologies
to be competitive on large-scale projects. We believe that there are still a significant number of potential targets with competitive
advantages in “big data” analytics, enterprise IT, secure data processing, seamless inter-agency technology integration,
communications and training solutions that would benefit from our deep bench of advisors who contribute decades of relevant government
and defense expertise. Our leadership team is well equipped to support a potential target on all key competitive factors of the
government services market as we have unique insight into how rapidly changing technologies will directly impact the evolving
preferences of defense, intelligence and federal government customers.
An
attractive target in government services will anchor a platform for further consolidation within the highly fragmented and rapidly
growing sector. Critical to any successful government services offering is the skillset, integrity and security clearances of
those who execute on its strategy. Our deep bench of connected advisors and former government officials will be the catalyst to
recruiting, retaining and developing an elite team of managers and employees, which we believe will enable us to exploit an opportunity
in government services.
Aerospace
The
aerospace industry has historically experienced attractive growth as passenger travel and worldwide trade and commerce have expanded
at rates in excess of global GDP. The industry has also demonstrated growth through economic cycles and resilience to exogenous
shocks such as 9/11, SARS and the global financial crisis. The COVID-19 pandemic has caused unprecedented disruption as the industry
has experienced order delays and cancellations, and a significant reduction in flight activity, aircraft production and deliveries.
In April 2020, global revenue per kilometer (“RPK”) plummeted 94.3% compared to April 2019. As passenger volume fell,
the global passenger load factor reached an all-time low of approximately 58% in June 2020. In July 2020, approximately 42% of
commercial jets were inactive, an increase from approximately 6% in July 2019. Although flights are increasing, with daily commercial
flights approximately twice the April low, aerospace OEMs are preparing for an extended recovery. Both Boeing and Airbus announced
pandemic-related production cuts in 2020 with Boeing reducing monthly 787/777 production by approximately 40%/60% and Airbus reducing
its monthly production of A320/A330/A250 by approximately 30%. Boeing delayed its 737 production ramp, targeting 31 planes per
month by 2022, a year later than their initial goal of 2021 while Airbus is preparing to operate at an extended 40% reduction
in output in the near term and does not expect a recovery to pre-COVID-19 levels until 2023-2025. In July 2020, The International
Air Transport Association’s (“IATA”) forecasted global passenger traffic (measured by RPK) will not recover
to pre-COVID-19 levels until 2024. This disruption has presented the opportunity to acquire, at an attractive valuation, a differentiated
business that operates in the global aerospace supply chain.
Although
we are optimistic that healthcare innovations will eventually reverse the post-COVID-19 status quo, we believe aerospace will
face a gradual and volatile recovery. The global aerospace supply chain is struggling with airline and OEM inventory de-stocking
and reduced production rates while reduced flight activity and rotation of scheduled maintenance programs have reduced aftermarket
volumes and MRO services. Many Tier 2 and Tier 3 suppliers lack sufficient capital and resources to withstand this disruption
and elongated recovery. Yet these suppliers are critical to airframe and engine OEMs which are not in a position to financially
or operationally support these suppliers, which they have traditionally done. We believe that we can find opportunities to provide
needed capital at attractive valuations to Tier 2 and Tier 3 suppliers in the highly fragmented global aerospace supply chain
landscape.
Given
increased sophistication of next generation aircraft programs as well as the safety-critical nature and required quality performance
characteristics of major aircraft systems and components, suppliers have historically generated attractive growth and margins.
In addition, these suppliers earn significant revenues from aftermarket products and MRO services which tend to be high margin
and recurring in nature. The technological shift to higher value parts and services, combined with added budgetary pressures is
accelerating customer trends — delayering, a flight to quality, and outsourcing — that
will catalyze a well-capitalized supplier with a strong, well-connected leadership team and scalable technology portfolio to capture
value through further consolidation. We believe there are numerous suppliers that either prior to, or as a result of the pandemic
are over-leveraged and require balance sheet repair. Many of these suppliers service critical military applications in addition
to their civil customers, where our team is uniquely positioned to provide needed leadership to navigate the pandemic and to expand
into new military and civil markets. Traditional private equity, government programs and bank support is not sufficient as there
are a number of suppliers with fundamentally good businesses but inefficient balance sheets. This has created the need for third
party capital and an experienced management team that can lead through this sector’s recovery.
Acquisition
Criteria
We
are searching for an opportunity where our differentiated team is uniquely positioned to add value. We believe the proposed target
will have certain of the following characteristics:
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•
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Opportunistic
situation in defense, government services and aerospace sectors
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•
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Attractive
competitive dynamics
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•
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History
of strong free cash-flow generation
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•
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Potential
platform value conducive to future acquisitions
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•
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Strong
in-place management or strong potential additions from our network
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Our
Acquisition Process
In
evaluating a prospective target business, we expect to conduct a thorough due diligence review that will encompass, among other
things, meetings with incumbent management and key employees, document reviews and inspection of facilities, as well as a review
of financial, operational, legal and other information that is made available to us. We will also utilize our operational and
capital planning experience.
We
are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor, officers
or directors. In the event we seek to complete our initial business combination with a company that is affiliated with our sponsor
or any of our officers or directors, we, or a committee of our independent directors, will obtain an opinion that our initial
business combination is fair to us from a financial point of view from either an independent investment banking firm or an independent
accounting firm.
Members
of our management team may directly or indirectly own our founder shares, Class A common stock and/or private placement warrants,
and, accordingly, may have a conflict of interest in determining whether a particular target business is an appropriate business
with which to effectuate our initial business combination. Further, each of our officers and directors may have a conflict of
interest with respect to evaluating a particular business combination if the retention or resignation of any such officer or director
were to be included by a target business as a condition to any agreement with respect to our initial business combination.
Our
officers have agreed not to 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, except other blank check companies organized by Pine Island
Capital Partners, until we have entered into a definitive agreement regarding our initial business combination or we have failed
to complete our initial business combination prior to November 19, 2022 or during any extended time that we have to consummate
a business combination beyond 24 months as a result of a stockholder vote to amend our amended and restated certificate of incorporation
(an “Extension Period”). Any of our directors, our sponsor or any of its affiliates (other than our officers), may,
following our initial business combination, sponsor or form, or in the case of individuals, serve as a director or officer of,
other blank check companies similar to ours during the period in which we are seeking an initial business combination. Any such
companies may present additional conflicts of interest in pursuing an acquisition target. However, we do not believe that any
such potential conflicts would materially affect our ability to complete our initial business combination.
Initial
Business Combination
As
required by the NYSE rules, our initial business combination will be approved by a majority of our independent directors. The
NYSE rules also require that we must complete our initial business combination with one or more businesses that together have
an aggregate fair market value of at least 80% of the net assets held in the trust account (excluding the deferred underwriting
commissions and taxes payable) at the time of our signing a definitive agreement in connection with our initial business combination.
We refer to this as the 80% of net assets test. Our board of directors will make the determination as to the fair market value
of our initial business combination. The fair market value of the target or targets will be determined by our board of directors
based upon one or more standards generally accepted by the financial community (such as actual and potential sales, earnings,
cash flow and/or book value). Even though our board of directors will rely on generally accepted standards, our board of directors
will have discretion to select the standards employed. In addition, the application of the standards generally involves a substantial
degree of judgment. Accordingly, investors will be relying on the business judgment of the board of directors in evaluating the
fair market value of the target or targets. The proxy solicitation materials or tender offer documents used by us in connection
with any proposed transaction will provide public stockholders with our analysis of our satisfaction of the 80% of net assets
test, as well as the basis for our determinations. If our board of directors is not able to independently determine the fair market
value of our initial business combination, we will obtain an opinion from an independent investment banking firm or another independent
entity that commonly renders valuation opinions with respect to the satisfaction of the 80% of net assets test. While we consider
it unlikely that our board of directors will not be able to make an independent determination of the fair market value of our
initial business combination, it may be unable to do so if it is less familiar or experienced with the business of a particular
target or if there is a significant amount of uncertainty as to the value of a target’s assets or prospects. In addition,
we have agreed not to enter into a definitive agreement regarding an initial business combination without the prior consent of
our sponsor.
We
may, at our option, pursue an acquisition opportunity jointly with one or more parties affiliated with Pine Island Capital Partners,
including, without limitation, officers and partners of Pine Island Capital Partners, investment funds, accounts, co-investment
vehicles and other entities managed by affiliates of Pine Island Capital Partners, and/or investors in funds, accounts, co-investment
vehicles and other entities managed by affiliates of Pine Island Capital Partners. Any such party may co-invest with us in the
target business at the time of our initial business combination, or we could raise additional proceeds to complete the acquisition
by issuing equity to such parties. The amount and other terms and conditions of any such joint acquisition or equity issuance
would be determined at the time thereof.
We
may structure our initial business combination either (i) in such a way so that the post-transaction company in which our public
stockholders own shares will own or acquire 100% of the equity interests or assets of the target business or businesses, or (ii)
in such a way so that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business
in order to meet certain objectives of the target management team or stockholders, or for other reasons. However, we will only
complete an initial business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting
securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register
as an investment company under the Investment Company Act of 1940, as amended, or the “Investment Company Act.” Even
if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our stockholders prior to
the initial business combination may collectively own a minority interest in the post-transaction company, depending on valuations
ascribed to the target and us in the initial business combination. For example, we could pursue a transaction in which we issue
a substantial number of new shares in exchange for all of the outstanding capital stock of a target. In this case, we would acquire
a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our stockholders
immediately prior to our initial business combination could own less than a majority of our outstanding shares subsequent to our
initial business combination. If less than 100% of the equity interests or assets of a target business or businesses are owned
or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will
be taken into account for purposes of the 80% of net assets test. If the initial business combination involves more than one target
business, the 80% of net assets test will be based on the aggregate value of all of the transactions and we will treat the target
businesses together as the initial business combination for purposes of a tender offer or for seeking stockholder approval, as
applicable.
In
addition, pursuant to an agreement entered into concurrently with the Initial Public Offering, our sponsor, upon consummation
of an initial business combination, will be entitled to nominate three individuals for election to our board of directors.
Other
Considerations
We
are not prohibited from pursuing an initial business combination or subsequent transaction with a company that is affiliated with
our sponsor, officers or directors. In the event we seek to complete our initial business combination or, subject to certain exceptions,
subsequent material transactions with a company that is affiliated with our sponsor or any of our officers or directors, we, or
a committee of independent directors, will obtain an opinion from an independent investment banking firm or an independent accounting
firm that such initial business combination or transaction is fair to our company from a financial point of view.
We
currently do not have any specific business combination under consideration. Our officers and directors have neither individually
identified nor considered a target business nor have they had any substantive discussions regarding possible target businesses
among themselves or with our underwriters or other advisors. Pine Island Capital Partners and its affiliates are continuously
made aware of potential business opportunities, one or more of which we may desire to pursue for a business combination, but we
have not (nor has anyone on our behalf) contacted any prospective target business or had any substantive discussions, formal or
otherwise, with respect to a business combination transaction with our company. We have not (nor have any of our agents or affiliates)
been approached by any candidates (or representative of any candidates) with respect to a possible acquisition transaction with
our company and we will not consider a business combination with any company that has already been identified to our sponsor,
or any of our directors or officers as a suitable acquisition candidate for affiliates of Pine Island Capital Partners unless
Pine Island Capital Partners or one of its affiliates, as applicable, in its sole discretion, declines such potential business
combination or makes available to our company a co-investment opportunity in accordance with applicable existing and future policies
and procedures. Additionally, we have not, nor has anyone on our behalf, taken any substantive measure, directly or indirectly,
to identify or locate any suitable acquisition candidate for us, nor have we engaged or retained any agent or other representative
to identify or locate any such acquisition candidate.
Pine
Island Capital Partners and its affiliates may raise investment funds or vehicles in the future, which may be during the period
in which we are seeking our initial business combination. These investment entities may be seeking acquisition opportunities and
related financing at any time. We may compete with any one or more of them on any given acquisition opportunity. In addition,
our officers and directors are not required to commit any specified amount of time to our affairs, and, accordingly, will have
conflicts of interest in allocating management time among various business activities, including identifying potential business
combinations and monitoring the related due diligence. Moreover, our officers and directors have and will have in the future time
and attention requirements for current and future investment funds, accounts, co-investment vehicles and other entities managed
by Pine Island Capital Partners or one of its affiliated entities. To the extent any conflict of interest arises between, on the
one hand, us and, on the other hand, investment funds, accounts, co-investment vehicles and other entities managed by Pine Island
Capital Partners or one of its affiliated entities (including, without limitation, arising as a result of certain of our officers
and directors being required to offer acquisition opportunities to such investment funds, accounts, co-investment vehicles or
other entities), Pine Island Capital Partners and its affiliated entities will resolve such conflicts of interest in their sole
discretion in accordance with their then existing fiduciary, contractual and other duties, and there can be no assurance that
such conflict of interest will be resolved in our favor.
Corporate
Information
Our
executive offices are located at 2455 E. Sunrise Blvd. Suite 1205, Fort Lauderdale, FL 33304 and our telephone number is (954)
526-4865.
We
are an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As
such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other
public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor
attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation
in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive
compensation and stockholder approval of any golden parachute payments not previously approved. If some investors find our securities
less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may
be more volatile.
In
addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition
period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words,
an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply
to private companies. We intend to take advantage of the benefits of this extended transition period.
We
will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary
of the completion of the Initial Public Offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or
(c) in which we are deemed to be a large accelerated filer, which means the aggregate worldwide market value of our Class A common
stock that is held by non-affiliates equals or exceeds $700.0 million as of the prior June 30, and (2) the date on which we have
issued more than $1.0 billion in non-convertible debt securities during the prior three-year period. References herein to emerging
growth company will have the meaning associated with it in the JOBS Act.
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 aggregate worldwide
market value of our Class A common stock held by non-affiliates equals or exceeds $250 million as of the prior June 30th, or (2)
our annual revenues exceeded $100 million during such completed fiscal year and the aggregate worldwide market value of our Class
A common stock held by non-affiliates equals or exceeds $700 million as of the prior June 30th.
Financial
Position
With
the funds available in our Trust Account, we offer a target business a variety of options, such as creating a liquidity event
for its owners, providing capital for the potential growth and expansion of its operations or strengthening its balance sheet
by reducing its debt or leverage ratio. Because we are able to complete our initial business combination using our cash, debt
or equity securities, or a combination of the foregoing, we have the flexibility to use the most efficient combination that will
allow us to tailor the consideration to be paid to the target business to fit its needs and desires. However, we have not taken
any steps to secure third-party financing and there can be no assurance it will be available to us if needed to complete a transaction.
Effecting
our Initial Business Combination
We
are not presently engaged in, and we will not engage in, any operations for an indefinite period of time. We intend to effectuate
our initial business combination using cash from the proceeds of the Initial Public Offering, the Over-Allotment and the Private
Placement, the proceeds of the sale of our shares in connection with our initial business combination (pursuant to forward purchase
agreements or backstop agreements we may enter into), shares issued to the owners of the target, debt issued to bank or other
lenders or the owners of the target, or a combination of the foregoing. We may seek to complete our initial business combination
with a company or business that may be financially unstable or in its early stages of development or growth, which would subject
us to the numerous risks inherent in such companies and businesses.
If
our initial business combination is paid for using equity or debt securities, or not all of the funds released from the trust
account are used for payment of the consideration in connection with our initial business combination or used for redemptions
of our Class A common stock, we may apply the balance of the cash released to us from the trust account for general corporate
purposes, including for maintenance or expansion of operations of the post-transaction company, the payment of principal or interest
due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working
capital.
We
may seek to raise additional funds through a private offering of debt or equity securities in connection with the completion of
our initial business combination, and we may effectuate our initial business combination using the proceeds of such offering rather
than using the amounts held in the trust account. In addition, we intend to target businesses larger than we could acquire with
the net proceeds of the Initial Public Offering and Private Placement, and may as a result be required to seek additional financing
to complete such proposed initial business combination. Subject to compliance with applicable securities laws, we would expect
to complete such financing only simultaneously with the completion of our initial business combination. In the case of an initial
business combination funded with assets other than the trust account assets, our proxy materials or tender offer documents disclosing
the initial business combination would disclose the terms of the financing and, only if required by law, we would seek stockholder
approval of such financing. There are no prohibitions on our ability to raise funds privately or through loans in connection with
our initial business combination. At this time, we are not a party to any arrangement or understanding with any third party with
respect to raising any additional funds through the sale of securities, the incurrence of debt or otherwise.
Sources
of Target Businesses
We
anticipate that target business candidates will be brought to our attention from various sources, including our global networks
and our advisors, as well as other sources such as investment bankers and investment professionals. Target businesses may be brought
to our attention by such unaffiliated sources as a result of being solicited by us through calls or mailings. These sources may
also introduce us to target businesses in which they think we may be interested on an unsolicited basis, since many of these sources
will have read this prospectus and know what types of businesses we are targeting. Our sponsor, officers, directors and advisors
and their respective affiliates may also bring to our attention target business candidates that they become aware of through their
business contacts as a result of formal or informal inquiries or discussions they may have. While we do not presently anticipate
engaging the services of professional firms or other individuals that specialize in business acquisitions on any formal basis,
we may engage these firms or other individuals in the future, in which event we may pay a finder’s fee, consulting fee,
advisory fee or other compensation to be determined in an arm’s length negotiation based on the terms of the transaction.
We will engage a finder only to the extent our management determines that the use of a finder may bring opportunities to us that
may not otherwise be available to us or if finders approach us on an unsolicited basis with a potential transaction that our management
determines is in our best interest to pursue. Payment of finder’s fees is customarily tied to completion of a transaction,
in which case any such fee will be paid out of the funds held in the trust account. In no event will our sponsor or any of our
existing officers or directors, or any entity with which our sponsor or officers are affiliated, be paid any finder’s fee,
reimbursement, consulting fee, monies in respect of any payment of a loan or other compensation by the company prior to, or in
connection with any services rendered for any services they render in order to effectuate, the completion of our initial business
combination (regardless of the type of transaction that it is). Although none of our sponsor, officers or directors, or any of
their respective affiliates, will be allowed to receive any compensation, finder’s fees or consulting fees from a prospective
business combination target in connection with a contemplated initial business combination, we do not have a policy that prohibits
our sponsor, officers or directors, or any of their respective affiliates, from negotiating for the reimbursement of out-of-pocket
expenses by a target business. Some of our officers and directors may enter into employment or consulting agreements with the
post-transaction company following our initial business combination. The presence or absence of any such fees or arrangements
will not be used as a criterion in our selection process of an initial business combination candidate.
We
are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor, officers
or directors, or their respective affiliates. In the event we seek to complete our initial business combination with a company
that is affiliated with our sponsor, officers or directors, or their respective affiliates, we, or a committee of independent
directors, will obtain an opinion from an independent investment banking firm or an independent accounting firm that our initial
business combination is fair to our company from a financial point of view. We are not required to obtain such an opinion in any
other context.
If
any of our officers or directors becomes aware of an initial business combination opportunity that falls within the line of business
of any entity to which he or she has pre-existing fiduciary or contractual obligations, he or she may be required to present such
business combination opportunity to such entity prior to presenting such business combination opportunity to us. Our officers
and directors currently have certain relevant fiduciary duties or contractual obligations that may take priority over their duties
to us.
Selection
of a Target Business and Structuring of Our Initial Business Combination
As
required by the NYSE rules, our initial business combination will be approved by a majority of our independent directors. The
NYSE rules also require that we must complete our initial business combination with one or more businesses that together have
an aggregate fair market value of at least 80% of the net assets held in the trust account (excluding the deferred underwriting
commissions and taxes payable) at the time of our signing a definitive agreement in connection with our initial business combination.
The fair market value of the target or targets will be determined by our board of directors based upon one or more standards generally
accepted by the financial community (such as actual and potential sales, earnings, cash flow and/or book value). Even though our
board of directors will rely on generally accepted standards, our board of directors will have discretion to select the standards
employed. In addition, the application of the standards generally involves a substantial degree of judgment. Accordingly, investors
will be relying on the business judgment of the board of directors in evaluating the fair market value of the target or targets.
The proxy solicitation materials or tender offer documents used by us in connection with any proposed transaction will provide
public stockholders with our analysis of our satisfaction of the 80% of net assets test, as well as the basis for our determinations.
If our board of directors is not able to independently determine the fair market value of our initial business combination, we
will obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation
opinions with respect to the satisfaction of such criteria. While we consider it unlikely that our board of directors will not
be able to make an independent determination of the fair market value of our initial business combination, it may be unable to
do so if it is less familiar or experienced with the business of a particular target or if there is a significant amount of uncertainty
as to the value of a target’s assets or prospects. We do not currently intend to purchase multiple businesses in unrelated
industries in conjunction with our initial business combination. Subject to this requirement, our management will have virtually
unrestricted flexibility in identifying and selecting one or more prospective target businesses, although we will not be permitted
to effectuate our initial business combination with another blank check company or a similar company with nominal operations.
In
any case, we will only complete an initial business combination in which we own or acquire 50% or more of the outstanding voting
securities of the target or otherwise acquire a controlling interest in the target sufficient for it not to be required to register
as an investment company under the Investment Company Act. If we own or acquire less than 100% of the equity interests or assets
of a target business or businesses, the portion of such business or businesses that are owned or acquired by the post-transaction
company is what will be taken into account for purposes of the NYSE’s 80% of net assets test. There is no basis for investors
to evaluate the possible merits or risks of any target business with which we may ultimately complete our initial business combination.
To
the extent we effect our initial business combination with a company or business that may be financially unstable or in its early
stages of development or growth we may be affected by numerous risks inherent in such company or business. Although our management
will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain
or assess all significant risk factors.
In
evaluating a prospective business target, we expect to conduct a thorough due diligence review, which may encompass, among other
things, meetings with incumbent management and key employees, document reviews, interviews of customers and suppliers, inspection
of facilities, as well as a review of financial and other information that will be made available to us.
The
time required to select and evaluate a target business and to structure and complete our initial business combination, and the
costs associated with this process, are not currently ascertainable with any degree of certainty. Any costs incurred with respect
to the identification and evaluation of a prospective target business with which our initial business combination is not ultimately
completed will result in our incurring losses and will reduce the funds we can use to complete another business combination.
In
addition, we have agreed not to enter into a definitive agreement regarding an initial business combination without the prior
consent of our sponsor.
Lack
of Business Diversification
For
an indefinite period of time after the completion of our initial business combination, the prospects for our success may depend
entirely on the future performance of a single business. Unlike other entities that have the resources to complete business combinations
with multiple entities in one or several industries, it is probable that we will not have the resources to acquire multiple businesses.
In addition, we intend to focus our search for an initial business combination in a single industry. By completing our initial
business combination with only a single entity, our lack of diversification may subject us to negative economic, competitive and
regulatory developments, any or all of which may have a substantial adverse impact on the particular industry in which we operate
after our initial business combination and cause us to depend on the marketing and sale of a limited number of products or services.
Post-Combination
Management Team
Although
we intend to closely scrutinize the management of a prospective target business when evaluating the desirability of effecting
our initial business combination with that business, our assessment of the target business’ management may not prove to
be correct. In addition, the future management may not have the necessary skills, qualifications or abilities to manage a public
company. Furthermore, the future role of members of our management team, if any, in the target business cannot presently be stated
with any certainty. The determination as to whether any of the members of our management team will remain with the combined company
will be made at the time of our initial business combination. While it is possible that one or more of our directors will remain
associated in some capacity with us following our initial business combination, it is unlikely that any of them will devote their
full efforts to our affairs subsequent to our initial business combination. Moreover, we cannot assure you that members of our
management team will have significant experience or knowledge relating to the operations of the particular target business.
We
cannot assure you that any of our key personnel will remain in senior management or advisory positions with the combined company.
The determination as to whether any of our key personnel will remain with the combined company will be made at the time of our
initial business combination.
Following
an initial business combination, we may seek to recruit additional managers to supplement the incumbent management of the target
business. We cannot assure you that we will have the ability to recruit additional managers, or that additional managers will
have the requisite skills, knowledge or experience necessary to enhance the incumbent management.
Stockholders
May Not Have the Ability to Approve Our Initial Business Combination
We
may conduct redemptions without a stockholder vote pursuant to the tender offer rules of the SEC subject to the provisions of
our amended and restated certificate of incorporation. However, we will seek stockholder approval if it is required by law or
applicable stock exchange rule, or we may decide to seek stockholder approval for business or other legal reasons.
Under
the NYSE’s listing rules, stockholder approval would be required for our initial business combination if, for example:
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we
issue shares of Class A common stock that will either (a) be equal to or in excess of
20% of the number of shares of our Class A common stock then outstanding or (b) have
voting power equal to or in excess of 20% of the voting power then outstanding;
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any
of our directors, officers or substantial security holders (as defined by the NYSE rules)
has a 5% or greater interest, directly or indirectly, in the target business or assets
to be acquired and if the number of shares of common stock to be issued, or if the number
of shares of common stock into which the securities may be convertible or exercisable,
exceeds either (a) 1% of the number of shares of common stock or 1% of the voting power
outstanding before the issuance in the case of any of our directors and officers or (b)
5% of the number of shares of common stock or 5% of the voting power outstanding before
the issuance in the case of any substantial security holders; or
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the
issuance or potential issuance of common stock will result in our undergoing a change
of control.
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The
decision as to whether we will seek stockholder approval of a proposed business combination in those instances in which stockholder
approval is not required by law will be made by us, solely in our discretion, and will be based on business and legal reasons,
which include a variety of factors, including, but not limited to:
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the
timing of the transaction, including in the event we determine stockholder approval would
require additional time and there is either not enough time to seek stockholder approval
or doing so would place the company at a disadvantage in the transaction or result in
other additional burdens on the company;
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the
expected cost of holding a stockholder vote;
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the
risk that the stockholders would fail to approve the proposed business combination;
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other
time and budget constraints of the company; and
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additional
legal complexities of a proposed business combination that would be time-consuming and
burdensome to present to stockholders.
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Permitted
Purchases of Our Securities
If
we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial
business combination pursuant to the tender offer rules, our initial stockholders, directors, officers, advisors or their respective
affiliates may purchase public shares or public warrants in privately negotiated transactions or in the open market either prior
to or following the completion of our initial business combination. There is no limit on the number of shares our initial stockholders,
directors, officers, advisors or their affiliates may purchase in such transactions, subject to compliance with applicable law
and the NYSE rules. However, they have no current commitments, plans or intentions to engage in such transactions and have not
formulated any terms or conditions for any such transactions. If they engage in such transactions, they will not make any such
purchases when they are in possession of any material non-public information not disclosed to the seller or if such purchases
are prohibited by Regulation M under the Exchange Act. We do not currently anticipate that such purchases, if any, would constitute
a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private
rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject
to such rules, the purchasers will comply with such rules. Any such purchases will be reported pursuant to Section 13 and Section
16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements. None of the funds held in the
trust account will be used to purchase public shares or public warrants in such transactions prior to completion of our initial
business combination.
The
purpose of any such purchases of shares could be to vote such shares in favor of the initial business combination and thereby
increase the likelihood of obtaining stockholder approval of the initial business combination or to satisfy a closing condition
in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial
business combination, where it appears that such requirement would otherwise not be met. The purpose of any such purchases of
public warrants could be to reduce the number of public warrants outstanding or to vote such warrants on any matters submitted
to the warrant holders for approval in connection with our initial business combination. Any such purchases of our securities
may result in the completion of our initial business combination that may not otherwise have been possible. In addition, if such
purchases are made, the public “float” of our shares of Class A common stock or warrants may be reduced and the number
of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing
or trading of our securities on a national securities exchange.
Our
sponsor, officers, directors and/or their affiliates anticipate that they may identify the stockholders with whom our sponsor,
officers, directors or their affiliates may pursue privately negotiated purchases by either the stockholders contacting us directly
or by our receipt of redemption requests submitted by stockholders following our mailing of proxy materials in connection with
our initial business combination. To the extent that our sponsor, officers, directors, advisors or their affiliates enter into
a private purchase, they would identify and contact only potential selling stockholders who have expressed their election to redeem
their shares for a pro rata share of the trust account or vote against our initial business combination, whether or not such stockholder
has already submitted a proxy with respect to our initial business combination. Our sponsor, officers, directors, advisors or
their affiliates will only purchase public shares if such purchases comply with Regulation M under the Exchange Act and the other
federal securities laws.
Any
purchases by our sponsor, officers, directors and/or their affiliates who are affiliated purchasers under Rule 10b-18 under the
Exchange Act will only be made to the extent such purchases are able to be made in compliance with Rule 10b-18, which is a safe
harbor from liability for manipulation under Section 9(a)(2) and Rule 10b-5 of the Exchange Act. Rule 10b-18 has certain technical
requirements that must be complied with in order for the safe harbor to be available to the purchaser. Our sponsor, officers,
directors and/or their affiliates will not make purchases of common stock if the purchases would violate Section 9(a)(2) or Rule
10b-5 of the Exchange Act. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the
extent such purchases are subject to such reporting requirements.
Redemption
Rights for Public Stockholders upon Completion of Our Initial Business Combination or Certain Stockholder Votes to Amend our Amended
and Restated Certificate of Incorporation
We
will provide our public stockholders with the opportunity to redeem all or a portion of their shares of Class A common stock upon
(i) the completion of our initial business combination or (ii) a stockholder vote to approve an amendment to our amended and restated
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 prior
to November 19, 2022 or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business
combination activity. Such redemptions, if any, will be made at a per-share price, payable in cash, equal to the aggregate amount
then on deposit in the trust account as of two business days prior to the event triggering the right to redeem, including interest
earned on the funds held in the trust account and not previously released to us to pay our franchise and income taxes, divided
by the number of then outstanding public shares, subject to the limitations described herein. The amount in the trust account
is initially anticipated to be approximately $10.00 per public share. The per-share amount we will distribute to investors who
properly redeem their shares will not be reduced by the deferred underwriting commissions we will pay to the underwriters. The
redemption rights will include the requirement that a beneficial holder must identify itself in order to validly redeem its public
shares. There will be no redemption rights upon the completion of our initial business combination with respect to our warrants.
Our initial stockholders, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed
to waive their redemption rights with respect to any founder shares and any public shares held by them in connection with the
completion of our initial business combination or a stockholder vote to approve an amendment to our amended and restated certificate
of incorporation, as described above.
Manner
of Conducting Redemptions
We
will provide our public stockholders with the opportunity to redeem all or a portion of their shares of Class A common stock upon
the completion of our initial business combination either (i) in connection with a stockholder meeting called to approve the initial
business combination or (ii) by means of a tender offer. The decision as to whether we will seek stockholder approval of a proposed
initial business combination or conduct a tender offer will be made by us, solely in our discretion, and will be based on a variety
of factors such as the timing of the transaction and whether the terms of the transaction would require us to seek stockholder
approval under the law or stock exchange listing requirement. Under the NYSE rules, asset acquisitions and stock purchases would
not typically require stockholder approval while direct mergers with our company where we do not survive and any transactions
where we issue more than 20% of our outstanding common stock or seek to amend our amended and restated certificate of incorporation
would require stockholder approval. If we structure an initial business combination with a target company in a manner that requires
stockholder approval, we will not have discretion as to whether to seek a stockholder vote to approve the proposed initial business
combination. We may conduct redemptions without a stockholder vote pursuant to the tender offer rules of the SEC unless stockholder
approval is required bylaw or stock exchange listing requirements or we choose to seek stockholder approval for business or other
reasons. So long as we obtain and maintain a listing for our securities on the NYSE, we will be required to comply with such rules.
If
a stockholder vote is not required and we do not decide to hold a stockholder vote for business or other reasons, we will, pursuant
to our amended and restated certificate of incorporation:
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conduct
the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which
regulate issuer tender offers, and
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file
tender offer documents with the SEC prior to completing our initial business combination
which contain substantially the same financial and other information about the initial
business combination and the redemption rights as is required under Regulation 14A of
the Exchange Act, which regulates the solicitation of proxies.
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Upon
the public announcement of our initial business combination, we or our sponsor will terminate any plan established in accordance
with Rule 10b5-1 to purchase shares of our Class A common stock in the open market if we elect to redeem our public shares through
a tender offer, to comply with Rule 14e-5 under the Exchange Act.
In
the event we conduct redemptions pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business
days, in accordance with Rule 14e-1(a) under the Exchange Act, and we will not be permitted to complete our initial business combination
until the expiration of the tender offer period. In addition, the tender offer will be conditioned on public stockholders not
tendering more than a specified number of public shares which are not purchased by our sponsor, which number will be based on
the requirement that we may not redeem public shares in an amount that would cause our net tangible assets to be less than $5,000,001
upon consummation of our initial business combination and after payment of deferred underwriting commissions (so that we are not
subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which may be
contained in the agreement relating to our initial business combination. If public stockholders tender more shares than we have
offered to purchase, we will withdraw the tender offer and not complete the initial business combination.
If,
however, stockholder approval of the transaction is required by law or stock exchange listing requirements, or we decide to obtain
stockholder approval for business or other reasons, we will, pursuant to our amended and restated certificate of incorporation:
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conduct
the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of
the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the
tender offer rules, and
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file
proxy materials with the SEC.
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In
the event that we seek stockholder approval of our initial business combination, we will distribute proxy materials and, in connection
therewith, provide our public stockholders with the redemption rights described above upon completion of the initial business
combination.
If
we seek stockholder approval, we will complete our initial business combination only if a majority of the outstanding shares of
common stock voted are voted in favor of the initial business combination. A quorum for such meeting will consist of the holders
present in person or by proxy of shares of outstanding capital stock of the company representing a majority of the voting power
of all outstanding shares of capital stock of the company entitled to vote at such meeting. Our initial stockholders will count
toward this quorum and pursuant to the letter agreement, our initial stockholders, officers and directors have agreed to vote
their founder shares and any public shares purchased during or after the Initial Public Offering (including in open market and
privately negotiated transactions) in favor of our initial business combination. For purposes of seeking approval of the majority
of our outstanding shares of common stock voted, non-votes will have no effect on the approval of our initial business combination
once a quorum is obtained. As a result, in addition to our initial stockholders’ founder shares, we would need only 8,189,551,
or 37.5% (assuming all outstanding shares are voted), or 1,364,926, or 6.25% (assuming only the minimum number of shares representing
a quorum are voted), of the 21,838,800 public shares outstanding to be voted in favor of an initial business combination (assuming
all outstanding shares are voted) in order to have our initial business combination approved (assuming the over-allotment option
is not exercised). We intend to give approximately 30 days (but not less than 10 days nor more than 60 days) prior written notice
of any such meeting, if required, at which a vote shall be taken to approve our initial business combination. These quorum and
voting thresholds, and the voting agreements of our initial stockholders, may make it more likely that we will consummate our
initial business combination. Each public stockholder may elect to redeem its public shares irrespective of whether they vote
for or against the proposed transaction.
Our
amended and restated certificate of incorporation provides that in no event will we redeem our public shares in an amount that
would cause our net tangible assets to be less than $5,000,001 upon consummation of our initial business combination and after
payment of deferred underwriting commissions (so that we are not subject to the SEC’s “penny stock” rules) or
any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business combination.
For example, the proposed initial business combination may require: (i) cash consideration to be paid to the target or its owners,
(ii) cash to be transferred to the target for working capital or other general corporate purposes or (iii) the retention of cash
to satisfy other conditions in accordance with the terms of the proposed initial business combination. In the event the aggregate
cash consideration we would be required to pay for all shares of Class A common stock that are validly submitted for redemption
plus any amount required to satisfy cash conditions pursuant to the terms of the proposed initial business combination exceed
the aggregate amount of cash available to us, we will not complete the initial business combination or redeem any shares, and
all shares of Class A common stock submitted for redemption will be returned to the holders thereof.
Limitation
on Redemption upon Completion of Our Initial Business Combination If We Seek Shareholder Approval
Notwithstanding
the foregoing, if we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection
with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation
provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder
is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from seeking
redemption rights with respect to more than an aggregate of 15% of the shares sold in the Initial Public Offering, which we refer
to as the “Excess Shares.” Such restriction shall also be applicable to our affiliates. We believe this restriction
will discourage stockholders from accumulating large blocks of shares, and subsequent attempts by such holders to use their ability
to exercise their redemption rights against a proposed initial business combination as a means to force us or our management to
purchase their shares at a significant premium to the then-current market price or on other undesirable terms. Absent this provision,
a public stockholder holding more than an aggregate of 15% of the shares sold in the Initial Public Offering could threaten to
exercise its redemption rights if such holder’s shares are not purchased by us or our management at a premium to the then-current
market price or on other undesirable terms. By limiting our stockholders’ ability to redeem no more than 15% of the shares
sold in the Initial Public Offering without our prior consent, we believe we will limit the ability of a small group of stockholders
to unreasonably attempt to block our ability to complete our initial business combination, particularly in connection with an
initial business combination with a target that requires as a closing condition that we have a minimum net worth or a certain
amount of cash. However, we would not be restricting our stockholders’ ability to vote all of their shares (including Excess
Shares) for or against our initial business combination.
Tendering
Stock Certificates in Connection with a Tender Offer or Redemption Rights
We
may require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their
shares in “street name,” to either tender their certificates to our transfer agent prior to the date set forth in
the tender offer documents or proxy materials mailed to such holders, or up to two business days prior to the initial vote on
the proposal to approve the initial business combination in the event we distribute proxy materials, or to deliver their shares
to the transfer agent electronically using The Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System,
at the holder’s option. The tender offer or proxy materials, as applicable, that we will furnish to holders of our public
shares in connection with our initial business combination will indicate whether we are requiring public stockholders to satisfy
such delivery requirements, which may include the requirement that a beneficial holder must identify itself in order to validly
redeem its public shares. Accordingly, a public stockholder would have from the time we send out our tender offer materials until
the close of the tender offer period, or up to two days prior to the vote on the initial business combination if we distribute
proxy materials, as applicable, to tender its shares if it wishes to seek to exercise its redemption rights. Given the relatively
short exercise period, it is advisable for stockholders to use electronic delivery of their public shares.
There
is a nominal cost associated with the above-referenced tendering process and the act of certificating the shares or delivering
them through the DWAC System. The transfer agent will typically charge the tendering broker $80.00 and it would be up to the broker
whether or not to pass this cost on to the redeeming holder. However, this fee would be incurred regardless of whether or not
we require holders seeking to exercise redemption rights to tender their shares. The need to deliver shares is a requirement of
exercising redemption rights regardless of the timing of when such delivery must be effectuated.
The
foregoing is different from the procedures used by many blank check companies. In order to perfect redemption rights in connection
with their business combinations, many blank check companies would distribute proxy materials for the stockholders’ vote
on an initial business combination, and a holder could simply vote against a proposed initial business combination and check a
box on the proxy card indicating such holder was seeking to exercise his or her redemption rights. After the initial business
combination was approved, the company would contact such stockholder to arrange for him or her to deliver his or her certificate
to verify ownership. As a result, the stockholder then had an “option window” after the completion of the initial
business combination during which he or she could monitor the price of the company’s stock in the market. If the price rose
above the redemption price, he or she could sell his or her shares in the open market before actually delivering his or her shares
to the company for cancellation. As a result, the redemption rights, to which stockholders were aware they needed to commit before
the stockholder meeting, would become “option” rights surviving past the completion of the initial business combination
until the redeeming holder delivered its certificate. The requirement for physical or electronic delivery prior to the meeting
ensures that a redeeming holder’s election to redeem is irrevocable once the initial business combination is approved.
Any
request to redeem such shares, once made, may be withdrawn at any time up to the date set forth in the tender offer materials
or the date of the stockholder meeting set forth in our proxy materials, as applicable. Furthermore, if a holder of a public share
delivered its certificate in connection with an election of redemption rights and subsequently decides prior to the applicable
date not to elect to exercise such rights, such holder may simply request that the transfer agent return the certificate (physically
or electronically). It is anticipated that the funds to be distributed to holders of our public shares electing to redeem their
shares will be distributed promptly after the completion of our initial business combination.
If
our initial business combination is not approved or completed for any reason, then our public stockholders who elected to exercise
their redemption rights would not be entitled to redeem their shares for the applicable pro rata share of the trust account. In
such case, we will promptly return any certificates delivered by public holders who elected to redeem their shares.
If
our initial proposed initial business combination is not completed, we may continue to try to complete an initial business combination
with a different target until November 19, 2022 or during any Extension Period.
Redemption
of Public Shares and Liquidation If No Initial Business Combination
Our
amended and restated certificate of incorporation provides that we will have only 24 months from the closing of the Initial Public
Offering to complete our initial business combination. If we do not complete our initial business combination within such 24-month
period or 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 franchise and income taxes (less up to $100,000 of interest to pay dissolution expenses),
divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’
rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law,
and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders
and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for
claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions
with respect to our warrants, which will expire worthless if we fail to complete our initial business combination within the 24-month
time period.
Our
initial stockholders, officers and directors have entered into a letter agreement with us, pursuant to which they have waived
their rights to liquidating distributions from the trust account with respect to any founder shares held by them if we fail to
complete our initial business combination prior to November 19, 2022 or during any Extension Period. However, if our initial stockholders,
officers or directors acquire public shares in or after the Initial Public Offering, they will be entitled to liquidating distributions
from the trust account with respect to such public shares if we fail to complete our initial business combination within the allotted
24-month time period.
Our
initial stockholders, officers and directors have agreed, pursuant to a written agreement with us, that they will not propose
any amendment to our amended and restated certificate of incorporation (i) to modify the substance or timing of our obligation
to 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 prior to November 19, 2022 or (ii) with respect to any other provision relating to stockholders’
rights or pre-initial business combination activity, unless we provide our public stockholders with the opportunity to redeem
their shares of Class A common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate
amount then on deposit in the trust account including interest earned on the funds held in the trust account and not previously
released to us to pay our franchise and income taxes divided by the number of then outstanding public shares. However, we may
not redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 upon consummation
of our initial business combination and after payment of deferred underwriting commissions (so that we are not subject to the
SEC’s “penny stock” rules). If this optional redemption right is exercised with respect to an excessive number
of public shares such that we cannot satisfy the net tangible asset requirement (described above), we would not proceed with the
amendment or the related redemption of our public shares at such time.
We
expect that all costs and expenses associated with implementing our plan of dissolution, as well as payments to any creditors,
will be funded from amounts remaining out of the approximately $1,000,000 of proceeds held outside the trust account, although
we cannot assure you that there will be sufficient funds for such purpose. We will depend on sufficient interest being earned
on the proceeds held in the trust account to pay any tax obligations we may owe. However, if those funds are not sufficient to
cover the costs and expenses associated with implementing our plan of dissolution, to the extent that there is any interest accrued
in the trust account not required to pay taxes on interest income earned on the trust account balance, we may request the trustee
to release to us an additional amount of up to $100,000 of such accrued interest to pay those costs and expenses.
If
we were to expend all of the net proceeds of the Initial Public Offering and the Private Placement, other than the proceeds deposited
in the trust account, and without taking into account interest, if any, earned on the trust account, the per-share redemption
amount received by stockholders upon our dissolution would be approximately $10.00. The proceeds deposited in the trust account
could, however, become subject to the claims of our creditors which would have higher priority than the claims of our public stockholders.
We cannot assure you that the actual per-share redemption amount received by stockholders will not be substantially less than
$10.00. Under Section 281(b) of the DGCL, our plan of dissolution must provide for all claims against us to be paid in full or
make provision for payments to be made in full, as applicable, if there are sufficient assets. These claims must be paid or provided
for before we make any distribution of our remaining assets to our stockholders. While we intend to pay such amounts, if any,
we cannot assure you that we will have funds sufficient to pay or provide for all creditors’ claims.
Although
we will seek to have all vendors, service providers, prospective target businesses or other entities with which we do business
execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account
for the benefit of our public stockholders, there is no guarantee that they will execute such agreements or even if they execute
such agreements that they would be prevented from bringing claims against the trust account including but not limited to fraudulent
inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the
waiver, in each case in order to gain an advantage with respect to a claim against our assets, including the funds held in the
trust account. If any third party refuses to execute an agreement waiving such claims to the monies held in the trust account,
our management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third
party that has not executed a waiver if management believes that such third party’s engagement would be significantly more
beneficial to us than any alternative. Examples of possible instances where we may engage a third party that refuses to execute
a waiver include the engagement of a third-party consultant whose particular expertise or skills are believed by management to
be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable
to find a service provider willing to execute a waiver. Marcum LLP, our independent registered public accounting firm, and the
underwriters of the Initial Public Offering will not execute agreements with us waiving such claims to the monies held in the
trust account.
In
addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of,
or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for
any reason. Our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party for services
rendered or products sold to us, or a prospective target business with which we have entered into a written letter of intent,
confidentiality or similar agreement or business combination agreement, reduce the amount of funds in the trust account to below
the lesser of (i) $10.00 per public share and (ii) the actual amount per public share held in the trust account as of the date
of the liquidation of the trust account, if less than $10.00 per share due to reductions in the value of the trust assets, less
taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed
a waiver of any and all rights to the monies held in the trust account (whether or not such waiver is enforceable) nor will it
apply to any claims under our indemnity of the underwriters of the Initial Public Offering against certain liabilities, including
liabilities under the Securities Act. However, we have not asked our sponsor to reserve for such indemnification obligations,
nor have we independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and believe that
our sponsor’s only assets are securities of our company. Therefore, we cannot assure you that our sponsor would be able
to satisfy those obligations. None of our officers, directors or members of our sponsor will indemnify us for claims by third
parties including, without limitation, claims by vendors and prospective target businesses.
In
the event that the proceeds in the trust account are reduced below (i) $10.00 per public share or (ii) such lesser amount per
public share held in the trust account as of the date of the liquidation of the trust account, due to reductions in value of the
trust assets, in each case net of the amount of interest which may be withdrawn to pay taxes, and our sponsor asserts that it
is unable to satisfy its indemnification obligations or that it has no indemnification obligations related to a particular claim,
our independent directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations.
While we currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce
its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment may
choose not to do so if, for example, the cost of such legal action is deemed by the independent directors to be too high relative
to the amount recoverable or if the independent directors determine that a favorable outcome is not likely. We have not asked
our sponsor to reserve for such indemnification obligations and we cannot assure you that our sponsor would be able to satisfy
those obligations. Accordingly, we cannot assure you that due to claims of creditors the actual value of the per-share redemption
price will not be less than $10.00 per public share.
We
will seek to reduce the possibility that our sponsor will have to indemnify the trust account due to claims of creditors by endeavoring
to have all vendors, service providers, prospective target businesses or other entities with which we do business execute agreements
with us waiving any right, title, interest or claim of any kind in or to monies held in the trust account. Our sponsor will also
not be liable as to any claims under our indemnity of the underwriters of the Initial Public Offering against certain liabilities,
including liabilities under the Securities Act. We will have access to up to approximately $1,000,000 from the proceeds of the
Initial Public Offering and the Private Placement with which to pay any such potential claims (including costs and expenses incurred
in connection with our liquidation, currently estimated to be no more than approximately $100,000). In the event that we liquidate
and it is subsequently determined that the reserve for claims and liabilities is insufficient, stockholders who received funds
from our trust account could be liable for claims made by creditors; however, such liability will not be greater than the amount
of funds from our trust account received by any such stockholder. In the event that our offering expenses exceed our estimate
of $1,000,000, we may fund such excess with funds from the funds not to be held in the trust account. In such case, the amount
of funds we intend to be held outside the trust account would decrease by a corresponding amount. Conversely, in the event that
the Initial Public Offering expenses are less than our estimate of $1,000,000, the amount of funds we intend to be held outside
the trust account would increase by a corresponding amount.
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 prior to November 19, 2022 or during any
Extension Period may be considered a liquidating distribution under Delaware law. If the corporation complies with certain procedures
set forth in Section 280 of the DGCL intended to ensure that it makes reasonable provision for all claims against it, including
a 60-day notice period during which any third-party claims can be brought against the corporation, a 90-day period during which
the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating distributions are
made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such
stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder
would be barred after the third anniversary of the dissolution.
Furthermore,
if the pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in
the event we do not complete our initial business combination prior to November 19, 2022 or during any Extension Period, is not
considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful (potentially
due to the imposition of legal proceedings that a party may bring or due to other circumstances that are currently unknown), then
pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful
redemption distribution, instead of three years, as in the case of a liquidating distribution. If we do not complete our initial
business combination prior to November 19, 2022 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 franchise and income taxes (less up
to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption
will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating
distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject
to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our
obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. Accordingly, it
is our intention to redeem our public shares as soon as reasonably possible following our 18th month and, therefore, we do not
intend to comply with those procedures. As such, our stockholders could potentially be liable for any claims to the extent of
distributions received by them (but no more) and any liability of our stockholders may extend well beyond the third anniversary
of such date.
Because
we will not be complying with Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us
at such time that will provide for our payment of all existing and pending claims or claims that may be potentially brought against
us within the subsequent ten years. However, because we are a blank check company, rather than an operating company, and our operations
will be limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors
(such as lawyers, investment bankers, etc.) or prospective target businesses. As described above, pursuant to the obligation contained
in our underwriting agreement, we will seek to have all vendors, service providers, prospective target businesses or other entities
with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies
held in the trust account. As a result of this obligation, the claims that could be made against us are significantly limited
and the likelihood that any claim that would result in any liability extending to the trust account is remote. Further, our sponsor
may be liable only to the extent necessary to ensure that the amounts in the trust account are not reduced below (i) $10.00 per
public share or (ii) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust
account, due to reductions in value of the trust assets, in each case net of the amount of interest withdrawn to pay taxes and
will not be liable as to any claims under our indemnity of the underwriters of the Initial Public Offering against certain liabilities,
including liabilities under the Securities Act. In the event that an executed waiver is deemed to be unenforceable against a third
party, our sponsor will not be responsible to the extent of any liability for such third-party claims.
If
we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the proceeds held
in the trust account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to
the claims of third parties with priority over the claims of our stockholders. To the extent any bankruptcy claims deplete the
trust account, we cannot assure you we will be able to return $10.00 per share to our public stockholders. Additionally, if we
file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, any distributions
received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential
transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover some or all amounts
received by our stockholders. Furthermore, our board of directors may be viewed as having breached its fiduciary duty to our creditors
and/or may have acted in bad faith, thereby exposing itself and our company to claims of punitive damages, by paying public stockholders
from the trust account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against
us for these reasons.
Our
public stockholders will be entitled to receive funds from the trust account only upon the earlier to occur of: (i) the completion
of our initial business combination, (ii) the redemption of any public shares properly tendered in connection with a stockholder
vote to amend any provisions of our amended and restated certificate of incorporation (A) to modify the substance or timing of
our obligation to 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 prior to November 19, 2022 or (B) with respect to any other provision relating
to stockholders’ rights or pre-initial business combination activity, and (iii) the redemption of all of our public shares
if we do not complete our business combination prior to November 19, 2022 or during any Extension Period, subject to applicable
law. In no other circumstances will a stockholder have any right or interest of any kind to or in the trust account. In the event
we seek stockholder approval in connection with our initial business combination, a stockholder’s voting in connection with
the initial business combination alone will not result in a stockholder’s redeeming its shares to us for an applicable pro
rata share of the trust account. Such stockholder must have also exercised its redemption rights as described above. These provisions
of our amended and restated certificate of incorporation, like all provisions of our amended and restated certificate of incorporation,
may be amended with a stockholder vote.
Competition
In
identifying, evaluating and selecting a target business for our initial business combination, we may encounter competition from
other entities having a business objective similar to ours, including other blank check companies, private equity groups and leveraged
buyout funds, and operating businesses seeking strategic business combinations. Many of these entities are well established and
have extensive experience identifying and effecting business combinations directly or through affiliates. Moreover, many of these
competitors possess greater financial, technical, human and other resources than we do. Our ability to acquire larger target businesses
will be limited by our available financial resources. This inherent limitation may give others with greater resources an advantage
in pursuing the initial business combination of a target business. Furthermore, our obligation to pay cash in connection with
our public stockholders who exercise their redemption rights may reduce the resources available to us for our initial business
combination and our outstanding warrants, and the future dilution they potentially represent, may not be viewed favorably by certain
target businesses. Either of these factors may place us at a competitive disadvantage in successfully negotiating an initial business
combination.
Facilities
Our
executive offices are located at 2455 E. Sunrise Blvd. Suite 1205, Fort Lauderdale, FL 33304 and our telephone number is (954)
526-4865. Our executive offices are provided to us by an affiliate of our sponsor at no cost to us. We consider our current office
space adequate for our current operations.
Employees
We
currently have three officers. These individuals are not obligated to devote any specific number of hours to our matters but they
intend to devote as much of their time as they deem necessary to our affairs until we have completed our initial business combination.
The amount of time they will devote in any time period will vary based on whether a target business has been selected for our
initial business combination and the stage of the initial business combination process we are in. We do not intend to have any
full-time employees prior to the completion of our initial business combination.
An
investment in our securities involves a high degree of risk. You should consider carefully all of the risks described below, together
with the other information contained in this annual report on Form 10-K, before making a decision to invest in our securities.
If any of the following events occur, our business, financial condition and operating results may be materially adversely affected.
In that event, the trading price of our securities could decline, and you could lose all or part of your investment. The risks
include the following:
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We
are a recently incorporated company with no operating history and no revenues, and you
have no basis on which to evaluate our ability to achieve our business objective.
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Past
performance by our management team or their respective affiliates may not be indicative
of future performance of an investment in us.
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Our
shareholders 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 shareholders do not support such a combination.
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Your
only opportunity to affect the investment decision regarding a potential business combination
may be limited to the exercise of your right to redeem your shares from us for cash.
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If
we seek shareholder approval of our initial business combination, our sponsor and members
of our management team have agreed to vote in favor of such initial business combination,
regardless of how our public shareholders vote.
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If
we seek shareholder approval of our initial business combination, our sponsor, directors,
executive officers, advisors and their affiliates may elect to purchase public shares
or warrants, which may influence a vote on a proposed business combination and reduce
the public “float” of our Class A common stock or public warrants.
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You
will not be entitled to protections normally afforded to investors of many other blank
check companies.
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You
will not have any rights or interests in funds from the trust account, except under certain
limited circumstances. Therefore, to liquidate your investment, you may be forced to
sell your public shares or warrants, potentially at a loss.
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If
the net proceeds of the Initial Public Offering and the Private Placement not being held
in the trust account are insufficient to allow us to operate until November 19, 2022,
it could limit the amount available to fund our search for a target business or businesses
and our ability to complete our initial business combination, and we will depend on loans
from our sponsor, its affiliates or members of our management team to fund our search
and to complete our initial business combination.
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Our
search for a business combination, and any target business with which we ultimately consummate
a business combination, may be materially adversely affected by the recent coronavirus
(COVID-19) outbreak and the status of debt and equity markets.
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The
ability of our public shareholders to redeem their shares for cash may make our financial
condition unattractive to potential business combination targets, which may make it difficult
for us to enter into a business combination with a target.
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We
are not required to obtain an opinion from an independent accounting or investment banking
firm, and consequently, you may have no assurance from an independent source that the
price we are paying for the business is fair to our shareholders from a financial point
of view.
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We
may not be able to consummate an initial business combination prior to November 19, 2022,
in which case we would cease all operations except for the purpose of winding up and
we would redeem our public shares and liquidate.
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We
may engage in a business combination with one or more target businesses that have relationships
with entities that may be affiliated with our sponsor, executive officers, directors
or initial shareholders which may raise potential conflicts of interest.
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Since
our sponsor, executive officers and directors will lose their entire investment in us
if our initial business combination is not completed (other than with respect to public
shares they may acquire during or after the Initial Public Offering), a conflict of interest
may arise in determining whether a particular business combination target is appropriate
for our initial business combination.
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Our
sponsor controls a substantial interest in us and thus may exert a substantial influence
on actions requiring a shareholder vote, potentially in a manner that you do not support.
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Our
executive officers and directors will allocate their time to other businesses thereby
causing conflicts of interest in their determination as to how much time to devote to
our affairs. This conflict of interest could have a negative impact on our ability to
complete our initial business combination.
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Our
executive officers, directors, security holders and their respective affiliates may have
competitive pecuniary interests that conflict with our interests.
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Risks
Related to Our Business and the Initial 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 choose not to hold a stockholder vote to approve our initial business combination unless the initial 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 law, the decision as to whether we will seek stockholder approval of
a proposed initial business combination or will allow stockholders to sell their shares to us in a tender offer will be made by
us, solely in our discretion, and will be based on a variety of factors, such as the timing of the transaction and whether the
terms of the transaction would otherwise require us to seek stockholder approval. Accordingly, we may complete our initial business
combination even if holders of a majority of our public shares do not approve of the initial business combination we complete.
If
we seek stockholder approval of our initial business combination, our initial stockholders have agreed to vote in favor of such
initial business combination, regardless of how our public stockholders vote.
Pursuant
to the letter agreement, our initial stockholders, officers and directors have agreed to vote their founder shares, as well as
any public shares purchased during or after the Initial Public Offering (including in open market and privately negotiated transactions),
in favor of our initial business combination. As a result, in addition to our initial stockholders’ founder shares, we would
need only 8,189,551, or 37.5% (assuming all outstanding shares are voted), or 1,364,926, or 6.25% (assuming only the minimum number
of shares representing a quorum are voted), of the 21,838,800 public shares outstanding to be voted in favor of an initial business
combination (assuming all outstanding shares are voted) in order to have our initial business combination approved (assuming the
over-allotment option is not exercised). Our initial stockholders own shares representing 20% of our outstanding shares of common
stock. Accordingly, if we seek stockholder approval of our initial business combination, the agreement by our initial stockholders
to vote in favor of our initial business combination will increase the likelihood that we will receive the requisite stockholder
approval for such initial business combination.
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 initial business combination.
At
the time of your investment in us, you will not be provided with an opportunity to evaluate the specific merits or risks of our
initial business combination. Since our board of directors may complete an initial business combination without seeking stockholder
approval, public stockholders may not have the right or opportunity to vote on the initial business combination, unless we seek
such stockholder vote.
Accordingly,
if we do not seek stockholder approval, your only opportunity to affect the investment decision regarding a potential business
combination may be limited to exercising your redemption rights within the period of time (which will be at least 20 business
days) set forth in our tender offer documents mailed to our public stockholders in which we describe our initial business combination.
The
ability of our public stockholders to redeem their shares for cash may make our financial condition unattractive to potential
business combination targets, which may make it difficult for us to enter into an initial business combination with a target.
We
may seek to enter into an initial business combination 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 initial business combination.
Furthermore, in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than
$5,000,001 upon consummation of our initial business combination and after payment of deferred underwriting commissions (so that
we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which
may be contained in the agreement relating to our initial business combination. Consequently, if accepting all properly submitted
redemption requests would cause our net tangible assets to be less than $5,000,001 upon consummation of our initial business combination
and after payment of deferred underwriting commissions or such greater amount necessary to satisfy a closing condition as described
above, we would not proceed with such redemption and the related business combination and may instead search for an alternate
business combination. Prospective targets will be aware of these risks and, thus, may be reluctant to enter into an initial business
combination with us.
The
ability of our public stockholders to exercise redemption rights with respect to a large number of our shares may not allow us
to complete the most desirable business combination or optimize our capital structure.
At
the time we enter into an agreement for our initial business combination, we will not know how many stockholders may exercise
their redemption rights, and therefore will need to structure the transaction based on our expectations as to the number of shares
that will be submitted for redemption. If our initial business combination agreement requires us to use a portion of the cash
in the trust account to pay the purchase price, or requires us to have a minimum amount of cash at closing, we will need to reserve
a portion of the cash in the trust account to meet such requirements, or arrange for third-party financing. In addition, if a
larger number of shares are submitted for redemption than we initially expected, we may need to restructure the transaction to
reserve a greater portion of the cash in the trust account or arrange for third-party financing. Raising additional third-party
financing may involve dilutive equity issuances or the incurrence of indebtedness at higher than desirable levels. Furthermore,
this dilution would increase to the extent that the anti-dilution provisions of the Class B common stock result in the issuance
of Class A shares on a greater than one-to-one basis upon conversion of the Class B common stock at the time of our business combination.
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 an initial 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 timeframe may give potential target businesses
leverage over us in negotiating an initial business combination and may decrease our ability to conduct due diligence on potential
business combination targets as we approach our dissolution deadline, which could undermine our ability to complete our initial
business combination on terms that would produce value for our stockholders.
Any
potential target business with which we enter into negotiations concerning an initial business combination will be aware that
we must complete our initial business combination prior to November 19, 2022 or seek a stockholder approved extension of such
period. Consequently, such target business may obtain leverage over us in negotiating an initial business combination, knowing
that if we do not complete our initial business combination with that particular target business, we may be unable to complete
our initial business combination with any target business. This risk will increase as we get closer to the timeframe described
above. In addition, we may have limited time to conduct due diligence and may enter into our initial business combination on terms
that we would have rejected upon a more comprehensive investigation.
Our
search for a business combination, and any target business with which we ultimately consummate a business combination, may be
materially adversely affected by the coronavirus (COVID-19) pandemic and the status of debt and equity markets.
The
coronavirus (COVID-19) pandemic has resulted, and other infectious diseases could result, in a widespread health crisis that could
adversely affect the economies and financial markets worldwide, and the business of any potential target business with which we
consummate a business combination could be materially and adversely affected. Furthermore, we may be unable to complete a business
combination if continued concerns relating to COVID-19 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, or if COVID-19 causes a prolonged economic downturn. The extent to which COVID-19 impacts our search for a
business combination will depend on future developments, which are highly uncertain and cannot be predicted, including new information
which may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others. If
the disruptions posed by COVID-19 or other matters of global concern continue for an extensive period of time, our ability to
consummate a business combination, or the operations of a target business with which we ultimately consummate a business combination,
may be materially adversely affected.
In
addition, our ability to consummate a business combination may be dependent on the ability to raise equity and debt financing,
which may be impacted by COVID-19 and other events, including as a result of increased market volatility, decreased market liquidity
and third-party financing being unavailable on terms acceptable to us or at all.
The
COVID-19 pandemic may also have the effect of heightening many of the other risks described in this “Risk Factors”
section, such as those related to the market for our securities and any cross-border transactions.
We
may not be able to complete our initial business combination within the prescribed timeframe, in which case we would cease all
operations except for the purpose of winding up and we would redeem our public shares and liquidate, in which case our public
stockholders may only receive $10.00 per share, or less than such amount in certain circumstances, and our warrants will expire
worthless.
Our
amended and restated certificate of incorporation provides that we must complete our initial business combination within 24 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. For instance, given the highly regulated nature of the defense, government service
and aerospace industries, it may be more difficult to find a suitable target business and complete our initial business combination
within such time period on terms and conditions that are satisfactory to us, whether as a result of the regulatory environment
applicable to its business or our existing corporate structure and ownership. Further, changes in governmental policies or defense
spending in the United States or other international jurisdictions may make the defense, government services and aerospace industries
less attractive industries than are currently expected. 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 franchise and income taxes (less up to $100,000 of interest to pay
dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public
stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject
to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining
stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to
provide for claims of creditors and the requirements of other applicable law. In such case, our public stockholders may only receive
$10.00 per share, and our warrants will expire worthless. In certain circumstances, our public stockholders may receive less than
$10.00 per share on the redemption of their shares. See “— If third parties bring claims against us, the proceeds
held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00
per share” and other risk factors below.
If
we seek stockholder approval of our initial business combination, our sponsor, directors, officers, advisors and their affiliates
may elect to purchase public shares or public warrants from public stockholders, which may influence a vote on a proposed initial
business combination and reduce the public “float” of our Class A common stock.
If
we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial
business combination pursuant to the tender offer rules, our sponsor, 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. However, they
have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions
for any such transactions. None of the funds in the trust account will be used to purchase public shares or public warrants in
such transactions.
Such
a purchase may include a contractual acknowledgement that such stockholder, although still the record holder of our shares is
no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that our sponsor,
directors, officers, advisors or their affiliates purchase public shares in privately negotiated transactions from public stockholders
who have already elected to exercise their redemption rights, such selling stockholders would be required to revoke their prior
elections to redeem their shares. The purpose of such purchases could be to vote such shares in favor of the initial business
combination and thereby increase the likelihood of obtaining stockholder approval of the initial business combination, or to satisfy
a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at
the closing of our initial business combination, where it appears that such requirement would otherwise not be met. The purpose
of any such purchases of public warrants could be to reduce the number of public warrants outstanding or to vote such warrants
on any matters submitted to the warrant holders for approval in connection with our initial business combination. Any such purchases
of our securities may result in the completion of our initial business combination that may not otherwise have been possible.
Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are
subject to such reporting requirements.
In
addition, if such purchases are made, the public “float” of our Class A common stock or public 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, proxy materials or
tender offer documents, 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,
which may include the requirement that a beneficial holder must identify itself. For example, we may require our public stockholders
seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,”
to either tender their certificates to our transfer agent prior to the date set forth in the tender offer documents mailed to
such holders, or up to two business days prior to the initial vote on the proposal to approve the initial business combination
in the event we distribute proxy materials, or to deliver their shares to the transfer agent electronically. In the event that
a stockholder fails to comply with these or any other procedures, its shares may not be redeemed. See the section of this prospectus
entitled “Proposed Business — Redemption Rights for Public Stockholders upon Completion of our Initial Business Combination
or Certain Stockholder Votes to Amend our Amended and Restated Certificate of Incorporation — Tendering Stock Certificates
in Connection with a Tender Offer or Redemption Rights.”
You
will not be entitled to protections normally afforded to investors of many other blank check companies.
Since
the net proceeds of the Initial Public Offering and the Private Placement are intended to be used to complete an initial business
combination with a target business that has not been identified, we may be deemed to be a “blank check” company under
the U.S. securities laws. However, because we had net tangible assets in excess of $5,000,000 upon the 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 will not be afforded the benefits or protections of those rules. Among other things, this means our units will be immediately
tradable and we will have a longer period of time to complete our initial business combination than do companies subject to Rule
419. Moreover, if we 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 amended and restated 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 seeking redemption
rights with respect to more than an aggregate of 15% of the shares sold in the Initial Public Offering without our prior consent,
which we refer to as the “Excess Shares.” However, we would not be restricting our stockholders’ ability to
vote all of their shares (including Excess Shares) for or against our 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 special purpose acquisition company structure and 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 do not complete our initial
business combination, our public stockholders may receive only approximately $10.00 per share on our redemption of our public
shares, or less than such amount in certain circumstances, and our warrants will expire worthless.
We
expect to encounter 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 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 similar technical, human and other resources to ours, 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 Private Placement, 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 present closing risk by reducing the resources
available to us for our initial business combination.
Additionally,
potential target companies may be less inclined to consummate a transaction with us because definitive documentation for such
a transaction will preclude any recourse against our trust account, meaning that potential counterparties may determine that they
do not have adequate contractual remedies in the event a transaction fails to close. These factors may place us at a competitive
disadvantage in successfully negotiating an initial business combination. If we do not complete our initial business combination,
our public stockholders may receive only approximately $10.00 per share on the liquidation of our trust account and our warrants
will expire worthless. In certain circumstances, our public stockholders may receive less than $10.00 per share upon our liquidation.
See “— If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share
redemption amount received by stockholders may be less than $10.00 per share” and other risk factors below.
If
the net proceeds of the Initial Public Offering and the Private Placement not being held in the trust account are insufficient
to allow us to operate until November 19, 2022, we may be unable to complete our initial business combination, in which case our
public stockholders may only receive $10.00 per share, or less than such amount in certain circumstances, and our warrants will
expire worthless.
The
funds available to us outside of the trust account may not be sufficient to allow us to operate until November 19, 2022, assuming
that our initial business combination is not completed during that time. We believe that the funds available to us outside of
the trust account will be sufficient to allow us to operate until November 19, 2022; however, we cannot assure you that our estimate
is accurate. Of the funds available to us, we could use a portion of the funds available to us to pay fees to consultants to assist
us with our search for a target business. We could also use a portion of the funds as a down payment or to fund a “no-shop”
provision (a provision in letters of intent or merger agreements designed to keep target businesses from “shopping”
around for transactions with other companies on terms more favorable to such target businesses) with respect to a particular proposed
initial business combination, although we do not have any current intention to do so. If we entered into a letter of intent or
other agreement where we paid for the right to receive exclusivity from a target business and were subsequently required to forfeit
such funds (whether as a result of our breach or otherwise), we might not have sufficient funds to continue searching for, or
conduct due diligence with respect to, a target business. If we do not complete our initial business combination, our public stockholders
may receive only approximately $10.00 per share on the liquidation of our trust account and our warrants will expire worthless.
In certain circumstances, our public stockholders may receive less than $10.00 per share upon our liquidation. See “—
If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption
amount received by stockholders may be less than $10.00 per share” and other risk factors below.
If
the net proceeds of the Initial Public Offering and the sale of the private placement warrants not being held in the trust account
are insufficient, it could limit the amount available to fund our search for a target business or businesses and complete our
initial business combination and we will depend on loans from our sponsor or management team to fund our search for an initial
business combination, to pay our franchise and income taxes and to complete our initial business combination. If we are unable
to obtain these loans, we may be unable to complete our initial business combination.
Of
the net proceeds of the Initial Public Offering and the sale of the private placement warrants, only approximately $1,000,000
will be available to us initially outside the trust account to fund our working capital requirements. In the event that our offering
expenses exceed our estimate of $1,000,000, we may fund such excess with funds not to be held in the trust account. In such case,
the amount of funds we intend to be held outside the trust account would decrease by a corresponding amount. The amount held in
the trust account will not be impacted as a result of such increase or decrease. Conversely, in the event that the Initial Public
Offering expenses are less than our estimate of $1,000,000, the amount of funds we intend to be held outside the trust account
would increase by a corresponding amount. If we are required to seek additional capital, we would need to borrow funds from our
sponsor, management team or other third parties to operate or may be forced to liquidate. None of our sponsor, members of our
management team nor any of their affiliates is under any obligation to advance funds to us in such circumstances. Any such advances
would be repaid only from funds held outside the trust account or from funds released to us upon completion of our initial business
combination. Up to $1,500,000 of such loans may be converted into private placement-equivalent warrants at a price of $1.50 per
warrant at the option of the lender. Prior to the completion of our initial business combination, we do not expect to seek loans
from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties will be willing to loan
such funds and provide a waiver against any and all rights to seek access to funds in our trust account. If we are unable to obtain
these loans, we may be unable to complete our initial business combination. If we do not complete our initial business combination
because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the trust account.
Consequently, our public stockholders may only receive approximately $10.00 per share on our redemption of our public shares,
and our warrants will expire worthless. In certain circumstances, our public stockholders may receive less than $10.00 per share
on the redemption of their shares. See “— If third parties bring claims against us, the proceeds held in the trust
account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00 per share”
and other risk factors below.
Subsequent
to the completion of our initial business combination, we may be required to take write-downs or write-offs, restructuring and
impairment or other charges that could have a significant negative effect on our financial condition, results of operations and
our stock price, which could cause you to lose some or all of your investment.
Even
if we conduct extensive due diligence on a target business with which we combine, we cannot assure you that this diligence will
surface all material issues that may be present inside a particular target business, that it would be possible to uncover all
material issues through a customary amount of due diligence, or that factors outside of the target business and outside of our
control will not later arise. As a result of these factors, we may be forced to later write-down or write-off assets, restructure
our operations, or incur impairment or other charges that could result in our reporting losses. Even if our due diligence successfully
identifies certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with
our preliminary risk analysis. 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 debt financing to partially finance the initial
business combination. Accordingly, any stockholders who choose to remain stockholders following the initial business combination
could suffer a reduction in the value of their shares. Such stockholders are unlikely to have a remedy for such reduction in value
unless they are able to successfully claim that the reduction was due to the breach by our officers or directors of a duty of
care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that
the proxy solicitation or tender offer materials, as applicable, relating to the initial business combination constituted an actionable
material misstatement or omission.
If
third parties bring claims against us, the proceeds held in the trust account could be reduced and the per- share redemption amount
received by stockholders may be less than $10.00 per share.
Our
placing of funds in the trust account may not protect those funds from third-party claims against us. Although we will seek to
have all vendors, service providers, prospective target businesses and other entities with which we do business execute agreements
with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit
of our public stockholders, such parties may not execute such agreements, or even if they execute such agreements they may not
be prevented from bringing claims against the trust account, including, but not limited to, fraudulent inducement, breach of fiduciary
responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order
to gain advantage with respect to a claim against our assets, including the funds held in the trust account. If any third party
refuses to execute an agreement waiving such claims to the monies held in the trust account, our management will perform an analysis
of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if
management believes that such third party’s engagement would be significantly more beneficial to us than any alternative.
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. Marcum LLP, our independent registered public accounting firm, and the underwriters of the Initial Public Offering, will
not execute agreements with us waiving such claims to the monies held in the trust account.
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 do not complete our initial business combination within the prescribed
timeframe, or upon the exercise of a redemption right in connection with our initial business combination, we will be required
to provide for payment of claims of creditors that were not waived that may be brought against us within the ten years following
redemption. Accordingly, the per-share redemption amount received by public stockholders could be less than the $10.00 per share
initially held in the trust account, due to claims of such creditors. Pursuant to the letter agreement, the form of which is filed
as Exhibit 10.1 to the registration statement of which this prospectus forms a part, our sponsor has agreed that it will be liable
to us if and to the extent any claims by a third party for services rendered or products sold to us, or a prospective target business
with which we have entered into a written letter of intent, confidentiality or similar agreement or business combination agreement,
reduce the amount of funds in the trust account to below the lesser of (i) $10.00 per public share and (ii) the actual amount
per public share held in the trust account as of the date of the liquidation of the trust account, if less than $10.00 per share
due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims
by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the trust account
(whether or not such waiver is enforceable) nor will it apply to any claims under our indemnity of the underwriters of the Initial
Public Offering against certain liabilities, including liabilities under the Securities Act. However, we have not asked our sponsor
to reserve for such indemnification obligations, nor have we independently verified whether our sponsor has sufficient funds to
satisfy its indemnity obligations and believe that our sponsor’s only assets are securities of our company. Therefore, we
cannot assure you that our sponsor would be able to satisfy those obligations. As a result, if any such claims were successfully
made against the trust account, the funds available for our initial business combination and redemptions could be reduced to less
than $10.00 per public share. In such event, we may not be able to complete our initial business combination, and you would receive
such lesser amount per share in connection with any redemption of your public shares. None of our officers, directors or members
of our sponsor will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective
target businesses.
Our
directors may decide not to enforce the indemnification obligations of our sponsor, resulting in a reduction in the amount of
funds in the trust account available for distribution to our public stockholders.
In
the event that the proceeds in the trust account are reduced below the lesser of (i) $10.00 per share and (ii) the actual amount
per share held in the trust account as of the date of the liquidation of the trust account if less than $10.00 per share due to
reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes, and our sponsor
asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim,
our independent directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations.
While
we currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification
obligations to us, it is possible that our independent directors in exercising their business judgment and subject to their fiduciary
duties may choose not to do so in any particular instance if, for example, the cost of such legal action is deemed by the independent
directors to be too high relative to the amount recoverable or if the independent directors determine that a favorable outcome
is not likely. If our independent directors choose not to enforce these indemnification obligations, the amount of funds in the
trust account available for distribution to our public stockholders may be reduced below $10.00 per share.
We
may not have sufficient funds to satisfy indemnification claims of our directors and officers.
We
have agreed to indemnify our officers and directors to the fullest extent permitted by law. However, our officers and directors
have agreed to waive (and any other persons who may become an officer or director prior to the initial business combination will
also be required to waive) any right, title, interest or claim of any kind in or to any monies in the trust account and not to
seek recourse against the trust account for any reason whatsoever (except to the extent they are entitled to funds from the trust
account due to their ownership of public shares). Accordingly, any indemnification provided will be able to be satisfied by us
only if (i) we have sufficient funds outside of the trust account or (ii) we consummate an initial business combination. Our obligation
to indemnify our officers and directors may discourage stockholders from bringing a lawsuit against our officers or directors
for breach of their fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative litigation
against our officers and directors, even though such an action, if successful, might otherwise benefit us and our stockholders.
Furthermore, a stockholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage
awards against our officers and directors pursuant to these indemnification provisions.
If,
after we distribute the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary
bankruptcy petition is filed against us that is not dismissed, a bankruptcy court may seek to recover such proceeds, and we and
our board may be exposed to claims of punitive damages.
If,
after we distribute the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary
bankruptcy petition is filed against us that is not dismissed, any distributions received by stockholders could be viewed under
applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.”
As a result, a bankruptcy court could seek to recover all amounts received by our stockholders. In addition, our board of directors
may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith, thereby exposing itself
and us to claims of punitive damages, by paying public stockholders from the trust account prior to addressing the claims of creditors.
If,
before distributing the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary
bankruptcy petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over
the claims of our stockholders and the per-share amount that would otherwise be received by our stockholders in connection with
our liquidation may be reduced.
If,
before distributing the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary
bankruptcy petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable
bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the
claims of our stockholders. To the extent any bankruptcy claims deplete the trust account, the per-share amount that would otherwise
be received by our stockholders in connection with our liquidation may be reduced.
If
we are deemed to be an investment company under the Investment Company Act, we may be required to institute burdensome compliance
requirements and our activities may be restricted, which may make it difficult for us to complete our 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;
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adoption
of a specific form of corporate structure; and
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reporting,
record keeping, voting, proxy and disclosure requirements and other rules and regulations.
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In
order not to be regulated as an investment company under the Investment Company Act, unless we can qualify for an exclusion, we
must ensure that we are engaged primarily in a business other than investing, reinvesting or trading in securities and that our
activities do not include investing, reinvesting, owning, holding or trading “investment securities” constituting
more than 40% of our total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. Our business
will be to identify and complete an initial 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 U.S. “government securities” within the meaning of Section 2(a)(16)
of the Investment Company Act having a maturity of 185 days or less or in money market funds meeting certain conditions under
Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations. Pursuant
to the trust agreement, the trustee is not permitted to invest in other securities or assets. By restricting the investment of
the proceeds to these instruments, and by having a business plan targeted at acquiring and growing businesses for the long term
(rather than on buying and selling businesses in the manner of a merchant bank or private equity fund), we intend to avoid being
deemed an “investment company” within the meaning of the Investment Company Act. The trust account is intended as
a holding place for funds pending the earliest to occur of: (i) the completion of our initial business combination; (ii) the redemption
of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of
incorporation (A) to modify the substance or timing of our obligation to 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 prior to November 19,
2022 or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity;
or (iii) absent an initial business combination prior to November 19, 2022 or during any Extension Period, our return of the funds
held in the trust account to our public stockholders as part of our redemption of the public shares. If we do not invest the proceeds
as discussed above, we may be deemed to be subject to the Investment Company Act. If we were deemed to be subject to the Investment
Company Act, compliance with these additional regulatory burdens would require additional expenses for which we have not allotted
funds and may hinder our ability to complete an initial business combination or may result in our liquidation. If we do not complete
our initial business combination, our public stockholders may receive only approximately $10.00 per share on the liquidation of
our trust account and our warrants will expire worthless.
Changes
in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, including our
ability to negotiate and complete our initial business combination and results of operations.
We
are subject to laws and regulations enacted by national, regional and local governments. In particular, we will be required to
comply with certain SEC and other legal requirements. Compliance with, and monitoring of, applicable laws and regulations may
be difficult, time consuming and costly.
Those
laws and regulations and their interpretation and application may also change from time to time and those changes could have a
material adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable
laws or regulations, as interpreted and applied, could have a material adverse effect on our business, 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 prior to November 19, 2022 or during any
Extension 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 end of the 24th month after the closing of the Initial Public Offering or the expiration
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 ten 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 prior to November 19, 2022
or during any Extension Period is not considered a liquidating distribution under Delaware law and such redemption distribution
is deemed to be unlawful (potentially due to the imposition of legal proceedings that a party may bring or due to other circumstances
that are currently unknown), then pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could
then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidating distribution.
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.
We
may not hold an annual meeting of stockholders until after we consummate a business combination (unless required by the NYSE),
and thus may not be in compliance with Section 211(b) of the DGCL, which requires an annual meeting of stockholders be held for
the purposes of electing directors in accordance with a company’s bylaws unless such election is made by written consent
in lieu of such a meeting. Therefore, if our stockholders want us to hold an annual meeting prior to our consummation of a 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.
We
may seek business combination opportunities in industries or sectors which may or may not be outside of our management team’s
area of expertise.
Although
we intend to primarily focus on identifying companies in the defense, government service and aerospace industries, we will consider
an initial business combination outside of our management team’s area of expertise if an initial business combination candidate
is presented to us and we determine that such candidate offers an attractive business combination opportunity for our company
or we are unable to identify a suitable candidate in this sector after having expanded a reasonable amount of time and effort
in an attempt to do so. Although our management will endeavor to evaluate the risks inherent in any particular business combination
candidate, we cannot assure you that we will adequately ascertain or assess all of the significant risk factors. We also cannot
assure you that an investment in our 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 an initial business combination candidate. In the event we elect
to pursue a business combination outside of the areas of our management team’s expertise, our management team’s expertise
may not be directly applicable to its evaluation or operation, and the information contained in this prospectus regarding the
areas of our management team’s expertise would not be relevant to an understanding of the business that we elect to acquire.
As a result, our management may not be able to adequately ascertain or assess all of the significant risk factors. Accordingly,
any stockholders who choose to remain stockholders following our initial business combination could suffer a reduction in the
value of their shares. Such stockholders are unlikely to have a remedy for such reduction in value.
Although
we have identified general criteria and guidelines that we believe are important in evaluating prospective target businesses,
we may enter into our initial business combination with a target that does not meet such criteria and guidelines, and as a result,
the target business with which we enter into our initial business combination may not have attributes 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 these positive attributes. If we complete our
initial business combination with a target that does not meet some or all of these guidelines, such combination may not be as
successful as a combination with a business that does meet all of our general criteria and guidelines. In addition, if we announce
a prospective business combination with a target that does not meet our general criteria and guidelines, a greater number of stockholders
may exercise their redemption rights, which may make it difficult for us to meet any closing condition with a target business
that requires us to have a minimum net worth or a certain amount of cash. In addition, if stockholder approval of the transaction
is required by law, or we decide to obtain stockholder approval for business or other 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 do not complete our initial business combination, our public stockholders may receive only approximately $10.00
per share on the liquidation of our trust account and our warrants will expire worthless. In certain circumstances, our public
stockholders may receive less than $10.00 per share on the redemption of their shares. See “— If third parties bring
claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders
may be less than $10.00 per share” and other risk factors below.
We
may seek business combination opportunities with a financially unstable business or an entity lacking an established record of
revenue, cash flow or earnings, which could subject us to volatile revenues, cash flows or earnings or difficulty in retaining
key personnel.
To
the extent we complete our initial business combination with a financially unstable business or an entity lacking an established
record of revenues or earnings, we may be affected by numerous risks inherent in the operations of the business with which we
combine. These risks include volatile revenues or earnings and difficulties in obtaining and retaining key personnel. Although
our officers and directors will endeavor to evaluate the risks inherent in a particular target business, we may not be able to
properly ascertain or assess all of the significant risk factors and we may not have adequate time to complete due diligence.
Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that
those risks will adversely impact a target business.
We
are not required to obtain an opinion from an independent investment banking firm or from an independent accounting firm, and
consequently, you may have no assurance from an independent source that the price we are paying for the business is fair to our
company from a financial point of view.
Unless
we complete our initial business combination with an affiliated entity or our board cannot independently determine the fair market
value of the target business or businesses, we are not required to obtain an opinion from an independent investment banking firm
or an independent accounting firm that the price we are paying is fair to our company from a financial point of view. If no opinion
is obtained, our stockholders will be relying on the judgment of our board of directors, who will determine fair market value
based on standards generally accepted by the financial community. Such standards used will be disclosed in our proxy materials
or tender offer documents, as applicable, related to our initial business combination.
Resources
could be wasted in researching business combinations that are not completed, which could materially adversely affect subsequent
attempts to locate and acquire or merge with another business. If we do not complete our initial business combination, our public
stockholders may receive only approximately $10.00 per share, or less than such amount in certain circumstances, on the liquidation
of our trust account and our warrants will expire worthless.
We
anticipate that the investigation of each specific target business and the negotiation, drafting and execution of relevant agreements,
disclosure documents and other instruments will require substantial management time and attention and substantial costs for accountants,
attorneys, consultants 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 do not complete our initial business combination,
our public stockholders may receive only approximately $10.00 per share on the liquidation of our trust account and our warrants
will expire worthless. In certain circumstances, our public stockholders may receive less than $10.00 per share on the redemption
of their shares. See “— If third parties bring claims against us, the proceeds held in the trust account could be
reduced and the per-share redemption amount received by stockholders may be less than $10.00 per share” and other risk factors
below.
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 services
and limited operating activities. This lack of diversification may negatively impact our operating results and profitability.
We
may effectuate our initial business combination with a single target business or multiple target businesses simultaneously or
within a short period of time. However, we may not be able to effectuate our initial business combination with more than one target
business because of various factors, including the existence of complex accounting issues and the requirement that we prepare
and file pro forma financial statements with the SEC that present operating results and the financial condition of several target
businesses as if they had been operated on a combined basis. By completing our initial business combination with only a single
entity, our lack of diversification may subject us to numerous economic, competitive and regulatory 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 intend to primarily 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 risks, any or all of which may have a
substantial adverse impact upon the particular industry in which we may operate subsequent to our initial business combination.
We
may attempt to simultaneously complete business combinations with multiple prospective targets, which may hinder our ability to
complete our initial business combination and give rise to increased costs and risks that could negatively impact our operations
and profitability.
If
we determine to simultaneously acquire several businesses that are owned by different sellers, we will need for each of such sellers
to agree that our purchase of its business is contingent on the simultaneous closings of the other business combinations, which
may make it more difficult for us, and delay our ability, to complete our initial business combination. We do not, however, intend
to purchase multiple businesses in unrelated industries in conjunction with 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 an initial business combination with a company that is not as profitable as we suspected, if at all.
In
pursuing our initial business combination strategy, we may seek to effectuate our initial business combination with a privately
held company. Very little public information generally exists about private companies, and we could be required to make our decision
on whether to pursue a potential initial business combination on the basis of limited information, which may result in an initial
business combination with a company that is not as profitable as we suspected, if at all.
Our
management may not be able to maintain control of a target business after our initial business combination.
We
may structure an initial business combination so that the post-transaction company in which our public stockholders own shares
will own less than 100% of the equity interests or assets of a target business, but we will only complete such business combination
if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires
a controlling interest in the target sufficient for us not to be required to register as an investment company under the Investment
Company Act. We will not consider any transaction that does not meet such criteria. Even if the post- transaction company owns
50% or more of the voting securities of the target, our stockholders prior to the 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 the
initial business combination. For example, we could pursue a transaction in which we issue a substantial number of new shares
of Class A common stock in exchange for all of the outstanding capital stock of a target. In this case, we would acquire a 100%
interest in the target. However, as a result of the issuance of a substantial number of new shares of common stock, our stockholders
immediately prior to such transaction could own less than a majority of our outstanding shares of common stock subsequent to such
transaction. In addition, other minority stockholders may subsequently combine their holdings resulting in a single person or
group obtaining a larger share of the company’s stock than we initially acquired. Accordingly, this may make it more likely
that our management will not be able to maintain our control of the target business. We cannot provide assurance that, upon loss
of control of a target business, new management will possess the skills, qualifications or abilities necessary to profitably operate
such business.
We
do not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for us to
complete an initial business combination with which a substantial majority of our stockholders do not agree.
Our
amended and restated certificate of incorporation will not provide a specified maximum redemption threshold, except that in no
event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 upon consummation
of our initial business combination and after payment of deferred underwriting commissions (such that we are not subject to the
SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in the
agreement relating to our initial business combination. As a result, we may be able to complete our initial business combination
even though a substantial majority of our public 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
initial business combination pursuant to the tender offer rules, have entered into privately negotiated agreements to sell their
shares to our sponsor, officers, directors, advisors or their affiliates. In the event the aggregate cash consideration we would
be required to pay for all shares of Class A common stock that are validly submitted for redemption plus any amount required to
satisfy cash conditions pursuant to the terms of the proposed initial business combination exceed the aggregate amount of cash
available to us, we will not complete the initial business combination or redeem any shares, 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.
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.
We
have not selected any specific business combination target but intend to target businesses larger than we could acquire with the
net proceeds of the Initial Public Offering and the sale of the private placement warrants. As a result, we may be required to
seek additional financing to complete such proposed initial 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. Further, the amount of additional financing we may be required
to obtain could increase as a result of future growth capital needs for any particular transaction, the depletion of the available
net proceeds in search of a target business, the obligation to repurchase for cash a significant number of public shares from
stockholders who elect redemption in connection with our initial business combination and/or the terms of negotiated transactions
to purchase public shares in connection with our initial business combination. If we do not complete our initial business combination,
our public stockholders may receive only approximately $10.00 per share plus any pro rata interest earned on the funds held in
the trust account and not previously released to us to pay our franchise and income taxes on the liquidation of our trust account,
and our warrants will expire worthless. In addition, even if we do not need additional financing to complete our 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 do not complete our initial business combination, our public stockholders may only receive approximately $10.00 per share
on the liquidation of our trust account, and our warrants will expire worthless. Furthermore, as described in the risk factor
entitled “If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share
redemption amount received by stockholders may be less than $10.00 per share,” under certain circumstances our public stockholders
may receive less than $10.00 per share upon the liquidation of the trust account.
Our
initial stockholders may exert a substantial influence on actions requiring a stockholder vote, potentially in a manner that you
do not support.
Our
initial stockholders own shares representing 20% of our issued and outstanding shares of common stock. Accordingly, they may exert
a substantial influence on actions requiring a stockholder vote, potentially in a manner that you do not support, including amendments
to our amended and restated certificate of incorporation and approval of major corporate transactions. If our initial stockholders
purchase any additional shares of common stock in the aftermarket or in privately negotiated transactions, this would increase
their control. Factors that would be considered in making such additional purchases would include consideration of the current
trading price of our Class A common stock. In addition, our board of directors, whose members were elected by our initial stockholders,
is and will be divided into three classes, each of which will generally serve for a term of three years with only one class of
directors being elected in each year. We may not hold an annual meeting of stockholders to elect new directors prior to the completion
of our initial business combination, in which case all of the current directors will continue in office until at least the completion
of the initial business combination. If there is an annual meeting, as a consequence of our “staggered” board of directors,
only a minority of the board of directors will be considered for election and our initial stockholders and only holders of our
founder shares will have the right to vote on the election of directors prior to our initial business combination. In addition,
we have agreed not to enter into a definitive agreement regarding an initial business combination without the prior consent of
our sponsor. Accordingly, our initial stockholders will continue to exert control at least until the completion of our initial
business combination.
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 an initial business combination meeting certain financial
significance tests include historical and/or pro forma financial statement disclosure in periodic reports. We would include the
same financial statement disclosure in connection with any tender offer documents. These financial statements may be required
to be prepared in accordance with, or be reconciled to, accounting principles generally accepted in the United States, 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 statements in accordance with federal proxy or tender offer rules and complete our initial business combination
within the prescribed timeframe.
Compliance
obligations under the Sarbanes-Oxley Act may make it more difficult for us to effectuate our initial business combination, require
substantial financial and management resources, and increase the time and costs of completing an initial business combination.
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. Further, for as long
as we remain an emerging growth company, we will not be required to comply with the independent registered public accounting firm
attestation requirement on our internal control over financial reporting. The fact that we are a blank check company makes compliance
with the requirements of the Sarbanes-Oxley Act particularly burdensome on us as compared to other public companies because a
target company with which we seek to complete our initial business combination may not be in compliance with the provisions of
the Sarbanes-Oxley Act regarding adequacy of its internal controls. The development of the internal control of any such entity
to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such business combination.
If
we effect our initial business combination with a company with operations or opportunities outside of the United States, we would
be subject to a variety of additional risks that may negatively impact our operations.
If
we effect our initial business combination with a company with operations or opportunities outside of the United States, we would
be subject to risks associated with cross-border business combinations, including in connection with investigating, agreeing to
and completing our initial business combination, conducting due diligence in a foreign jurisdiction, having such transaction approved
by any local governments, regulators or agencies and changes in the purchase price based on fluctuations in foreign exchange rates.
In
addition, we would be subject to 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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local
regulations regarding the industries in which we operate;
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exchange
listing and/or delisting requirements;
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tariffs
and trade barriers;
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regulations
related to customs and import/export matters;
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local
lobbying regulations;
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U.S.
Foreign Corrupt Practices Act compliance;
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local
or regional economic policies and market conditions;
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unexpected
changes in regulatory requirements;
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longer
payment cycles and challenges in collecting accounts receivable;
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tax
issues, including but not limited to 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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underdeveloped
or unpredictable legal or regulatory systems;
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protection
of intellectual property;
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changes
in industry, regulatory or environmental standards within the jurisdictions where we
operate;
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public
health or safety concerns and governmental restrictions, including those caused by outbreaks
of pandemic disease such as the COVID-19 pandemic;
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social
unrest, crime, strikes, riots, civil disturbances, terrorist attacks, natural disasters
and wars; 70
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regime
changes and political upheaval;
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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.
If
we consummate a business combination with a target company with substantially all of its operations or opportunities outside of
the United States, substantially all of our assets could be located in a foreign country and substantially all of our revenue
could be derived from our operations in such country. Accordingly, our results of operations and prospects could be subject, to
a significant extent, to the economic, political and legal policies, developments and conditions in the country in which we operate.
The
economic, political and social conditions, as well as government policies, of the country in which our operations are ultimately
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.
If
we pursue a target business in the aerospace, defense or government service industries, we would be subject to a variety of additional
risks that may negatively impact our operations.
Business
combinations with companies in the aerospace, defense or government service sectors, entail special considerations and risks.
If we are successful in completing a business combination with such a target business, we may be subject to, and possibly adversely
affected by, the following risks:
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An
inability to compete effectively in a highly competitive environment with many incumbents
having substantially greater resources;
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An
inability to manage rapid change, increasing customer expectations and growth;
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A
reliance on proprietary technology to provide services and to manage our operations,
and the failure of this technology to operate effectively, or our failure to use such
technology effectively;
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An
inability to deal with our customers’ privacy concerns;
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An
inability to attract and retain customers;
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An
inability to license or enforce intellectual property rights on which our business may
depend;
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Any
significant disruption in our computer systems or those of third parties that we would
utilize in our operations;
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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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Disruption
or failure of our networks, systems or technology as a result of computer viruses, “cyber-attacks,”
misappropriation of data or other malfeasance, as well as outages, natural disasters,
terrorist attacks, accidental releases of information or similar events;
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An
inability to obtain necessary hardware, software and operational support;
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Reliance
on third-party vendors or service providers;
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Our
business may be subject to extensive government regulations in the markets in which we
will operate, any of which may be difficult and expensive to comply with; for instance,
if we were to contact with the U.S. government, such regulations would include extensive
procurement regulations applicable to sales to the U.S. government, export-import control,
security, contract pricing and costs, and product integrity requirements, and changes
to those regulations could increase our costs; foreign governments with whom we contact
may have similar, or more onerous regulations, changes to which could also increase our
costs;
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If
we contract with the any particular government, including the U.S. government, such government
may modify, curtail or terminate one or more of our contracts, and changes in such government’s
spending and priorities could impact our financial position, results of operations and
overall business; and
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U.S.
government agencies, including the Defense Contract Audit Agency, the Defense Contract
Management Agency and various agency Inspectors General, routinely audit and investigate
government contractors, and foreign governments with whom we contract may have similar
processes to audit and investigate their government contractors.
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Any
of the foregoing could have an adverse impact on our operations following a business combination. However, our efforts in identifying
prospective target businesses will not be limited to the aerospace, defense or government service sectors. Accordingly, if we
acquire a target business in another industry, these risks will likely not affect us and we will be subject to other risks attendant
with the specific industry in which we operate or target business which we acquire, none of which can be presently ascertained.
We
may engage the underwriters or one of their respective affiliates to provide additional services to us after the Initial Public
Offering, which may include acting as financial advisor in connection with an initial business combination or as placement agent
in connection with a related financing transaction. The underwriters are entitled to receive deferred commissions that will be
released from the trust only on a completion of an initial business combination. These financial incentives may cause the underwriters
to have potential conflicts of interest in rendering any such additional services to us after the Initial Public Offering, including,
for example, in connection with the sourcing and consummation of an initial business combination.
We
may engage the underwriters or one of their respective affiliates to provide additional services to us after the Initial Public
Offering, including, for example, identifying potential targets, providing financial advisory services, acting as a placement
agent in a private offering or arranging debt financing. We may pay the underwriters or their respective affiliates fair and reasonable
fees or other compensation that would be determined at that time in an arm’s length negotiation. The underwriters are also
entitled to receive deferred commissions that are conditioned on the completion of an initial business combination. The fact that
the underwriters or their respective affiliates’ financial interests are tied to the consummation of a business combination
transaction may give rise to potential conflicts of interest in providing any such additional services to us, including potential
conflicts of interest in connection with the sourcing and consummation of an initial business combination.
Risks
Related to Ownership of Our Securities
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 $10.00 per share.
The
net proceeds of the Initial Public Offering and certain proceeds from the sale of the private placement warrants are held in an
interest-bearing trust account. 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 $218,838,800 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 $10.00 per share.
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: (i) our completion
of an 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, (ii) the redemption of any public shares properly submitted
in connection with a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance
or timing of our obligation to 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 prior to November 19, 2022 or (B) with respect to any other provision
relating to stockholders’ rights or pre-initial business combination activity and (iii) the redemption of our public shares
if we do not complete an initial business combination prior to November 19, 2022 or during any Extension Period, subject to applicable
law and as further described herein. 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.
The
NYSE may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in
our securities and subject us to additional trading restrictions.
Our
securities are listed on the NYSE. We cannot assure you that our securities will continue to be listed on the NYSE in the future
or 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. Generally, we must maintain a minimum amount
in stockholders’ equity and a minimum number of holders of our securities. Additionally, in connection with our initial
business combination, we will be required to demonstrate compliance with the NYSE’s initial listing requirements, which
are more rigorous than the NYSE’s continued listing requirements, in order to continue to maintain the listing of our securities
on the NYSE. For instance, our stock price would generally be required to be at least $4.00 per share. We cannot assure you that
we will be able to meet those initial listing requirements at that time. If the NYSE delists our securities from trading on its
exchange and we are not able to list our securities on another national securities exchange, we expect our securities could be
quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including:
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a
limited availability of market quotations for our securities;
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reduced
liquidity for our securities;
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a
determination that our 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 preempts the states from regulating
the sale of certain securities, which are referred to as “covered securities.” Because we expect that our units and
eventually our Class A common stock and warrants will be listed on the NYSE, our units, Class A common stock and warrants will
be covered securities. Although the states are preempted from regulating the sale of our securities, the federal statute does
allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity,
then the states can regulate or bar the sale of covered securities in a particular case. While we are not aware of a state having
used these powers to prohibit or restrict the sale of securities issued by blank check companies, other than the State of Idaho,
certain state securities regulators view blank check companies unfavorably and might use these powers, or threaten to use these
powers, to hinder the sale of securities of blank check companies in their states. Further, if we were no longer listed on the
NYSE, our securities would not be covered securities and we would be subject to regulation in each state in which we offer our
securities, including in connection with our initial business combination.
If
we have not completed an initial business combination prior to November 19, 2022, our public stockholders may be forced to wait
beyond such 24 months before redemption from our trust account.
If
we have not completed an initial business combination prior to November 19, 2022 or during any Extension Period, the proceeds
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 taxes (less up to $100,000 of the interest to pay dissolution expenses), will be used to fund the redemption of our
public shares, as further described herein. Any redemption of public stockholders from the trust account will be effected automatically
by function of our amended and restated certificate of incorporation prior to any voluntary winding up. If we are required to
wind-up, liquidate the trust account and distribute such amount therein, pro rata, to our public stockholders, as part of any
liquidation process, such winding up, liquidation and distribution must comply with the applicable provisions of the DGCL. In
that case, investors may be forced to wait beyond 24 months from the closing of the Initial Public Offering or the expiration
of any Extension Period before the redemption proceeds of our trust account become available to them, and they receive the return
of their pro rata portion of the proceeds from our trust account. We have no obligation to return funds to investors prior to
the date of our redemption of public shares or liquidation unless we complete our initial business combination prior thereto and
only then in cases where investors have sought to redeem their Class A common stock. Only upon our redemption or any liquidation
will public stockholders be entitled to distributions if we do not complete our initial business combination.
Holders
of Class A common stock will not be entitled to vote on any election of directors we hold prior to our initial business combination.
Prior
to our initial business combination, only holders of our founder shares will have the right to vote on the election of directors.
Holders of our public shares will not be entitled to vote on the election of directors during such time. In addition, prior to
the completion of an initial business combination, holders of a majority of our founder shares may remove a member of the board
of directors for any reason. Accordingly, you may not have any say in the management of our company prior to the consummation
of an initial business combination.
We
are not registering the shares of Class A common stock issuable upon exercise of the warrants under the Securities Act or any
state securities laws at this time, and such registration may not be in place when an investor desires to exercise warrants, thus
precluding such investor from being able to exercise its warrants except on a cashless basis. If the issuance of the shares upon
exercise of warrants is not registered, qualified or exempt from registration or qualification, the holder of such warrant will
not be entitled to exercise such warrant and such warrant may have no value and expire worthless.
We
are not registering the shares of Class A common stock issuable upon exercise of the warrants under the Securities Act or any
state securities laws at this time. However, under the terms of the warrant agreement, we have agreed that as soon as practicable,
but in no event later than 15 business days after the closing of our initial business combination, we will use our commercially
reasonable efforts to file with the SEC a registration statement for the registration under the Securities Act of the shares of
Class A common stock issuable upon exercise of the warrants and thereafter will use our commercially reasonable efforts to cause
the same to become effective within 60 business days following our initial business combination and to maintain a current prospectus
relating to the Class A common stock issuable upon exercise of the warrants until the expiration of the warrants in accordance
with the provisions of the warrant agreement. We cannot assure you that we will be able to do so if, for example, any facts or
events arise which represent a fundamental change in the information set forth in the registration statement or prospectus, the
financial statements contained or incorporated by reference therein are not current or correct or the SEC issues a stop order.
If the shares of Class A common stock 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, in which case the number of shares of our Class
A common stock that you will receive upon cashless exercise will be based on a formula subject to a maximum number of shares equal
to 0.361 shares of our Class A common stock per warrant (subject to adjustment). 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 state registration is available. If that exemption, or another exemption, is not available, holders
will not be able to exercise their warrants on a cashless basis. In no event will we be required to net cash settle any warrant,
or issue securities or other compensation in exchange for the warrants in the event that we are unable to register or qualify
the shares underlying the warrants under applicable state securities laws and there is no exemption available. If the issuance
of the shares upon exercise of the warrants is not so registered or qualified or exempt from registration or qualification, the
holder of such warrant will 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. 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.
The
warrants may become exercisable and redeemable for a security other than the shares of Class A common stock, and you will not
have any information regarding such other security at this time.
In
certain situations, including if we are not the surviving entity in our initial business combination, the warrants may become
exercisable for a security other than the shares of Class A common stock. As a result, if the surviving company redeems your warrants
for securities pursuant to the warrant agreement, you may receive a security in a company of which you do not have information
at this time. Pursuant to the warrant agreement, the surviving company will be required to use commercially reasonable efforts
to register the issuance of the security underlying the warrants within 15 business days of the closing of an initial business
combination.
If
you exercise your public warrants on a “cashless basis,” you will receive fewer shares of Class A common stock from
such exercise than if you were to exercise such warrants for cash.
There
are circumstances in which the exercise of the public warrants may be required or permitted to be made on a cashless basis. First,
if a registration statement covering the shares of Class A common stock issuable upon exercise of the warrants is not effective
by the 60th business day after the closing of our initial business combination, warrant holders may, until such time as there
is an effective registration statement, exercise warrants on a cashless basis in accordance with Section 3(a)(9) of the Securities
Act or another exemption. Second, if a registration statement covering the Class A common stock issuable upon exercise of the
warrants is not effective within a specified period following the consummation of our initial business combination, warrant holders
may, until such time as there is an effective registration statement and during any period when we shall have failed to maintain
an effective registration statement, exercise warrants on a cashless basis pursuant to the exemption provided by Section 3(a)(9)
of the Securities Act, provided that such exemption is available; if that exemption, or another exemption, is not available, holders
will not be able to exercise their warrants on a cashless basis. Third, if we call the public warrants for redemption under certain
circumstances, warrant holders will be able to exercise their warrants on a cashless basis prior to redemption. In the event of
an exercise on a cashless basis, a holder would pay the warrant exercise price by surrendering the warrants for that number of
shares of Class A common stock equal to the lesser of (A) the quotient obtained by dividing (x) the product of the number of shares
of Class A common stock underlying the warrants, multiplied by the excess of the “fair market value” of our Class
A common stock (defined above) over the exercise price of the warrants by (y) the fair market value and (B) 0.361 per whole warrant,
and the number of shares of our Class A common stock received by a holder upon exercise will be fewer than it would have been
had such holder exercised the warrant for cash. For example, if the holder is exercising 875 public warrants at $11.50 per share
through a cashless exercise when the shares of our Class A common stock have a fair market value of $17.50 per share when there
is no effective registration statement, then upon the cashless exercise, the holder will receive 300 shares of our Class A common
stock. The holder would have received 875 shares of our Class A common stock if the exercise price was paid in cash. This will
have the effect of reducing the potential “upside” of the holder’s investment in our company because the warrant
holder will hold a smaller number of shares of our Class A common stock upon a cashless exercise of the warrants they hold.
We
may issue additional common stock or preferred stock to complete our initial business combination or under an employee incentive
plan after completion of our initial business combination. We may also issue shares of Class A common stock upon the conversion
of the Class B common stock at a ratio greater than one-to-one at the time of our initial business combination as a result of
the anti-dilution provisions contained in our amended and restated certificate of incorporation. Any such issuances would dilute
the interest of our stockholders and likely present other risks.
Our
amended and restated certificate of incorporation authorizes the issuance of up to 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 1,000,000 shares of preferred
stock, par value $0.0001 per share. There are 178,161,200 and 14,540,300 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 outstanding warrants. There are no shares of preferred stock issued and outstanding.
Shares of Class B common stock are convertible into shares of our Class A common stock initially at a one-for-one ratio but subject
to adjustment as set forth herein, including in certain circumstances in which we issue Class A common stock or equity-linked
securities related to our initial business combination. Shares of Class B common stock are also convertible at the option of the
holder at any time.
We
may issue a substantial number of additional shares of common or preferred stock to complete our initial business combination
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 as described in “Description of Securities — Redeemable Warrants — Redemption
of warrants when the price per share of our Class A common stock equals or exceeds $10.00” 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 amended and restated certificate of incorporation. However, our amended and restated certificate of
incorporation will provide, among other things, that prior to or in connection with our initial business combination, we may not
issue additional shares of capital stock that would entitle the holders thereof to (i) receive funds from the trust account or
(ii) vote on any initial business combination. These provisions of our amended and restated certificate of incorporation, like
all provisions of our amended and restated certificate of incorporation, may be amended with the approval of our stockholders.
However, our initial stockholders, officers and directors have agreed, pursuant to a written agreement with us, that they will
not propose any amendment to our amended and restated certificate of incorporation (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 prior to November 19, 2022 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 shares of common stock upon approval of any such amendment at a per- share price, payable in cash,
equal to the aggregate amount then on deposit in the trust account, including interest (which interest shall be net of taxes payable),
divided by the number of then outstanding public shares.
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;
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may
subordinate the rights of holders of common stock if preferred stock is issued with rights
senior to those afforded our common stock;
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•
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could
cause a change of control if a substantial number of shares of our common stock are issued,
which may affect, among other things, our ability to use our net operating loss carry
forwards, if any, and could result in the resignation or removal of our present officers
and directors; and
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•
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may
adversely affect prevailing market prices for our units, Class A common stock and/or
warrants.
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We
may issue notes or other debt securities, or otherwise incur substantial debt, to complete an initial 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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•
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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
disadvantages compared to our competitors who have less debt.
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The
grant of registration rights to our initial stockholders may make it more difficult to complete our initial business combination,
and the future exercise of such rights may adversely affect the market price of our Class A common stock.
Pursuant
to an agreement entered into concurrently with the issuance and sale of the securities in the Initial Public Offering, our initial
stockholders and their permitted transferees can demand that we register the shares of Class A common stock into which are founder
shares are convertible, the private placement warrants, the shares of Class A common stock issuable upon exercise of the private
placement warrants held, or to be held, by them, and holders of warrants that may be issued upon conversion of working capital
loans may demand that we register such warrants or the Class A common stock issuable upon exercise of such warrants. We will bear
the cost of registering these securities. The registration and availability of such a significant number of securities for trading
in the public market may have an adverse effect on the market price of our Class A common stock. In addition, the existence of
the registration rights may make our initial business combination more costly or difficult to conclude. This is because the stockholders
of the target business may increase the equity stake they seek in the combined entity or ask for more cash consideration to offset
the negative impact on the market price of our Class A common stock that is expected when the securities owned by our initial
stockholders or holders of working capital loans or their respective permitted transferees are registered.
We
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 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.
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.
A
provision of our warrant agreement may make it more difficult for us to consummate an initial business combination.
Unlike
most blank check companies, if
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(a)
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we
issue additional shares of Class A common stock or equity-linked securities for capital
raising purposes in connection with the closing of our initial business combination at
a Newly Issued Price of less than $9.20 per share;
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(b)
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the
aggregate gross proceeds from such issuances represent more than 60% of the total equity
proceeds, and interest thereon, available for the funding of our initial business combination
on the date of the consummation of our initial business combination (net of redemptions),
and
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(c)
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the
Market Value is below $9.20 per share,
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then
the exercise price of the warrants will be adjusted to be equal to 115% of the higher of the Market Value and the Newly Issued
Price, and the $18.00 per share redemption trigger prices described below under “Description of Securities — Redeemable
Warrants — Public Stockholders’ Warrants — Redemption of warrants when the price per share of Class A common
stock equals or exceeds $18.00” and “Redemption of warrants when the price per share of Class A common stock equals
or exceeds $10.00” 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 described below under “Description of Securities —
Redeemable Warrants — Public Stockholders’ Warrants — Redemption of warrants when the price per share of Class
A common stock equals or exceeds $10.00” 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.
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 (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like and certain issuances of
Class A common stock and equity- linked securities) for any 20 trading days within a 30 trading-day period ending on the third
trading day prior to the date on which we give proper notice of such redemption and provided certain other conditions are met.
If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify
the underlying securities for sale under all applicable state securities laws. Redemption of the outstanding warrants could force
you (i) to exercise your warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so,
(ii) to sell your warrants at the then-current market price when you might otherwise wish to hold your warrants or (iii) to accept
the nominal redemption price which, at the time the outstanding warrants are called for redemption, is likely to be substantially
less than the market value of your warrants. None of the private placement warrants will be redeemable by us (except as described
below under “Description of Securities — Redeemable Warrants — Public Stockholders’ Warrants — Redemption
of warrants when the price per share of Class A common stock equals or exceeds $10.00”) so long as they are held by our
sponsor or its permitted transferees.
In
addition, we have the ability to redeem the outstanding public warrants at any time after they become exercisable and prior to
their expiration, at a price of $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided
that the closing price of our Class A common stock equals or exceeds $10.00 per share (as adjusted for adjustments to the
number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “Description of
Securities — Redeemable Warrants — Public Stockholders’ Warrants — Anti-Dilution Adjustments”) for
any 20 trading days within a 30 trading-day period ending on the third trading day prior to proper notice of such redemption and
provided that certain other conditions are met, including that holders will be able to exercise their warrants prior to
redemption for a number of shares of Class A common stock determined based on the redemption date and the fair market value of
shares of our Class A common stock. Please see “Description of Securities — Redeemable Warrants — Public Stockholders’
Warrants — Redemption of warrants when the price per share of Class A common stock equals or exceeds $10.00.” The
value received upon exercise of the warrants (1) may be less than the value the holders would have received if they had exercised
their warrants at a later time where the underlying share price is higher and (2) may not compensate the holders for the value
of the warrants, including because the number of shares received is capped at 0.361 shares of Class A common stock per whole warrant
(subject to adjustment) irrespective of the remaining life of the warrants.
None
of the private placement warrants will be redeemable by us (except as set forth under “Description of Securities —
Redeemable Warrants — Public Stockholders’ Warrants — Redemption of warrants when the price per share of Class
A common stock equals or exceeds $10.00”) so long as they are held by our sponsor or its permitted transferees.
Our
warrants and founder shares may have an adverse effect on the market price of our Class A common stock and make it more difficult
to effectuate our initial business combination.
We
issued warrants to purchase 7,279,600 shares of our Class A common stock as part of the units offered in the Initial Public Offering
and, simultaneously with the closing of the Initial Public Offering, we issued in a private placement warrants to purchase an
aggregate of 4,245,173 shares of Class A common stock at $1.50 per share. Our initial stockholders, including our sponsor, currently
own an aggregate of 5,459,700 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 sponsor makes any working capital loans, up to $1,500,000
of such loans may be converted into warrants, at the price of $1.50 per warrant at the option of the lender. Such warrants would
be identical to the private placement warrants, including as to exercise price, exercisability and exercise period.
To
the extent we issue shares of Class A common stock to effectuate an initial 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 business combination 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 initial business combination. Therefore, our warrants and founder shares may make it more difficult to effectuate an initial
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 or its permitted transferees, (i) they will not be redeemable by us (except as described
below under “Description of Securities — Redeemable Warrants — Public Stockholders’ Warrants — Redemption
of warrants when the price per share of Class A common stock equals or exceeds $10.00”), (ii) they (including the Class
A common stock issuable upon exercise of these warrants) may not, subject to certain limited exceptions, be transferred, assigned
or sold by our sponsor until 30 days after the completion of our initial business combination, (iii) they may be exercised by
the holders on a cashless basis and (iv) they are entitled to registration rights.
Because
each unit contains one-third 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-third of one redeemable warrant. No fractional warrants will be issued upon separation of the units and only
whole warrants will trade. Accordingly, unless you purchase at least three units, you will not be able to receive or trade a whole
warrant. This is different from other offerings similar to ours whose units include one share of common stock and one warrant
to purchase one whole share. We have established the components of the units in this way in order to reduce the dilutive effect
of the warrants upon completion of an initial business combination since the warrants will be exercisable in the aggregate for
one third of the number of shares compared to units that each contain a whole warrant to purchase one share, thus making us, we
believe, a more attractive merger partner for target businesses. Nevertheless, this unit structure may cause our units to be worth
less than if they included a warrant to purchase one whole share.
Risks
Related to Our Management
Our
ability to successfully effect our initial business combination and to be successful thereafter will be totally dependent upon
the efforts of our key personnel, some of whom may join us following our initial business combination. The loss of key personnel
could negatively impact the operations and profitability of our post- combination business.
Our
ability to successfully effect our initial business combination is dependent upon the efforts of our key personnel. The role of
our key personnel in the target business, however, cannot presently be ascertained. Although some of our key personnel may remain
with the target business in senior management or advisory positions following our initial business combination, it is likely that
some or all of the management of the target business will remain in place. While we intend to closely scrutinize any individuals
we employ 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 initial business combination candidate may resign upon completion of our initial business combination. The departure
of an initial business combination target’s key personnel could negatively impact the operations and profitability of our
post- combination business. The role of an initial business combination 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 initial
business combination candidate’s management team will remain associated with the initial business combination candidate
following our initial business combination, it is possible that members of the management of an initial business combination 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.
We
are dependent upon our officers and directors and their departure could adversely affect our ability to operate.
Our
operations are dependent upon a relatively small group of individuals and, in particular, our officers and directors. We believe
that our success depends on the continued service of our officers and directors, at least until we have completed our initial
business combination. We do not have an employment agreement with, or key-man insurance on the life of, any of our directors or
officers. The unexpected loss of the services of one or more of our directors or officers could have a detrimental effect on us.
Our
key personnel may negotiate employment or consulting agreements as well as reimbursement of out-of-pocket expenses, if any, with
a target business in connection with a particular business combination. These agreements may provide for them to receive compensation
or reimbursement for out-of-pocket expenses, if any, following our initial business combination and as a result, may cause them
to have conflicts of interest in determining whether a particular business combination is the most advantageous.
Our
key personnel may be able to remain with the company after the completion of our initial business combination only if they are
able to negotiate employment or consulting agreements in connection with the initial business combination. Additionally, they
may negotiate reimbursement of any out-of-pocket expenses incurred on our behalf prior to the consummation of our initial business
combination, should they choose to do so. Such negotiations would take place simultaneously with the negotiation of the initial
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 initial business combination, or as reimbursement for such out-of-pocket
expenses. 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 of our key personnel will remain with us after the completion of our initial
business combination. We cannot assure you that any of our key personnel will remain in senior management or advisory positions
with us. The determination as to whether any of our key personnel will remain with us will be made at the time of our initial
business combination. In addition, pursuant to an agreement entered into concurrently with the issuance and sale of the securities
in the Initial Public Offering, our sponsor, upon consummation of an initial business combination, will be entitled to nominate
three individuals for election to our board of directors.
We
may have a limited ability to assess the management of a prospective target business and, as a result, may affect our initial
business combination with a target business whose management may not have the skills, qualifications or abilities to manage a
public company, which could, in turn, negatively impact the value of our stockholders’ investment in us.
When
evaluating the desirability of effecting our initial business combination with a prospective target business, our ability to assess
the target business’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 who choose to remain stockholders following the initial business combination could suffer a reduction in the
value of their shares. Such stockholders are unlikely to have a remedy for such reduction in value.
Any
stockholders who choose to remain stockholders following our initial business combination could suffer a reduction in the value
of their securities.
We
will seek to complete an initial business combination with companies in the defense, government service and aerospace industries,
but may also pursue other business combination opportunities, except that we will not, under our amended and restated certificate
of incorporation, be permitted to effectuate our initial business combination 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 sales or earnings, we may be affected
by the risks inherent in the business and operations of a financially unstable or a development stage entity. Although our officers
and directors will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will
properly ascertain or assess all of the significant risk factors or that we will have adequate time to complete due diligence.
Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that
those risks will adversely impact a target business. For instance, changes in governmental policies in the United States or other
jurisdictions in which any specific target business operates may change following our initial business combination, which could
result in increased regulations, reduced demand for government spending, including defense spending, or other factors inherent
in the industry in which the target business operates. We also cannot assure you that an investment in our units will ultimately
prove to be more favorable to investors than a direct investment, if such opportunity were available, in a business combination
target. Accordingly, any stockholders who choose to remain stockholders following our initial business combination could suffer
a reduction in the value of their securities. Such stockholders are unlikely to have a remedy for such reduction in value unless
they are able to successfully claim that the reduction was due to the breach by our officers or directors of a duty of care or
other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that the proxy
solicitation or tender offer materials, as applicable, relating to the business combination contained an actionable material misstatement
or material omission.
Our
officers and directors will allocate their time to other businesses thereby causing conflicts of interest in their determination
as to how much time to devote to our affairs. This conflict of interest could have a negative impact on our ability to complete
our initial business combination.
Our
officers and directors are not required to, and will not, commit their full time to our affairs, which may result in a conflict
of interest in allocating their time between our operations and our search for an initial business combination and their other
businesses.
We
do not intend to have any full-time employees prior to the completion of our initial business combination. Each of our officers
and directors is engaged in other business endeavors for which he may be entitled to substantial compensation and our officers
and directors are not obligated to contribute any specific number of hours per week to our affairs. Our independent directors
may 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 the section of this prospectus
entitled “Management — Officers and Directors.”
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.
We
are engaged in the business of identifying and combining with one or more businesses. 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 may not participate in the formation of, or become an officer or director of, any other special
purpose acquisition companies with a class of securities registered under the Exchange Act, until we have entered into a definitive
agreement regarding our initial business combination or we have failed to complete our initial business combination prior to November
19, 2022 or during any Extension Period.
Pine
Island Capital Partners and its respective affiliates have invested in diverse industries, including in the defense, government
service and aerospace industries. As a result, there could be overlap between companies that would be suitable for a business
combination with us and companies that present and attractive investment opportunity for our sponsor, our directors or officers
and/or certain of Pine Island Capital Partners’ funds and/or other investment vehicles.
Our
officers and directors also may become aware of business opportunities which may be appropriate for presentation to us and other
entities to which they owe certain fiduciary or contractual duties. Any such opportunities may present additional conflicts of
interest in pursuing an acquisition target, and our directors and officers may have conflicts of interest in determining to which
entity a particular business opportunity should be presented. These conflicts may not be resolved in our favor and a potential
target business may be presented to another entity prior to its presentation to us. Our amended and restated certificate of incorporation
will provide that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity
is expressly offered to such person solely in his or her capacity as a director or officer of our company and such opportunity
is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue, and to the
extent the director or officer is permitted to refer that opportunity to us without violating another legal obligation.
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 the sections of this prospectus entitled “Management — Officers and Directors,”
“Management — Conflicts of Interest” and “Certain Relationships and Related Party Transactions.”
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 an initial business combination with a target business that is
affiliated with our sponsor, our directors or officers, although we do not intend to do so. 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.
We
may engage in an initial business combination with one or more target businesses that have relationships with entities that may
be affiliated with our sponsor, officers, directors or existing holders which may raise potential conflicts of interest.
In
light of the involvement of our sponsor, officers and directors with other entities, we may decide to acquire one or more businesses
with which our sponsor or one or more of our officers or directors is affiliated, including business affiliated with Pine Island
Capital Partners. Our officers and directors also serve as officers and board members for other entities, including, without limitation,
those described under the section of this prospectus entitled “Management — Conflicts of Interest.” Such entities
may compete with us for business combination opportunities. Our sponsor, officers and directors are not currently aware of any
specific opportunities for us to complete our initial business combination with any entities with which they are affiliated, and
there have been no preliminary discussions concerning an initial business combination with any such entity or entities. Although
we will not be specifically focusing on, or targeting, any transaction with any affiliated entities, we would pursue such a transaction
if we determined that such affiliated entity met our criteria for an initial business combination as set forth in the section
of this prospectus entitled “Proposed Business — Selection of a Target Business and Structuring of our Initial Business
Combination” and such transaction was approved by a majority of our disinterested directors. Despite our agreement to obtain
an opinion, from an independent investment banking firm or an independent accounting firm regarding the fairness to our company
from a financial point of view of an initial business combination with one or more domestic or international businesses affiliated
with our officers, directors or existing holders, potential conflicts of interest still may exist and, as a result, the terms
of the initial business combination may not be as advantageous to our public stockholders as they would be absent any conflicts
of interest.
Moreover,
we may, at our option, pursue an affiliated joint acquisition opportunity with one or more affiliates of Pine Island Capital Partners
or with other entities to which an officer or director has a fiduciary, contractual or other obligation or duty. Any such parties
may co-invest with us in the target business at the time of our initial business combination, or we could raise additional proceeds
to complete the acquisition by issuing equity to any such parties, which may give rise to certain conflicts of interest.
Since
our sponsor and its investors and our directors will lose their entire at-risk investment in us if our initial business combination
is not completed, a conflict of interest may arise in determining whether a particular business combination target is appropriate
for our initial business combination.
Our
initial stockholders hold an aggregate of 5,459,700 founder shares. All of the founder shares will be worthless if we do not complete
an initial business combination. In addition, our sponsor has purchased an aggregate of 4,245,173 warrants at a price of $1.50
per warrant, which will also be worthless if we do not complete an initial business combination. Our initial stockholders, officers
and directors have entered into a letter agreement with us pursuant to which they have agreed to vote any shares owned by them
in favor of any proposed initial business combination and to waive their redemption rights with respect to their founder shares
and public shares in connection with (i) the completion of our initial business combination and (ii) any stockholder
vote to approve an amendment to our amended and restated 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
Unlike
many other similarly structured blank check companies, our initial stockholders will receive additional shares of Class A common
stock if we issue shares to consummate an initial business combination.
The
founder shares will automatically convert into Class A common stock at the time of our initial business combination, or earlier
at the option of the holders, on a one-for-one basis, subject to adjustment as provided herein. In the case that additional shares
of Class A common stock, or equity-linked securities convertible into or exercisable or exchangeable for Class A common stock,
are issued or deemed issued in excess of the amounts offered in this prospectus and related to the closing of the initial business
combination, the ratio at which founder shares shall convert into Class A common stock will be adjusted so that the number of
Class A common stock issuable upon conversion of all founder shares will equal, in the aggregate, on an as-converted basis, 20%
of the sum of (i) the total number of all outstanding shares of common stock upon completion of the Initial Public Offering, plus
(ii) all shares of Class A common stock and equity-linked securities issued, or deemed issued in connection with the initial business
combination (excluding any shares or equity-linked securities issued, or to be issued, to any seller in the business combination,
and any private placement-equivalent warrants issued to our sponsor or its affiliates upon conversion of loans made to us). This
is different from most other similarly structured blank check companies in which the initial stockholder will only be issued an
aggregate of 20% of the total number of shares to be outstanding prior to the 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 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, accept less favorable terms or both. However, 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, even after we were to complete an initial business combination, our directors and officers could still be subject to
potential liability from claims arising from conduct alleged to have occurred prior to the 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.
General
Risk Factors
We
are a newly formed company with no operating history and no revenues, and you have no basis on which to evaluate our ability to
achieve our business objective.
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 an initial business combination
and may be unable to complete our initial business combination. If we fail to complete our initial business combination, we will
never generate any operating revenues.
Past
performance by our management team, directors, advisors, Pine Island Capital Partners and their respective affiliates may not
be indicative of future performance of an investment in the company or in the future performance of any business we may acquire.
Information
regarding performance by, or businesses associated with, our management team, directors and advisors and their respective affiliates,
including Pine Island Capital Partners, is presented for informational purposes only. Past performance by our management team,
directors and advisors, Pine Island Capital Partners and such affiliates is not a guarantee (i) either of success with respect
to any business combination we may consummate or (ii) that we will be able to locate a suitable candidate for our initial business
combination. You should not rely on the historical performance of our management team, directors and advisors, Pine Island Capital
Partners or that of their respective affiliates as indicative of the future performance of an investment in the company or the
returns the company will, or is likely to, generate going forward. Our management team, directors and advisors, Pine Island Capital
Partners and their respective affiliates have had limited past experience with blank check and special purpose acquisition companies.
We
are an emerging growth company and a smaller reporting company within the meaning of the Securities Act, and if we take advantage
of certain exemptions from disclosure requirements available to emerging growth companies or smaller reporting companies, this
could make our securities less attractive to investors and may make it more difficult to compare our performance with other public
companies.
We
are an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act, and we may
take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are
not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements
of Section 404 of the Sarbanes- Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports
and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and
stockholder approval of any golden parachute payments not previously approved. As a result, our stockholders may not have access
to certain information they may deem important. We could be an emerging growth company for up to five years, although circumstances
could cause us to lose that status earlier, including if the aggregate worldwide market value of our Class A common stock held
by non-affiliates equals or exceeds $700.0 million as of any June 30 before that time, in which case we would no longer be an
emerging growth company as of the following December 31. We cannot predict whether investors will find our securities less attractive
because we will rely on these exemptions. If some investors find our securities less attractive as a result of our reliance on
these exemptions, the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading
market for our securities and the trading prices of our securities may be more volatile.
Further,
Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial
accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared
effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised
financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and
comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. We
have elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has
different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard
at the time private companies adopt the new or revised standard. This may make comparison of our financial statements with another
public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended
transition period difficult or impossible because of the potential differences in 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 aggregate worldwide
market value of our Class A common stock held by non-affiliates equaled or exceeded $250 million as of the prior June 30th, and
(2) our annual revenues equaled or exceeded $100 million during such completed fiscal year or the aggregate worldwide market value
of our Class A common stock held by non-affiliates equaled or exceeded $700 million as of the prior June 30th. To the extent we
take advantage of such reduced disclosure obligations, it may also make comparison of our financial statements and other disclosures
with other public companies difficult or impossible.
As
the number of special purpose acquisition companies evaluating targets increases, attractive targets may become scarcer and there
may be more competition for attractive targets. This could increase the valuations of business combination targets and the cost
of our initial business combination, and could even result in our inability to find a target or to consummate an initial business
combination.
In
recent years, the number of special purpose acquisition companies that have been formed has increased substantially. Many potential
targets for special purpose acquisition companies have already entered into an initial business combination, and there are still
many special purpose acquisition companies seeking targets for their initial business combination, as well as many such companies
currently in registration. As a result, at times, fewer attractive targets may be available, and it may require more time, more
effort and more resources to identify a suitable target and to consummate an initial business combination. In addition, because
there are more special purpose acquisition companies seeking to enter into an initial business combination with available targets,
the competition for available targets with attractive fundamentals or business models may increase, which could cause target companies
to demand improved financial terms. Attractive deals could also become scarcer for other reasons, such as economic or industry
sector downturns, geopolitical tensions, or increases in the cost of additional capital needed to close business combinations
or operate targets post-business combination. This could increase the cost of, delay or otherwise complicate or frustrate our
ability to find and consummate an initial business combination, and may result in our inability to consummate an initial business
combination on terms favorable to our investors altogether.
Cyber
incidents or attacks directed at us could result in information theft, data corruption, operational disruption and/or financial
loss.
We
depend on digital technologies, including information systems, infrastructure and cloud applications and services, including those
of third parties with which we may deal. Sophisticated and deliberate attacks on, or security breaches in, our systems or infrastructure,
or the systems or infrastructure of third parties or the cloud, could lead to corruption or misappropriation of our assets, proprietary
information and sensitive or confidential data. As an early stage company without significant investments in data security protection,
we may not be sufficiently protected against such occurrences. We may not have sufficient resources to adequately protect against,
or to investigate and remediate any vulnerability to, cyber incidents. It is possible that any of these occurrences, or a combination
of them, could have adverse consequences on our business and lead to financial loss.
In
order to effectuate an initial business combination, blank check companies have, in the recent past, amended various provisions
of their charters and other governing instruments. We cannot assure you that we will not seek to amend our amended and restated
certificate of incorporation or governing instrument in a manner that will make it easier for us to complete our initial business
combination that some of our stockholders or warrant holders may not support.
In
order to effectuate an initial business combination, blank check companies have, in the recent past, amended various provisions
of their charters and governing instruments, including their warrant agreements. For example, blank check companies have amended
the definition of business combination, increased redemption thresholds and extended the time to consummate an initial business
combination. We cannot assure you that we will not seek to amend our charter or governing instruments, including to extend the
time to consummate an initial business combination in order to effectuate our initial business combination.
The
provisions of our amended and restated certificate of incorporation that relate to our pre-business combination activity (and
corresponding provisions of the agreement governing the release of funds from our trust account), including an amendment to permit
us to withdraw funds from the trust account such that the per share amount investors will receive upon any redemption or liquidation
is substantially reduced or eliminated, may be amended with the approval of holders of 65% of our common stock, which is a lower
amendment threshold than that of some other blank check companies. It may be easier for us, therefore, to amend our amended and
restated certificate of incorporation and the trust agreement to facilitate the completion of an initial business combination
that some of our stockholders may not support.
Our
amended and restated certificate of incorporation provides that any of its provisions related to pre-initial business combination
activity (including the requirement to deposit proceeds of the Initial Public Offering and the private placement of warrants into
the trust account and not release such amounts except in specified circumstances, and to provide redemption rights to public stockholders
as described herein and including to permit us to withdraw funds from the trust account such that the per share amount investors
will receive upon any redemption or liquidation is substantially reduced or eliminated) may be amended if approved by holders
of 65% of our common stock entitled to vote thereon, and corresponding provisions of the trust agreement governing the release
of funds from our trust account may be amended if approved by holders of 65% of our common stock entitled to vote thereon. In
all other instances, our amended and restated certificate of incorporation may be amended by holders of a majority of our outstanding
common stock entitled to vote thereon, subject to applicable provisions of the DGCL or applicable stock exchange rules. We may
not issue additional securities that can vote on amendments to our amended and restated certificate of incorporation. Our initial
stockholders, who will collectively beneficially own up to 20% of our common stock upon the closing of the Initial Public Offering
(assuming they do not purchase any units in the Initial Public Offering), will participate in any vote to amend our amended and
restated certificate of incorporation and/or trust agreement and will have the discretion to vote in any manner they choose. As
a result, we may be able to amend the provisions of our amended and restated certificate of incorporation which govern our pre-initial
business combination behavior more easily than some other blank check companies, and this may increase our ability to complete
an initial business combination with which you do not agree. Our stockholders may pursue remedies against us for any breach of
our amended and restated certificate of incorporation.
Our
initial stockholders, officers and directors have agreed, pursuant to a written agreement with us, that they will not propose
any amendment to our amended and restated certificate of incorporation (i) to modify the substance or timing of our obligation
to 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 prior to November 19, 2022 or (ii) with respect to any other provision relating to stockholders’
rights or pre-initial business combination activity, unless we provide our public stockholders with the opportunity to redeem
their shares of Class A common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate
amount then on deposit in the trust account, divided by the number of then outstanding public shares. These agreements are contained
in a letter agreement that we have entered into with our initial stockholders, officers and directors. Our stockholders are not
parties to, or third-party beneficiaries of, these agreements and, as a result, will not have the ability to pursue remedies against
our initial stockholders, officers and directors for any breach of these agreements. As a result, in the event of a breach, our
stockholders would need to pursue a stockholder derivative action, subject to applicable law.
Provisions
in our amended and restated certificate of incorporation and Delaware law may inhibit a takeover of us, which could limit the
price investors might be willing to pay in the future for our Class A common stock and could entrench management.
Our
amended and restated certificate of incorporation will contain 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, the ability
of the board of directors to designate the terms of and issue new series of preferred stock, and the fact that prior to the completion
of our initial business combination only holders of shares of our Class B common stock, which may make the removal of management
more difficult and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices
for our securities.
We
are also subject to anti-takeover provisions under Delaware law, which could delay or prevent a change of control. Together these
provisions may make the removal of management more difficult and may discourage transactions that otherwise could involve payment
of a premium over prevailing market prices for our securities.
Our
amended and restated certificate of incorporation will require, 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
amended and restated certificate of incorporation will require, 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 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, (C) for which the Court of Chancery does not have subject matter jurisdiction,
or (D) any action created by the Exchange Act or any other claim for which the federal courts have exclusive 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 amended and restated certificate of incorporation. Unless the Company consents
in writing to the selection of an alternative forum, the federal district courts of the United States shall be the exclusive forum
for any action arising under the Securities Act. This choice of forum provision may limit a stockholder’s ability to bring
a claim in a judicial forum that it finds favorable for disputes with us or any of our directors, officers, other employees or
stockholders, which may discourage lawsuits with respect to such claims, although our stockholders will not be deemed to have
waived our compliance with federal securities laws and the rules and regulations thereunder. Alternatively, if a court were to
find the choice of forum provision contained in our amended and restated 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.
Exchange
rate fluctuations and currency policies may cause a target business’ ability to succeed in the international markets to
be diminished.
In
the event we acquire a non-U.S. target, all revenues and income would likely be received in a foreign currency, and the dollar
equivalent of our net assets and distributions, if any, could be adversely affected by reductions in the value of the local currency.
The value of the currencies in our target regions fluctuate and are affected by, among other things, changes in political and
economic conditions. Any change in the relative value of such currency against our reporting currency may affect the attractiveness
of any target business or, following consummation of our initial business combination, our financial condition and results of
operations. Additionally, if a currency appreciates in value against the dollar prior to the consummation of our initial business
combination, the cost of a target business as measured in dollars will increase, which may make it less likely that we are able
to consummate such transaction.