Emerging Markets Horizon Corp. - Annual Report: 2021 (Form 10-K)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2021
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
EMERGING MARKETS HORIZON CORP.
(Exact name of registrant as specified in its charter)
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Cayman Islands
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001-41136
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98-1607027
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(State or other jurisdiction of incorporation or organization)
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(Commission File Number)
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(I.R.S. Employer
Identification Number)
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8th Floor, Berkeley Square House, Berkeley Square
London, United Kingdom
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W1J 6DB
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(Address of principal executive offices)
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(Zip Code)
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Registrant’s telephone number, including area code: +44 20 7647 9100
Not Applicable
(Former name or former address, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
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Title of Each Class:
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Trading Symbol:
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Name of Each Exchange on Which Registered:
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Units, each consisting of one Class A ordinary share, par value $0.0001, and one-half of one redeemable warrant to acquire one Class A ordinary share
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HORIU
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The Nasdaq Stock Market LLC
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Class A ordinary shares included as part of the units
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HORI
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The Nasdaq Stock Market LLC
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Redeemable warrants included as part of the units, each whole warrant exercisable for one Class A ordinary share at an exercise price of $11.50
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HORIW
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The Nasdaq Stock Market LLC
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Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No ☒
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter
period that the registrant was required to submit and post such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,
“smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer
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☐
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Accelerated filer
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☐
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Non-accelerated filer
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☒
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Smaller reporting company
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☒
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Emerging growth company
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☒
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange
Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.
7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☒ No ☐
As of June 30, 2021, the last business day of the registrant’s most recently completed second fiscal quarter, the registrant’s securities were not publicly traded. Accordingly, there was no market value for the
registrant’s Class A ordinary shares on such date. The registrant’s units began trading on The Nasdaq Stock Market LLC (“Nasdaq”) on December 9, 2021 and the registrant’s Class A ordinary shares, par value $0.0001 (the “Class A ordinary shares”)
and warrants began separate trading on Nasdaq on January 31, 2022.
As of September 12, 2022, 28,750,000 Class A ordinary shares, par value $0.0001, and 7,187,500 Class B ordinary shares, par value $0.0001, were issued and outstanding.
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Page
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iv
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PART I
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1
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Item 1.
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1
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Item 1A.
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14
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Item 1B.
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46
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Item 2.
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46
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Item 3.
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46
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Item 4.
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46
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PART II
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47
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Item 5.
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47
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Item 6.
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48
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Item 7.
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48
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Item 7A.
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51
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Item 8.
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51
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Item 9.
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51
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Item 9A.
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51
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Item 9B.
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52
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Item 9C.
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52
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PART III
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53
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Item 10.
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53
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Item 11.
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60
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Item 12.
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60
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Item 13.
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62
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Item 14.
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63
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PART IV
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65
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Item 15.
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65
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Item 16.
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66
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CERTAIN TERMS
Unless otherwise stated in this Annual Report on Form 10-K (this “Report”), or the context otherwise requires, references to:
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“amended and restated memorandum and article of association” are to the amended and restated memorandum and articles of association that the company adopted prior to the consummation of our initial public
offering;
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“Companies Act” are to the Companies Act (As Revised) of the Cayman Islands as the same may be amended from time to time;
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“equity-linked securities” are to any debt or equity securities that are convertible, exercisable or exchangeable for our Class A ordinary shares issued in a financing transaction in connection with our initial
business combination, including but not limited to a private placement of equity or debt;
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“founder shares” are to our Class B ordinary shares initially purchased by our prior sponsor in a private placement prior to our initial public offering, and subsequently transferred to our sponsor, and the
Class A ordinary shares that will be issued upon the automatic conversion of the Class B ordinary shares at the time of our initial business combination or earlier at the option of the holders thereof (for the avoidance of doubt, such Class
A ordinary shares will not be “public shares”);
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“management” or our “management team” are to our executive officers and directors;
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“ordinary resolution” are to a resolution adopted by the affirmative vote of at least a majority of the votes cast by the holders of the issued shares present in person or represented by proxy at a general
meeting of the company and entitled to vote on such matter or a resolution approved in writing by all of the holders of the issued shares entitled to vote on such matter;
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“ordinary shares” are to our Class A ordinary shares and our Class B ordinary shares;
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“prior sponsor” are to EM Horizon Investments, a Cayman Islands limited liability company;
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“private placement warrants” are to the warrants issued to our prior sponsor in a private placement simultaneously with the closing of our initial public offering, and subsequently transferred to our sponsor;
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“public shares” are to our Class A ordinary shares sold as part of the units in our initial public offering (whether they are purchased in our initial public offering or thereafter in the open market);
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“public shareholders” are to the holders of our public shares, including our sponsor and management team to the extent our sponsor and/or members of our management team purchase public shares, provided that our
sponsor’s and each member of our management team’s status as a “public shareholder” shall only exist with respect to such public shares;
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“public warrants” are to our redeemable warrants sold as part of the units in our initial public offering (whether they were purchased in our initial public offering or thereafter in the open market), to the
private placement warrants if held by third parties other than our sponsor (or permitted transferees), and to any private placement warrants issued upon conversion of working capital loans and extension loans, if any, that are sold to third
parties that are not initial purchasers or executive officers or directors (or permitted transferees), in each case, following the consummation of our initial business combination;
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“special resolution” are to a resolution adopted by the affirmative vote of at least a two-thirds (2∕3) majority (or such higher threshold as specified in the company’s amended and restated memorandum and
articles of association) of the votes cast by the holders of the issued shares present in person or represented by proxy at a general meeting of the company and entitled to vote on such matter or a resolution approved in writing by all of the
holders of the issued shares entitled to vote on such matter;
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“sponsor” are to New Emerging Markets Horizon, a Cayman Islands limited liability company;
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"trust account” are to the trust account into which the net proceeds of our initial public offering and our concurrent sale of private placement warrants was placed, which is maintained by Continental Stock
Transfer and Trust Company, as trustee;
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“VTB” are to VTB Bank (PJSC) and its subsidiaries; and
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“we,” “us,” “company” or “our company” are to Emerging Markets Horizon Corp., a Cayman Islands corporation (Nasdaq: HORIU, HORI, HORIW).
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This Report, including, without limitation, statements under the heading “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations,” includes forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”). These forward-looking statements can be identified by the use of forward-looking terminology,
including the words “believes,” “estimates,” “anticipates,” “expects,” “intends,” “plans,” “may,” “will,” “potential,” “projects,” “predicts,” “continue,” or “should,” or, in each case, their negative or other variations or comparable terminology.
There can be no assurance that actual results will not materially differ from expectations. Such statements include, but are not limited to, any statements relating to our ability to consummate any acquisition or other business combination and any
other statements that are not statements of current or historical facts. These statements are based on management’s current expectations, but actual results may differ materially due to various factors, including, but not limited to:
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our ability to select an appropriate target business or businesses;
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our ability to complete our initial business combination;
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our expectations around the performance of a prospective target business or businesses;
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our success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial business combination;
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our officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business or in approving our initial business combination;
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our potential ability to obtain additional financing to complete our initial business combination;
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our pool of prospective target businesses;
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our ability to consummate an initial business combination due to the uncertainty resulting from the COVID-I9 pandemic;
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the ability of our officers and directors to generate a number of potential business combination opportunities;
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our public securities’ potential liquidity and trading;
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the lack of a market for our securities;
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the intended use of proceeds not held in the trust account or available to us from interest income on the trust account balance;
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the trust account not being subject to claims of third parties; or
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our financial performance following our initial public offering.
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The forward-looking statements contained in this Report are based on our current expectations and beliefs concerning future developments and their potential effects on us. Future developments affecting us may not be those that we have anticipated.
These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) and other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these
forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the heading “Risk Factors.” Should one or more of these risks or uncertainties materialize, or should any of our assumptions
prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future
events or otherwise, except as may be required under applicable securities laws. These risks and others described under “Risk Factors” may not be exhaustive.
By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. We caution you that forward-looking statements are not guarantees of
future performance and that our actual results of operations, financial condition and liquidity, and developments in the industry in which we operate may differ materially from those made in or suggested by the forward-looking statements contained in
this Report. In addition, even if our results or operations, financial condition and liquidity, and developments in the industry in which we operate are consistent with the forward-looking statements contained in this Report, those results or
developments may not be indicative of results or developments in subsequent periods.
The following is a summary of the principal risks described below in Part I, Item 1A “Risk Factors” in this Report on Form 10-K. We believe that the risks described in the “Risk Factors” section are material to investors, but other factors not
presently known to us or that we currently believe are immaterial may also adversely affect us. The following summary should not be considered an exhaustive summary of the material risks facing us, and it should be read in conjunction with the “Risk
Factors” section and the other information contained in this Report.
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We have 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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Our public 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 public shareholders do not support
such a combination.
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Because of our limited resources and the significant competition for initial business combination opportunities, it may be more difficult for us to complete our initial business combination. If we have not consummated our initial business
combination within the required time period, our public shareholders may receive only approximately $10.20 per public share, or less in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless.
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Your only opportunity to affect the investment decision regarding a potential initial 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 management team have agreed to vote in favor of such initial business combination, regardless of how our public shareholders vote.
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The ability of our public shareholders to redeem their shares for cash may make our financial condition unattractive to potential initial business combination targets, which may make it difficult for us to enter into an initial business
combination with a target.
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The ability of our public shareholders to exercise redemption rights with respect to a large number of our shares may not allow us to complete the most desirable initial business combination or optimize our capital structure.
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The ability of our public shareholders to exercise redemption rights with respect to a large number of our shares could increase the probability that our initial business combination would be unsuccessful and that you would have to wait
for liquidation in order to redeem your shares.
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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 negative impacts on the global economy, capital markets or other
geopolitical conditions resulting from the recent invasion of Ukraine by Russia and subsequent sanctions against Russia, Belarus and related individuals and entities.
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Our search for a business combination, and any target business with which we ultimately consummate an initial business combination, may be materially adversely affected by the coronavirus (“COVID-19”) outbreak and the status of debt and
equity markets.
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We may not be able to consummate an initial business combination by March 13, 2023 (or June 13, 2023, as applicable), 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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If we seek shareholder approval of our initial business combination, our sponsor, directors, executive officers, advisors and their affiliates may elect to purchase shares or warrants, which may influence a vote on a proposed initial
business combination and reduce the public “float” of our Class A ordinary shares or public warrants.
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If a shareholder fails to receive notice of our offer to redeem our public shares in connection with our initial business combination, or fails to comply with the procedures for tendering its shares, such shares may not be redeemed.
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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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Our independent registered public accounting firm’s report contains an explanatory paragraph that expresses substantial doubt about our ability to continue as a “going concern.”
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Nasdaq may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.
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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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If we seek shareholder approval of our initial business combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a “group” of shareholders are deemed to hold in excess of 15% of our Class A ordinary
shares, you will lose the ability to redeem all such shares in excess of 15% of our Class A ordinary shares.
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Subsequent to the completion of our initial business combination, we may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on our financial condition,
results of operations and the price of our securities, which could cause you to lose some or all of your investment.
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If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by shareholders may be less than $10.20 per share.
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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 shareholders may be less than $10.20 per share.
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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 or in the future performance of the business we may acquire.
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Our directors may decide not to enforce the indemnification obligations of our sponsor, resulting in a reduction in the amount of funds in the trust account available for distribution to our public shareholders.
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We may not have sufficient funds to satisfy indemnification claims of our directors and executive officers.
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If the net proceeds of our initial public offering and the sale of the private placement warrants not being held in the trust account are insufficient to allow us to operate until March 13, 2023 (or June 13, 2023, as applicable), 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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If, after we distribute the proceeds in the trust account to our public shareholders, we file a bankruptcy petition or an involuntary bankruptcy or winding-up petition is filed against us that is not dismissed, a bankruptcy or insolvency
court may seek to recover such proceeds, and the members of our board of directors may be viewed as having breached their fiduciary duties to our creditors, thereby exposing the members of our board of directors and us to claims of punitive
damages.
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If, before distributing the proceeds in the trust account to our public shareholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against us that is not dismissed, the claims of
creditors in such proceeding may have priority over the claims of our shareholders, and the per-share amount that would otherwise be received by our shareholders in connection with our liquidation may be reduced.
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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.
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PART I
| ITEM 1. |
Overview
We are a blank check company incorporated as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses,
which we refer to throughout this Report as our initial business combination.
Our sponsor, New Emerging Markets Horizon, is controlled by FPP Capital Advisers (“FPP”), an affiliate of FPP Asset Management LLP (“FPP AM”). FPP AM brings together a team of professionals with extensive experience in capital raising, mergers and
investments across a variety of regions and industries. We believe that this team will be able to source and evaluate attractive acquisition opportunities, as well as position the target, once chosen, for long-term success in the public markets.
Prior to June 8, 2022, our sponsor was EM Horizon Investments (our “prior sponsor”), which at its inception was controlled by FPP, Riccardo Orcel and Nevsky Properties Limited (“Nevsky Properties”), which was in turn controlled by VTB. Following
the imposition of sanctions relating to Russia by the United States and other jurisdictions, including blocking sanctions against VTB as well as entities owned 50 percent or more, directly or indirectly, by VTB, we and our prior sponsor implemented
certain remedial measures. On March 23, 2022, Nevsky Properties relinquished, irrevocably and in perpetuity, its interest in our sponsor to the fullest extent permitted by law and such interest was blocked by our sponsor such that it no longer
conferred under any circumstances any economic or voting rights upon Nevsky Properties. In addition, following certain other changes in management effective on the same date, neither we nor our prior sponsor employed, had on its board of directors or
received any services from any employees, representatives or affiliates of VTB. Our prior sponsor was controlled solely by FPP as of April 21, 2022, when Mr. Orcel agreed to suspend indefinitely his voting and management rights in our prior sponsor,
though he remained a non-voting member and Nevsky Properties formally remained on our prior sponsor’s register of members due to certain restrictions under applicable Cayman Islands law.
On June 8, 2022, our prior sponsor and our sponsor entered into a novation agreement, whereby our prior sponsor transferred all of its rights and obligations under each of the contracts to which it was a party to our sponsor, and a securities
transfer agreement, whereby our prior sponsor transferred all of its founder shares and private placement warrants to our sponsor. While our sponsor remains controlled solely by FPP and Mr. Orcel remains a non-voting member, Nevsky Properties is not
on its register of members.
Jonathan Neill, our Chief Executive Officer, is the founding partner of FPP AM and has nearly 30 years of investment management experience. He also brings an extensive network of business relationships across emerging markets generally.
We are further supported by our advisory committee, which is comprised of senior executives from FPP AM with experience across a wide range of sectors. We expect that our advisory committee will provide us with access to its expertise and industry
networks from which we intend to source and evaluate targets, as well as devise plans to optimize any business that we acquire.
While we may pursue an initial business combination with a target at any stage of its corporate evolution or in any industry or sector, we intend to focus on identifying high-growth technology and consumer-exposed businesses with an enterprise
value of at least $700 million in Western Europe, Central and Eastern Europe (“CEE”), the Commonwealth of Independent States (the “CIS”) (excluding Russia and Belarus) or Latin America. We will seek to acquire businesses led by world-class management
teams, with validated technologies, proven business models and attractive unit economics, strong corporate governance compliant with Environmental, Social and Governance (“ESG”) principles and that are well positioned for continual growth and market
leadership over the long term.
Initial Public Offering
As of December 31, 2021, we had not commenced any operations. All activity for the period from May 6, 2021 (inception) through December 31, 2021 relates to our formation and initial public offering, which is
described below, and subsequent to our initial public offering, identifying a target company for an initial business combination.
The registration statement for our initial public offering was declared effective on December 8, 2021. On December 13, 2021, we consummated the initial public offering of 28,750,000 units, including the
issuance of 3,750,000 units as a result of the underwriters’ exercise in full of their over-allotment option, at $10.00 per unit and the sale of 9,000,000 private placement warrants at a price of $1.50 per warrant
in a private placement to our prior sponsor that closed simultaneously with our initial public offering.
Upon the closing of our initial public offering, a total of $293,250,000, consisting of proceeds from the initial public offering and the sale of the private placement warrants, was placed in a trust account
maintained by Continental Stock Transfer & Trust Company, acting as trustee. The funds in the trust account will be invested only in U.S. government treasury bills with a maturity of 185 days or less or in money
market funds investing solely in U.S. Treasuries and meeting certain conditions under Rule 2a-7 under the Investment Company Act until the earlier of: (i) the completion of a business combination and (ii) the distribution of the funds in the trust
account to our shareholders.
Our Business Strategy and Acquisition Criteria
Our strategy is to identify and acquire a business with strong market fundamentals and significant growth potential. We also intend to leverage our sponsor’s expertise, capital markets track record and extensive network to identify investment
opportunities that can generate attractive risk-adjusted returns for our shareholders in the public markets. Consistent with this strategy, we have identified the following acquisition criteria and guidelines to evaluate prospective targets. We will
use these criteria and guidelines in evaluating acquisition opportunities but may decide to enter into our initial business combination with a target business that does not meet these criteria and guidelines:
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Location in large, underpenetrated emerging markets, particularly in Western Europe, CEE, the CIS (excluding Russia and Belarus) or Latin America. We aim to pursue
best-in-class opportunities in Western Europe, CEE, the CIS (excluding Russia and Belarus) or Latin America technology and consumer-exposed sectors offering attractive long-term prospects, as we believe such markets offer a wide range of
investment opportunities. Specifically, we seek companies that will be well-positioned for success as a U.S.-listed company.
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Compelling growth prospects. We plan to invest in companies with strong growth potential and established market and product positions. In addition, we seek to invest in
companies with minimal capital intensity.
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Proven technology and market adoption with appropriate scalability risk. We will focus on companies with established market-tested products and services offerings. We also
believe that proven healthy historical revenue trends and commercial traction with key customers are important mitigants for technology and market adoption risks.
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Proven monetization and attractive unit economics with high operating leverage. We will target companies with a sustainable financial scale, established business models and
proven unit economics, including core metrics that tie to key financial and operating targets, such as recurring revenue, cohort consistency, churn rates and pricing per product or customer.
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World-class management teams. We aim to partner with creative and ambitious management teams with successful track records and we will therefore invest a significant amount of
time in assessing leadership quality and evaluating areas for improvement over time.
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Attractive valuation based on historical benchmarking across cycles. We will seek margin of safety with valuation metrics benchmarked “through-the-cycle”. We will also put
emphasis on management teams maintaining a significant level of long-term alignment with public shareholders.
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Compliant with highest ESG standards. We will focus on companies that would be a good fit for a prospective U.S. listing, prepared for the scrutiny of the public markets.
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These criteria and guidelines are not intended to be exhaustive. We will evaluate each opportunity on a case-by-case basis and are willing to accept a high degree of situational, legal and/or capital structure complexity in a business combination
if we believe it is justified by the potential opportunity. Any evaluation of the merits of a particular initial business combination may be based, to the extent relevant, on these general criteria and guidelines as well as other considerations,
factors, criteria and guidelines that our officers and directors may deem relevant. In the event that we decide to enter into an initial business combination with a target business that does not meet the above criteria and guidelines, we will
disclose this in shareholder communications related to our initial business combination, which would be in the form of tender offer documents or proxy solicitation materials that we would file with the SEC.
Members of our management team have communicated with their broad network of professional relationships to articulate our acquisition criteria, and we have begun a disciplined process of reviewing and pursuing promising leads. We also anticipate
that prospective business targets may be brought to our attention from various unaffiliated sources, including investment market participants, private equity groups, investment banking firms, industry consultants, accounting firms and large business
enterprises.
Sourcing
We intend to identify and acquire one or more businesses in Western Europe, CEE, the CIS (excluding Russia and Belarus) or Latin America. We believe this regional focus offers a differentiated investment opportunity to our shareholders. We plan to
leverage our team sourcing channels and relationships within the business and financial community to build a pipeline of business combination opportunities, and we will rely on our team’s experience in engaging with management to help to ensure the
returns to all stakeholders are maximized.
In addition to our team’s sourcing capabilities, we intend to capitalize on the experience and platform of FPP AM. All three of our founders have track records of deal-making across a variety of sectors and jurisdictions and identifying
high-quality assets, businesses and management teams.
We believe that we are well-positioned to pursue differentiated opportunities, which would not be easily replicated by other market participants, due to:
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FPP AM’s experience in sourcing, structuring, acquiring, operating, integrating, developing, growing, financing and selling businesses;
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FPP AM’s experience in both investing in and operating across a range of sectors, setting and changing strategies, and identifying, monitoring and recruiting world-class talent;
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FPP AM’s established relationships with sellers, financing providers and prominent executives and entrepreneurs;
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FPP AM’s experience as leaders, executives, board members, investors or bankers in multiple businesses;
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FPP AM’s experience in executing transactions and negotiating transactions favorable to investors across a broad range of sectors under varying economic and financial market conditions;
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FPP AM’s experience in investing either directly or indirectly via funds, and their network in private equity opportunities, which should help to ensure access to a wide breadth of deal flow via portfolio
companies; and
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the personal network and connections of our independent board members and advisory committee members, which we expect to provide additional sourcing capabilities.
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Our Acquisition Process
In evaluating a prospective target business, we expect to conduct a comprehensive due diligence review. That due diligence review may include, among other things, financial statement analysis, document reviews, meetings with the target’s
management and other employees, consultations with relevant industry experts, competitors, customers and suppliers, as well as a review of additional information that we will seek to obtain as part of our analysis of a target company.
We are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor, officers or directors or any of their affiliates. 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 independent directors, if required by applicable law or based upon the determination of our board of directors or a committee thereof, may but are
not required to obtain an opinion from an independent investment banking firm which is a member of the Financial Industry Regulatory Authority (“FINRA”), or an independent accounting firm that commonly renders valuation opinions that such initial
business combination is fair to our company from a financial point of view. However, as required by our amended and restated memorandum and articles of association, in no event will we complete an initial business combination, including with a
company that is affiliated with our sponsor or any of our officers or directors, if such initial business combination would be prohibited under Sanctions (as defined below), or result in us or the combined company becoming subject to Sanctions or
Secondary Sanctions (as defined below).
We currently do not have any specific business combination under consideration. Our officers and directors have neither individually selected 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. Our management team is regularly 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. 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.
Certain of our officers and directors have, or may in the future have, fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present business combination opportunities to such
entities, subject to his or her fiduciary duties. As a result, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then-current fiduciary or contractual
obligations, then he or she may be required to honor such fiduciary or contractual obligations to present such business combination opportunity to such entity, before we can pursue such opportunity. If these other entities decide to pursue any such
opportunity, we may be precluded from pursuing the same. However, we do not expect these duties to materially affect our ability to complete our initial business combination. Our amended and restated memorandum and articles of association provide
that we renounce, to the maximum extent permitted by law, our interest or expectancy in, or in being offered an opportunity to participate in, any business opportunity which may be a corporate opportunity for both us and our sponsor and another
entity, including any entities managed by our sponsor or its affiliates and any companies in which our sponsor or such entities have invested or about which any of our officers or directors acquires knowledge and we will waive any claim or cause of
action we may have in respect thereof. In addition, our amended and restated memorandum and articles of association contain provisions to exculpate and indemnify, to the maximum extent permitted by law, such persons in respect of any liability,
obligation or duty to our company that may arise as a consequence of such persons becoming aware of any business opportunity or failing to present such business opportunity. Our code of ethics requires us to avoid, wherever possible, all conflicts of
interests, except under guidelines or resolutions approved by our board of directors (or the appropriate committee of our board) or as disclosed in our public filings with the SEC.
In addition, our sponsor, officers and directors may sponsor, form or participate in other special purpose acquisition companies similar to ours or may pursue other business or investment ventures during the period in which we are seeking an
initial business combination. Any such companies, businesses or investments may present additional conflicts of interest in pursuing an initial business combination. Our sponsor, 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. However, we do
not believe that any such potential conflicts would materially affect our ability to complete our initial business combination.
FPP AM provides the services of its extensive legal, structuring and banking workforce to facilitate origination and execution work streams. We will in the future engage service providers from FPP AM for services in connection with identifying and
investigating potential targets for, and the consummation of, a business combination, and we may pay fees, including non-cash compensation, and reimburse expenses for any such services. Similarly, FPP AM may provide services to prospective
acquisition targets, including in connection with or following an initial business combination with us, and may receive fees and other compensation and expense reimbursements in exchange for such services.
Initial Business Combination
So long as our securities are then listed on Nasdaq, our initial business combination must occur with one or more target businesses that together have an aggregate fair market value of at least 80% of the net assets held in the trust account
(excluding the deferred underwriting commissions and taxes payable on the interest earned on the trust account) at the time of signing a definitive agreement in connection with our initial business combination. If our board of directors is not able
to independently determine the fair market value of the target business or businesses, we may obtain an opinion from an independent investment banking firm or an independent valuation or appraisal firm with respect to the satisfaction of such
criteria. While we consider it unlikely that our board will not be able to make an independent determination of the fair market value of a target business or businesses, it may be unable to do so if the board is less familiar or experienced with the
target company’s business, there is a significant amount of uncertainty as to the value of the company’s assets or prospects, including if such company is at an early stage of development, operations or growth, or if the anticipated transaction
involves a complex financial analysis or other specialized skills and the board determines that outside expertise would be helpful or necessary in conducting such analysis. Since any opinion, if obtained, would merely state that the fair market value
of the target business meets the 80% of net assets threshold, unless such opinion includes material information regarding the valuation of a target business or the consideration to be provided, it is not anticipated that copies of such opinion would
be distributed to our shareholders. However, if required under applicable law, any proxy statement that we deliver to shareholders and file with the SEC in connection with a proposed transaction will include such opinion.
We anticipate structuring our initial business combination such that the post-business combination company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the target
management team or shareholders or for other reasons, but we will only complete such business combination if the post-business combination company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a
controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”). Even if the post-business combination company owns or
acquires 50% or more of the voting securities of the target, our shareholders prior to the business combination may collectively own a minority interest in the post-business combination company, depending on valuations ascribed to the target and us
in the 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, shares or other equity interests of a target. In this case, we would
acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our shareholders immediately prior to our initial business combination could own less than a majority of our outstanding
shares subsequent to our initial business combination. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-business combination company, the portion of such business or businesses
that is owned or acquired is what will be valued for purposes of the 80% of net assets test. If the business combination involves more than one target business, the 80% of net assets test will be based on the aggregate value of all of the target
businesses. In addition, we have agreed not to enter into a definitive agreement regarding an initial business combination without the prior consent of our sponsor. If our securities are not then listed on Nasdaq for whatever reason, we would no
longer be required to meet the foregoing 80% of net asset test.
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.
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.
Status as a Public Company
We believe our structure will make us an attractive business combination partner to target businesses. As an existing public company, we offer a target business an alternative to the traditional initial public offering through a merger or other
business combination with us. In a business combination transaction with us, the owners of the target business may, for example, exchange their shares of stock, shares or other equity interests in the target business for our Class A ordinary shares
(or shares of a new holding company) or for a combination of our Class A ordinary shares and cash, allowing us to tailor the consideration to the specific needs of the sellers. We believe target businesses will find this method a more expeditious and
cost effective method to becoming a public company than the typical initial public offering. The typical initial public offering process takes a significantly longer period of time than the typical business combination transaction process, and there
are significant expenses, market and other uncertainties in the initial public offering process, including underwriting discounts and commissions, marketing and road show efforts that may not be present to the same extent in connection with a
business combination with us.
Furthermore, once a proposed business combination is completed, the target business will have effectively become public, whereas an initial public offering is always subject to the underwriters’ ability to complete the offering, as well as general
market conditions, which could delay or prevent the offering from occurring or have negative valuation consequences. Once public, we believe the target business would then have greater access to capital, an additional means of providing management
incentives consistent with shareholders’ interests and the ability to use its shares as currency for acquisitions. Being a public company can offer further benefits by augmenting a company’s profile among potential new customers and vendors and aid
in attracting talented employees.
While we believe that our structure and our management team’s backgrounds will make us an attractive business partner, some potential target businesses may view our status as a blank check company, such as our lack of an operating history and our
ability to seek shareholder approval of any proposed initial business combination, negatively.
We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As such, we are eligible to take advantage of certain exemptions from various
reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding
a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved, If some investors find our securities less attractive as a result, there may be a less active trading market for
our securities and the prices of our securities may be more volatile.
In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting
standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition
period.
We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of our initial public offering, (b) in which we have total annual gross revenue of at least
$1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Class A ordinary shares that are held by non-affiliates exceeds $700 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.
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 any fiscal year for so long as either (1) the market value of our ordinary shares held by non-affiliates did not exceed $250 million as of the prior June
30, or (2) our annual revenues did not exceed $100 million during such completed fiscal year and the market value of our ordinary shares held by non-affiliates did not exceed $700 million as of the prior June 30.
Financial Position
With the gross proceeds from our initial public offering, 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 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.
Redemption Rights for Public Shareholders upon Completion of our Initial Business Combination
We will provide our public shareholders with the opportunity to redeem all or a portion of their Class A ordinary shares upon the completion of our initial business combination at a per-share price, payable in cash, equal
to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of the initial business combination, including interest earned on the funds held in the trust account and not previously
released to us to pay our income taxes, if any, 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 $10.20 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 of our initial public offering. The redemption rights will include the
requirement that a beneficial holder must identify itself in order to validly redeem its shares. There will be no redemption rights upon the completion of our initial business combination with respect to our warrants. Further, we will not proceed
with redeeming our public shares, even if a public shareholder has properly elected to redeem its shares, if a business combination does not close. Our sponsor and each member of our management team have entered into an agreement with us, pursuant to
which they have agreed to waive their redemption rights with respect to any founder shares and public shares held by them in connection with (i) the completion of our initial business combination and (ii) a shareholder vote to approve an amendment to
our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial
business combination or to redeem 100% of our public shares if we do not complete our initial business combination by March 13, 2023 (or by June 13, 2023, as applicable) or (B) with respect to any other provision relating to the rights of holders of
our Class A ordinary shares.
Limitations on Redemptions
Our amended and restated memorandum and articles of association provide 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 (so that we do not then become subject to
the SEC’s “penny stock” rules). However, the proposed business combination may require: (i) cash consideration to be paid to the target or its owners, (ii) cash to be transferred to the target for working capital or other general corporate purposes
or (iii) the retention of cash to satisfy other conditions in accordance with the terms of the proposed business combination. Furthermore, although we will not redeem shares in an amount that would cause our net
tangible assets to fall below $5,000,001, we do not have a maximum redemption threshold based on the percentage of shares sold in this offering, as many blank check companies do. In the event the aggregate cash consideration we would be
required to pay for all Class A ordinary shares that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to
us, we will not complete the business combination or redeem any shares, and all Class A ordinary shares submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate
business combination.
Manner of Conducting Redemptions
We will provide our public shareholders with the opportunity to redeem all or a portion of their Class A ordinary shares upon the completion of our initial business combination either (i) in connection with a shareholder
meeting called to approve the business combination or (ii) by means of a tender offer. The decision as to whether we will seek shareholder approval of a proposed business combination or conduct a tender offer will be made by us, solely in our
discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would require us to seek shareholder approval under applicable law or stock exchange listing requirement or whether
we were deemed to be a foreign private issuer (which would require a tender offer rather than seeking shareholder approval under SEC rules). Asset acquisitions and share purchases would not typically require shareholder approval while direct mergers
with our company where we do not survive and any transactions where we issue more than 20% of our issued and outstanding ordinary shares or seek to amend our amended and restated memorandum and articles of association would typically require
shareholder approval. We currently intend to conduct redemptions in connection with a shareholder vote unless shareholder approval is not required by applicable law or stock exchange listing requirement or we choose to conduct redemptions pursuant to
the tender offer rules of the SEC for business or other reasons. So long as we obtain and maintain a listing for our securities on Nasdaq, we will be required to comply with Nasdaq rules.
If we held a shareholder vote to approve our initial business combination, we would, pursuant to our amended and restated memorandum and articles of association:
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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 shareholder approval of our initial business combination, we will distribute proxy materials and, in connection therewith, provide our public shareholders with the redemption rights described above
upon completion of the initial business combination.
If we seek shareholder approval, we will complete our initial business combination only if we obtain the approval of an ordinary resolution, or such higher approval threshold as may be required by Cayman Islands or other
applicable law and pursuant to our amended and restated memorandum and articles of association. In such case, our sponsor and each member of our management team have agreed to vote their founder shares and public shares in favor of our initial
business combination. As a result, in addition to our founder shares, we would need 10,781,251, or 37.5% (assuming all issued and outstanding shares are voted), or 1,796,876, or 6.25% (assuming only the minimum number of shares representing a quorum
are voted), of the 28,750,000 public shares sold in our initial public offering to be voted in favor of an initial business combination in order to have our initial business combination approved, subject to any higher approval threshold as may be
required by Cayman Islands or other applicable law. Each public shareholder may elect to redeem their public shares irrespective of whether they vote for or against the proposed transaction or vote at all. In addition, our sponsor and each member of
our management team have entered into an agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares and public shares held by them in connection with (i) the completion of a business
combination and (ii) a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the
right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination by March 13, 2023 (or June 13, 2023, as applicable) or (B) with
respect to any other provision relating to the rights of holders of our Class A ordinary shares.
If we conduct redemptions pursuant to the tender offer rules of the SEC, we will, pursuant to our amended and restated memorandum and articles of association:
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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, if we elect to conduct redemptions pursuant to the tender offer rules, we and our sponsor will terminate any plan established in accordance with Rule 10b5-1
to purchase Class A ordinary shares in the open market, in order 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 shareholders not tendering more than a specified number of public shares, which number
will be based on the requirement that we will only redeem public shares so long as (after such redemptions) our net tangible assets will be at least $5,000,001, either prior to or upon consummation of an initial business combination, after payment of
the deferred underwriting commission (so that we do not then become subject to the SEC’s “penny stock” rules), or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business combination.
If public shareholders tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete such initial business combination.
Limitation on Redemption upon Completion of our Initial Business Combination if we Seek Shareholder Approval
If we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated
memorandum and articles of association provide that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange
Act), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the shares sold in our initial public offering, which we refer to as “Excess Shares,” without our prior consent. We believe this restriction will
discourage shareholders from accumulating large blocks of shares, and subsequent attempts by such holders to use their ability to exercise their redemption rights against a proposed business combination as a means to force us or our management to
purchase their shares at a significant premium to the then-current market price or on other undesirable terms. Absent this provision, a public shareholder holding more than an aggregate of 15% of the shares sold in our initial public offering could
threaten to exercise its redemption rights if such holder’s shares are not purchased by us, our sponsor or our management at a premium to the then-current market price or on other undesirable terms. By limiting our shareholders’ ability to redeem no
more than 15% of the shares sold in our initial public offering without our prior consent, we believe we will limit the ability of a small group of shareholders to unreasonably attempt to block our ability to complete our initial business
combination, particularly in connection with a business combination with a target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. However, we would not be restricting our shareholders’ 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
Public shareholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” will be required to either tender their certificates (if any) to our transfer agent prior to the date set forth
in the proxy solicitation or tender offer materials, as applicable, mailed to such holders, 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, in each case up to two business days prior to the initially scheduled vote to approve the business combination. The proxy solicitation or tender offer materials, as applicable, that we will
furnish to holders of our public shares in connection with our initial business combination will indicate the applicable delivery requirements, which will include the requirement that a beneficial holder must identify itself in order to validly
redeem its shares. Accordingly, a public shareholder would have from the time we send out our tender offer materials until the close of the tender offer period, or up to two business days prior to the initially scheduled vote on the proposal to
approve the business combination if we distribute proxy materials, as applicable, to tender its shares if it wishes to seek to exercise its redemption rights. Given the relatively short period in which to exercise redemption rights, it is advisable
for shareholders 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 a fee of approximately $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 shareholders’ vote on an initial business combination, and a holder could simply vote against a proposed business combination and check a box on the proxy card indicating such holder was seeking to exercise his or her redemption
rights. After the business combination was approved, the company would contact such shareholder to arrange for him or her to deliver his or her certificate to verify ownership. As a result, the shareholder then had an “option window” after the
completion of the business combination during which he or she could monitor the price of the company’s shares 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 shareholders were aware they needed to commit before the shareholder meeting, would become “option” rights surviving past the completion of the
business combination until the redeeming holder delivered its certificate. The requirement for physical or electronic delivery prior to the meeting ensures that a redeeming shareholder’s election to redeem is irrevocable once the business combination
is approved.
Any request to redeem such shares, once made, may be withdrawn at any time up to two business days prior to the initially scheduled vote on the proposal to approve the business combination, unless otherwise agreed to by us.
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 shareholders who elected to exercise their redemption rights would not be entitled to redeem their shares for the applicable
pro rata share of the trust account. In such case, we will promptly return any certificates delivered by public holders who elected to redeem their shares.
If our initial proposed business combination is not completed, we may continue to try to complete a business combination with a different target until March 13, 2023 (or June 13, 2023, as applicable).
Redemption of Public Shares and Liquidation if no Initial Business Combination
Our amended and restated memorandum and articles of association provide that we will have only 15 months from the closing of our initial public offering, or until March 13, 2023, or 18 months from the closing of
our initial public offering, or until June 13, 2023, if we have executed a letter of intent, agreement in principle or definitive agreement for our initial business combination within 15 months from the closing of our initial public offering but
have not completed our initial business combination within such 15-month period, to complete an initial business combination (the “Combination Period”). If we have not completed an initial business combination within such 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 income taxes, if any (less up to $100,000 of interest to pay winding up and dissolution expenses) divided by
the number of the then-outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any); and (iii) as promptly as
reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in the case of clauses (ii) and (iii) to our obligations under Cayman Islands law to
provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to complete an initial business
combination within the prescribed timeframe.
Our sponsor and each member of our management team have entered into an agreement with us, pursuant to which they have agreed to waive their rights to liquidating distributions from the trust account with respect to any
founder shares they hold if we fail to complete an initial business combination within the prescribed timeframe (although they will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail
to complete our initial business combination within the prescribed time frame).
Our sponsor, executive officers, directors and director nominees have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated memorandum and articles of
association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public
shares if we do not complete our initial business combination within the prescribed timeframe or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares, unless we provide our public shareholders with
the opportunity to redeem their public shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust
account and not previously released to us to pay our income taxes, if any, divided by the number of the then-outstanding public shares. However, we will only redeem our public shares so long as (after such redemptions) our net tangible assets to be
less than $5,000,001 (i) in the case of our initial business combination, either prior to or upon consummation of such initial business combination, after payment of the deferred underwriting commission or (ii) in the case of an amendment to our
amended and restated memorandum and articles of association (a) to modify the substance or timing of our obligation to allow redemptions in connection with our initial business combination or to redeem 100% of our public shares if we have not
consummated our initial business combination by March 13, 2023 (or June 13, 2023, as applicable) or (b) with respect to any other provision relating to shareholders’ rights or pre-initial business combination activity, upon such amendment (in each
case so that we do not then become 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, we would
not proceed with the amendment or the related redemption of our public shares at such time. This redemption right shall apply in the event of the approval of any such amendment, whether proposed by our sponsor, any executive officer, director or
director nominee, or any other person.
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 proceeds held outside the trust account plus
up to $100,000 of funds from the trust account available to us to pay winding up and dissolution expenses, although we cannot assure you that there will be sufficient funds for such purpose. However, if those funds are not sufficient to cover the
costs and expenses associated with implementing our plan of dissolution, to the extent that there is any interest accrued in the trust account not required to pay income taxes on interest income earned on the trust account balance, we may request the
trustee to release to us an additional amount of up to $100,000 of such accrued interest to pay those costs and expenses.
If we were to expend all of the net proceeds of our initial public offering and the sale of the private placement warrants, other than the proceeds deposited in the trust account, and without taking into account interest,
if any, earned on the trust account, the per-share redemption amount received by shareholders upon our dissolution would be $10.20. 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 shareholders. We cannot assure you that the actual per-share redemption amount received by shareholders will not be less than $10.20. 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 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 shareholders, 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, Citigroup Global Markets Inc. and VTB Capital plc will not execute an agreement 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. In order to protect the amounts held in the trust account, 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 (other than our independent registered public accounting firm), or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amounts in the trust account to below the lesser of
(i) $10.20 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 $10.20 per public share due to reductions in the value of the trust assets, in each
case net of the interest that may be withdrawn to pay our tax obligations, provided that such liability will not apply to any claims by a third-party or prospective target business that executed a waiver of
any and all rights to seek access to the trust account nor will it apply to any claims under our indemnity of the underwriters of our initial public offering against certain liabilities, including liabilities under the Securities Act. 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. 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 we believe that our sponsor’s only assets are securities of our company. Therefore, we cannot assure you that our
sponsor would be able to satisfy those obligations. None of our officers or directors will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.
In the event that the proceeds in the trust account are reduced below the lesser of (i) $10.20 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 $10.20 per public share due to reductions in the value of the trust assets, in each case net of the amount of interest which may be withdrawn to pay our income tax obligations, 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 in any particular instance. 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 $10.20 per public share.
We will seek to minimize the possibility that our sponsor will have to indemnify the trust account due to claims of creditors by endeavoring to have all vendors, service providers, prospective target businesses or other
entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to monies held in the trust account. Our sponsor will also not be liable as to any claims under our indemnity of the
underwriters of our initial public against certain liabilities, including liabilities under the Securities Act. We may have access to amounts held outside of the trust account 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, shareholders 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 shareholder.
If we file a bankruptcy or winding up petition or an involuntary bankruptcy or winding up petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy
or insolvency law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our shareholders. To the extent any bankruptcy claims deplete the trust account, we cannot assure you we will
be able to return $10.20 per public share to our public shareholders. Additionally, if we file a bankruptcy or winding up petition or an involuntary bankruptcy or winding up petition is filed against us that is not dismissed, any distributions
received by shareholders could be viewed under applicable debtor/creditor and/or bankruptcy or insolvency laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy or insolvency court could seek to recover some
or all amounts received by our shareholders. 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, and thereby exposing itself and our company to claims of
punitive damages, by paying public shareholders from the trust account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons.
Our public shareholders will be entitled to receive funds from the trust account only (i) in the event of the redemption of our public shares if we do not complete our initial business combination within from the prescribed
timeframe, (ii) in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have
their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within the prescribed timeframe or (B) with respect to any other provision
relating to the rights of holders of our Class A ordinary shares, or (iii) if they redeem their respective shares for cash upon the completion of the initial business combination. Public shareholders who redeem their Class A ordinary shares in
connection with a shareholder vote described in clause (ii) in the preceding sentence shall not be entitled to funds from the trust account upon the subsequent completion of an initial business combination or liquidation if we have not completed an
initial business combination within the prescribed timeframe, with respect to such Class A ordinary shares so redeemed. In no other circumstances will a shareholder have any right or interest of any kind to or in the trust account. In the event we
seek shareholder approval in connection with our initial business combination, a shareholder’s voting in connection with the business combination alone will not result in a shareholder’s redeeming its shares to us for an applicable pro rata share of
the trust account. Such shareholder must have also exercised its redemption rights described above. These provisions of our amended and restated memorandum and articles of association, like all provisions of our amended and restated memorandum and
articles of association, may be amended with a shareholder vote.
Officer and Director Resignations and Appointments
On March 23, 2022, the Board of Directors appointed Jonathan Neill as our Chief Financial Officer (“CFO”) and director, effective March 23, 2022. On March 23, 2022, the Board of Directors accepted the resignation of Bernard Abdelmalak as CFO and
director, effective March 23, 2022. There were no disagreements, no arguments, no conflicts and no disputes with our officers, directors, auditors and other professional service providers in connection with Mr. Abdelmalak’s decision to step down as
CFO and director.
On April 21, 2022, the Board of Directors accepted the resignation of Riccardo Orcel as our Chief Executive Officer (“CEO”) and director, effective April 21, 2022. On April 21, 2022, the Board of Directors appointed Jonathan Neill as our interim
CEO and director, effective April 21, 2022. Concurrently with his appointment as CEO, Mr. Neill resigned from his position as CFO but remained a director. On April 21, 2022, the Board of Directors appointed Christopher Edwards as our interim CFO and
director, effective April 21, 2022. There were no disagreements, no arguments, no conflicts and no disputes with our officers, directors, auditors and other professional service providers in connection with Mr. Orcel’s decision to step down as CEO
and director.
Corporate Information
Our executive offices are located at 8th Floor, Berkeley Square House, Berkeley Square, London, W1J 6DB, United Kingdom, and our telephone number is +44 20 7647 9100.
We are an “emerging growth company,” as defined in the JOBS Act. We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of our initial public
offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Class A ordinary shares that is held by non-affiliates equals or exceeds $700 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 Rule 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of
audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our ordinary shares held by non-affiliates equals or exceeds $250
million as of the prior June 30, or (2) our annual revenues equaled or exceeded $100 million during such completed fiscal year and the market value of our ordinary shares held by non-affiliates equals or
exceeds $700 million as of the prior June 30.
An investment in our securities involves a high degree of risk. You should consider carefully all of the risks described below, together with the other information contained in this Report and the final prospectus
associated with our initial public offering, before making a decision to invest in our units. If any of the following events occur, our business, financial condition and operating results may be materially adversely affected. In that event, the
trading price of our securities could decline, and you could lose all or part of your investment.
Risks Relating to our Search for, and Consummation of or Inability to Complete an Initial Business Combination
Our public 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 public shareholders do not support such a combination. Even if we seek shareholder approval, the holders of our founder shares will participate in the vote on such approval.
We may choose not to hold a shareholder vote to approve our initial business combination unless the business combination would require shareholder approval under applicable law or stock exchange rules or if we decide to
hold a shareholder vote for business or other reasons. For instance, if we were seeking to acquire a target business where the consideration we were paying in the transaction was all cash, we would typically not be required to seek shareholder
approval to complete such a transaction. Except as required by applicable law or stock exchange listing requirements, the decision as to whether we will seek shareholder approval of a proposed business combination or will allow shareholders to sell
their shares to us in a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors, such as the timing of the transaction and whether the terms of the transaction would otherwise require us to seek
shareholder approval. Even if we seek shareholder approval, the holders of our founder shares will participate in the vote on such approval. Accordingly, we may complete our initial business combination even if holders of a majority of our ordinary
shares do not approve of the business combination we complete.
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.
Our initial shareholders own 20% of our issued and outstanding ordinary shares. Our sponsor and members of our management team also may from time to time purchase Class A ordinary shares prior to our initial business
combination. Our amended and restated memorandum and articles of association provide that, if we seek shareholder approval, we will complete our initial business combination only if a simple majority of the ordinary shares (or such higher approval
threshold as may be required by Cayman Islands or other applicable law and pursuant to the amended and restated memorandum and articles of association), represented in person or by proxy and entitled to vote thereon, voted at a shareholder meeting
are voted in favor of the business combination. As a result, in addition to our founder shares, we would need 10,781,251, or 37.5% (assuming all issued and outstanding shares are voted), or 1,796,876, or 6.25% (assuming only the minimum number of
shares representing a quorum are voted), of the 28,750,000 public shares sold in our initial public offering to be voted in favor of an initial business combination in order to have our initial business combination approved (assuming all outstanding
shares are voted). Accordingly, if we seek shareholder approval of our initial business combination, the agreement by our sponsor and each member of our management team to vote in favor of our initial business combination will increase the likelihood
that we will receive the requisite shareholder approval for such initial business combination.
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,
unless we seek shareholder approval of such 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 any target businesses. Since our board of directors may complete a business combination without
seeking shareholder approval, public shareholders may not have the right or opportunity to vote on the business combination, unless we seek such shareholder approval. Accordingly, if we do not seek shareholder approval, 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 shareholders in which we describe our initial business combination.
The ability of our public shareholders to redeem their shares for cash may make our financial condition unattractive to potential business combination targets, which may make it
difficult for us to enter into a business combination with a target.
We may seek to enter into a business combination transaction agreement with a prospective target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. If too many public
shareholders exercise their redemption rights, we would not be able to meet such closing condition and, as a result, would not be able to proceed with the business combination. The amount of the deferred underwriting commissions payable to the
underwriters of our initial public offering will not be adjusted for any shares that are redeemed in connection with a business combination and such amount of deferred underwriting discount is not available for us to use as consideration in an
initial business combination. Furthermore, in no event will we redeem our public shares in an amount that would cause our net tangible assets, after payment of the deferred underwriting commissions, to be less than $5,000,001 either prior to or upon
consummation of an initial business combination, after payment of deferred underwriting commissions (so that we do not then become subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which may be contained
in the agreement relating to a business combination. Consequently, if accepting all properly submitted redemption requests would cause our net tangible assets, after payment of deferred underwriting commissions, to be less than $5,000,001 either
prior to or upon consummation of an initial business combination, 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 a business combination transaction with us.
The ability of our public shareholders to exercise redemption rights with respect to a large number of our shares may not allow us to complete the most desirable business combination
or optimize our capital structure.
At the time we enter into an agreement for our initial business combination, we will not know how many shareholders may exercise their redemption rights, and therefore 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 than we initially expect are submitted for
redemption, we may need to restructure the transaction to reserve a greater portion of the cash in the trust account or arrange for additional third-party financing. Raising additional third-party financing may involve dilutive equity issuances or
the incurrence of indebtedness at higher than desirable levels. Furthermore, the dilution applicable to our public shares would increase to the extent that the anti-dilution provision of the Class B ordinary shares results in the issuance of Class A
shares on a greater than one-to-one basis upon conversion of the Class B ordinary shares at the time of our initial 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 shareholders who properly exercise their redemption rights will not be reduced by the
deferred underwriting commission and after such redemptions, the amount held in trust will continue to reflect our obligation to pay the entire deferred underwriting commissions.
The ability of our public shareholders to exercise redemption rights with respect to a large number of our shares could increase the probability that our initial business combination
would be unsuccessful and that you would have to wait for liquidation in order to redeem your shares.
If our initial business combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price, or requires us to have a minimum amount of cash at closing, the probability that our
initial business combination would be unsuccessful is increased. If our initial business combination is unsuccessful, you would not receive your pro rata portion of the funds in the trust account until we liquidate the trust account. If you are in
need of immediate liquidity, you could attempt to sell your shares in the open market; however, at such time our shares may trade at a discount to the pro rata amount per share in the trust account. In either situation, you may suffer a material loss
on your investment or lose the benefit of funds expected in connection with our redemption of our public shares until we liquidate or you are able to sell your shares in the open market.
The requirement that we complete an initial business combination within the prescribed time frame may give potential target businesses leverage over us in negotiating a business
combination and may limit the time we have in which to conduct due diligence on potential business combination targets, in particular as we approach our business combination deadline, which could undermine our ability to complete our initial business
combination on terms that would produce value for our shareholders.
Any potential target business with which we enter into negotiations concerning a business combination will be aware that we must complete an initial business combination by March 13, 2023 (or June 13, 2023, as
applicable). Consequently, such target business may obtain leverage over us in negotiating a business combination, knowing that if we do not complete our initial business combination with that particular target business, we may be unable to
complete our initial business combination with any target business. This risk will increase as we get closer to the time frame 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 negative impacts on
the global economy, capital markets or other geopolitical conditions resulting from the recent invasion of Ukraine by Russia and subsequent sanctions against Russia, Belarus and related individuals and entities.
U.S. and global markets are experiencing volatility and disruption following the escalation of geopolitical tensions and the recent invasion of Ukraine by Russia in February 2022. In response to such invasion, the North
Atlantic Treaty Organization (“NATO”) deployed additional military forces to eastern Europe, and the United States, the United Kingdom, the European Union and other countries have announced various sanctions and restrictive actions against Russia,
Belarus and related individuals and entities, including the removal of certain financial institutions from the Society for Worldwide Interbank Financial Telecommunication (“SWIFT”) payment system. Certain countries, including the United States, have
also provided and may continue to provide military aid or other assistance to Ukraine during the ongoing military conflict, increasing geopolitical tensions with Russia. The invasion of Ukraine by Russia and the resulting measures that have been
taken, and could be taken in the future, by NATO, the United States, the United Kingdom, the European Union and other countries have created global security concerns that could have a lasting impact on regional and global economies. Although the
length and impact of the ongoing military conflict in Ukraine is highly unpredictable, the conflict could lead to market disruptions, including significant volatility in commodity prices, credit and capital markets, as well as supply chain
interruptions. Additionally, Russian military actions and the resulting sanctions could adversely affect the global economy and financial markets and lead to instability and lack of liquidity in capital markets.
Any of the abovementioned factors, or any other negative impact on the global economy, capital markets or other geopolitical conditions resulting from the Russian invasion of Ukraine and subsequent sanctions, could
adversely affect our search for a business combination and any target business with which we ultimately consummate a business combination. Furthermore, certain members of our prior sponsor are or were affiliated with entities subject to sanctions,
and while we do not believe our sponsor or any of its current members is subject to any sanctions restrictions, government authorities have wide discretion in imposing additional sanctions.
The extent and duration of the Russian invasion of Ukraine, resulting sanctions and any related market disruptions are impossible to predict, but could be substantial, particularly if current or new sanctions continue for
an extended period of time or if geopolitical tensions result in expanded military operations on a global scale. Any such disruptions 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, cross-border transactions or our ability to raise equity or debt financing in connection with any particular business combination. If these disruptions 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.
Our search for a business combination, and any target business with which we ultimately complete a business combination, may be materially adversely affected by the COVID-19 outbreak
and other events and the status of debt and equity markets.
In December 2019, a novel strain of coronavirus was reported to have surfaced, which has and is continuing to spread throughout parts of the world, including in the United States. On January 30, 2020, the World Health
Organization declared the outbreak of COVID-19 a “Public Health Emergency of International Concern.” On January 31, 2020, U.S. Health and Human Services Secretary Alex M. Azar II declared a public health emergency for the United States to aid the
U.S. healthcare community in responding to COVID-19, and on March 11, 2020 the World Health Organization characterized the outbreak as a “pandemic.” The COVID-19 outbreak has adversely affected, and other events (such as terrorist attacks, natural
disasters or a significant outbreak of other infectious diseases) could adversely affect, economies and financial markets worldwide, potentially including the business of any target business with which we may intend to complete a business
combination. Furthermore, we may be unable to complete a business combination at all if concerns relating to the outbreak of COVID-19 continue to restrict travel, limit the ability to have meetings with potential investors or make it impossible or
impractical to negotiate and complete a transaction with the target company’s personnel, vendors and service providers in a timely manner, if at all. 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. While vaccines for COVID-19 are
being and have been developed, there is no guarantee that such vaccines will be durable and effective consistent with current expectations and we expect distribution and administration of the vaccines will take significant time. The disruptions posed
by COVID-19 or other events (such as terrorist attacks, natural disasters or a significant outbreak of other infectious diseases) continue for an extensive period of time, our ability to complete a business combination, or the operations of a target
business with which we ultimately complete a business combination, may be materially adversely affected. In addition, our ability to complete a transaction may be dependent on the ability to raise equity and debt financing which may be impacted by
COVID-19 and other events (such as terrorist attacks, natural disasters or a significant outbreak of other infectious diseases), including as a result of increased market volatility, decreased market liquidity and third-party financing being
unavailable on terms acceptable to us or at all.
Finally, the outbreak of COVID-19 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 cross-border
transactions.
We may not be able to complete an initial business combination by March 13, 2023 (or June 13, 2023, as applicable), in which case we would cease all operations except for the
purpose of winding up and we would redeem our public shares and liquidate.
We may not be able to find a suitable target business and complete an initial business combination by March 13, 2023 (or June 13, 2023, as applicable). Our ability to complete our initial business combination may be
negatively impacted by general market conditions, volatility in the capital and debt markets and the other risks described herein, including as a result of terrorist attacks, natural disasters or a significant outbreak of infectious diseases. For
example, the outbreak of COVID-19 continues to impact the economy both in the U.S. and globally, and, while the extent of the impact of the outbreak on us will depend on future developments, it could limit our ability to complete our initial
business combination, 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. Additionally, the outbreak of COVID-19 and other events (such as
terrorist attacks, natural disasters or a significant outbreak of other infectious diseases) may negatively impact businesses we may seek to acquire.
If we have not completed an initial business combination within such time period, we will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than 10 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 income taxes, if any (less up to $100,000 of interest to pay winding up and dissolution expenses), divided by the number of the then-outstanding public shares, which redemption will completely extinguish public shareholders’ rights as
shareholders (including the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors,
liquidate and dissolve, subject in the case of clauses (ii) and (iii), to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. In either such case, our public shareholders may
receive only $10.20 per public share, or less than $10.20 per public share, on the redemption of their shares, and our warrants will expire worthless. 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 shareholders may be less than $10.20 per public share” and other risk factors herein.
As the number of special purpose acquisition companies evaluating targets has increased, attractive targets have become scarcer and there has been more competition for attractive
targets. This could increase the cost of our initial business combination and could even result in our inability to find a target or to complete an initial business combination.
In recent years, the number of special purpose acquisition companies that have been formed has increased substantially. Many potential targets for special purpose acquisition companies have already entered into an initial
business combination, and there are still many special purpose acquisition companies preparing for an initial public offering, as well as many such companies currently in registration. As a result, at times, fewer attractive targets have been
available to complete 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 has increased, 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 complete an initial business
combination, and may result in our inability to complete an initial business combination on terms favorable to our investors altogether.
If we seek shareholder approval of our initial business combination, our sponsor, directors, executive officers, advisors and their respective 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 ordinary shares or public warrants.
If we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, directors, executive
officers, advisors or their respective affiliates may purchase public shares or warrants 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 warrants in such transactions.
In the event that our sponsor, directors, executive officers, advisors or their affiliates purchase shares in privately negotiated transactions from public shareholders who have already elected to exercise their redemption
rights, such selling shareholders would be required to revoke their prior elections to redeem their shares. The purpose of any such transaction could be to (1) vote in favor of the business combination and thereby increase the likelihood of obtaining
shareholder approval of the business combination, (2) reduce the number of public warrants outstanding or vote such warrants on any matters submitted to the warrant holders for approval in connection with our initial business combination or (3)
satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met.
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 Class A ordinary shares or public
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. 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.
If a shareholder fails to receive notice of our offer to redeem our public shares in connection with our initial business combination, or fails to comply with the procedures for
tendering its shares, such shares may not be redeemed.
We will comply with the proxy rules or tender offer rules, as applicable, when conducting redemptions in connection with our initial business combination. Despite our compliance with these rules, if a shareholder fails to
receive our proxy solicitation or tender offer materials, as applicable, such shareholder may not become aware of the opportunity to redeem its shares. In addition, the proxy solicitation or tender offer materials, as applicable, that we will furnish
to holders of our public shares in connection with our initial business combination will describe the various procedures that must be complied with in order to validly redeem or tender public shares. In the event that a shareholder fails to comply
with these or any other procedures disclosed in the proxy or tender offer materials, as applicable, its shares may not be redeemed.
If we seek shareholder approval of our initial business combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a “group” of shareholders are
deemed to hold in excess of 15% of our Class A ordinary shares, you will lose the ability to redeem all such shares in excess of 15% of our Class A ordinary shares.
If we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated
memorandum and articles of association provide that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange
Act), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the shares sold in our initial public offering, which we refer to as the “Excess Shares,” without our prior consent. However, we would not be
restricting our shareholders’ ability to vote all of their shares (including Excess Shares) for or against our initial business combination. Your inability to redeem the Excess Shares will reduce your influence over our ability to complete our
initial business combination and you could suffer a material loss on your investment in us if you sell Excess Shares in open market transactions. Additionally, you will not receive redemption distributions with respect to the Excess Shares if we
complete our initial business combination. And as a result, you will continue to hold that number of shares exceeding 15% and, in order to dispose of such shares, would be required to sell your shares in open market transactions, potentially at a
loss.
Because of our limited resources and the significant competition for business combination opportunities, it may be more difficult for us to complete our initial business combination.
If we have not completed our initial business combination within the required time period, our public shareholders may receive only approximately $10.20 per public share, or less than such amount in certain circumstances, on the liquidation of our
trust account and our warrants will expire worthless.
We expect to encounter intense competition from other entities having a business objective similar to ours, including private investors (which may be individuals or investment partnerships), other blank check companies and
other entities, domestic and international, competing for the types of businesses we intend to acquire. Many of these individuals and entities are well established and have extensive experience in identifying and effecting, directly or indirectly,
acquisitions of companies operating in or providing services to various industries. Many of these competitors possess greater technical, human and other resources or more local industry knowledge than we do and our financial resources will be
relatively limited when contrasted with those of many of these competitors. While we believe there are numerous target businesses we could potentially acquire with the net proceeds of our initial public offering and the sale of the private placement
warrants, our ability to compete with respect to the acquisition of certain target businesses that are sizable will be limited by our available financial resources. This inherent competitive limitation gives others an advantage in pursuing the
acquisition of certain target businesses. Furthermore, we are obligated to offer holders of our public shares the right to redeem their shares for cash at the time of our initial business combination in conjunction with a shareholder vote or via a
tender offer. Target companies will be aware that this may reduce the resources available to us for our initial business combination. Any of these obligations may place us at a competitive disadvantage in successfully negotiating a business
combination. If we have not completed our initial business combination within the required time period, our public shareholders may receive only approximately $10.20 per public share, or less than such amount in certain circumstances, on the
liquidation of our trust account and our warrants will expire worthless. 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 shareholders may be less
than $10.20 per public share” and other risk factors herein.
Changes in the market for directors and officers liability insurance could make it more difficult and more expensive for us to negotiate and complete an initial business combination.
In recent months, the market for directors and officers liability insurance for special purpose acquisition companies has changed in ways adverse to us and our management team. Fewer insurance companies are offering quotes
for directors and officers liability coverage, the premiums charged for such policies have generally increased and the terms of such policies have generally become less favorable. These trends may continue into the future.
The increased cost and decreased availability of directors and officers liability insurance could make it more difficult and more expensive for us to negotiate and complete an initial business combination. In order to
obtain directors and officers liability insurance or modify its coverage as a result of becoming a public company, the post-business combination entity might need to incur greater expense and/or accept less favorable terms. Furthermore, any failure
to obtain adequate directors and officers liability insurance could have an adverse impact on the post-business combination’s ability to attract and retain qualified officers and directors.
In addition, after completion of any initial business combination, our directors and officers could be subject to potential liability from claims arising from conduct alleged to have occurred prior to such initial business
combination. As a result, in order to protect our directors and officers, the post-business combination entity may need to purchase additional insurance with respect to any such claims (“run-off insurance”). The need for run-off insurance would be an
added expense for the post-business combination entity and could interfere with or frustrate our ability to complete an initial business combination on terms favorable to our investors.
If the net proceeds of our initial public offering and the sale of the private placement warrants not being held in the trust account are insufficient to allow us to operate
until March 13, 2023 (or June 13, 2023, as applicable), 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.
While we believe that the funds available to us outside of the trust account, together with funds available from loans from our sponsor, its affiliates or members of our management team are sufficient to allow us to
operate for at least until March 13, 2023 (or June 13, 2023, as applicable), we cannot assure you that our estimate is accurate, and our sponsor, its affiliates or members of our management team are under no obligation to advance funds to us in
such circumstances. Of the funds available to us, we expect to use a portion of the funds available to us to pay fees to consultants to assist us with our search for a target business. We could also use a portion of the funds as a down payment or
to fund a “no-shop” provision (a provision in letters of intent designed to keep target businesses from “shopping” around for transactions with other companies or investors on terms more favorable to such target businesses) with respect to a
particular proposed business combination, although we do not have any current intention to do so. If we entered into a letter of intent where we paid for the right to receive exclusivity from a target business and were subsequently required to
forfeit such funds (whether as a result of our breach or otherwise), we might not have sufficient funds to continue searching for, or conduct due diligence with respect to, a target business.
If we are required to seek additional capital, we would need to borrow funds from our sponsor, its affiliates, members of our management team or other third parties to operate or may be forced to liquidate. Neither our
sponsor, members of our management team nor their affiliates is under any obligation to loan funds to or otherwise invest in us in such circumstances. Any such advances may be repaid only from funds held outside the trust account or from funds
released to us upon completion of our initial business combination. Prior to the completion of our initial business combination, we do not expect to seek loans from parties other than our sponsor, its affiliates or members of our management team 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 have not completed our initial business combination within the required time period
because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the trust account. Consequently, our public shareholders may only receive an estimated $10.20 per public share, or possibly less, on our
redemption of our public shares, and our warrants will expire worthless. 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 shareholders may be less
than $10.20 per public share” and other risk factors herein.
If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by shareholders may be less than $10.20
per public share.
Our placing of funds in the trust account may not protect those funds from third-party claims against us. Although we will seek to have all vendors, service providers (other than our independent registered public accounting
firm), prospective target businesses 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
shareholders, such parties may not execute such agreements, or even if they execute such agreements, they may not be prevented from bringing claims against the trust account, including, but not limited to, fraudulent inducement, breach of fiduciary
responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against our assets, including the funds held in the trust account. If any
third-party refuses to execute an agreement waiving such claims to the monies held in the trust account, our management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third-party that has not
executed a waiver if management believes that such third-party’s engagement would be significantly more beneficial to us than any alternative. Marcum LLP, our independent registered public accounting firm, 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 have not completed an initial business combination by March 13, 2023 (or June 13, 2023, as applicable), 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 shareholders could be less than the $10.20 per public share initially
held in the trust account, due to claims of such creditors.
Pursuant to the letter agreement, our sponsor has agreed that it will be liable to us if and to the extent any claims by a third-party (other than our independent auditors) for services rendered or products sold to us, or a
prospective target business with which we have discussed entering into a transaction agreement, reduce the amounts in the trust account to below the lesser of (i) $10.20 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 $10.20 per public share due to reductions in the value of the trust assets, in each case net of the interest that may be withdrawn to pay our tax obligations, provided that
such liability will not apply to any claims by a third-party or prospective target business that executed a waiver of any and all rights to seek access to the trust account nor will it apply to any claims under our indemnity of the underwriters of
our initial public offering against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third-party, our sponsor will not be responsible to the
extent of any liability for such third-party claims.
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 we 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 $10.20 per public share. In such event, we may not be able to complete our initial business combination, and you would receive such lesser amount per share
in connection with any redemption of your public shares. None of our officers or directors will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.
Our directors may decide not to enforce the indemnification obligations of our sponsor, resulting in a reduction in the amount of funds in the trust account available for distribution
to our public shareholders.
In the event that the proceeds in the trust account are reduced below the lesser of (i) $10.20 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 $10.20 per public share due to reductions in the value of the trust assets, in each case net of the interest that may be withdrawn to pay our tax obligations, 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, for example, if 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 shareholders may be reduced below $10.20 per
public share.
We may not have sufficient funds to satisfy indemnification claims of our directors and executive 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 any right, title, interest or claim of any kind in or to any monies in
the trust account and to not 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 complete an initial business combination. Our obligation to indemnify our officers and directors may discourage shareholders 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 shareholders. Furthermore, a shareholder’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.
The securities in which we invest the funds held in the trust account could bear a negative rate of interest, which could reduce the value of the assets held in trust such that the
per-share redemption amount received by public shareholders may be less than $10.20 per share.
The proceeds held in the trust account will be invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the
Investment Company Act which invest only in direct U.S. government 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 that we are unable to complete our initial business combination or make certain amendments to our amended and restated memorandum and articles of association, our public shareholders are entitled to receive their pro-rata share of the
proceeds held in the trust account, plus any interest income, net of income taxes paid or payable (less, in the case we are unable to complete our initial business combination, $100,000 of interest to pay winding up and dissolution expenses).
Negative interest rates could reduce the value of the assets held in trust such that the per-share redemption amount received by public shareholders may be less than $10.20 per share.
If, after we distribute the proceeds in the trust account to our public shareholders, we file a bankruptcy, winding up or insolvency petition or an involuntary bankruptcy, winding up
or insolvency petition is filed against us that is not dismissed, a bankruptcy or insolvency court may seek to recover such proceeds, and the members of our board of directors may be viewed as having breached their fiduciary duties to our creditors,
thereby exposing the members of our board of directors and us to claims of punitive damages.
If, after we distribute the proceeds in the trust account to our public shareholders, we file a bankruptcy, winding up or insolvency petition or an involuntary bankruptcy, winding up or insolvency petition is filed against
us that is not dismissed, any distributions received by shareholders could be viewed under applicable debtor/creditor and/or bankruptcy or insolvency laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy or
insolvency court or liquidator could seek to recover some or all amounts received by our shareholders. In addition, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith, thereby
exposing itself and us to claims of punitive damages, by paying public shareholders from the trust account prior to addressing the claims of creditors.
If, before distributing the proceeds in the trust account to our public shareholders, we file a bankruptcy, winding up or insolvency petition or an involuntary bankruptcy, winding up
or insolvency petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our shareholders and the per-share amount that would otherwise be received by our shareholders in
connection with our liquidation may be reduced.
If, before distributing the proceeds in the trust account to our public shareholders, we file a bankruptcy, winding up or insolvency petition or an involuntary bankruptcy, winding up or insolvency petition is filed against
us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy or insolvency law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our
shareholders. To the extent any bankruptcy claims deplete the trust account, the per-share amount that would otherwise be received by our shareholders in connection with our liquidation may be reduced.
If we are deemed to be an investment company under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted,
which may make it difficult for us to complete our initial business combination.
If we are deemed to be an investment company under the Investment Company Act, our activities may be restricted, including:
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restrictions on the nature of our investments; and
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restrictions on the issuance of securities, each of which may make it difficult for us to complete our initial business combination.
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In addition, we may have imposed upon us burdensome requirements, including:
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registration as an investment company with the SEC;
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adoption of a specific form of corporate structure; and
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reporting, record keeping, voting, proxy and disclosure requirements and other rules and regulations that we are currently not subject to.
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In order not to be regulated as an investment company under the Investment Company Act, unless we can qualify for an exclusion, we must ensure that we are engaged primarily in a business other than investing, reinvesting or
trading of securities and that our activities do not include investing, reinvesting, owning, holding or trading “investment securities” constituting more than 40% of our assets (exclusive of U.S. government securities and cash items) on an
unconsolidated basis. Our business will be to identify and complete a business combination and thereafter to operate the post-transaction business or assets for the long term. We do not plan to buy businesses or assets with a view to resale or profit
from their resale. We do not plan to buy unrelated businesses or assets or to be a passive investor.
We do not believe that our anticipated principal activities will subject us to the Investment Company Act. To this end, the proceeds held in the trust account may only be invested in United States “government
securities” within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest
only in direct U.S. government treasury obligations. Pursuant to the trust agreement, the trustee is not permitted to invest in other securities or assets. By restricting the investment of the proceeds to these instruments, and by having a business
plan targeted at acquiring and growing businesses for the long term (rather than on buying and selling businesses in the manner of a merchant bank or private equity fund), we intend to avoid being deemed an “investment company” within the meaning
of the Investment Company Act. Our securities are not intended for persons who are seeking a return on investments in government securities or investment securities. The trust account is intended as a holding place for funds pending the earliest to
occur of either: (i) the completion of our initial business combination; (ii) the redemption of any public shares properly tendered in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A)
to modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not
complete our initial business combination by March 13, 2023 (or June 13, 2023, as applicable) or (B) with respect to any other material provision relating to the rights of holders of our Class A ordinary shares; or (iii) absent our completing an
initial business combination by March 13, 2023 (or June 13, 2023, as applicable), our return of the funds held in the trust account to our public shareholders as part of our redemption of the public shares. If we do not invest the proceeds as
discussed above, we may be deemed to be subject to the Investment Company Act. If we were deemed to be subject to the Investment Company Act, compliance with these additional regulatory burdens would require additional expenses for which we have
not allotted funds and may hinder our ability to complete a business combination. If we have not completed our initial business combination within the required time period, our public shareholders may receive only approximately $10.20 per public
share, or less than such amount in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless.
Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, 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 are required to comply with certain SEC and other legal requirements, our ability to consummate a business
combination may be contingent on our ability to comply with certain laws and regulations and any post-business combination company may be subject to additional laws and regulations. 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, including as a result of changes in economic, political, social and government policies, 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.
If we have not completed an initial business combination within the required time period, our public shareholders may be forced to wait beyond such time period before redemption from
our trust account.
If we have not completed an initial business combination by March 13, 2023 (or June 13, 2023, as applicable), 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 our income taxes, if any (less up to $100,000 of interest to pay winding up and dissolution expenses), will be used to fund the redemption of our public
shares, as further described herein. Any redemption of public shareholders from the trust account will be effected automatically by function of our amended and restated memorandum and articles of association prior to any voluntary winding up. If we
are required to wind up, liquidate the trust account and distribute such amount therein, pro rata, to our public shareholders, as part of any liquidation process, such winding up, liquidation and distribution must comply with the applicable
provisions of the Companies Act. In that case, investors may be forced to wait beyond March 13, 2023 (or June 13, 2023, as applicable) 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 their redemption or any liquidation unless, prior thereto, we complete our initial business combination or amend
certain provisions of our amended and restated memorandum and articles of association, and only then in cases where investors have sought to redeem their Class A ordinary shares. Only upon their redemption or any liquidation will public
shareholders be entitled to distributions if we do not complete our initial business combination and do not amend certain provisions of our amended and restated memorandum and articles of association prior thereto.
Our shareholders may be held liable for claims by third parties against us to the extent of distributions received by them upon redemption of their shares.
If we are forced to enter into an insolvent liquidation, any distributions received by shareholders could be viewed as an unlawful payment if it was proved that immediately following the date on which the distribution was
made, we were unable to pay our debts as they fall due in the ordinary course of business. As a result, a liquidator could seek to recover some or all amounts received by our shareholders. Furthermore, our directors may be viewed as having breached
their fiduciary duties under Cayman Islands law to us or our creditors and/or may have acted in bad faith, thereby exposing themselves and our company to claims, by paying public shareholders from the trust account prior to addressing the claims of
creditors. We cannot assure you that claims will not be brought against us for these reasons. We and our directors and officers who knowingly and willfully authorized or permitted any distribution to be paid out of our share premium account while we
were unable to pay our debts as they fall due in the ordinary course of business would be guilty of an offence and may be liable for a fine of up to $18,292.68 and imprisonment for up to five years in the Cayman Islands.
Holders of Class A ordinary shares 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 our initial business combination, holders of our founder shares may remove a member of the board of directors for any reason by ordinary resolution. Accordingly, you may not have any say in the management of
our company prior to the consummation of an initial business combination.
We may not hold an annual general meeting of shareholders until after the consummation of our initial business combination, which could delay the opportunity for our shareholders to
appoint directors.
In accordance with Nasdaq corporate governance requirements, we are not required to hold an annual meeting until, but no later than one year after our first fiscal year end following our listing on Nasdaq. There is no
requirement under the Companies Act for us to hold annual or shareholder meetings to elect directors. Until we hold an annual meeting of shareholders, public shareholders may not be afforded the opportunity to elect directors and to discuss company
affairs with management. Our board of directors is divided into three classes with only one class of directors being elected in each year and each class (except for those directors appointed prior to our first annual meeting of shareholders) serving
a three-year term. In addition, as holders of our Class A ordinary shares, our public shareholders will not have the right to vote on the appointment of directors until after the consummation of our initial business combination.
Because we are neither limited to evaluating a target business in a particular industry, sector or geographic area nor have we selected any specific target businesses with which to
pursue our initial business combination, you will be unable to ascertain the merits or risks of any particular target business’s operations.
We may pursue business combination opportunities with an operating company of any size (subject to our satisfaction of the 80% of net assets test) and in any industry, sector or geographic area, except that we will not,
under our amended and restated memorandum and articles of association, be permitted to effectuate our initial business combination solely with another blank check company or similar company with nominal operations. Because we have not yet selected or
approached any specific target business with respect to a business combination, there is no basis to evaluate the possible merits or risks of any particular target business’s operations, results of operations, cash flows, liquidity, financial
condition or prospects. To the extent we complete our initial business combination, we may be affected by numerous risks inherent in the business operations with which we combine. For example, if we combine with a financially unstable business or an
entity lacking an established record of 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. We also cannot assure you that an investment in our securities will ultimately prove to be more
favorable to investors than a direct investment, if such opportunity were available, in a business combination target. Accordingly, any holders who choose to retain their securities following the business combination could suffer a reduction in the
value of their securities. Such holders are unlikely to have a direct remedy for such reduction in value unless 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.
We may seek business combination opportunities in industries, sectors or geographies which may or may not be outside of our management’s area of expertise.
We will consider an initial business combination in industries, sectors or geographies outside of our management’s area of expertise if an initial business combination target is presented to us and we determine that such
candidate offers an attractive business combination opportunity for our company. Although our management will endeavor to evaluate the risks inherent in any particular business combination target, we cannot assure you that we will adequately
ascertain or assess all of the significant risk factors relevant to such acquisition. In the event we elect to pursue an initial business combination outside of the areas of our management’s expertise, our management’s expertise may not be directly
applicable to its evaluation or operation, and the information contained in this Report regarding the areas of our management’s expertise would not be relevant to an understanding of the business that we elect to acquire. As a result, our management
may not be able to adequately ascertain or assess all of the significant risk factors. Accordingly, any holders who choose to retain their securities following our initial business combination could suffer a reduction in the value of their
securities. Such holders are unlikely to have a remedy for such reduction in value.
Although we have identified general criteria and guidelines that we believe are important in evaluating prospective target businesses, we may enter into our initial business
combination with a target that does not meet such criteria and guidelines, and as a result, the target business with which we enter into our initial business combination may not have attributes entirely consistent with our general criteria and
guidelines.
Although we have identified general criteria and guidelines for evaluating prospective target businesses, it is possible that a target business with which we enter into our initial business combination will not have all of
these positive attributes. If we complete our initial business combination with a target that does not meet some or all of these criteria and guidelines, such combination may not be as successful as a combination with a business that does meet all of
our general criteria and guidelines. In addition, if we announce a prospective business combination with a target that does not meet our general criteria and guidelines, a greater number of shareholders may exercise their redemption rights, which may
make it difficult for us to meet any closing condition with a target business that requires us to have a minimum net worth or a certain amount of cash. In addition, if shareholder approval of the transaction is required by applicable law or stock
exchange listing requirements, or we decide to obtain shareholder approval for business or other reasons, it may be more difficult for us to attain shareholder approval of our initial business combination if the target business does not meet our
general criteria and guidelines. If we have not completed our initial business combination within the required time period, our public shareholders may receive only approximately $10.20 per public share, or less than such amount in certain
circumstances, on the liquidation of our trust account and our warrants will expire worthless.
We are not required to obtain an opinion from an independent accounting or investment banking firm or from a valuation or appraisal firm, regarding fairness 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.
We are not required to obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions that the price we are paying is fair to our shareholders from a
financial point of view, unless we pursue a business combination with a company that is affiliated with our sponsor, officers or directors or any of their affiliates and such opinion is (i) required by applicable law or (ii) based upon the
determination of our board of directors. If no opinion is obtained, our shareholders will be relying on the judgment of our board of directors, who will determine fair market value based on standards generally accepted by the financial community.
Such standards used will be disclosed in our proxy solicitation or tender offer materials, as applicable, related to our initial business combination.
We may issue additional Class A ordinary shares or preference shares to complete our initial business combination or under an employee incentive plan after completion of our initial
business combination. We may also issue Class A ordinary shares upon the conversion of the founder shares 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 memorandum and articles of association. Any such issuances would dilute the interest of our shareholders and likely present other risks.
Our amended and restated memorandum and articles of association authorize the issuance of up to 300,000,000 Class A ordinary shares, par value $0.0001 per share, 30,000,000 Class B ordinary shares, par value $0.0001 per
share, and 1,000,000 preference shares, par value $0.0001 per share. There are 271,250,000 and 22,812,500 authorized but unissued Class A ordinary shares and Class B ordinary shares, respectively, available for issuance which amount does not take
into account shares reserved for issuance upon exercise of outstanding warrants or shares issuable upon conversion of the Class B ordinary shares, if any. The Class B ordinary shares are automatically convertible into Class A ordinary shares (which
such Class A ordinary shares delivered upon conversion will not have any redemption rights or be entitled to liquidating distributions from the trust account if we fail to complete an initial business combination) at the time of our initial business
combination or earlier at the option of the holders thereof as described herein and in our amended and restated memorandum and articles of association. There are no preference shares issued and outstanding.
We may issue a substantial number of additional Class A ordinary shares or preference shares to complete our initial business combination or under an employee incentive plan after completion of our initial business
combination. We may also issue Class A ordinary shares in connection with our redeeming the warrants or upon conversion of the Class B ordinary shares at a ratio greater than one-to-one at the time of our initial business combination as a result of
the anti-dilution provisions as set forth herein. However, our amended and restated memorandum and articles of association provide, among other things, that prior to or in connection with our initial business combination, we may not issue additional
shares that would entitle the holders thereof to (i) receive funds from the trust account or (ii) vote on any initial business combination or on any other proposal presented to shareholders prior to or in connection with the completion of an initial
business combination. These provisions of our amended and restated memorandum and articles of association, like all provisions of our amended and restated memorandum and articles of association, may be amended with a shareholder vote. The issuance of
additional ordinary or preference shares:
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may significantly dilute the equity interest of investors in our initial public offering, which dilution would increase if the anti-dilution provisions in the Class B ordinary shares resulted in the issuance
of Class A ordinary shares on a greater than one-to-one basis upon conversion of the Class B ordinary shares;
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may subordinate the rights of holders of Class A ordinary shares if preference shares are issued with rights senior to those afforded our Class A ordinary shares;
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could cause a change in control if a substantial number of Class A ordinary shares are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could
result in the resignation or removal of our present officers and directors;
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may have the effect of delaying or preventing a change of control of us by diluting the share ownership or voting rights of a person seeking to obtain control of us;
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may adversely affect prevailing market prices for our units, Class A ordinary shares and/or warrants; and
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may not result in adjustment to the exercise price of our warrants.
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Unlike some other similarly structured blank check companies, our sponsor will receive additional Class A ordinary shares if we issue shares to complete an initial business
combination.
The founder shares will automatically convert into Class A ordinary shares (which such Class A ordinary shares delivered upon conversion will not have any redemption rights or be entitled to liquidating distributions from
the trust account if we fail to complete an initial business combination) at the time of our initial business combination or earlier at the option of the holders thereof at a ratio such that the number of Class A ordinary shares 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 ordinary shares issued and outstanding upon completion of our initial public offering, plus (ii) the total number of
Class A ordinary shares issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by us in connection with or in relation to the consummation of the initial business
combination, excluding any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, deemed issued, or to be issued, to any seller in the initial business combination. In no event will the
Class B ordinary shares convert into Class A ordinary shares at a rate of less than one-to-one. This is different than some other similarly structured blank check companies in which the initial shareholders will only be issued an aggregate of 20% of
the total number of shares to be outstanding prior to the 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 have not completed our initial business combination within the required time period, our public shareholders may receive only approximately $10.20 per public share, or less than such amount in certain circumstances, on the
liquidation of our trust account and our warrants will expire worthless.
We anticipate that the investigation of each specific target business and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require substantial management time
and attention and substantial costs for accountants, attorneys and others. If we decide not to complete a specific initial business combination, the costs incurred up to that point for the proposed transaction likely would not be recoverable.
Furthermore, if we reach an agreement relating to a specific target business, we may fail to complete our initial business combination for any number of reasons including those beyond our control. Any such event will result in a loss to us of the
related costs incurred which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we have not completed our initial business combination within the required time period, our public
shareholders may receive only approximately $10.20 per public share, or less than such amount in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless.
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.
In light of the involvement of our sponsor, executive officers and directors and their affiliates with other entities, we may decide to acquire one or more businesses affiliated with our sponsor, executive officers,
directors, initial shareholders or their affiliates. Certain members of our sponsor and their respective affiliates manage several investment vehicles and our directors also serve as officers and board members for other entities, including, without
limitation, those described under “Directors, Executive Officers and Corporate Governance—Conflicts of Interest.” Our sponsor, officers and directors may sponsor, form or participate in other blank check companies similar to ours during the period in
which we are seeking an initial business combination. Such entities may compete with us for business combination opportunities and, as a result, we may be precluded from pursuing such 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 substantive discussions concerning a business combination with any such entity
or entities. Although we will not be specifically focusing on, or targeting, any transaction with any affiliated entities, we would pursue such a transaction if we determined that such affiliated entity met our criteria and guidelines for a business
combination as set forth in “Business—Our Business Strategy and Acquisition Criteria” and such transaction was approved by a majority of our independent and disinterested directors. Even though we may, if required by applicable law or based upon the
determination of our board of directors or a committee thereof, obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions regarding the fairness to our company from a
financial point of view of a business combination with one or more domestic or international businesses affiliated with our sponsor, executive officers, directors or initial shareholders, potential conflicts of interest still may exist and, as a
result, the terms of the business combination may not be as advantageous to our public shareholders as they would be absent any conflicts of interest.
Since our sponsor, 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 have acquired during or may acquire after our initial public offering), a conflict of interest may arise in determining whether a particular business combination target is appropriate for our initial business combination.
On May 11, 2021, our prior sponsor paid $25,000, or approximately $0.003 per share, to cover certain expenses on our behalf in consideration of 7,187,500 Class B ordinary shares, par value
$0.0001. Prior to the initial investment in the company of $25,000 by our prior sponsor, we had no assets, tangible or intangible. The per share price of the founder shares was determined by dividing the amount contributed to us by the number of
founder shares issued. On December 8, 2021, our prior sponsor transferred 12,500 Class B ordinary shares to each of our independent directors. On June 8, 2022, our prior sponsor transferred its remaining 7,150,000 Class B ordinary shares to
our sponsor. The founder shares will be worthless if we do not complete an initial business combination. In addition, our prior sponsor purchased 9,000,000 private placement warrants, each exercisable to purchase one
Class A ordinary share at $11.50 per share, subject to adjustment, at a price of $1.50 per warrant ($13,500,000 in the aggregate), in a private placement simultaneously with the closing of our initial public offering. On June 8, 2022, our
prior sponsor transferred its 9,000,000 private placement warrants to our sponsor. If we do not complete an initial business combination by March 13, 2023 (or June 13, 2023, as applicable), the private placement
warrants will expire worthless. The personal and financial interests of our executive officers and directors may influence their motivation in identifying and selecting a target business combination, completing an initial business combination and
influencing the operation of the business following the initial business combination. This risk may become more acute as the 15-month anniversary of the closing of
our initial public offering nears, which is the deadline for our consummation of an initial business combination unless automatically extended as described herein.
Our independent registered public accounting firm’s report contains an explanatory paragraph that expresses substantial doubt about our ability to continue as a “going concern.”
As of December 31, 2021, we have incurred and expect to continue to incur costs in pursuit of our financing and acquisition plans. We cannot assure you that our plans to raise capital or to consummate an initial
business combination will be successful. If we are unable to raise additional funds to alleviate liquidity needs and complete a business combination by March 13, 2023 (or June 13, 2023, as applicable), then we will cease all operations except for
the purpose of liquidating. The liquidity condition and date for mandatory liquidation and subsequent dissolution raise substantial doubt about our ability to continue as a going concern. Management intends to complete an initial business
combination prior to required liquidation, however, it is uncertain whether management will succeed in doing so. The financial statements contained elsewhere in this Report do not include any adjustments that might result from our inability to
continue as a going concern.
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 shareholders’ investment in us.
Although we have no commitments as of the date of this Report to issue any notes or other debt securities, we may choose to incur substantial debt to complete our initial business combination. We and our officers 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 Class A ordinary shares;
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using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our Class A ordinary shares if declared, expenses, capital
expenditures, acquisitions and other general corporate purposes;
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limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;
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increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and
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limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages
compared to our competitors who have less debt.
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We may only be able to complete one business combination with the proceeds of our initial public offering and the sale of the private placement warrants, which will cause us to be
solely dependent on a single business which may have a limited number of products or services. This lack of diversification may negatively impact our operations and profitability.
We may 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. Accordingly, the prospects for our success may be:
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solely dependent upon the performance of a single business, property or asset; or
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dependent upon the development or market acceptance of a single or limited number of products, processes or services.
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This lack of diversification may subject us to numerous economic, competitive and regulatory risks, any or all of which may have a substantial adverse impact upon the particular industry in which we may operate subsequent
to our initial business combination.
We may attempt to simultaneously complete business combinations with multiple prospective targets, which may hinder our ability to complete our initial business combination and give
rise to increased costs and risks that could negatively impact our operations and profitability.
If we determine to simultaneously acquire several businesses that are owned by different sellers, we will need for each of such sellers to agree that our purchase of its business is contingent on the simultaneous closings
of the other business combinations, which may make it more difficult for us, and delay our ability, to complete our initial business combination. With multiple business combinations, we could also face additional risks, including additional burdens
and costs with respect to possible multiple negotiations and due diligence investigations (if there are multiple sellers) and the additional risks associated with the subsequent assimilation of the operations and services or products of the acquired
companies in a single operating business. If we are unable to adequately address these risks, it could negatively impact our profitability and results of operations.
We may attempt to complete our initial business combination with a private company about which little information is available, which may result in an initial business combination with
a company that is not as profitable as we suspected, if at all.
In pursuing our acquisition strategy, we may seek to effectuate our initial business combination with a privately held company. Very little public information generally exists about private companies, and we could be
required to make our decision on whether to pursue a potential initial business combination on the basis of limited information, which may result in a business combination with a company that is not as profitable as we suspected, if at all.
We do not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for us to complete our initial business combination with
which a substantial majority of our shareholders do not agree.
Our amended and restated memorandum and articles of association do not provide a specified maximum redemption threshold, except that we will only redeem our public shares so long as, after payment of deferred underwriting
commissions and after such redemptions, our net tangible assets will be at least $5,000,001 (i) in the case of our initial business combination, either prior to or upon consummation of such initial business combination, after payment of the
deferred underwriting commission or (ii) in the case of an amendment to our amended and restated memorandum and articles of association (a) to modify the substance or timing of our obligation to allow redemptions in connection with our initial
business combination or to redeem 100% of our public shares if we have not consummated our initial business combination by March 13, 2023 (or June 13, 2023, as applicable) or (b) with respect to any other provision relating to shareholders’ rights or pre-initial business combination activity, upon such amendment (in each case such that we do not then become subject to the SEC’s “penny stock” rules), or any greater net tangible asset or cash
requirement that may be contained in the agreement relating to our initial business combination. In addition, our potential initial business combination may impose a minimum cash requirement for (i) cash consideration to be paid to the target or
its owners, (ii) cash for working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions. As a result, we may be able to complete our initial business combination even though a substantial majority of
our public shareholders do not agree with the transaction and have redeemed their shares or, if we seek shareholder approval of our initial business combination and do not conduct redemptions in connection with our initial business combination
pursuant to the tender offer rules, have entered into privately negotiated agreements to sell their shares to our sponsor, officers, directors, advisors or their respective affiliates. In the event the aggregate cash consideration we would be
required to pay for all Class A ordinary shares that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available
to us, we will not complete the business combination or redeem any shares, all Class A ordinary shares submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business combination.
In order to effectuate an initial business combination, blank check companies have, in the past, amended various provisions of their charters and other governing instruments, including
their warrant agreements. We cannot assure you that we will not seek to amend our amended and restated memorandum and articles of association or governing instruments in a manner that will make it easier for us to complete our initial business
combination that our shareholders may not support.
In order to effectuate a business combination, blank check companies have, in the recent past, amended various provisions of their charters and governing instruments, including their warrant agreements. For example, blank
check companies have amended the definition of business combination, increased redemption thresholds, extended the time to complete an initial business combination and, with respect to their warrants, amended their warrant agreements to require the
warrants to be exchanged for cash and/or other securities. Amending our amended and restated memorandum and articles of association will require a special resolution of our shareholders as a matter of Cayman Islands law, meaning the approval of
holders of at least two-thirds (2⁄3) majority (or such higher threshold as specified in the company’s amended and restated memorandum and articles of association) of our ordinary shares who attend and vote at a shareholder meeting of the company, and
amending our warrant agreement will require a vote of holders of at least 50% of the public warrants and, solely with respect to any amendment to the terms of the private placement warrants or any provision of the warrant agreement with respect to
the private placement warrants, 50% of the number of the then-outstanding private placement warrants.
In addition, our amended and restated memorandum and articles of association require us to provide our public shareholders with the opportunity to redeem their public shares for cash if we propose an amendment to our
amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial
business combination or to redeem 100% of our public shares if we do not complete our initial business combination by March 13, 2023 (or June 13, 2023, as applicable) or (B) with respect to any other provision relating to the rights of holders of
our Class A ordinary shares. To the extent any of such amendments would be deemed to fundamentally change the nature of any of the securities offered through our initial public offering, we would register, or seek an exemption from registration
for, the affected securities. We cannot assure you that we will not seek to amend our amended and restated memorandum and articles of association or other governing instruments or extend the time to complete an initial business combination in order
to effectuate our initial business combination.
The provisions of our amended and restated memorandum and articles of association that relate to the rights of holders of our Class A ordinary shares (and corresponding provisions of
the agreement governing the release of funds from our trust account) may be amended with the approval of a special resolution which requires the approval of the holders of at least two-thirds (2⁄3) majority (or such higher threshold as specified in
the company’s amended and restated memorandum articles of association) of our ordinary shares who attend and vote at a shareholder meeting of the company, which is a lower amendment threshold than that of some other blank check companies. It may be
easier for us, therefore, to amend our amended and restated memorandum and articles of association to facilitate the completion of an initial business combination that some of our shareholders may not support.
Some other blank check companies have a provision in their charter which prohibits the amendment of certain of its provisions, including those which relate to the rights of a company’s shareholders, without approval by a
certain percentage of the company’s shareholders. In those companies, amendment of these provisions typically requires approval by between 90% and 100% of the company’s shareholders. Our amended and restated memorandum and articles of association
provide that any of its provisions related to the rights of holders of our Class A ordinary shares (including the requirement to deposit proceeds of our initial public offering and the sale of the private placement warrants into the trust account and
not release such amounts except in specified circumstances, and to provide redemption rights to public shareholders as described herein) may be amended if approved by special resolution and corresponding provisions of the trust agreement governing
the release of funds from our trust account may be amended if approved by holders of at least 65% of our ordinary shares. Our initial shareholders and their permitted transferees, if any, who will collectively beneficially own, on an as-converted
basis, 20% of our Class A ordinary shares upon the closing of our initial public offering, will participate in any vote to amend our amended and restated memorandum and articles of association and/or trust agreement and will have the discretion to
vote in any manner they choose. As a result, we may be able to amend the provisions of our amended and restated memorandum and articles of association which govern our pre-business combination behavior more easily than some other blank check
companies, and this may increase our ability to complete a business combination with which you do not agree. Our shareholders may pursue remedies against us for any breach of our amended and restated memorandum and articles of association.
Our sponsor, executive officers and directors have agreed, pursuant to agreements with us, that they will not propose any amendment to our amended and restated memorandum and articles of association (A) that would
modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not
complete our initial business combination by March 13, 2023 (or June 13, 2023, as applicable) or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares, unless we provide our public shareholders
with the opportunity to redeem their Class A ordinary shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held
in the trust account and not previously released to us to pay our income taxes, if any, divided by the number of the then-outstanding public shares. Our shareholders are not parties to, or third-party beneficiaries of, these agreements and, as a
result, will not have the ability to pursue remedies against our sponsor, executive officers or directors for any breach of these agreements. As a result, in the event of a breach, our shareholders would need to pursue a shareholder derivative
action, subject to applicable law.
We may be unable to obtain additional financing to complete our initial business combination or to fund the operations and growth of a target business, which could compel us to
restructure or abandon a particular business combination. If we have not completed our initial business combination within the required time period, our public shareholders may receive only approximately $10.20 per public share, or less than such
amount in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless.
Although we believe that the net proceeds of our initial public offering and the sale of the private placement warrants will be sufficient to allow us to complete our initial business combination, we cannot ascertain the
capital requirements for any particular transaction. If the net proceeds of our initial public offering and the sale of the private placement warrants prove to be insufficient, either because of the size of our initial business combination, the
depletion of the available net proceeds in search of a target business, the obligation to redeem for cash a significant number of shares from shareholders who elect redemption in connection with our initial business combination or the terms of
negotiated transactions to purchase shares in connection with our initial business combination, we may be required to seek additional financing or to abandon the proposed business combination. We cannot assure you that such financing will be
available on acceptable terms, if at all. The current economic environment may make it difficult for companies to obtain acquisition financing. To the extent that additional financing proves to be unavailable when needed to complete our initial
business combination, we would be compelled to either restructure the transaction or abandon that particular business combination and seek an alternative target business candidate. If we have not completed our initial business combination within the
required time period, our public shareholders may receive only approximately $10.20 per public share, or less than such amount in certain circumstances, 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 shareholders is required to provide any financing to us in connection with or after our initial business combination.
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.
Our sponsor owns, on an as-converted basis, 19.89% of our issued and outstanding ordinary shares. Accordingly, it may exert a substantial influence on actions requiring a shareholder vote, potentially in a manner that you
do not support, including appointment of our directors, amendments to our amended and restated memorandum and articles of association and approval of significant corporate transactions including our initial business combination. If our sponsor
purchases any additional Class A ordinary shares in the aftermarket or in privately negotiated transactions, this would increase its control. Neither our sponsor nor, to our knowledge, any of our officers or directors, have any current intention to
purchase additional securities, other than as disclosed in this Report. Factors that would be considered in making such additional purchases would include consideration of the current trading price of our Class A ordinary shares.
In addition, our board of directors, whose members were elected by our sponsor, is divided into three classes, each of which generally serves 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 shareholders 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
business combination. If there is an annual meeting, as a consequence of our “staggered” board of directors, only a minority of the board of directors will be considered for election and our sponsor, because of its ownership position, will control
the outcome, as only holders of our Class B ordinary shares will have the right to vote on the election of directors and to remove directors prior to our initial business combination.
Accordingly, our sponsor will continue to exert control at least until the completion of 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.
Because we must furnish our shareholders with target business financial statements, we may lose the ability to complete an otherwise advantageous initial business combination with some
prospective target businesses.
The federal proxy rules require that a proxy statement with respect to a vote on an initial business combination meeting certain financial significance tests include historical and/or pro forma financial statement
disclosure in periodic reports. We will include the same financial statement disclosure in connection with our tender offer documents, whether or not they are required under the tender offer rules. These financial statements may be required to be
prepared in accordance with, or be reconciled to, accounting principles generally accepted in the United States of America, or “GAAP”, or international financial reporting standards as issued by the International Accounting Standards Board, or
“IFRS”, depending on the circumstances and the historical financial statements may be required to be audited in accordance with the standards of the Public Company Accounting Oversight Board (United States), or “PCAOB”. These financial statement
requirements may limit the pool of potential target businesses we may acquire because some targets may be unable to provide such financial statements in time for us to disclose such financial statements in accordance with federal proxy rules and
complete our initial business combination within the prescribed time frame.
Compliance obligations under the Sarbanes-Oxley Act may make it more difficult for us to effectuate a business combination, require substantial financial and management resources, and
increase the time and costs of completing a 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, 2022. Only in the event we are
deemed to be a large accelerated filer or an accelerated filer and no longer qualify as an emerging growth company, will we be required to comply with the independent registered public accounting firm attestation requirement on our internal control
over financial reporting. The fact that we are a blank check company makes compliance with the requirements of the Sarbanes-Oxley Act particularly burdensome on us as compared to other public companies because a target business with which we seek to
complete our initial business combination may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of its internal controls. The development of the internal control of any such entity to achieve compliance with the
Sarbanes-Oxley Act may increase the time and costs necessary to complete any such business combination.
Risks Relating to the Post-Business Combination Company
Subsequent to our completion of our initial business combination, we may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a
significant negative effect on our financial condition, results of operations and the price of our securities, which could cause you to lose some or all of your investment.
Even if we conduct extensive due diligence on a target business with which we combine, we cannot assure you that this diligence will identify all material issues with a particular target business, that it would be possible
to uncover all material issues through a customary amount of due diligence, or that factors outside of the target business and outside of our control will not later arise. As a result of these factors, we may be forced to later write-down or
write-off assets, restructure our operations, or incur impairment or other charges that could result in our reporting losses. Even if our due diligence successfully identifies certain risks, unexpected risks may arise and previously known risks may
materialize in a manner not consistent with our preliminary risk analysis. Even though these charges may be non-cash items and not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to negative
market perceptions about us or our securities. In addition, charges of this nature may cause us to violate net worth or other covenants to which we may be subject as a result of assuming pre-existing debt held by a target business or by virtue of our
obtaining post-combination debt financing. Accordingly, any holders who choose to retain their securities following the business combination could suffer a reduction in the value of their securities. Such holders 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.
We may seek acquisition opportunities with an early stage company, a financially unstable business or an entity lacking an established record of revenue or earnings.
To the extent we complete our initial business combination with an early stage company, a financially unstable business or an entity lacking an established record of sales or earnings, we may be affected by numerous risks
inherent in the operations of the business with which we combine. These risks include investing in a business without a proven business model and with limited historical financial data, volatile revenues or earnings, intense competition 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.
The officers and directors of an initial business combination candidate may resign upon completion of our initial business combination. The loss 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 acquisition candidate will not
wish to remain in place and may resign upon completion of our initial business combination. The loss of an initial business combination target’s key personnel could negatively impact the operations and profitability of our post-combination business.
Our management may not be able to maintain control of a target business after our initial business combination. Upon the loss of control of a target business, new management may not
possess the skills, qualifications or abilities necessary to profitably operate such business.
We may structure our initial business combination so that the post-business combination company in which our public shareholders own shares will own less than 100% of the equity interests or assets of a target business, but
we will only complete such business combination if the post-business combination company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient
for 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-business combination company owns 50% or more of the voting
securities of the target, our shareholders prior to our initial business combination may collectively own a minority interest in the post-business combination company, depending on valuations ascribed to the target and us in the business combination.
For example, we could pursue a transaction in which we issue a substantial number of new Class A ordinary shares in exchange for all of the outstanding capital stock, shares or other equity interests 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 Class A ordinary shares, our shareholders immediately prior to such transaction could own less than a majority of our outstanding Class A ordinary shares
subsequent to such transaction. In addition, other minority shareholders may subsequently combine their holdings resulting in a single person or group obtaining a larger share of the company’s shares than we initially acquired. Accordingly, this may
make it more likely that our management will not be able to maintain control of the target business. We cannot provide assurance that, upon loss of control of a target business, new management will possess the skills, qualifications or abilities
necessary to profitably operate such business.
We may have a limited ability to assess the management of a prospective target business and, as a result, may 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 shareholders’ 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 business’s management, therefore, may prove to be incorrect and such management may lack the skills, qualifications or abilities we suspected. Should the target business’s management not
possess the skills, qualifications or abilities necessary to manage a public company, the operations and profitability of the post-combination business may be negatively impacted. Accordingly, any shareholders who choose to retain their securities
following the initial business combination could suffer a reduction in the value of their securities. Such shareholders are unlikely to have a remedy for such reduction in value.
Risks Associated with Acquiring and Operating a Business in Foreign Countries
If we pursue a target company with operations or opportunities outside of the United States for our initial business combination, we may face additional burdens in connection with
investigating, agreeing to and completing such initial business combination, and if we effect such initial business combination, we would be subject to a variety of additional risks that may negatively impact our operations.
If we pursue a target a company with operations or opportunities outside of the United States for our initial business combination, 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, local laws in countries where a potential target company for business combination operate may have requirements on limit majority foreign ownership or there may be tax laws, rules and regulations that may make
it more difficult for such target company to merge or combine with an offshore entity such as us; as a result, there may be delays or additional complications with the initial business combinations or, in some cases, limit our ability to combine with
such target company.
If we effect our initial business combination with such a company, we would be subject to any special considerations or risks associated with companies operating in an international setting, including any of the following:
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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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exchange listing and/or delisting requirements;
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tariffs and trade barriers, including the impact of ongoing trade wars between the United States and foreign countries;
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regulations related to customs and import/export matters;
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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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challenges in managing and staffing international operations;
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longer payment cycles;
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tax issues, such as tax law changes and variations in tax laws as compared to the United States;
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currency fluctuations and exchange controls;
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rates of inflation;
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challenges in collecting accounts receivable;
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cultural and language differences;
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employment regulations;
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underdeveloped or unpredictable legal or regulatory systems;
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corruption;
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protection of intellectual property;
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social unrest, crime, strikes, riots and civil disturbances;
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regime changes and political upheaval;
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terrorist attacks, natural disasters and wars;
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deterioration of political relations with the United States; and
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government appropriation of assets.
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We may not be able to adequately address these additional risks. If we were unable to do so, we may be unable to complete such initial business combination, or, if we complete such combination, our operations might suffer,
either of which may adversely impact our business, financial condition and results of operations.
Emerging markets are subject to different risks as compared to more developed markets.
Acquiring and operating a business in an emerging market can involve a greater degree of risk than acquiring and operating a business in more developed markets, including, in some cases, increased political, economic and
legal risks. Emerging market governments and judiciaries often exercise broad, unchecked discretion and are susceptible to abuse and corruption. Moreover, financial turmoil in any emerging market country tends to adversely affect the value of
investments in all emerging market countries as investors move their money to more stable, developed markets. As has happened in the past, financial problems or an increase in the perceived risks associated with investing in companies in emerging
economies could dampen foreign investment and adversely affect the local economy. Generally, investment in emerging markets is only suitable for sophisticated investors who fully appreciate the significance of the risks involved in, and are familiar
with, investing in emerging markets.
We may reincorporate in another jurisdiction in connection with our initial business combination and such reincorporation may result in taxes imposed on shareholders.
We may, in connection with our initial business combination and subject to requisite shareholder approval by special resolution under the Companies Act, reincorporate in the jurisdiction in which the target company or
business is located or in another jurisdiction. The transaction may require a shareholder or warrant holder to recognize taxable income in the jurisdiction in which the shareholder or warrant holder is a tax resident or in which its members are
resident if it is a tax transparent entity. In the event of a reincorporation pursuant to our initial business combination, such tax liability may attach prior to any consummation of redemption. We do not intend to make any cash distributions to
shareholders or warrant holders to pay such taxes. Shareholders or warrant holders may be subject to withholding taxes or other taxes with respect to their ownership of us after the reincorporation.
We may reincorporate in another jurisdiction in connection with our initial business combination, and the laws of such jurisdiction may govern some or all of our future material
agreements and we may not be able to enforce our legal rights.
In connection with our initial business combination, we may reincorporate or re-domicile in another jurisdiction of our business from the Cayman Islands to another jurisdiction. If we determine to do this, the laws of such
jurisdiction may govern some or all of our future material agreements. The system of laws and the enforcement of existing laws in such jurisdiction may not be as certain in implementation and interpretation as in the Cayman Islands or the United
States. The inability to enforce or obtain a remedy under any of our future agreements could result in a significant loss of business, business opportunities or capital.
We are subject to changing law and regulations regarding regulatory matters, corporate governance and public disclosure that have increased both our costs and the risk of
non-compliance.
We are subject to rules and regulations by various governing bodies, including, for example, the SEC, which are charged with the protection of investors and the oversight of companies whose securities are publicly traded,
and to new and evolving regulatory measures under applicable law. Our efforts to comply with new and changing laws and regulations have resulted in and are likely to continue to result in, increased general and administrative expenses and a diversion
of management time and attention from seeking a business combination target.
Moreover, because these laws, regulations and standards are subject to varying interpretations, their application in practice may evolve over time as new guidance becomes available. This evolution may result in continuing
uncertainty regarding compliance matters and additional costs necessitated by ongoing revisions to our disclosure and governance practices. If we fail to address and comply with these regulations and any subsequent changes, we may be subject to
penalty and our business may be harmed.
If our management following our initial business combination is unfamiliar with U.S. securities laws, they may have to expend time and resources becoming familiar with such laws, which
could lead to various regulatory issues.
Following our initial business combination, our management may resign from their positions as officers or directors of the company and the management of the target business at the time of the business combination will
remain in place. Management of the target business may not be familiar with U.S. securities laws. If new management is unfamiliar with United States securities laws, they may have to expend time and resources becoming familiar with such laws. This
could be expensive and time-consuming and could lead to various regulatory issues which may adversely affect our operations.
After our initial business combination, substantially all of our assets may be located in a foreign country and substantially all of our revenue may be derived from our operations in
any such country. Accordingly, our results of operations and prospects will be subject, to a significant extent, to the economic, political and social conditions and government policies, developments and conditions in the country in which we operate.
The economic, political and social conditions, as well as government policies, of the country in which our operations are located could affect our business. Economic growth could be uneven, both geographically and among
various sectors of the economy and such growth may not be sustained in the future. If in the future such country’s economy experiences a downturn or grows at a slower rate than expected, there may be less demand for spending in certain industries. A
decrease in demand for spending in certain industries could materially and adversely affect our ability to find an attractive target business with which to complete our initial business combination and if we effect our initial business combination,
the ability of that target business to become profitable.
Exchange rate fluctuations and currency policies may cause a target business’ ability to succeed in the international markets to be diminished.
In the event we acquire a non-U.S. target, all revenues and income would likely be received in a foreign currency, 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 complete such transaction. Given our geographic
focus of potential acquisition targets, our exposure to exchange rate fluctuations and currency policies may be elevated.
Risks Relating to our Management Team
We are dependent upon our executive officers and directors, and their loss could adversely affect our ability to operate.
Our operations are dependent upon a relatively small group of individuals and, in particular, our executive officers and directors. We believe that our success depends on the continued service of our officers and directors,
at least until we have completed our initial business combination. In addition, our executive 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 their time among various business activities, including identifying potential business combinations and monitoring the related due diligence. We do not have an employment agreement with, or key-man insurance on the life of, any of our
directors or executive officers. Furthermore, our sponsor and each of our officers and directors have duties and obligations with respect to confidentiality to other entities and may in the future agree to additional such duties or obligations, which
may prevent our sponsor and such officers and directors from disclosing such information to the company. Our sponsor and our officers and directors will comply with such duties and obligations of confidentiality to such other entities, in which case,
the company may not have access to such information.
The unexpected loss of the services of one or more of our directors or executive officers could have a detrimental effect on us.
Our ability to successfully effect our initial business combination and to be successful thereafter will be dependent upon the efforts of our key personnel, some of whom may join us
following our initial business combination. The loss of our or our target’s 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, director or advisory positions following our initial business combination, it is likely that some or all of the management of the target business will remain
in place. While we intend to closely scrutinize any individuals we engage after our initial business combination, we cannot assure you that our assessment of these individuals will prove to be correct. These individuals may be unfamiliar with the
requirements of operating a company regulated by the SEC, which could cause us to have to expend time and resources helping them become familiar with such requirements.
Our key personnel may negotiate employment or consulting agreements with a target business in connection with a particular business combination, and a particular business combination
may be conditioned on the retention or resignation of such key personnel. These agreements may provide for them to receive compensation following our initial business combination and as a result, may cause them to have conflicts of interest in
determining whether a particular business combination is the most advantageous.
Our key personnel may be able to remain with our company after the completion of our initial business combination only if they are able to negotiate employment or consulting agreements in connection with the business
combination. Such negotiations would take place simultaneously with the negotiation of the business combination and could provide for such individuals to receive compensation in the form of cash payments and/or our securities for services they would
render to us after the completion of the business combination. Such negotiations also could make such key personnel’s retention or resignation a condition to any such agreement. The personal and financial interests of such individuals may influence
their motivation in identifying and selecting a target business, subject to his or her fiduciary duties under Cayman Islands law. However, we believe the ability of such individuals to remain with us after the completion of our initial business
combination will not be the determining factor in our decision as to whether or not we will proceed with any potential business combination. There is no certainty, however, that any of our key personnel will remain with us after the completion of our
initial business combination. We cannot assure you that any of our key personnel will remain in senior management or advisory positions with us. The determination as to whether any of our key personnel will remain with us will be made at the time of
our initial business combination.
In addition, pursuant to a registration and shareholder rights agreement entered into on December 8, 2021 (as amended by the novation agreement dated June 8, 2022, whereby our prior sponsor transferred its rights and
obligations under the registration and shareholder rights agreement to our sponsor), our sponsor, upon and following consummation of an initial business combination, will be entitled to nominate three individuals for election to our board of
directors, as long as our sponsor holds any securities covered by the registration and shareholder rights agreement.
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.
Our executive officers and directors are not required to, and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our operations and our search for a
business combination and their other businesses. We do not intend to have any full-time employees prior to the completion of our initial business combination. Each of our executive officers is engaged in several other business endeavors for which
they may be entitled to substantial compensation, and our executive officers are not obligated to contribute any specific number of hours per week to our affairs. Certain of our independent directors also serve as officers and board members for other
entities. If our executive 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.
Our officers and directors presently have, and any of them in the future may have, additional fiduciary or contractual obligations to other entities, including another blank check
company, and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should be presented.
Until we complete our initial business combination, we intend to engage in the business of identifying and combining with one or more businesses or entities. Each of our officers and directors presently has, and any of them
in the future may have, additional fiduciary or contractual obligations to other entities pursuant to which such officer or director may be required to present a business combination opportunity to such entity. Accordingly, they may have conflicts of
interest in determining to which entity a particular business opportunity should be presented. These conflicts may not be resolved in our favor and a potential target business may be presented to another entity prior to its presentation to us.
In addition, our sponsor, officers and directors may in the future become affiliated with other blank check companies that may have acquisition objectives that are similar to ours. Accordingly, they may have conflicts of
interest in determining to which entity a particular business opportunity should be presented. These conflicts may not be resolved in our favor and a potential target business may be presented to such other blank check companies prior to its
presentation to us. Our amended and restated memorandum and articles of association provide that we renounce, to the maximum extent permitted by law, our interest or expectancy in, or in being offered an opportunity to participate in any business
opportunity which may be a corporate opportunity for both us and our sponsor and another entity, including any entities managed by our sponsor or its affiliates and any companies in which our sponsor or such entities have invested or about which any
of our officers or directors acquires knowledge and we will waive any claim or cause of action we may have in respect thereof. In addition, our amended and restated memorandum and articles of association contain provisions to exculpate and indemnify,
to the maximum extent permitted by law, such persons in respect of any liability, obligation or duty to our company that may arise as a consequence of such persons becoming aware of any business opportunity or failing to present such business
opportunity.
Our executive 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, executive officers, security holders or affiliates from having a direct or indirect pecuniary or financial interest in any investment to be acquired or
disposed of by us or in any transaction to which we are a party or have an interest. In fact, we may enter into a business combination with a target business that is affiliated with our sponsor, our directors or executive officers, although we do not
intend to do so. Nor do we have a policy that expressly prohibits any such persons from engaging for their own account in business activities of the types conducted by us. Accordingly, such persons or entities may have a conflict between their
interests and ours.
The personal and financial interests of our directors and officers may influence their motivation in timely identifying and selecting a target business and completing a business combination. Consequently, our directors’ and
officers’ discretion in identifying and selecting a suitable target business may result in a conflict of interest when determining whether the terms, conditions and timing of a particular business combination are appropriate and in our interests. If
this were the case, it may be a breach of their fiduciary duties to us as a matter of Cayman Islands law and we might have a claim against such individuals. However, we might not ultimately be successful in any claim we may make against them for such
reason.
Risks Relating to our Securities
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.
Our public shareholders 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 Class A
ordinary shares that such shareholder properly elected to redeem, subject to the limitations described herein, (ii) the redemption of any public shares properly tendered in connection with a shareholder vote to amend our amended and restated
memorandum and articles of association (A) to modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to
redeem 100% of our public shares if we do not complete our initial business combination by March 13, 2023 (or June 13, 2023, as applicable) or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares,
and (iii) the redemption of our public shares if we have not completed an initial business combination by March 13, 2023 (or June 13, 2023, as applicable), subject to applicable law and as further described herein. Public shareholders who redeem
their Class A ordinary shares in connection with a shareholder vote described in clause (ii) in the preceding sentence shall not be entitled to funds from the trust account upon the subsequent completion of an initial business combination or
liquidation if we have not completed an initial business combination by March 13, 2023 (or June 13, 2023, as applicable), with respect to such Class A ordinary shares so redeemed. In no other circumstances will a public shareholder have any right
or interest of any kind in the trust account. Holders of warrants will not have any right to the proceeds held in the trust account with respect to the warrants. Accordingly, to liquidate your investment, you may be forced to sell your public
shares or warrants, potentially at a loss.
Nasdaq may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading
restrictions.
Our units, Class A ordinary shares and warrants are currently listed on Nasdaq. However, we cannot assure you that our securities will be, or will continue to be, listed on Nasdaq in the future or prior to our initial
business combination. In order to continue listing our securities on Nasdaq prior to our initial business combination, we must maintain certain financial, distribution and share price levels. Generally, we must maintain a minimum number of holders of
our securities (generally 400 public holders).
Additionally, in connection with our initial business combination, we will be required to demonstrate compliance with Nasdaq’s initial listing requirements, which are more rigorous than Nasdaq’s continued listing
requirements, in order to continue to maintain the listing of our securities on Nasdaq.
For instance, in order for our Class A ordinary shares to be listed upon the consummation of our initial business combination, at such time our share price would generally be required to be at least $4.00 per share, the
market value of listed securities would be required to be at least $75 million and we would be required to have a minimum of 400 round lot holders (with at least 50% of such round lot holders holding securities with a market value of at least $2,500)
of our securities. We cannot assure you that we will be able to meet those initial listing requirements at that time.
If Nasdaq delists any of our securities from trading on its exchange and we are not able to list our securities on another national securities exchange, we expect such securities could be quoted on an over-the-counter
market. If this were to occur, we could face significant material adverse consequences, including:
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a limited availability of market quotations for our securities;
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reduced liquidity for our securities;
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a determination that our Class A ordinary shares are a “penny stock” which will require brokers trading in our Class A ordinary shares to adhere to more stringent rules and possibly result in a reduced level of
trading activity in the secondary trading market for our securities;
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a limited amount of news and analyst coverage; and
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a decreased ability to issue additional securities or obtain additional financing in the future.
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The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” Because our
units, our Class A ordinary shares and warrants are listed on Nasdaq, our units, Class A ordinary shares and warrants qualify as covered securities under the statute. Although the states are preempted from regulating the sale of covered securities,
the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. While we
are not aware of a state having used these powers to prohibit or restrict the sale of securities issued by blank check companies, other than the State of Idaho, certain state securities regulators view blank check companies unfavorably and might use
these powers, or threaten to use these powers, to hinder the sale of securities of blank check companies in their states. Further, if we were no longer listed on Nasdaq, our securities would not qualify as covered securities under the statute and we
would be subject to regulation in each state in which we offer our securities, including in connection with our initial business combination.
We previously received notices of failure to satisfy a continued listing rule from Nasdaq and we may in the future fail to comply with applicable Nasdaq rules.
On April 19, 2022 and May 19, 2022, we received notices from the Listing Qualifications Department of Nasdaq stating that we were not in compliance with Nasdaq Listing Rule 5250(c)(1), or the Rule, because we did not
timely file our Form 10-K for the period ended December 31, 2021 and our Form 10-Q for the period ended March 31, 2022, respectively, with the SEC. The Rule requires listed companies to timely file all required periodic financial reports with the
SEC. While we currently expect to be able to file our Quarterly Reports on Form 10-Q for the periods ended March 31, 2022 and June 30, 2022 within the extension period provided by Nasdaq, which expires on October 12, 2022, there can be no assurance
that we will be able to remain in compliance with the Rule or with other Nasdaq listing requirements in the future. If we are unable to remain in compliance with the Rule or with any of the other continued listing requirements, Nasdaq may take
steps to delist our securities, which could have adverse results, as described above in: “-Nasdaq may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in
our securities and subject us to additional trading restrictions.”
Because we are incorporated under the laws of the Cayman Islands, you may face difficulties in protecting your interests, and your ability to protect your rights through the U.S.
federal courts may be limited.
We are an exempted company incorporated under the laws of the Cayman Islands. As a result, it may be difficult for investors to effect service of process within the United States upon our directors or executive officers, or
enforce judgments obtained in the United States courts against our directors or officers.
Our corporate affairs are governed by our amended and restated memorandum and articles of association, the Companies Act (as the same may be supplemented or amended from time to time) and the common law of the Cayman
Islands. We are also subject to the federal securities laws of the United States. The rights of shareholders to take action against the directors, actions by minority shareholders and the fiduciary responsibilities of our directors to us under Cayman
Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from English common law, the
decisions of whose courts are of persuasive authority, but are not binding on a court in the Cayman Islands. The rights of our shareholders and the fiduciary responsibilities of our directors under Cayman Islands law are different from what they
would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands has a different body of securities laws as compared to the United States, and certain states, such as Delaware, may have more
fully developed and judicially interpreted bodies of corporate law. In addition, Cayman Islands companies may not have standing to initiate a shareholders’ derivative action in a Federal court of the United States.
We have been advised by our Cayman Islands legal counsel, that the courts of the Cayman Islands are unlikely (i) to recognize or enforce against us judgments of courts of the United States predicated upon the civil
liability provisions of the federal securities laws of the United States or any state; and (ii) in original actions brought in the Cayman Islands, to impose liabilities against us predicated upon the civil liability provisions of the federal
securities laws of the United States or any state, so far as the liabilities imposed by those provisions are penal in nature. In those circumstances, although there is no statutory enforcement in the Cayman Islands of judgments obtained in the United
States, the courts of the Cayman Islands will recognize and enforce a foreign money judgment of a foreign court of competent jurisdiction without retrial on the merits based on the principle that a judgment of a competent foreign court imposes upon
the judgment debtor an obligation to pay the sum for which judgment has been given provided certain conditions are met. For a foreign judgment to be enforced in the Cayman Islands, such judgment must be final and conclusive and for a liquidated sum,
and must not be in respect of taxes or a fine or penalty, inconsistent with a Cayman Islands judgment in respect of the same matter, impeachable on the grounds of fraud or obtained in a manner, or be of a kind the enforcement of which is, contrary to
natural justice or the public policy of the Cayman Islands (awards of punitive or multiple damages may well be held to be contrary to public policy). A Cayman Islands Court may stay enforcement proceedings if concurrent proceedings are being brought
elsewhere.
As a result of all of the above, public shareholders may have more difficulty in protecting their interests in the face of actions taken by management, members of the board of directors or controlling shareholders than they
would as public shareholders of a United States company.
After our initial business combination, it is possible that a majority of our directors and officers will live outside the United States and all of our assets will be located outside
the United States; therefore investors may not be able to enforce federal securities laws or their other legal rights.
It is possible that after our initial business combination, a majority of our directors and officers will reside outside of the United States and all of our assets will be located outside of the United States. As a result,
it may be difficult, or in some cases not possible, for investors in the United States to enforce their legal rights, to effect service of process upon all of our directors or officers or to enforce judgments of United States courts predicated upon
civil liabilities and criminal penalties on our directors and officers under United States laws.
Provisions in our amended and restated memorandum and articles of association may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future
for our Class A ordinary shares and could entrench management.
Our amended and restated memorandum and articles of association contain provisions that may discourage unsolicited takeover proposals that shareholders 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 preference shares, and the fact that prior to the completion of our initial business combination only holders of our Class B
ordinary shares, which have been issued to our sponsor, are entitled to vote on the election of directors, which may make more difficult the removal of management and may discourage transactions that otherwise could involve payment of a premium over
prevailing market prices for our securities.
Since only holders of our founder shares will have the right to vote on the election of directors, Nasdaq may consider us to be a “controlled company” within the meaning of Nasdaq
rules and, as a result, we may qualify for exemptions from certain corporate governance requirements.
Only holders of our founder shares have the right to vote on the election of directors. As a result, Nasdaq may consider us to be a “controlled company” within the meaning of Nasdaq corporate governance standards. Under
Nasdaq corporate governance standards, a company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements,
including the requirements that:
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we have a board that includes a majority of “independent directors,” as defined under Nasdaq listing rules;
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we have a compensation committee of our board that is comprised entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and
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director nominations be made, or recommended to the full board, by our independent directors or by a nominating committee of our board that is composed entirely of independent directors with a written charter
or resolution addressing the committee’s purpose and responsibilities.
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We do not intend to utilize these exemptions and intend to comply with the corporate governance requirements of Nasdaq, subject to applicable phase-in rules. However, if we determine in the future to utilize some or all of
these exemptions, you will not have the same protections afforded to shareholders of companies that are subject to all of Nasdaq corporate governance requirements.
The grant of registration rights to our sponsor 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 ordinary shares.
Pursuant to a registration and shareholder rights agreement entered into on December 8 2021 (as amended by the novation agreement dated June 8, 2022, whereby our prior sponsor transferred its rights and obligations under the registration and
shareholder rights agreement to our sponsor), our sponsor and its permitted transferees can demand that we register the resale of the Class A ordinary shares into which founder shares are convertible and the private placement warrants and the
Class A ordinary shares issuable upon exercise of the private placement warrants. The registration rights will be exercisable with respect to the founder shares, the private placement warrants and the Class A ordinary shares issuable upon exercise
of such private placement 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 ordinary shares. In addition, the existence of the registration rights may make our initial business combination more costly or difficult to conclude. This is because the shareholders of the target business may increase the equity
stake they seek in the combined entity or ask for more cash consideration to offset the negative impact on the market price of our securities that is expected when the securities owned by our sponsor or its permitted transferees are registered for
resale.
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 our Class A ordinary shares purchasable upon exercise of a warrant could be decreased, all without your approval.
Our warrants were 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 for the purpose of (i) curing any ambiguity or correct any mistake, including to conform the provisions of the warrant agreement to the description of the terms of the warrants and the warrant agreement set
forth in the final prospectus for our initial public offering, or defective provision (ii) amending the provisions relating to cash dividends on ordinary shares as contemplated by and in accordance with the warrant agreement or (iii) adding or
changing any provisions with respect to matters or questions arising under the warrant agreement as the parties to the warrant agreement may deem necessary or desirable and that the parties deem to not adversely affect the rights of the registered
holders of the warrants, provided that the approval by the holders of at least 50% of the then-outstanding public warrants is required 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 and, solely with respect to any amendment to the terms of the private placement
warrants or any provision of the warrant agreement with respect to the private placement warrants, 50% of the number of the then-outstanding private placement warrants. 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, shorten the exercise period or
decrease the number of Class A ordinary shares purchasable upon exercise of a warrant.
Members of our management team and affiliated companies have been, and may from time to time be, involved in legal proceedings or governmental investigations unrelated to our business.
Members of our management team have been involved in a wide variety of businesses. Such involvement has, and may lead to, media coverage and public awareness. As a result of such involvement, members of our management team
and affiliated companies have been, and may from time to time be, involved in legal proceedings or governmental investigations unrelated to our business. Any such proceedings or investigations may be detrimental to our reputation and could negatively
affect our ability to identify and complete an initial business combination and may have an adverse effect on the price of our securities.
Our warrant agreement designates the courts of the State of New York or the United States District Court for the Southern District of New York as the sole and exclusive forum for
certain types of actions and proceedings that may be initiated by holders of our warrants, which could limit the ability of warrant holders to obtain a favorable judicial forum for disputes with our company.
Our warrant agreement provides that, subject to applicable law, (i) any action, proceeding or claim against us arising out of or relating in any way to the warrant agreement, including under the Securities Act, will be
brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and (ii) that we irrevocably submit to such jurisdiction, which jurisdiction shall be the exclusive forum for any
such action, proceeding or claim. We will waive any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum.
Notwithstanding the foregoing, these provisions of the warrant agreement do not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal district courts of
the United States of America are the sole and exclusive forum. Any person or entity purchasing or otherwise acquiring any interest in any of our warrants shall be deemed to have notice of and to have consented to the forum provisions in our warrant
agreement. If any action, the subject matter of which is within the scope of the forum provisions of the warrant agreement, is filed in a court other than a court of the State of New York or the United States District Court for the Southern District
of New York (a “foreign action”) in the name of any holder of our warrants, such holder shall be deemed to have consented to: (x) the personal jurisdiction of the state and federal courts located in the State of New York in connection with any action
brought in any such court to enforce the forum provisions (an “enforcement action”), and (y) having service of process made upon such warrant holder in any such enforcement action by service upon such warrant holder’s counsel in the foreign action as
agent for such warrant holder.
This choice-of-forum provision may limit a warrant holder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with our company, which may discourage such lawsuits. Alternatively, if a court
were to find this provision of our warrant agreement inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other
jurisdictions, which could materially and adversely affect our business, financial condition and results of operations and result in a diversion of the time and resources of our management and board of directors.
A provision of our warrant agreement may make it more difficult for us to complete an initial business combination.
Unlike most blank check companies, if (i) we issue additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of our initial business combination at a newly
issued price of less than $9.20 per ordinary share, (ii) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds (the “Newly Issued Price”), 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 (iii) the Market Value is below $9.20 per share, 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 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 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 complete 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 the outstanding public warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that
the closing price of our Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant) 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. If and when the warrants become redeemable by us, we may exercise our redemption
right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws. As a result, we may redeem the warrants as set forth above even if the holders are otherwise unable to exercise the
warrants. Redemption of the outstanding warrants could force you to (i) exercise your warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) sell your warrants at the then-current market price
when you might otherwise wish to hold your warrants or (iii) accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, we expect would be substantially less than the market value of your warrants.
In addition, 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 ordinary shares 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) 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 Class A ordinary shares determined based on the redemption date and the fair market value of our Class A ordinary shares. 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 when the underlying share price is higher and (2) may not compensate the holders for the value of the
warrants, including because the number of ordinary shares received is capped at 0.361 Class A ordinary shares per warrant (subject to adjustment) irrespective of the remaining life of the warrants.
None of the private placement warrants will be redeemable by us as so long as they are held by our sponsor or its permitted transferees.
Our warrants may have an adverse effect on the market price of our Class A ordinary shares and make it more difficult to effectuate our initial business combination.
We issued warrants to purchase 14,375,000 of our Class A ordinary shares as part of the units offered in our initial public offering and, simultaneously with the closing of our initial public offering, we issued in a
private placement an aggregate of 9,000,000 private placement warrants, each exercisable to purchase one Class A ordinary share at $11.50 per share, subject to adjustment. We may also issue Class A ordinary shares in connection with our redemption of
our warrants.
To the extent we issue ordinary shares for any reason, including to effectuate a business combination, the potential for the issuance of a substantial number of additional Class A ordinary shares upon exercise of these
warrants could make us a less attractive acquisition vehicle to a target business. Such warrants, when exercised, will increase the number of issued and outstanding Class A ordinary shares and reduce the value of the Class A ordinary shares issued to
complete the business transaction. Therefore, our warrants may make it more difficult to effectuate a business transaction or increase the cost of acquiring the target business.
Because each unit contains one-half of one redeemable warrant and only a whole warrant may be exercised, the units may be worth less than units of other blank check companies.
Each unit contains one-half of one redeemable warrant. Pursuant to the warrant agreement, no fractional warrants will be issued upon separation of the units, and only whole units will trade. If, upon exercise of the
warrants, a holder would be entitled to receive a fractional interest in a share, we will, upon exercise, round down to the nearest whole number the number of Class A ordinary shares to be issued to the warrant holder. This is different from other
offerings similar to ours whose units include one ordinary share and one whole warrant to purchase one whole share. We have established the components of the units in this way in order to reduce the dilutive effect of the warrants upon completion of
a business combination since the warrants will be exercisable in the aggregate for one-half of the number of shares compared to units that each contain a whole warrant to purchase one whole share, thus making us, we believe, a more attractive merger
partner for target businesses. Nevertheless, this unit structure may cause our units to be worth less than if a unit included a warrant to purchase one whole share.
We are not registering the Class A ordinary shares issuable upon exercise of the warrants under the Securities Act or any state securities laws at this time, and such registration may
not be in place when an investor desires to exercise warrants, thus precluding such investor from being able to exercise its warrants except on a cashless basis and potentially causing such warrants to expire worthless.
We are not registering the Class A ordinary shares issuable upon exercise of the warrants under the Securities Act or any state securities laws at this time. However, under the terms of the warrant agreement, we have agreed
that, as soon as practicable, but in no event later than 20 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 covering the issuance of
such shares, and we will use our commercially reasonable efforts to cause the same to become effective within 60 business days after the closing of our initial business combination and to maintain the effectiveness of such registration statement and
a current prospectus relating to those Class A ordinary shares until the warrants expire or are redeemed. We cannot assure you that we will be able to do so if, for example, any facts or events arise which represent a fundamental change in the
information set forth in the registration statement or prospectus, the financial statements contained or incorporated by reference therein are not current, complete or correct or the SEC issues a stop order. If the shares issuable upon exercise of
the warrants are not registered under the Securities Act in accordance with the above requirements, we will be required to permit holders to exercise their warrants on a cashless basis, in which case, the number of Class A ordinary shares that you
will receive upon cashless exercise will be based on a formula subject to a maximum amount of shares equal to 0.361 Class A ordinary shares 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 registration is available. Notwithstanding the above, if our Class A ordinary shares are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered
security” under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event we
so elect, we will not be required to file or maintain in effect a registration statement, but we will use our commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not
available. Exercising the warrants on a cashless basis could 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 Class A ordinary shares upon a cashless
exercise of the warrants they hold. In no event will we be required to net cash settle any warrant, or issue securities or other compensation in exchange for the warrants in the event that we are unable to register or qualify the shares underlying
the warrants under applicable state securities laws and no exemption is available. If the issuance of the shares upon exercise of the warrants is not so registered or qualified or exempt from registration or qualification, the holder of such warrant
shall not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In such event, holders who acquired their warrants as part of a purchase of units will have paid the full unit purchase price solely for the Class
A ordinary shares included in the units. There may be a circumstance where an exemption from registration exists for holders of our private placement warrants to exercise their warrants while a corresponding exemption does not exist for holders of
the public warrants included as part of units sold in our initial public offering. In such an instance, our sponsor and its permitted transferees (which may include our directors and executive officers) would be able to exercise their warrants and
sell the ordinary shares underlying their warrants while holders of our public warrants would not be able to exercise their warrants and sell the underlying ordinary shares. 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 Class A ordinary shares for sale under all applicable state securities laws. As a result, we may redeem the warrants as set forth above even if the holders are otherwise
unable to exercise their warrants.
Our warrants are accounted for as derivative liabilities and are recorded at fair value with changes in fair value each period reported in earnings, which may have an adverse effect on
the market price of our ordinary shares or may make it more difficult for us to complete an initial business combination.
We issued 14,375,000 warrants as part of the units offered in our initial public offering and, simultaneously with the closing of our initial public offering, we issued in a private placement 9,000,000 private placement
warrants. We account for both the warrants underlying the units offered in our initial public offering and the private placement warrants as a warrant liability. At each reporting period (1) the accounting treatment of the warrants will be
re-evaluated for proper accounting treatment as a liability or equity and (2) the fair value of the liability of the public and private warrants will be remeasured and the change in the fair value of the liability will be recorded as other income
(expense) in our statement of operations.
Changes in the inputs and assumptions for the valuation model we use to determine the fair value of such liability may have a material impact on the estimated fair value of the embedded derivative liability. The share price
of our ordinary shares represents the primary underlying variable that impacts the value of the derivative instruments. Additional factors that impact the value of the derivative instruments include the volatility of our share price, discount rates
and stated interest rates. As a result, our financial statements and results of operations will fluctuate quarterly, based on various factors, such as the share price of our ordinary shares, many of which are outside of our control. In addition, we
may change the underlying assumptions used in our valuation model, which could in result in significant fluctuations in our results of operations. If our share price is volatile, we expect that we will recognize non-cash gains or losses on our
warrants or any other similar derivative instruments each reporting period and that the amount of such gains or losses could be material. The impact of changes in fair value on earnings may have an adverse effect on the market price of our ordinary
shares.
The warrants may become exercisable and redeemable for a security other than the Class A ordinary shares, 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 Class A ordinary shares. 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 20 business days of the closing of an initial business combination.
General Risk Factors
We have no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.
We are a recently incorporated exempted company under the laws of the Cayman Islands and have 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. If we fail to complete our initial business combination, we will never generate any operating revenues.
Past performance by our sponsor, our management team or their respective affiliates may not be indicative of future performance of an investment in us.
Information regarding performance is presented for informational purposes only. Any past experience or performance of our sponsor, our management team and their respective affiliates, including investments and transactions
in which they have participated and businesses with which they have been associated, is not a guarantee of either (i) our ability to successfully identify and execute a transaction or (ii) success with respect to any business combination that we may
complete or that we will be able to provide positive returns to our shareholders. You should not rely on the historical record of our management team or their respective affiliates, or any related investment’s performance as indicative of the future
performance of an investment in us or the returns we will, or are likely to, generate going forward. Our management has no experience in operating special purpose acquisition companies. The market price of our securities may be influenced by numerous
factors, many of which are beyond our control, and our shareholders may experience losses on their investment in our securities.
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.
We may be a passive foreign investment company, or “PFIC,” which could result in adverse U.S. federal income tax consequences to U.S. investors.
If we are a PFIC for any taxable year (or portion thereof) that is included in the holding period of a U.S. Holder of our units, Class A ordinary shares or warrants, the U.S. Holder may be subject to adverse U.S. federal
income tax consequences and may be subject to additional reporting requirements. Our PFIC status for our current and subsequent taxable years may depend upon the status of an acquired company pursuant to a business combination and whether we qualify
for the PFIC start-up exception. Depending on the particular circumstances, the application of the start-up exception may be subject to uncertainty, and there cannot be any assurance that we will qualify for the start-up exception. In addition, our
actual PFIC status for any taxable year will not be determinable until after the end of such taxable year. Accordingly, there can be no assurances with respect to our status as a PFIC for our current taxable year or any subsequent taxable year. If we
determine we are a PFIC for any taxable year, upon written request, we will endeavor to provide to a U.S. Holder such information as the Internal Revenue Service (“IRS”) may require, including a PFIC Annual Information Statement, in order to enable
the U.S. Holder to make and maintain a “qualified electing fund” election, but there can be no assurance that we will timely provide such required information, and such election would be unavailable with respect to our warrants in all cases. We urge
U.S. investors to consult their tax advisors regarding the possible application of the PFIC rules. As used herein, the term “U.S. Holder” means a beneficial owner of our Class A ordinary shares or warrants that is for U.S. federal income tax
purposes: an individual citizen or resident of the United States; a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) that is created or organized under the laws of the United States, any state thereof or the
District of Columbia; an estate the income of which is subject to U.S. federal income taxation regardless of its source; or a trust if (A) a court within the United States is able to exercise primary supervision over the administration of the trust
and one or more U.S. persons have the authority to control all substantial decisions of the trust; or (B) it has in effect under applicable U.S. Treasury regulations a valid election to be treated as a U.S. person.
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 shareholder approval of any golden parachute payments not previously
approved. As a result, our shareholders may not have access to certain information they may deem important. We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier, including if
the market value of our Class A ordinary shares held by non-affiliates exceeds $700 million as of any June 30 before that time, in which case we would no longer be an emerging growth company as of the following December 31. We cannot predict whether
investors will find our securities less attractive because we will rely on these exemptions. If some investors find our securities less attractive as a result of our reliance on these exemptions, the trading prices of our securities may be lower than
they otherwise would be, there may be a less active trading market for our securities and the trading prices of our securities may be more volatile.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a
Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can
elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. We have elected not to opt out of such extended transition period
which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or
revised standard. This may make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or
impossible because of the potential differences in accounting standards used.
Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things,
providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our ordinary shares held by non-affiliates exceeds $250 million as of the
prior June 30, or (2) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our ordinary shares held by non-affiliates exceeds $700 million as of the prior June 30. To the extent we take advantage of such
reduced disclosure obligations, it may also make comparison of our financial statements with other public companies difficult or impossible.
None.
We do not own any real estate or other physical properties materially important to our operation. Our executive office is located at 8th Floor, Berkeley Square House, Berkeley Square, London, W1J 6DB United Kingdom. We consider our current office
space adequate for our current operations.
To the knowledge of our management, there is no litigation currently pending or contemplated against us, any of our officers or directors in their capacity as such or against any of our property.
Not applicable.
PART II
| ITEM 5. |
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
Market Information
Our units, Class A ordinary shares and warrants are each traded on the Nasdaq under the symbol “HORIU,” “HORI” and “HORIW,” respectively.
Our units commenced public trading on December 9, 2021. Our Class A ordinary shares and warrants began separate trading on January 31, 2022.
Holders
On September 12, 2022, there was one holder of record for our units, one holder of record for our Class A ordinary shares, four holders of our Class B ordinary shares and two holders of our warrants.
Dividends
We have not paid any cash dividends on our ordinary shares to date and do not intend to pay cash dividends prior to the completion of an initial business combination. The payment of cash dividends in the future will be dependent upon our revenues
and earnings, if any, capital requirements and general financial conditions subsequent to completion of an initial business combination. The payment of any cash dividends subsequent to an initial business combination will be within the discretion of
our board of directors at such time. In addition, our board of directors is not currently contemplating and does not anticipate declaring any share dividends in the foreseeable future. Further, if we incur any indebtedness, our ability to declare
dividends may be limited by restrictive covenants we may agree to in connection therewith.
Securities Authorized for Issuance Under Equity Compensation Plans
None.
Recent Sales of Unregistered Securities; Use of Proceeds from Registered Offerings
Sales of Unregistered Securities
On May 11, 2021, our prior sponsor paid $25,000, or approximately $0.003 per share, to cover certain expenses on our behalf in consideration of 7,187,500 Class B ordinary shares, par value $0.0001 per share. Such securities were issued pursuant to
the exemption from registration contained in Section 4(a)(2) of the Securities Act. No underwriting discounts or commissions were paid with respect to such sales. On December 8, 2021, our prior sponsor transferred 12,500 Class B ordinary shares to
each of our independent directors. On June 8, 2022, our prior sponsor transferred its remaining 7,150,000 Class B ordinary shares to our sponsor.
On December 13, 2021, we completed our initial public offering of 28,750,000 units, including the issuance of 3,750,000 units as a result of the underwriters’ exercise in full of their over-allotment option. The units were sold at an offering
price of $10.00 per unit, generating gross proceeds of $287,500,000. Each unit consists of one (1) Class A ordinary share, par value $0.0001, and one-half (1/2) of one (1) redeemable warrant. Each whole warrant entitles the holder thereof to purchase
one (1) Class A ordinary share at a price of $11.50 per share, subject to certain adjustments. Concurrently with the closing of our initial public offering, we completed the private sale of 9,000,000 private placement warrants at a purchase price of
$1.50 per private placement warrant, to our sponsor, generating gross proceeds of $13,500,000. 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 the company, (ii) they (including the Class A ordinary shares issuable upon exercise thereof) 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, (ii) they may be exercised by the holders on a cashless basis, and (iii) they (including the Class A ordinary shares issuable upon exercise thereof) are
subject to registration rights. This issuance was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.
Use of Proceeds
Following the closing of the initial public offering and the sale of the private placement warrants, a total of $293,250,000, consisting of proceeds from the initial public offering and the sale of the private placement warrants, was placed in the
trust account.
We paid a total of $5,750,000 in underwriting discounts and commissions and $850,492 in other transaction costs related to the initial public offering. In addition, the underwriters agreed to defer $10,062,500
in underwriting discounts and commissions. Of these total amounts, $1,071,693 was allocated to the warrants and included in non-operating expense.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
None.
Not applicable.
| ITEM 7. |
The following discussion and analysis of the company’s financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto, which are included in “Item
8. Financial Statements and Supplementary Data” of this Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements. Our actual results may differ materially from those anticipated in
these forward-looking statements as a result of many factors, including those set forth under “Special Note Regarding Forward-Looking Statements,” “Item 1A. Risk Factors” and elsewhere in this Report.
Overview
We are a blank check company incorporated as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses
(the “Business Combination”). We intend to effectuate our Business Combination using cash derived from the proceeds of our initial public offering and the sale of the private placement warrants, our shares, debt or a combination of cash, shares and
debt.
We expect to continue to incur significant costs in the pursuit of a Business Combination. We cannot assure you that our plans to complete a Business Combination will be successful.
Results of Operations
We have neither engaged in any operations nor generated any revenues through December 31, 2021. All activity for the period from May 6, 2021 (inception) through December 31, 2021 were organizational activities, those necessary to prepare for the
Initial Public Offering (as defined below) and, subsequent to the closing of the Initial Public Offering, identifying a target company for a Business Combination. We do not expect to generate any operating revenues until after the completion of a
Business Combination. We generate non-operating income in the form of interest income on investments held in the trust account. We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing
compliance), as well as for due diligence expenses.
For the period from May 6, 2021 (inception) through December 31, 2021, we had net income of $14,266,328, which consisted of a decrease in the fair value of warrant liabilities of $15,427,500 and interest earned on marketable securities held in the
trust account of $1,371, partially offset by formation costs of $3,471, insurance expenses of $23,333, professional services expenses of $58,729, offering costs allocated to warrants of $1,071,693 and other expenses of $5,317.
Liquidity and Capital Resources
On December 13, 2021, we consummated an initial public offering (the “Initial Public Offering”) of 28,750,000 units, at a price of $10.00 per unit, generating gross proceeds of $287,500,000. Simultaneously with the closing
of the Initial Public Offering, we consummated the sale of 9,000,000 private placement warrants to our prior sponsor at a price of $1.50 per private placement warrant, generating gross proceeds of $13,500,000.
Following the Initial Public Offering, the full exercise of the over-allotment option and the sale of the private placement warrants, a total of $293,250,000 of the proceeds thereof was placed in the trust account. We
incurred $850,492 in other offering costs related to the Initial Public Offering, in addition to $5,750,000 in underwriting fees and $10,062,500 of deferred
underwriting fees. Of these total amounts, $1,071,693 was allocated to the warrant liabilities and included in non-operating expense.
For the period from May 6, 2021 (inception) through December 31, 2021, net cash used in operating activities was $671,321, net cash used in investing activities was $293,250,000 (principal deposited into trust account) and
net cash provided by financing activities was $294,424,508 (net proceeds from the Initial Public Offering, sale of private placement warrants and issuance of Class B shares).
As of December 31, 2021, we had cash and marketable securities held in the trust account of $293,251,371. We intend to use substantially all of the funds held in the trust account, including any amounts representing
interest earned on the trust account, which interest shall be net of taxes payable and excluding deferred underwriting commissions, to complete a Business Combination. We may withdraw interest from the trust account to pay taxes, if any, or up to
$100,000 of dissolution expenses in the event of liquidation. To the extent that our share capital or debt is used, in whole or in part, as consideration to complete a Business Combination, the remaining proceeds held in the trust account will be
used as working capital to finance the operations of the target business or businesses, make other acquisitions and/or pursue our growth strategies.
As of December 31, 2021, we had cash of $503,187 held outside of the trust account. We intend to use the funds held outside the trust account primarily to identify and
evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents
and material agreements of prospective target businesses and structure, negotiate and/or complete a Business Combination.
In order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, our sponsor or an affiliate of our sponsor or certain of our officers and directors may, but are not
obligated to, loan us funds as may be required. If we complete a Business Combination, we may repay such loaned amounts out of the proceeds held in the trust account released to us. In the event that a Business Combination does not close, we may use
a portion of the working capital held outside the trust account to repay such loaned amounts, but no proceeds from our trust account would be used for such repayment.
We do not believe we will need to raise additional funds in order to meet the expenditures required for operating our business. However, if our estimate of the costs of identifying a target business, undertaking in-depth
due diligence and negotiating a Business Combination is less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to a Business Combination. Moreover, we may need to obtain additional
financing either to complete a Business Combination or because we become obligated to redeem a significant number of the public shares upon consummation of a Business Combination, in which case we may issue additional securities or incur debt in
connection with such Business Combination.
Going Concern Consideration
We assess going concern considerations in accordance with Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going
Concern.” As of December 31, 2021, we had cash held outside of the trust account of $503,187 and have incurred and expect to continue to incur significant costs in pursuit of our financing and acquisition plans. We will be using the funds
in our operating account for paying existing accounts payable, identifying and evaluating prospective initial Business Combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the
target business to merge with or acquire, paying general operating and administrative expenses, and structuring, negotiating and consummating the Business Combination. Although we believe that we will have sufficient working capital and borrowing
capacity to meet our needs through the earlier of the consummation of a Business Combination or one year from this filing, there is a risk that our liquidity may not be sufficient. Additionally, in order to finance transaction costs in connection
with a Business Combination, our sponsor, or an affiliate of our sponsor or certain of our officers and directors may, but are not obligated to, provide us with working capital loans. As of December 31, 2021, there were no amounts outstanding under
any such working capital loans.
We are focused on identifying high-growth technology and consumer-exposed businesses in Western Europe, CEE, the CIS (excluding Russia and Belarus) or Latin America. The recent actions by Russia against Ukraine and
subsequent sanctions against Russia, Belarus and related individuals and entities have created global security concerns that could have a lasting impact on regional and global economies. In response to the imposition of such sanctions, we have
adjusted our target region to exclude Russia and Belarus.
In addition, the end of the Combination Period will occur prior to one year after the issuance of our financial statements for the fiscal year ended December 31, 2021. There is no assurance that our plans to
consummate a Business Combination will be successful during the Combination Period. As outlined in our amended and restated memorandum and article of association, if we do not complete, or have an agreement in principle or a definitive agreement
for, a business combination by the end of the Combination Period, we will cease operations and redeem our public shares. Although we are continuing our pursuit of potential targets for an initial business combination, the end of the Combination
Period occurring prior to one year after the issuance of our financial statements creates substantial doubt regarding our ability to continue as a going concern. The financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
Off-Balance Sheet Arrangements
As of December 31, 2021, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K. We do not participate in transactions that create relationships with unconsolidated
entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing
arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities or purchased any non-financial assets.
Contractual Obligations
We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities.
The underwriters are entitled to a deferred underwriting fee of $0.35 per unit, or $10,062,500 in the aggregate. The deferred underwriting fee will become payable to the underwriters from the amounts held in the trust
account solely in the event that we complete a Business Combination, subject to the terms of the underwriting agreement.
Critical Accounting Policies and Significant Estimates
The preparation of financial statements and related disclosures in conformity with GAAP requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of
contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the critical accounting policies set
forth below.
Warrant Liabilities
We account for our public warrants and private placement warrants (collectively, the “Warrants”) as either equity-classified or liability-classified instruments based on an assessment of the Warrants’ specific terms and
applicable authoritative guidance in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 480, “Distinguishing Liabilities from Equity,” and ASC Topic 815, “Derivatives and Hedging.” The assessment considers whether the Warrants are freestanding financial instruments pursuant to ASC Topic 480, whether Warrants meet the definition of a liability pursuant to ASC Topic
480 and whether the Warrants meet all of the requirements for equity classification under ASC Topic 815, including whether the Warrants are indexed to the Class A ordinary shares, among other conditions for equity classification. This assessment,
which requires the use of professional judgment, is conducted at the time of issuance of the Warrants and as of each subsequent quarterly period-end date while the Warrants are outstanding.
For issued or modified Warrants that meet all of the criteria for equity classification, the Warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or
modified Warrants that do not meet all of the criteria for equity classification, the Warrants are required to be recorded as liabilities at their initial fair value on the date of issuance and adjusted to fair value at each balance sheet date
thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. The Warrants are accounted for as liabilities and represent a significant accounting estimate. The fair value
of the public warrants and the private placement warrants was estimated using a Monte Carlo simulation approach.
Class A Ordinary Shares Subject to Possible Redemption
We account for the Class A ordinary shares subject to possible redemption in accordance with the guidance in ASC Topic 480, “Distinguishing Liabilities from Equity.” Class A
ordinary shares subject to mandatory redemption are classified as a liability instrument and are measured at fair value. Conditionally redeemable Class A ordinary shares (including Class A ordinary shares that feature redemption rights that are
either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) are classified as temporary equity. At all other times, Class A ordinary shares are classified as a component of
shareholders’ deficit. The Class A ordinary shares feature certain redemption rights that are considered to be outside of our control and subject to occurrence of uncertain future events. Accordingly, the Class A ordinary shares subject to possible
redemption are presented at redemption value as temporary equity, outside of the shareholders’ deficit section of our balance sheet.
Net Income Per Ordinary Share
We have two classes of ordinary shares, which are referred to as Class A ordinary shares and Class B ordinary shares. Income and losses are shared pro rata between the two classes of ordinary shares. Net income per
ordinary share for each class of ordinary shares is computed by dividing net income allocated to the class by the weighted average number of ordinary shares of the class outstanding during the period. The calculation of diluted income per share
does not consider the effect of the Public Warrants issued in connection with the Initial Public Offering and the sale of the private placement warrants, because the exercise of the warrants is contingent upon the occurrence of future events and
the inclusion of such warrants would be anti-dilutive under the treasury stock method.
Recent Accounting Pronouncements
In August 2020, the FASB issued Accounting Standards Update (“ASU”) No. 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20)” and “Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”), which simplifies accounting for convertible instruments
by removing major separation models required under current GAAP. ASU 2020-06 removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and it also simplifies the diluted earnings per
share calculation in certain areas. ASU 2020-06 is effective on January 1, 2022 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. We adopted ASU 2020-06 effective on May 6,
2021 (inception) and it did not have a material impact on our financial position, results of operations and cash flows.
Our management does not believe that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on our financial statements.
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.
This information appears in Item 15 of this Report and is included herein by reference.
| ITEM 9. |
None.
Evaluation of Disclosure Controls and Procedures
Disclosure controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act, such as this Report, is recorded, processed, summarized, and reported within
the time period specified in the SEC’s rules and forms. Disclosure controls are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including the chief executive officer and chief
financial officer, as appropriate to allow timely decisions regarding required disclosure.
Our management evaluated, with the participation of our principal executive officer and principal financial and accounting officer (our “Certifying Officers”), the effectiveness of our disclosure controls and procedures as of December 31, 2021,
pursuant to Rule 13a-15(b) under the Exchange Act. Based upon that evaluation, our Certifying Officers concluded that, as of December 31, 2021, our disclosure controls and procedures were effective.
We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance
that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs.
Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all of our control deficiencies and instances of fraud, if any.
The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future
conditions.
Management’s Report on Internal Controls Over Financial Reporting
This Report does not include a report of management’s assessment regarding internal control over financial reporting or an attestation report of our independent registered public accounting firm due to a transition period established by rules of
the SEC for newly public companies.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to
materially affect, our internal control over financial reporting.
| ITEM 9B. |
None.
| ITEM 9C. |
None.
PART III
Directors and Executive Officers
As of the date of this Report, our directors and officers are as follows:
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Name
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Age
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Position
|
||
|
Jonathan Neill
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62
|
Interim Chief Executive Officer and Director
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||
|
Christopher Edwards
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49
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Interim Chief Financial Officer and Director
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||
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Enrique Fernández Aisa
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53
|
Director
|
||
|
Konrad Kozik
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51
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Director
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||
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Herbert Stepic
|
75
|
Director
|
Jonathan Neill
Mr. Neill serves as our interim CEO and director. On March 23, 2022, the Board of Directors appointed Jonathan Neill as our CFO and a director, effective March 23, 2022. On April 21, 2022, the Board of Directors appointed Jonathan Neill as our
interim CEO, effective April 21, 2022. Concurrently with his appointment as CEO, Mr. Neill resigned from his position as CFO. Mr. Neill is the founding partner of FPP Asset Management LLP and has nearly 30 years of investment management experience.
From 1990 to 1998, he was senior investment manager at Pictet Asset Management London, jointly responsible for the groups’ specialist equity business of international smaller companies and emerging markets, totalling over $2 billion under management.
Prior to Pictet Asset Management London, Mr. Neill worked at Mercury Asset Management from 1988 to 1990 as a manager of specialist international growth stocks and a specialist UK growth fund. He began his career in 1986 at Oppenheimer Fund
Management. Mr. Neill holds a BA Honors French from the University of Bristol in the United Kingdom.
Christopher Edwards
Mr. Edwards serves as our interim CFO and director. On April 21, 2022, the Board of Directors appointed Christopher Edwards as our interim CFO and a director, effective April 21, 2022. Mr. Edwards is director and CFO at FPP Asset Management LLP.
He began his career in 1994 at NPI, a UK-based asset management firm, as a fund manager responsible for Latin American investments. He moved to Henderson Investors in 1997 to work on the emerging markets desk focusing on Latin America as well as on
broader emerging markets mandates. In 2000, Mr. Edwards moved to FPP Asset Management to run Latin American assets and also to develop further FPP’s proprietary macroeconomic model and research. Mr. Edwards holds a First Class degree in Ancient and
Modern History from Oxford University
Enrique Fernández Aisa
Enrique Fernández Aisa serves on our board of directors as an independent director. Since July 2020, Mr. Fernández Aisa has been a Non-Executive Director at M.Video-Eldorado. Prior to his current role at the board of M.Video-Eldorado, Mr.
Fernández Aisa held various executive positions at the company, including as a Chief Executive Officer from 2016 to 2020 and as a Chief Commercial Officer from 2009 to 2016. Before joining, M.Video-Eldorado worked in different management roles in
Eldorado Retail Company, MediaMarkt Saturn Retail Group, MediaMarkt Saturn Spain and Whirlpool Europe. Mr. Fernández Aisa has a successful track record of M&A execution. During his tenure at M.Video-Eldorado, he oversaw the acquisition of
Eldorado LLC for RUB 45.5 billion in April 2018 and the acquisition of Media-Saturn-Rusland LLC, the Russian business of MediaMarktSaturn, in August 2018.
Konrad Kozik
Konrad Kozik serves on our board of directors as an independent director. Mr. Kozik is currently an independent international business advisor focused on strategic and corporate advisory work for boards and shareholders, providing counsel on a
number of economic, business, corporate governance and regulatory issues within the EU, CEEMEA and Russia & CIS regions. Mr. Kozik has extensive experience in originating, leading and completing corporate finance and M&A transactions, on both
sell- and buy-side, and managing several post-deal integration and transformation efforts. Currently, Mr. Kozik serves as an independent non-executive board member at a number of financial institutions in Europe and CEEMEA region, working alongside
major value-driven shareholders (Deutsche Bank, Intesa Sanpaolo Group and EBRD, in addition to various private equity firms), and in which capacity he also acts as chairman of the audit committee, chairman of the risk committee and member of the
remuneration committee. Previously, Mr. Kozik served as deputy CEO of Allianz SE operating entities in Russia from 2014 to 2016 and in Poland from 2016 to 2018, during which he originated and completed significant corporate turnarounds, reshaping the
operations of Allianz SE in the region. From 2007 to 2014, Mr. Kozik was an executive board member and CFO at UniCredit Bank Russia, where he originated and led initiatives to transform the bank’s business, helping lead it on a path of growth and
expansion in the region, to become one of the major players in corporate and retail banking. From 1999 to 2007, Mr. Kozik served as an executive board member for various public financial institutions in the CEE region, including UniCredit Group
(Italy) and KBC Group (Belgium).
Herbert Stepic
Herbert Stepic serves on our board of directors as an independent director. Mr. Stepic is currently an independent international business consultant and serves as chairman at BC Moldindconbank S.A. From 2001 to 2013, he acted in multiple
capacities at Raiffeisen, one of the leading banking groups in CEE, including deputy chairman of Raiffeisen Zentralbank, CEO of Raiffeisen Bank International AG (“RBI”) and Raiffeisen International Bank Holding, as well as being a member of the audit
committee of Raiffeisen branches in Hungary, Poland, Bulgaria, Slovenia, Albania and Bosnia. He has been working as Consultant focused in the finance industry and real estate, primarily in CEE and EU-countries, since May 2013. Mr. Stepic holds
non-executive board positions in various industries internationally. Mr. Stepic has more than 40 years of experience in the international finance industry, business and trade and has particular expertise in for CEE, the Arab World and Far East Asia.
Mr. Stepic is responsible for establishing the first RBI outpost in Budapest in 1987. Under his leadership, the bank expanded its network of subsidiary banks into 17 CEE-markets, and 32 outposts worldwide including Peking, Hong Kong and Singapore.
Mr. Stepic has been serving in major board functions for 27 years, including his long-term position on the board of the International Chamber of Commerce in Austria; he is the author of the “Handbook for Export Finance,” widely used in international
trade and export.
Number and Terms of Office of Officers and Directors
Our board of directors has five directors. Our board of directors is divided into three classes, with only one class of directors being appointed in each year, and with each class (except for those directors appointed prior to our first annual
general meeting) serving a three-year term. In accordance with the Nasdaq corporate governance requirements, we are not required to hold an annual general meeting until one year after our first fiscal year end following our listing on Nasdaq. The
term of office of the first class of directors, consisting of Enrique Fernández Aisa, Konrad Kozik and Herbert Stepic, will expire at our first annual general meeting. The term of office of the second class of directors, consisting of Jonathan Neill,
will expire at our second annual general meeting. The term of office of the third class of directors, consisting of Christopher Edwards, will expire at our third annual general meeting.
Prior to the completion of an initial business combination (and assuming that all of the founder shares have not been converted to Class A ordinary shares), the holders of a majority of our founder shares may appoint or
remove a member of the board of directors for any reason. In addition, the board of directors may fill any vacancy or appoint an additional director by appointing a person who is recommended by a majority of the independent directors, provided that
the appointment does not cause the total number of directors to exceed the number fixed in the Amended and Restated Memorandum of Association.
Our Sponsor, upon and following consummation of an initial business combination, will be entitled to nominate three individuals for appointment to our board of directors, as long as our sponsor holds any securities covered
by the registration and shareholder rights agreement.
Our officers are appointed by the board of directors and serve at the discretion of the board of directors, rather than for specific terms of office. Our board of directors is authorized to appoint persons to the offices set forth in our amended
and restated memorandum and articles of association as it deems appropriate. Our amended and restated memorandum and articles of association provide that our officers may consist of one or more of the chairperson of the board, chief executive
officer, president, chief financial officer, vice presidents, secretary, treasurer and such other offices as may be determined by the board of directors.
Director Independence
Nasdaq listing standards require that a majority of our board of directors be independent. Our board of directors has determined that Enrique Fernández Aisa, Konrad Kozik and Herbert Stepic are “independent directors” as defined in Nasdaq listing
standards. Our independent directors have regularly scheduled meetings at which only independent directors are present.
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires our executive officers and directors, and persons who own more than ten percent of any publicly traded class of our equity securities, to file reports of ownership and changes in ownership of equity
securities of the company with the SEC and to furnish the company with copies of these reports.
Based solely upon a review of such forms, we are aware of no late Section 16(a) filings other than late Form 3 reports filed by Enrique Fernández Aisa, Konrad Kozik, Herbert Stepic and our sponsor (in each case, the initial filing as an insider of
the company).
Controlled Company Status
Until the completion of our initial business combination, only holders of our founder shares will have the right to vote on the election of directors. As a result, the Nasdaq considers us to be a “controlled company” within the meaning of the
Nasdaq corporate governance standards. Under the Nasdaq corporate governance standards, a company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with
certain corporate governance requirements. We do not intend to utilize these exemptions and intend to comply with the corporate governance requirements of the Nasdaq, subject to applicable phase-in rules. However, if we determine in the future to
utilize some or all of these exemptions, you will not have the same protections afforded to shareholders of companies that are subject to all of the Nasdaq corporate governance requirements.
Committees of the Board of Directors
Our board of directors has two standing committees: an audit committee and a compensation committee. Subject to phase-in rules and a limited exception, the rules of Nasdaq and Rule 10A-3 of the Exchange Act require that the audit committee of a
listed company be comprised solely of independent directors. Subject to phase-in rules and a limited exception, the rules of Nasdaq require that the compensation committee of a listed company be comprised solely of independent directors.
Audit Committee
We have established an audit committee of the board of directors. Enrique Fernández Aisa, Konrad Kozik and Herbert Stepic serve as members of our audit committee. Our board of directors has determined that each of Enrique Fernández Aisa, Konrad
Kozik and Herbert Stepic are independent under Nasdaq listing standards and applicable SEC rules. Enrique Fernández Aisa serves as the Chairman of the audit committee. Under Nasdaq listing standards and applicable SEC rules, all the directors on the
audit committee must be independent. Each member of the audit committee is financially literate, and our board of directors has determined that Herbert Stepic qualifies as an “audit committee financial expert” as defined in applicable SEC rules.
We have adopted an audit committee charter, which details the principal functions of the audit committee. The audit committee is responsible for:
| • |
meeting with our independent registered public accounting firm regarding, among other issues, audits, and adequacy of our accounting and control systems;
|
| • |
monitoring the independence of the independent registered public accounting firm;
|
| • |
verifying the rotation of the lead (or coordinating) audit partner having primary responsibility for the audit and the audit partner responsible for reviewing the audit as required by law;
|
| • |
inquiring and discussing with management our compliance with applicable laws and regulations;
|
| • |
pre-approving all audit services and permitted non-audit services to be performed by our independent registered public accounting firm, including the fees and terms of the services to be performed;
|
| • |
appointing or replacing the independent registered public accounting firm;
|
| • |
determining the compensation and oversight of the work of the independent registered public accounting firm (including resolution of disagreements between management and the independent auditor regarding
financial reporting) for the purpose of preparing or issuing an audit report or related work;
|
| • |
establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or reports which raise material issues regarding our financial
statements or accounting policies;
|
| • |
monitoring compliance on a quarterly basis with the terms of our initial public offering and, if any noncompliance is identified, immediately taking all action necessary to rectify such noncompliance or
otherwise causing compliance with the terms of our initial public offering; and
|
| • |
reviewing and approving all payments made to our existing shareholders, executive officers or directors and their respective affiliates. Any payments made to members of our audit committee will be reviewed and
approved by our board of directors, with the interested director or directors abstaining from such review and approval.
|
Compensation Committee
We have established a compensation committee of our board of directors. The members of our compensation committee are Enrique Fernández Aisa, Konrad Kozik and Herbert Stepic, who serves as chairman of the compensation committee.
Under Nasdaq listing standards, we are required to have a compensation committee composed entirely of independent directors. Our board of directors has determined that each of Enrique Fernández Aisa, Konrad Kozik and Herbert Stepic are
independent. We adopted a compensation committee charter, which details the principal functions of the compensation committee, including:
| • |
reviewing and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Officer’s compensation, evaluating our Chief Executive Officer’s performance in light of such
goals and objectives and determining and approving the remuneration (if any) of our Chief Executive Officer;
|
| • |
reviewing and approving the compensation of all of our other Section 16 executive officers;
|
| • |
reviewing our executive compensation policies and plans;
|
| • |
implementing and administering our incentive compensation equity-based remuneration plans;
|
| • |
assisting management in complying with our proxy statement and/or annual report disclosure requirements;
|
| • |
approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our executive officers and employees;
|
| • |
producing a report on executive compensation to be included in our annual proxy statement, to the extent required; and
|
| • |
reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors.
|
The charter also provides that the compensation committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, legal counsel or other adviser and is directly responsible for the appointment, compensation and
oversight of the work of any such adviser.
However, before engaging or receiving advice from a compensation consultant, external legal counsel or any other adviser, the compensation committee will consider the independence of each such adviser, including the factors required by Nasdaq and
the SEC.
Compensation Committee Interlocks and Insider Participation
None of our executive officers currently serves, and in the past year has not served, as a member of the board of directors or compensation committee (or other committee serving an equivalent function) of any entity that has one or more executive
officers serving on our board of directors.
Director Nominations
We do not have a standing nominating committee. In accordance with Rule 5605(e) of the Nasdaq rules, a majority of the independent directors may recommend a director nominee for selection by the board of directors. The board of directors believes
that the independent directors can satisfactorily carry out the responsibility of properly selecting or approving director nominees without the formation of a standing nominating committee. As there is no standing nominating committee, we do not have
a nominating committee charter in place.
The board of directors will also consider director candidates recommended for nomination by our shareholders during such times as they are seeking proposed nominees to stand for election at the next annual meeting of shareholders (or, if
applicable, a special meeting of shareholders). Our shareholders that wish to nominate a director for election to the board of directors should follow the procedures set forth in our amended and restated memorandum and articles of association.
We have not formally established any specific, minimum qualifications that must be met or skills that are necessary for directors to possess. In general, in identifying and evaluating nominees for director, the board of directors considers
educational background, diversity of professional experience, knowledge of our business, integrity, professional reputation, independence, wisdom, and the ability to represent the best interests of our shareholders.
Code of Ethics
We have adopted a Code of Ethics applicable to our directors, officers and employees. A copy of the Code of Ethics will be provided without charge upon request from us. We intend to disclose any amendments to or waivers of certain provisions of
our Code of Ethics in a Current Report on Form 8-K.
Conflicts of Interest
Under Cayman Islands law, directors and officers owe the following fiduciary duties:
| • |
duty to act in good faith in what the director or officer believes to be in the best interests of the company as a whole;
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| • |
duty to exercise powers for the purposes for which those powers were conferred and not for a collateral purpose;
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| • |
directors should not improperly fetter the exercise of future discretion;
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| • |
duty not to put themselves in a position in which there is a conflict between their duty to the company and their personal interests; and
|
| • |
duty to exercise independent judgment.
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In addition to the above, directors also owe a duty of care which is not fiduciary in nature. This duty has been defined as a requirement to act as a reasonably diligent person having both the general knowledge, skill and experience that may
reasonably be expected of a person carrying out the same functions as are carried out by that director in relation to the company and the general knowledge skill and experience of that director.
As set out above, directors have a duty not to put themselves in a position of conflict and this includes a duty not to engage in self-dealing, or to otherwise benefit as a result of their position. However, in some instances what would otherwise
be a breach of this duty can be forgiven and/or authorized in advance by the shareholders provided that there is full disclosure by the directors. This can be done by way of permission granted in the amended and restated memorandum and articles of
association or alternatively by shareholder approval at general meetings.
Our amended and restated memorandum and articles of association provide that, subject to his or her fiduciary duties under Cayman Islands law, no director shall be disqualified or prevented from contracting with the company nor shall any contract
or transaction entered into by or on behalf of the company in which any director shall have an interest be liable to be avoided.
Certain of our officers and directors presently have, and any of them in the future may have, additional fiduciary and contractual duties to other entities. As a result, if any of our officers or directors becomes aware of a business combination
opportunity which is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, then, subject to their fiduciary duties under Cayman Islands law, he or she may need to honor such fiduciary or contractual
obligations to present such business combination opportunity to such entity. If these other entities decide to pursue any such opportunity, we may be precluded from pursuing the same. Our amended and restated memorandum and articles of association
provide that, to the fullest extent permitted by applicable law: (i) no individual serving as a director or an officer shall have any duty, except to the extent expressly assumed by contract, to refrain from engaging directly or indirectly in the
same or similar business activities or lines of business as us; and (ii) we renounce any interest or expectancy in, or in being offered an opportunity to participate in, any potential transaction or matter which may be a 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.
Below is a table summarizing the entities to which our executive officers and directors currently have fiduciary duties, contractual obligations or other material management relationships:
|
Individual
|
|
Entity
|
|
Entity’s
Business
|
|
Affiliation
|
|
Jonathan Neill
|
FPP Asset Management LLP
|
Investment
|
Director
|
|||
|
Christopher Edwards
|
FPP Asset Management LLP
|
Investment
|
Director and CFO
|
|||
|
Enrique Fernández Aisa
|
|
PJSC M.Video
|
|
Consumer Retail
|
|
Director
|
|
Konrad Kozik
|
|
Deutsche Bank Poland S.A.
|
|
Banking
|
|
Board Member
|
|
|
Intesa Sanpaolo Bank S.A.
|
|
Banking
|
|
Board Member
|
|
|
|
Moldova Agroindbank
|
|
Banking
|
|
Board Member
|
|
|
Herbert Stepic
|
|
BC Moldinconbank S.A.
|
|
Banking
|
|
Board Member
|
|
|
Tamak Holding
|
|
Investment
|
|
Board Member
|
Potential investors should also be aware of the following other potential conflicts of interest:
| • |
Our executive officers and directors are not required to, and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our operations and our
search for a business combination and their other businesses. We do not intend to have any full-time employees prior to the completion of our initial business combination. Each of our executive officers is engaged in several other business
endeavors for which he may be entitled to substantial compensation, and our executive officers are not obligated to contribute any specific number of hours per week to our affairs.
|
| • |
Our prior sponsor subscribed for founder shares and purchased private placement warrants in a transaction that closed simultaneously with the closing of our initial public offering (such founder shares and
private placement warrants were subsequently transferred by our prior sponsor to our sponsor).
|
| • |
Our prior sponsor and each member of our management team have entered into an agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares and
public shares held by them in connection with (i) the completion of our initial business combination and (ii) a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association (A) that would
modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do
not complete our initial business combination within the prescribed timeframe or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares. Pursuant to the novation agreement dated June 8,
2022, our prior sponsor transferred its rights and obligations under such agreement to our sponsor. Additionally, our sponsor has agreed to waive its rights to liquidating distributions from the trust account with respect to its founder
shares if we fail to complete our initial business combination within the prescribed time frame. If we do not complete our initial business combination within the prescribed time frame, the private placement warrants will expire worthless.
Except as described herein, our sponsor and our directors and executive officers have agreed not to transfer, assign or sell any of their founder shares until the earliest of (i) one year after the completion of our initial business
combination and (ii) subsequent to our initial business combination, (A) if the closing price of our Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share subdivisions, share capitalizations, reorganizations,
recapitalizations and the like) for any 20 trading days within any 30-trading-day period commencing at least 150 days after our initial business combination, (B) the date on which we complete a liquidation, merger, share exchange or other
similar transaction that results in all of our public shareholders having the right to exchange their ordinary shares for cash, securities or other property. Except as described herein, the private placement warrants will not be
transferable until 30 days following the completion of our initial business combination. In case of our executive officers and director nominees will own ordinary shares or warrants directly or indirectly, they 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.
|
| • |
Our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors is included by a target
business as a condition to any agreement with respect to our initial business combination. In addition, our sponsor, officers and directors may sponsor, form or participate in 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, particularly in the event there is overlap among investment mandates.
|
We are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor, officers or directors or any of their affiliates. 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 independent directors, if required by applicable law or based upon the determination of our board of directors or a committee thereof, may but are
not required to obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions that such initial business combination is fair to our company from a financial point of view.
However, as required by our amended and restated memorandum and articles of association, in no event will we complete an initial business combination, including with a company that is affiliated with our sponsor or any of our officers or directors,
if such initial business combination would be prohibited under Sanctions, or result in us or the combined company becoming subject to Sanctions or Secondary Sanctions.
Furthermore, in no event will our sponsor or any of our existing officers or directors, or their respective affiliates, be paid by us any finder’s fee, consulting fee or other compensation prior to, or for any services they render in order to
effectuate, the completion of our initial business combination. We shall reimburse an affiliate of our sponsor for office space, secretarial and administrative services provided to us in the amount of up to $5,000 per month. Upon completion of the
initial business combination or our liquidation, we will cease paying these monthly fees.
We cannot assure you that any of the above-mentioned conflicts will be resolved in our favor.
If we seek shareholder approval, we will complete our initial business combination only if we obtain the approval of an ordinary resolution, or such higher approval threshold as may be required by Cayman Islands or other applicable law and
pursuant to our amended and restated memorandum and articles of association. In such case, our sponsor and each member of our management team have agreed to vote their founder shares and public shares in favor of our initial business combination.
Limitation on Liability and Indemnification of Officers and Directors
Cayman Islands law does not limit the extent to which a company’s memorandum and articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to
be contrary to public policy, such as to provide indemnification against willful default, willful neglect, actual fraud or the consequences of committing a crime. Our amended and restated memorandum and articles of association provide for
indemnification of our officers and directors to the maximum extent permitted by law, including for any liability incurred in their capacities as such, except through their own actual fraud, willful default or willful neglect. We will enter into
agreements with our directors and officers to provide contractual indemnification in addition to the indemnification provided for in our amended and restated memorandum and articles of association. We expect to purchase a policy of directors’ and
officers’ liability insurance that insures our officers and directors against the cost of defense, settlement or payment of a judgment in some circumstances and insures us against our obligations to indemnify our officers and directors.
Our officers and directors have agreed to waive any right, title, interest or claim of any kind in or to any monies in the trust account, and have agreed to waive any right, title, interest or claim of any kind they may have in the future as a
result of, or arising out of, any services provided to us and will not 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 only be able to be satisfied by us if (i) we have sufficient funds outside of the trust account or (ii) we complete an initial business combination.
Our indemnification obligations may discourage shareholders 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 shareholders. Furthermore, a shareholder’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.
We believe that these provisions, the policy of directors’ and officers’ liability insurance and the indemnity agreements are necessary to attract and retain talented and experienced officers and directors.
None of our executive officers or directors have received any cash compensation for services rendered to us. Commencing on the date that our securities are first listed on Nasdaq through the earlier of
consummation of our initial business combination and our liquidation, we will reimburse an affiliate of our sponsor for office space, secretarial and administrative services provided to us up to the amount of $5,000 per month. In addition,
our sponsor, executive officers and directors, or their respective affiliates are reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due
diligence on suitable business combinations. Our audit committee reviews on a quarterly basis all payments that were made by us to our sponsor, executive officers or directors, or their affiliates. Any such payments prior to an initial business
combination will be made using funds held outside the trust account. Other than quarterly audit committee review of such reimbursements, we do not expect to have any additional controls in place governing our reimbursement payments to our directors
and executive officers for their out-of-pocket expenses incurred in connection with our activities on our behalf in connection with identifying and consummating an initial business combination. Other than these payments and reimbursements, no
compensation of any kind, including finder’s and consulting fees, will be paid by the company to our sponsor, executive officers and directors, or their respective affiliates, prior to or in connection with the completion of our initial business
combination.
After the completion of our initial business combination, directors or members of our management team who remain with us may be paid consulting or management fees from the combined company. All of these fees will be fully disclosed to
shareholders, to the extent then known, in the proxy solicitation materials or tender offer materials furnished to our shareholders in connection with a proposed business combination. We have not established any limit on the amount of such fees that
may be paid by the combined company to our directors or members of management. It is unlikely the amount of such compensation will be known at the time of the proposed business combination, because the directors of the post-combination business will
be responsible for determining executive officer and director compensation. Any compensation to be paid to our executive officers will be determined, or recommended to the board of directors for determination, either by a compensation committee
constituted solely by independent directors or by a majority of the independent directors on our board of directors.
We do not intend to take any action to ensure that members of our management team maintain their positions with us after the consummation of our initial business combination, although it is possible that some or all of our executive officers and
directors may negotiate employment or consulting arrangements to remain with us after our initial business combination. The existence or terms of any such employment or consulting arrangements to retain their positions with us may influence our
management’s motivation in identifying or selecting a target business but we do not believe that the ability of our management to remain with us after the consummation of our initial business combination will be a determining factor in our decision
to proceed with any potential business combination. We are not party to any agreements with our executive officers and directors that provide for benefits upon termination of employment.
| ITEM 12. |
The following table sets forth information regarding the beneficial ownership of our ordinary shares as of September 12, 2022 by:
| • |
each person known by us to be the beneficial owner of more than 5% of our issued and outstanding ordinary shares;
|
| • |
each of our executive officers and directors that beneficially owns our ordinary shares; and
|
| • |
all our executive officers and directors as a group.
|
Beneficial ownership is determined in accordance with the rules of the SEC. To our knowledge, each person named in the table below has sole voting and investment power with respect to all of our ordinary shares beneficially
owned by them, except as otherwise set forth in the notes to the table and pursuant to applicable community property laws.
In the table below, percentage ownership is based on 28,750,000 units (which includes Class A ordinary shares that are underlying the units) and 7,187,000 Class B ordinary shares outstanding as of September 12, 2022. The table below does not
include the Class A ordinary shares underlying the private placement warrants held by our sponsor because these securities are not exercisable within 60 days of this Report.
|
Class B
ordinary shares
|
Class A
ordinary shares
|
|||||||||||||||
|
Name of Beneficial Owners(1)
|
Number of
Shares
Beneficially
Owned(2)
|
Approximate
Percentage
of Class
|
Number of
Shares
Beneficially
Owned
|
Approximate
Percentage
of Class
|
||||||||||||
|
New Emerging Markets Horizon (our sponsor)(3)
|
7,150,000
|
99.5
|
%
|
—
|
—
|
|||||||||||
|
FPP Capital Advisers
|
—
|
(4)
|
—
|
—
|
—
|
|||||||||||
|
Enrique Fernández Aisa
|
12,500
|
*
|
—
|
—
|
||||||||||||
|
Konrad Kozik
|
12,500
|
*
|
—
|
—
|
||||||||||||
|
Herbert Stepic
|
12,500
|
*
|
—
|
—
|
||||||||||||
|
All officers and directors as a group (five individuals)
|
37,500
|
*
|
—
|
—
|
||||||||||||
|
LF Group DMCC(5)
|
—
|
—
|
1,500,000
|
5.22
|
%
|
|||||||||||
|
Adage Capital Partners, L.P.(6)
|
—
|
—
|
1,500,000
|
5.22
|
%
|
|||||||||||
|
PIK Invest Ltd(7)
|
—
|
—
|
2,000,000
|
7.0
|
%
|
|||||||||||
| * |
Less than one percent.
|
| (1) |
Unless otherwise noted, the business address of each of our shareholders is 8th Floor, Berkeley Square House, Berkeley Square, London, W1J 6DB, United Kingdom.
|
| (2) |
Interests shown consist solely of founder shares, classified as Class B ordinary shares. The Class B ordinary shares will automatically convert into Class A ordinary shares of the company at the time of the
company’s initial business combination, or earlier at the option of the holder, on a one-for-one basis, subject to adjustment, as more fully described under the heading “Description of Securities—Founder Shares” in the company’s prospectus
filed pursuant to Rule 424(b)(4) (File No. 333-258393).
|
| (3) |
New Emerging Markets Horizon, our sponsor, is the record holder of the Class B ordinary shares reported herein. Our sponsor is managed by FPP Capital Advisers, an affiliate of FPP AM. FPP may be deemed to
beneficially own shares held by our sponsor by virtue of its control over our sponsor. Riccardo Orcel holds a non-voting 19.99% membership interest in our sponsor. Other than FPP, no member of our sponsor exercises voting or dispositive
control over any of the shares held by our sponsor. Accordingly, none of them will be deemed to have or share beneficial ownership of such shares. FPP disclaims beneficial ownership of our ordinary shares held by our sponsor, other than to
the extent of any pecuniary interest it may have therein, directly or indirectly.
|
| (4) |
Does not include any shares indirectly owned by this individual as a result of their membership interest in our sponsor.
|
| (5) |
According to a Schedule 13G filed with the SEC on December 20, 2021, each of LF Group DMCC and Sergey Lomakin may be deemed to be the beneficial owner of 1,500,000 Class A ordinary shares. Each of LF Group
DMCC and Sergey Lomakin may be deemed to have sole voting and sole dispositive power over 1,500,000 Class A ordinary shares. The principal business address of each of LF Group DMCC and Sergey Lomakin is 4316, DMCC Business Centre, Level No
1, Jewellery & Gemplex 3, Dubai, United Arab Emirates.
|
| (6) |
According to a Schedule 13G filed with the SEC on December 27, 2021, each of Adage Capital Partners, L.P. (“ACP”), Adage Capital Partners GP, L.L.C. (“ACPGP”), Adage Capital Advisors, L.L.C. (“ACA”), Robert
Atchinson and Phillip Gross may be deemed to be the beneficial owner of 1,500,000 Class A ordinary shares. ACP has the power to dispose of and the power to vote the Class A Ordinary Shares beneficially owned by it, which power may be
exercised by its general partner, ACPGP. ACA, as managing member of ACPGP, directs ACPGP’s operations. Neither ACPGP nor ACA directly own any Class A Ordinary Shares. Messrs. Atchinson and Gross, as managing members of ACA, have shared
power to vote the Class A Ordinary Shares beneficially owned by ACP. Neither Mr. Atchinson nor Mr. Gross directly own any Class A Ordinary Shares. Each of ACP, ACPGP, ACA, Mr. Atchinson and Mr. Gross may be deemed to have shared voting and
shared dispositive power of 2,000,000 Class A ordinary shares. The principal business address of each of ACP, ACPGP, ACA, Mr. Atchinson and Mr. Gross is 200 Clarendon Street, 52nd Floor, Boston, Massachusetts 02116.
|
| (7) |
According to a Schedule 13G filed with the SEC on December 23, 2021, each of PIK Invest Ltd, International LLC Ledamen, PIK + LLC, HREF Foundation and Mr. Sergey Gordeev may be deemed to be the beneficial
owner of 2,000,000 Class A ordinary shares. PIK Invest Ltd is wholly owned by International LLC Ledamen. International LLC Ledamen is wholly owned by PIK + LLC. PIK + LLC is wholly owned by HREF Foundation. HREF Foundation is controlled
by Mr. Gordeev. Each of PIK Invest Ltd, International LLC Ledamen, PIK + LLC, HREF Foundation and Mr. Sergey Gordeev may be deemed to have shared voting and shared dispositive power of 2,000,000 Class A ordinary shares. The principal
business address of PIK Invest Ltd is Faneromenis, 106, 3rd Floor, Flat/Office 301, 6031, Larnaca, Cyprus. The principal business address of International LLC Ledamen is Premises B/70, 25, Solnechniy Boulevard, Kaliningrad, Urban District
Kaliningrad, Kaliningrad Region, 236006. The principal business address of PIK + LLC is Room 7, Premises I, 7th Floor, 19, Barrikadnaya Street, Moscow, 123242. The principal business address of HREF Foundation is SCHREIBER & ZINDEL
Treuhand-Anstalt, Kirchstrasse 39; 9490 Vaduz, Liechtenstein. The principal business address of Mr. Gordeev is bld.1, 19, Barrikadnaya Street, Moscow, 123242.
|
Transfers of Founder Shares and Private Placement Warrants
The founder shares, the private placement warrants and any Class A ordinary shares issued upon conversion or exercise thereof are each subject to transfer restrictions pursuant to lock-up provisions in the agreement entered
into by our sponsor and management team. Our sponsor and each member of our management team have agreed not to transfer, assign or sell any of their founder shares until the earliest of (a) one year after the completion of our initial business
combination and (b) subsequent to our initial business combination, (x) if the closing price of our Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share subdivisions, share capitalizations, reorganizations,
recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination or (y) the date on which we complete a liquidation, merger, share exchange or other similar
transaction that results in all of our public shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property. The private placement warrants and the respective Class A ordinary shares underlying such
warrants are not transferable, assignable or salable until 30 days after the completion of our initial business combination. The foregoing restrictions are not applicable to transfers (a) to our officers or directors, any affiliates or family members
of any of our officers or directors, any members or partners of our sponsor or their affiliates, any affiliates of our sponsor, or any employees of such affiliates; (b) in the case of an individual, by gift to a member of one of the individual’s
immediate family or to a trust, the beneficiary of which is a member of the individual’s immediate family, an affiliate of such person or to a charitable organization; (c) in the case of an individual, by virtue of laws of descent and distribution
upon death of the individual; (d) in the case of an individual, pursuant to a qualified domestic relations order; (e) by private sales or transfers made in connection with any forward purchase agreement or similar arrangement or in connection with
the consummation of a business combination at prices no greater than the price at which the founder shares, private placement warrants or Class A ordinary shares, as applicable, were originally purchased; (f) by virtue of the laws of the Cayman
Islands or our sponsor’s organizational documents upon liquidation or dissolution of our sponsor; (g) to the company for no value for cancellation in connection with the consummation of our initial business combination; (h) in the event of our
liquidation prior to the completion of our initial business combination; or (i) in the event of our completion of a liquidation, merger, share exchange or other similar transaction which results in all of our public shareholders having the right to
exchange their Class A ordinary shares for cash, securities or other property subsequent to our completion of our initial business combination; provided, however, that in the case of clauses (a) through (f) these permitted transferees must enter into
a written agreement agreeing to be bound by these transfer restrictions and the other restrictions contained in the letter agreement.
| ITEM 13. |
Founder Shares
On May 11, 2021, our prior sponsor paid $25,000, or approximately $0.003 per share, to cover certain expenses on our behalf in consideration of 7,187,500 Class B ordinary shares, par value $0.0001. On December 8, 2021, our prior sponsor
transferred 12,500 Class B ordinary shares to each of our independent directors. On June 8, 2022, our prior sponsor transferred its remaining 7,150,000 Class B ordinary shares to our sponsor. The number of founder shares issued was determined based
on the expectation that such founder shares would represent 20% of the issued and outstanding shares upon completion of our initial public offering.
The founder shares (including the Class A ordinary shares issuable upon exercise thereof) may not, subject to certain limited exceptions, be transferred, assigned or sold by the holder.
Private Placement Warrants
Pursuant to a written agreement, our prior sponsor purchased an aggregate of 9,000,000 private placement warrants for a purchase price of $1.50 per whole warrant in a private placement that occurred simultaneously with the closing of our initial
public offering. On June 8, 2022, our prior sponsor transferred its 9,000,000 private placement warrants to our sponsor. As such, our sponsor’s interest in this transaction is valued at $13,500,000. The proceeds from the initial public offering and
the private placement warrants (initially totaling $293,250,000) are held in the trust account. Each private placement warrant entitles the holder to purchase one Class A ordinary share at $11.50 per share, subject to adjustment. The private
placement warrants (including the Class A ordinary shares issuable upon exercise thereof) may not, subject to certain limited exceptions, be transferred, assigned or sold by the holder until 30 days after the completion of our initial business
combination.
Promissory Note
Prior to the closing of the initial public offering, our prior sponsor agreed to loan us up to $300,000 to be used for a portion of the expenses of the initial public offering pursuant to a promissory note. The loan was non-interest bearing,
unsecured and due at the earlier of December 31, 2021 or the closing of the initial public offering. We borrowed $275,000 under the promissory note, which was repaid upon the closing of the initial public offering on December 13, 2021 out of the
offering proceeds not held in the trust account.
Related Party Loans
In addition, in order to finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate of our sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as
may be required. If we complete an initial business combination, we may repay such loaned amounts out of the proceeds of the trust account released to us. In the event that the initial business combination does not close, we may use a portion of
the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used for such repayment. The terms of such loans by our officers and directors, if any, have not been determined and no
written agreements exist with respect to such loans as of December 31, 2021. We do not expect to seek loans from parties other than our sponsor, its affiliates or our management team 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. On September 9, 2022, we entered into a Working Capital Loan (as defined below) with our sponsor in the form of a
promissory note (the “2022 Note”). Pursuant to the 2022 Note, we may borrow from the Sponsor, from time to time, up to an aggregate of $1,500,000. Borrowings under the 2022 Note will not bear interest. The 2022 Note will mature on the earlier to
occur of (i) the effective date of our Business Combination or (ii) the date that the winding up of the Company becomes effective. The 2022 Note contains customary events of default, including those relating to our failure to repay the principal
amount due upon maturity of the 2022 Note and certain bankruptcy events. $561,996 has been drawn and is outstanding under the 2022 Note as of the date of this Report.
After our initial business combination, members of our management team who remain with us may be paid consulting, management or other fees from the combined company with any and all amounts being fully disclosed to our shareholders, to the extent
then known, in the tender offer or proxy solicitation materials, as applicable, furnished to our shareholders. It is unlikely the amount of such compensation will be known at the time of distribution of such tender offer materials or at the time of a
shareholder meeting held to consider our initial business combination, as applicable, as it will be up to the directors of the post-combination business to determine executive and director compensation.
Registration and Shareholder Rights
We have entered into a registration and shareholder rights agreement, pursuant to which our sponsor will be entitled to certain registration rights with respect to the private placement warrants and the Class A ordinary
shares issuable upon exercise of the foregoing and upon conversion of the founder shares, as long as our sponsor holds any securities covered by the registration and shareholder rights agreement, which is filed as Exhibit 10.2 to this Report. We will
bear the expenses incurred in connection with the filing of any such registration statements.
Policy for Approval of Related Party Transactions
The audit committee of our board of directors has adopted a charter, providing for the review, approval and/or ratification of “related party transactions,” which are those transactions required to be disclosed pursuant to
Item 404 of Regulation S-K as promulgated by the SEC, by the audit committee. At its meetings, the audit committee shall be provided with the details of each new, existing, or proposed related party transaction, including the terms of the
transaction, any contractual restrictions that we have already committed to, the business purpose of the transaction, and the benefits of the transaction to us and to the relevant related party. Any member of the committee who has an interest in the
related party transaction under review by the committee shall abstain from voting on the approval of the related party transaction, but may, if so requested by the chairman of the committee, participate in some or all of the committee’s discussions
of the related party transaction. Upon completion of its review of the related party transaction, the committee may determine to permit or to prohibit the related party transaction.
As more fully discussed elsewhere in this Report, 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 then-current fiduciary
or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such opportunity to such entity. Our officers and directors currently have certain relevant fiduciary duties or contractual obligations that
may take priority over their duties to us.
No compensation of any kind, including finder’s and consulting fees, is paid by the company to our sponsor, officers and directors, or their respective affiliates, for services rendered prior to or in connection with the completion of an initial
business combination. However, these individuals will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business
combinations. Our audit committee reviews on a quarterly basis all payments that were made by us to our sponsor, officers, directors or their affiliates and will determine which expenses and the amount of expenses that will be reimbursed. There is no
cap or ceiling on the reimbursement of out-of-pocket expenses incurred by such persons in connection with activities on our behalf.
The following is a summary of fees paid to Marcum LLP, our independent registered public accounting firm, for services rendered.
Audit Fees. Audit fees consist of fees billed for professional services rendered for the audit of our year-end financial statements, reviews of our quarterly financial statements and services that are
normally provided by our independent registered public accounting firm in connection with statutory and regulatory filings. The aggregate fees billed by Marcum LLP for audit fees, inclusive of required filings with the SEC for the period from May 6,
2021 (inception) through December 31, 2021, and of services rendered in connection with our initial public offering and the preparation of this Form 10-K, totaled $79,825.
Audit-Related Fees. Audit-related fees consist of fees billed for assurance and related services that are reasonably related to performance of the audit of our year-end financial statements and are not
reported under “Audit Fees.” These services include attest services that are not required by statute or regulation and consultation concerning financial accounting and reporting standards. We did not pay Marcum LLP any audit-related fees during the
period from May 6, 2021 (inception) through December 31, 2021.
Tax Fees. Tax fees consist of fees billed for professional services relating to PFIC analysis, tax compliance, tax planning and tax advice. We did not pay Marcum LLP any tax fees during the period from May
6, 2021 (inception) through December 31, 2021.
All Other Fees. All other fees consist of fees billed for all other services. We did not pay Marcum LLP any other fees during the period from May 6, 2021 (inception) through December 31, 2021.
Pre-Approval Policy
Our audit committee was formed upon the consummation of our initial public offering. As a result, the audit committee did not pre-approve all of the foregoing services, although any services rendered prior to the formation of our audit committee
were approved by our management. Since the formation of our audit committee, and on a going-forward basis, the audit committee has and will pre-approve all auditing services and permitted non-audit services to be performed for us by our auditors,
including the fees and terms thereof (subject to the de minimis exceptions for non-audit services described in the Exchange Act which are approved by the audit committee prior to the completion of the audit).
PART IV
| (a) |
The following documents are filed as part of this Report on Form 10-K:
|
| (1) |
Financial Statements:
|
|
Page
|
|||
|
Report of Independent Registered Public Accounting Firm
|
F-2
|
||
|
Financial Statements
|
|||
|
Balance Sheet as of December 31, 2021
|
F-3
|
||
|
Statement of Operations for the period from May 6, 2021 (inception) through December 31, 2021
|
F-4
|
||
|
Statement of Changes in Shareholders’ Deficit for the period from May 6, 2021 (inception) through December 31, 2021
|
F-5
|
||
|
Statement of Cash Flows for the period from May 6, 2021 (inception) through December 31, 2021
|
F-6
|
||
|
Notes to Financial Statements
|
F-7 |
| (2) |
Financial Statement Schedules:
|
None.
| (3) |
Exhibits:
|
We hereby file as part of this Report the exhibits listed in the following Exhibit Index. Exhibits which are incorporated herein by reference can be obtained from the SEC’s website at www.sec.gov.
|
Exhibit No.
|
Description
|
|
|
Amended and Restated Memorandum and Articles of Association.(1)
|
||
|
Warrant Agreement, dated December 8, 2021, by and between Continental Stock Transfer & Trust Company and the Company.(1)
|
||
|
Description of Registrant’s Securities.*
|
||
|
Investment Management Trust Account Agreement, dated December 8, 2021, by and between Continental Stock Transfer & Trust Company and the Company.(1)
|
||
|
Registration and Shareholder Rights Agreement, dated December 8, 2021, by and among the Company, the Sponsor and certain other securityholders named therein.(1)
|
||
|
Private Placement Warrants Purchase Agreement, dated December 8, 2021, by and between the Company and the Sponsor.(1)
|
||
|
Letter Agreement, dated December 8, 2021, by and among the Company, the Sponsor and the Company’s officers and directors.(1)
|
||
|
Administrative Services Agreement, dated December 8, 2021, by and between the Company and the Sponsor.(1)
|
||
|
Form of Indemnity Agreement by and between the Company and each of its officers and directors of the Company.(1)
|
||
| Promissory Note, dated September 9, 2022, by and between the Company and the Sponsor.* |
||
|
Certification of the Principal Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a) or Rule 15d-14(a).*
|
||
|
Certification of the Principal Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a) or Rule 15d-14(a).*
|
||
|
Certification of the Principal Executive Officer pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
|
||
|
Certification of the Principal Financial Officer pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
|
| * |
Filed herewith
|
| ** |
Furnished herewith
|
| (1) |
Previously filed as an exhibit to our Current Report on Form 8-K filed with the SEC on December 14, 2021, and incorporated by reference herein.
|
Not applicable.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Act of 1934, the registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized.
| Date: September 12, 2022 | EMERGING MARKETS HORIZON CORP. | ||
| /s/ Jonathan Neill |
|||
| Name: | Jonathan Neill | ||
| Title: | Interim Chief Executive Officer and Director | ||
Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:
|
Name
|
Position
|
Date
|
||
|
Jonathan Neill
/s/ Jonathan Neill
|
Interim Chief Executive Officer and Director
(Principal Executive Officer)
|
September 12, 2022
|
||
|
Christopher Edwards
/s/ Christopher Edwards
|
Interim Chief Financial Officer and Director
(Principal Financial Officer)
|
September 12, 2022
|
||
|
Enrique Fernández Aisa
/s/ Enrique Fernández Aisa
|
Director
|
September 12, 2022
|
||
|
Konrad Kozik
/s/ Konrad Kozik
|
Director
|
September 12, 2022
|
||
|
Herbert Stepic
/s/ Herbert Stepic
|
Director
|
September 12, 2022
|
Emerging Markets Horizon Corp.
INDEX TO FINANCIAL STATEMENTS
|
Page
|
|
|
F-2
|
|
|
Financial Statements:
|
|
|
F-3
|
|
|
F-4
|
|
|
F-5
|
|
|
F-6
|
|
|
F-7
|
To the Shareholders and the Board of Directors of
Emerging Markets Horizon Corp.
Opinion on the Financial Statements
We have audited the accompanying balance sheet of Emerging Markets Horizon Corp. (the “Company”) as of December 31, 2021, the related statements of operations, changes in shareholders’ deficit and cash
flows for the period from May 6, 2021 (inception) through December 31, 2021, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the
financial position of the Company as of December 31, 2021, and the results of its operations and its cash flows for the period from May 6, 2021 (inception) through December 31, 2021, in conformity with accounting principles generally accepted in the
United States of America.
Explanatory Paragraph – Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 1 to the financial statements, the Company’s business
plan is dependent on the completion of a business combination and the Company’s cash and working capital as of December 31, 2021 are not sufficient to complete its planned activities for a reasonable period of time, which is considered to be one year
from the issuance date of the financial statements. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1. The financial
statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm
registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the
Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of
material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of
internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures
included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the
overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
/s/ Marcum llp
Marcum llp
We have served as the Company’s auditor since 2021.
Hartford, CT
EMERGING MARKETS HORIZON CORP.
DECEMBER 31, 2021
|
ASSETS
|
||||
|
Current Assets
|
||||
|
Cash
|
$
|
503,187
|
||
|
Other receivables
|
12,500
|
|||
|
Prepaid expenses - current
|
584,866
|
|||
|
Total Current Assets
|
1,100,553
|
|||
|
Investments held in Trust Account
|
293,251,371
|
|||
|
Prepaid expenses - non-current
|
116,668
|
|||
|
Total Assets
|
$
|
294,468,592
|
||
|
|
||||
|
LIABILITIES AND SHAREHOLDERS’ DEFICIT
|
||||
|
Current Liabilities
|
||||
|
Accounts payable and accrued expenses
|
$
|
133,563
|
||
|
Total Current Liabilities
|
133,563
|
|||
|
|
||||
|
Warrant liabilities
|
13,881,250
|
|||
|
Deferred underwriting commissions payable
|
10,062,500
|
|||
|
Total Liabilities
|
24,077,313
|
|||
|
Commitments and Contingencies
|
||||
|
Class A ordinary shares, $0.0001 par value, subject to possible redemption; 28,750,000 shares (at a redemption value of $10.20 per share)
|
293,251,371
|
|||
|
|
||||
|
Shareholders’ Deficit
|
||||
|
Preferred shares, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding
|
—
|
|||
|
Class A ordinary shares, $0.0001 par value; 300,000,000 shares authorized; none issued and outstanding (excluding 28,750,000 shares subject to possible redemption)
|
—
|
|||
|
Class B ordinary shares, $0.0001 par value; 30,000,000 shares authorized; 7,187,500 shares issued and outstanding
|
719
|
|||
|
Accumulated deficit
|
(22,860,811
|
)
|
||
|
Total Shareholders’ Deficit
|
(22,860,092
|
)
|
||
|
TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT
|
$
|
294,468,592
|
||
The accompanying notes are an integral part of the financial statements.
EMERGING MARKETS HORIZON CORP.
FOR THE PERIOD FROM MAY 6, 2021 (INCEPTION) THROUGH DECEMBER 31, 2021
|
Formation costs
|
$
|
3,471
|
||
|
Loss from operations
|
(3,471
|
)
|
||
|
Other income (expense):
|
||||
|
Change in fair value of warrant liabilities
|
15,427,500
|
|||
|
Insurance expenses
|
(23,333
|
)
|
||
|
Professional services
|
(58,729
|
)
|
||
|
Interest earned on investments held in Trust Account
|
1,371
|
|||
|
Offering costs allocated to warrants
|
(1,071,693
|
)
|
||
|
Other expenses
|
(5,317
|
)
|
||
|
Total other income, net
|
14,269,799
|
|||
|
Net Income
|
$
|
14,266,328
|
||
|
Weighted average Class A redeemable shares outstanding, basic and diluted
|
2,156,250
|
|||
|
Basic and diluted net income per Class A redeemable share outstanding
|
$
|
1.71
|
||
|
Weighted average Class B non-redeemable shares outstanding, basic
|
6,164,063
|
|||
|
Basic net income per Class B non-redeemable share outstanding
|
$
|
1.71
|
||
|
Weighted average Class B non-redeemable shares outstanding, diluted
|
7,007,813
|
|||
|
Diluted net income per Class B non-redeemable share outstanding
|
$
|
1.51
|
The accompanying notes are an integral part of the financial statements.
EMERGING MARKETS HORIZON CORP.
FOR THE PERIOD FROM MAY 6, 2021 (INCEPTION) THROUGH DECEMBER 31, 2021
|
Class B
Ordinary Shares
|
Additional
Paid in
Capital
|
Accumulated
Deficit
|
Total
Shareholders’
Deficit
|
|||||||||||||||||
|
Shares
|
Amount
|
|||||||||||||||||||
|
Balance – May 6, 2021 (inception)
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
|||||||||||
|
Issuance of Class B ordinary shares to Sponsor
|
7,187,500
|
719
|
24,281
|
—
|
25,000
|
|||||||||||||||
|
Proceeds from Private Placement Warrants in excess of fair value
|
—
|
—
|
—
|
2,160,000
|
2,160,000
|
|||||||||||||||
|
Accretion of net shares subject to possible redemption
|
—
|
—
|
(24,281
|
)
|
(39,287,139
|
)
|
(39,311,420
|
)
|
||||||||||||
|
Net income
|
—
|
—
|
—
|
14,266,328
|
14,266,328
|
|||||||||||||||
|
Balance – December 31, 2021
|
7,187,500
|
$
|
719
|
$
|
—
|
$
|
(22,860,811
|
)
|
$
|
(22,860,092
|
)
|
|||||||||
The accompanying notes are an integral part of the financial statements.
EMERGING MARKETS HORIZON CORP.
FOR THE PERIOD FROM MAY 6, 2021 (INCEPTION) THROUGH DECEMBER 31, 2021
|
Cash flows from Operating Activities:
|
||||
|
Net income
|
$
|
14,266,328
|
||
|
Adjustments to reconcile net income to net cash used in operating activities:
|
||||
|
Offering costs allocated to warrants
|
1,071,693
|
|||
|
Change in fair value of warrant liabilities
|
(15,427,500
|
)
|
||
|
Interest earned on investments held in Trust Account
|
(1,371
|
)
|
||
|
Changes in operating assets and liabilities:
|
||||
|
Prepaid expenses and other current assets
|
(714,034
|
)
|
||
|
Accounts payable and accrued expenses
|
133,563
|
|||
|
Net cash used in operating activities
|
(671,321
|
)
|
||
|
Cash flows from Investing Activities:
|
||||
|
Principal deposited into Trust Account
|
(293,250,000
|
)
|
||
|
Net cash used in investing activities
|
(293,250,000
|
)
|
||
|
Cash flows from Financing Activities:
|
||||
|
Proceeds from initial public offering, net of underwriting discount
|
281,750,000
|
|||
|
Proceeds from the sale of Private Placement warrants
|
13,500,000
|
|||
|
Proceeds from the issuance of Class B shares
|
25,000
|
|||
|
Proceeds from promissory note – related party
|
275,000
|
|||
|
Repayment of promissory note – related party
|
(275,000
|
)
|
||
|
Payment of offering costs
|
(850,492
|
)
|
||
|
Net cash provided by financing activities
|
294,424,508
|
|||
|
Net Change in Cash
|
$
|
503,187
|
||
|
Cash – Beginning of period
|
—
|
|||
|
Cash – End of period
|
$
|
503,187
|
||
|
Supplemental Disclosures of Noncash Financing Activities
|
||||
|
Initial value of common shares subject to possible redemption
|
$
|
253,939,951
|
||
|
Initial fair value of liability associated with warrants
|
$
|
29,308,750
|
||
|
Accretion of shares subject to possible redemption
|
$
|
39,311,420
|
||
|
Deferred underwriting commissions
|
$
|
10,062,500
|
||
The accompanying notes are an integral part of the financial statements.
EMERGING MARKETS HORIZON CORP.
NOTE 1 — DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
Emerging Markets Horizon Corp. (the “Company”) is a newly incorporated blank check company incorporated as a Cayman Islands exempted company on May 6, 2021. The Company was formed for the purpose of
effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (a “business combination”). On May 11, 2021, EM Horizon Investments (the “Prior Sponsor”) purchased
7,187,500 Class B ordinary shares of the Company in a private placement. On December 8, 2021, the Prior Sponsor transferred 12,500 Class B ordinary shares to each of the Company’s independent directors and, on June 8, 2022, it transferred its
remaining 7,150,000 Class B ordinary shares to our current sponsor, New Emerging Markets Horizon (the “Sponsor”).
The Sponsor is controlled by FPP Capital Advisers (“FPP”), an affiliate of FPP Asset Management LLP (“FPP AM”). Prior to June 8, 2022, the Company’s sponsor was the Prior Sponsor, which at its inception was
controlled by FPP, Riccardo Orcel and Nevsky Properties Limited (“Nevsky Properties”), which is in turn controlled by VTB. Following the imposition of sanctions relating to Russia by the United States and other jurisdictions, including blocking
sanctions against VTB as well as entities owned 50 percent or more, directly or indirectly, by VTB, we and the Prior Sponsor implemented certain remedial measures. On March 23, 2022, Nevsky Properties relinquished, irrevocably and in perpetuity,
its interest in the Sponsor to the fullest extent permitted by law and such interest was blocked by the Sponsor such that it no longer conferred under any circumstances any economic or voting rights upon Nevsky Properties. In addition, following
certain other changes in management effective on the same date, neither the Company nor its Prior Sponsor employed, had on its board of directors or received any services from any employees, representatives or affiliates of VTB. The Prior Sponsor
was controlled solely by FPP as of April 21, 2022, when Mr. Orcel agreed to suspend indefinitely his voting and management rights in the Prior Sponsor, though he remained a non-voting member and Nevsky Properties formally remained on the Prior
Sponsor’s register of members due to certain restrictions under applicable Cayman Islands law.
On June 8, 2022, the Company’s Prior Sponsor and Sponsor entered into a novation agreement, whereby the Prior Sponsor transferred all of its rights and obligations under each of the contracts to which it was a
party to the Sponsor, and a securities transfer agreement, whereby the Company’s Prior Sponsor transferred all of its founder shares and private placement warrants to the Sponsor. While the Company’s Sponsor remains controlled solely by FPP and
Mr. Orcel remains a non-voting member, Nevsky Properties is not on its register of members.
The Company intends to pursue a business combination with a target company in any stage of its corporate evolution. The Company intends to focus on identifying high growth technology and consumer-exposed
businesses in Western Europe, Central & Eastern Europe (“CEE”), the Commonwealth of Independent States (the “CIS”) (excluding Russia and Belarus) or Latin America. The Company is an early stage and emerging growth company and, as such, the
Company is subject to all of the risks associated with early stage and emerging growth companies.
As of December 31, 2021, the Company had not commenced any operations. All activity for the period from May 6, 2021 (inception) through December 31, 2021 relates to the Company’s formation and its initial
public offering (the “Initial Public Offering” or “IPO”), which is described below. The Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest. The Company will generate non-operating
income in the form of interest income from the proceeds derived from the Initial Public Offering. The Company has selected December 31 as its fiscal year end.
The registration statement for the Company’s Initial Public Offering was declared effective on December 8, 2021. On December 13, 2021, the Company consummated the Initial Public Offering of 28,750,000
units (the “Units” and, with respect to the Class A ordinary shares included in the Units being offered, the “Public Shares”) at $10.00 per Unit, which includes the full exercise of the underwriters’ over-allotment option (see Note 3), and the sale
of 9,000,000 warrants (the “Private Placement Warrants”), which includes the full exercise of the underwriters’ over-allotment option, at a price of $1.50 per Private Placement Warrant in a private placement to the Prior Sponsor that closed
simultaneously with the Initial Public Offering (see Note 4). The Prior Sponsor transferred its 9,000,000 Private Placement Warrants to the Sponsor on June 8, 2022.
As of December 31, 2021, transaction costs amounted to $16,662,992 consisting of $5,750,000 of underwriting fees, $10,062,500 of deferred underwriting fees payable (which are included in the balance
held in a trust account with Continental Stock Transfer and Trust Company acting as trustee (the “Trust Account”)), and $850,492 of other offering costs. These costs were charged to shareholders’ deficit upon completion of the Initial Public
Offering. As described in Note 6, the $10,062,500 deferred underwriting commission is contingent upon the consummation of a Business Combination within 15 months of the Initial Public Offering, or by March 13, 2023, unless the time period to
consummate a Business Combination is extended pursuant to the Company's amended and restated certificate of incorporation
The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, although
substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. Nasdaq rules provide that the Business Combination must be with one or more target businesses that together have a fair market
value equal to at least 80% of the balance in the Trust Account (less any deferred underwriting commissions and taxes payable on interest earned on the Trust Account) at the time of the signing a definitive agreement to enter a Business Combination.
The Company will only complete a Business Combination if the post-Business Combination company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for
it not to be required to register as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”). There is no assurance that the Company will be able to successfully effect a Business Combination. Upon
the closing of the Initial Public Offering on December 13, 2021, an amount of $293,250,000 ($10.20 per Unit), using the net proceeds from the sale of Units and the Private Placement Warrants, was placed in the Trust Account. The funds in the Trust
Account will be invested only in U.S. government treasury bills with a maturity of 185 days or less or in money market funds investing solely in U.S. Treasuries and meeting certain conditions under Rule 2a-7 under the Investment Company Act until the
earlier of: (i) the completion of a Business Combination and (ii) the distribution of the funds in the Trust Account to the Company’s shareholders, as described below.
The Company will provide its holders of the outstanding public shares (the “public shareholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business
Combination either (i) in connection with a shareholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a Business Combination or conduct
a tender offer will be made by the Company. The public shareholders will be entitled to redeem their shares for a pro rata portion of the amount held in the Trust Account (initially $10.20 per share), calculated as of two business days prior to the
completion of a Business Combination, including interest. The per-share amount to be distributed to the Public Shareholders who redeem their shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriter
(as discussed in Note 6). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants. The Public Shares will be recorded at redemption value and classified as temporary equity upon the
completion of the Initial Public Offering, in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 480, “Distinguishing Liabilities from Equity.”
The Company will proceed with a Business Combination only if the Company has net tangible assets of at least $5,000,001 either prior to or upon such consummation of a Business Combination and, if the
Company seeks shareholder approval, a majority of the shares voted are voted in favor of the Business Combination. If a shareholder vote is not required by law and the Company does not decide to hold a shareholder vote for business or other reasons,
the Company will, pursuant to its Amended and Restated Memorandum and Articles of Association (the “Amended and Restated Memorandum and Articles of Association”), conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and
Exchange Commission (“SEC”) and file tender offer documents with the SEC prior to completing a Business Combination. If, however, shareholder approval of the transaction is required by law, or the Company decides to obtain shareholder approval for
business or other reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company seeks shareholder approval in connection with a
Business Combination, the Sponsor has agreed to vote its Founder Shares (as defined in Note 5) and any Public Shares purchased during or after the Initial Public Offering in favor of approving a Business Combination. Additionally, each public
shareholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction or don’t vote at all.
Notwithstanding the above, if the Company seeks shareholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the Amended and Restated Memorandum
and Articles of Association provides that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 15% or more of the Public Shares, without the prior consent of the Company.
The Sponsor has agreed (a) to waive its redemption rights with respect to its Founder Shares and Public Shares held by it in connection with the completion of a Business Combination, (b) to waive its
liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination by March 13, 2023 (or June 13, 2023 if the Company has executed a letter of intent, agreement in principle or definitive agreement for the
Business Combination within 15 months from the closing of Initial Public Offering but have not completed the Business Combination within such 15-month period), and (c) not to propose an amendment to the Amended and Restated Memorandum and Articles of
Association (i) to modify the substance or timing of the Company’s obligation to allow redemption in connection with the Company’s initial Business Combination or to redeem 100% of its Public Shares if the Company does not complete a Business
Combination or (ii) with respect to any other provision relating to shareholders’ rights or pre-initial business combination activity, unless the Company provides the public shareholders with the opportunity to redeem their Public Shares in
conjunction with any such amendment.
The Company will have until March 13, 2023 (or June 13, 2023, as applicable) (as such period may be extended pursuant to the Company’s Amended and Restated Memorandum and Articles of Association) to
complete a Business Combination (the “Combination Period”). If the Company is unable to complete a Business Combination within the Combination Period, the Company 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 the Company to pay its tax obligations (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 shareholders’ rights as shareholders (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 Company’s remaining
shareholders and the Company’s board of directors, dissolve and liquidate, subject in each case to the Company’s obligations under Cayman Island 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 the Company’s warrants, which will expire worthless if the Company fails to complete a Business Combination within the Combination
Period.
The Sponsor has agreed to waive its liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination within the Combination Period. However, if the Sponsor
acquires Public Shares in or after the Initial Public Offering, such Public Shares will be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business Combination within the Combination Period. The
underwriters have agreed to waive their rights to their deferred underwriting commission (see Note 6) held in the Trust Account in the event the Company does not complete a Business Combination within the Combination Period and, in such event, such
amounts will be included with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value of the assets remaining available
for distribution will be less than the Initial Public Offering price per Unit ($10.00).
In order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the
Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (1) $10.20 per Public Share or (2) the actual amount per Public Share held
in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay our taxes. This liability will not apply with respect to
any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities,
including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any
liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (except the Company’s
independent registered public accounting firm), prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in
the Trust Account.
Liquidity and Capital Resources
As of December 31, 2021, the Company had $503,187 in its operating bank account, and working capital of $966,990.
Prior to the completion of the IPO, the Company’s liquidity needs had been satisfied through a capital contribution from the Prior Sponsor of $25,000, to cover certain offering costs, for common stock
with respect to the Founder Shares, and the loan under an unsecured promissory note from the Prior Sponsor of $275,000. The Company fully repaid the outstanding amounts under the promissory note to the Prior Sponsor on December 13, 2021. Subsequent
to the consummation of the IPO and Private Placement, the Company’s liquidity needs have been satisfied through the proceeds from the consummation of the Private Placement not held in the Trust Account. The Sponsor is expected to provide all
necessary financial support through Working Capital Loans (as defined below), equity financing, or a combination thereof, to enable the Company to meet its financial obligations as they become due through twelve months from the date the financial
statements are issued.
Based on the foregoing, management believes that the Company will have sufficient cash and borrowing capacity to meet its needs through the earlier of the consummation of a Business Combination or one
year from this filing. Over this time period, the Company will be using these funds for paying existing accounts payable, identifying and evaluating prospective Business Combination candidates, performing due diligence on prospective target
businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and consummating the Business Combination.
Going Concern Consideration
The Company assesses going concern considerations in accordance with Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s
Ability to Continue as a Going Concern.” As of December 31, 2021, the Company had cash held outside of the Trust Account of $503,187 and has incurred and expects to continue to incur significant costs in pursuit of its financing and
acquisition plans. The Company will be using the funds in its operating account for paying existing accounts payable, identifying and evaluating prospective initial Business Combination candidates, performing due diligence on prospective target
businesses, paying for travel expenditures, selecting the target business to merge with or acquire, paying general operating and administrative expenses, and structuring, negotiating and consummating the Business Combination. Although the Company
believes that it will have sufficient working capital and borrowing capacity to meet its needs through the earlier of the consummation of a Business Combination or one year from this filing, there is a risk that the Company’s liquidity may not be
sufficient. Additionally, in order to finance transaction costs in connection with a Business Combination, the Company’s Sponsor, or an affiliate of the Sponsor or certain of the Company’s officers and directors may, but are not obligated to,
provide the Company with Working Capital Loans, as defined below (see Note 5). As of December 31, 2021, there were no amounts outstanding under any Working Capital Loans.
The Company is focused on identifying high-growth technology and consumer-exposed businesses in Western Europe, CEE, the CIS (excluding Russia and Belarus) or Latin America. The recent actions by Russia
against Ukraine and subsequent sanctions against Russia, Belarus and related individuals and entities have created global security concerns that could have a lasting impact on regional and global economies (see Note 10). In response to the
imposition of such sanctions, the Company has adjusted its target region to exclude Russia and Belarus.
In addition, the end of the Combination Period will occur prior to one year after the issuance of our financial statements. There is no assurance that the Company’s plans to consummate a Business
Combination will be successful during the Combination Period. As outlined in the Company’s certificate of incorporation, if the Company does not complete, have an agreement in principle or a definitive agreement for a business combination by the end
of the Combination Period, the Company will cease operations and redeem its public shares. Although the Company is continuing its pursuit of potential targets for an initial business combination, the end of the Combination Period occurring prior to
one year after the issuance of our financial statements creates substantial doubt regarding the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this
uncertainty.
Risks and Uncertainties
Management is currently evaluating the impact of the COVID-19 pandemic and the Russia-Ukraine war on the target industries and has concluded that while it is reasonably possible that the virus and/or the
war could have a negative effect on the Company’s financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable as of the date of the financial statements. The financial statements
do not include any adjustments that might result from the outcome of these uncertainties.
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the
SEC.
Emerging Growth Company
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it 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 independent registered public accounting
firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding
advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
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 election to opt out is irrevocable. The Company has 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, the Company, 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 the Company’s 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.
Use of Estimates
The preparation of the financial statement in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at
the date of the financial statement, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. One of the more significant accounting estimates included in these financial
statements is the determination of the fair value of the warrant liabilities. Such estimates may be subject to change as more current information becomes available and, accordingly, the actual results could differ significantly from those and other
estimates.
Cash and Cash Equivalents
The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company had cash of $503,187 as of December 31, 2021.
Investments Held in Trust Account
At December 31, 2021, the Company had $293,251,371 in cash and marketable securities held in the Trust Account.
Offering Costs associated with the Initial Public Offering
The Company complies with the requirements of FASB ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A — “Expenses of
Offering.” Offering costs totaling $16,662,992 (consisting of $5,750,000 of underwriting fees, $10,062,500 of deferred underwriting fees payable, and $850,492 of other offering costs) were charged to
shareholders’ deficit. Other offering costs consist principally of costs incurred in connection with the Initial Public Offering. Of these total amounts, $1,071,693 was allocated to the warrants and included in non-operating expense.
Ordinary Shares Subject to Possible Redemption
The Company accounts for its ordinary shares subject to possible redemption in accordance with the guidance in ASC Topic 480, “Distinguishing Liabilities from Equity.”
Ordinary shares subject to mandatory redemption are classified as a liability instrument and are measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that are either within the
control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, ordinary shares are classified as a component of shareholders’
deficit. The Company’s Class A ordinary shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, at December 31, 2021, the shares of Class
A ordinary shares subject to possible redemption in the amount of $293,251,371 are presented as temporary equity, outside of the shareholders’ deficit section of the Company’s balance sheet.
The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable shares of Class A ordinary shares to equal the redemption value at the end of each
reporting period. Immediately upon the closing of the Initial Public Offering, the Company recognized a measurement adjustment from initial book value to redemption value. The change in the carrying value of redeemable Class A ordinary shares
resulted in charges against additional paid-in capital and accumulated deficit of approximately $39.3 million.
The activity in Class A ordinary shares subject to possible redemption for the period from May 6, 2021 (inception) through December 31, 2021 is as follows:
|
Class A ordinary shares subject to possible redemption at May 6, 2021 (inception)
|
$
|
—
|
||
|
Gross proceeds from the sale of Class A ordinary shares in IPO
|
287,500,000
|
|||
|
Less:
|
||||
|
Fair value of Public Warrants at issuance
|
(17,968,750
|
)
|
||
|
Issuance costs on Class A shares
|
(15,591,299
|
)
|
||
|
Plus:
|
||||
|
Accretion of shares subject to possible redemption to redemption value
|
39,311,420
|
|||
|
Class A ordinary shares subject to possible redemption at December 31, 2021
|
$
|
293,251,371
|
The Class B ordinary shares are classified as a component of shareholders’ deficit since they are not subject to possible redemption outside of the Company’s control.
Income Taxes
The Company is considered an exempted Cayman Islands company and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States. As such, the
Company's tax provision was zero for the period presented.
The Company accounts for income taxes under ASC 740, "Income Taxes" ("ASC 740"). ASC 740 requires the recognition of deferred tax assets and liabilities for both
the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation
allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.
ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements and prescribes a recognition threshold and measurement process for financial
statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The
Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31 2021. The Company is currently
not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Depository
Insurance Coverage of $250,000. The Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account.
Fair Value Measurements
Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. GAAP
establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1
measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:
| • |
Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;
|
| • |
Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for
identical or similar instruments in markets that are not active; and
|
| • |
Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one
or more significant inputs or significant value drivers are unobservable.
|
In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its
entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement.
Derivative Financial Instruments
The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, “Derivatives and Hedging”. Derivative instruments are initially recorded at fair value on the issuance date and re-valued at each reporting date, with changes in the fair value reported in the statements of
operations. Derivative assets and liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date.
Fair Value of Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the
carrying amounts represented in the accompanying balance sheet, primarily due to their short-term nature.
Warrant Liabilities
The Company accounts for warrants as liability-classified instruments based on an assessment of the warrants’ specific terms and applicable authoritative guidance in ASC Topic 480, “Distinguishing Liabilities from Equity” (“ASC 480”), and ASC Topic 815, “Derivatives and Hedging” (“ASC 815”). The assessment considers whether the warrants are
freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed
to the Company’s own common shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires
the use of professional judgment, is conducted at the time warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity
classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all of the criteria for equity classification, the warrants are required
to be recorded as liabilities at their initial fair value on the date of issuance and adjusted to fair value at each balance sheet date thereafter. Based on its assessment, the Company will account for its warrants as liability-classified.
Net Income Per Common Share
Net income per common share is computed by dividing net income by the weighted average number of common shares outstanding during the period. The calculation of diluted income per common share does not
consider the effect of the warrants issued in connection with the (i) IPO, (ii) exercise of over-allotment and (iii) Private Placement since the exercise of the warrants is contingent upon the occurrence of future events and the inclusion of such
warrants would be anti-dilutive under the treasury stock method. The warrants are exercisable to purchase 9,000,000 shares of common stock in the aggregate.
The Company’s statements of operations include a presentation of income per share for common stock subject to possible redemption in a manner similar to the two-class method of income per common share.
Net income per common share, basic and diluted, for redeemable common stock is calculated by dividing the proportional amount of net income by the weighted average number of redeemable common shares outstanding during the period.
Net income per common share, basic and diluted, for non-redeemable common stock is calculated by dividing the net income, adjusted for income attributable to redeemable common stock, by the weighted
average number of non-redeemable common shares outstanding during the period. Non-redeemable common stock includes the Founder Shares as these common shares do not have any redemption features and do not participate in the income earned on the
Trust Account. The weighted average number of non-redeemable common shares used for calculating basic net income per common share was reduced for the effect of an aggregate of 937,500 shares of Class B common stock that were subject to forfeiture
until the over-allotment option was exercised by the underwriters on December 13, 2021 (see Note 5), upon which date the forfeiture provision lapsed. Since the contingency was satisfied as of December 31, 2021, the Company includes these shares in
the weighted average number of non-redeemable common shares as of the beginning of the period to determine the dilutive impact of these shares.
The following table reflects the calculation of basic and diluted income per common share for the period from May 6, 2021 (inception) through December 31, 2021:
|
Common shares subject to possible redemption
|
||||
|
Numerator: Net income allocable to common shares subject to possible redemption
|
$
|
3,697,189
|
||
|
Denominator: Weighted average Class A redeemable common shares Weighted average Class A redeemable common shares outstanding, basic and diluted
|
2,156,250
|
|||
|
Basic and diluted net income per share, Class A redeemable common stock
|
$
|
1.71
|
||
|
Non-Redeemable Common Stock
|
||||
|
Numerator: Net income minus redeemable net earnings
|
||||
|
Net income
|
$
|
14,266,328
|
||
|
Less: redeemable net income
|
(3,697,189
|
)
|
||
|
Non-redeemable net income
|
$
|
10,569,139
|
||
|
Denominator: Weighted average Class B non-redeemable common shares Weighted average Class B non-redeemable common shares outstanding, basic
|
6,164,063
|
|||
|
Weighted average Class B non-redeemable common shares outstanding, diluted
|
7,007,813
|
|||
|
Basic net income per share, Class B non-redeemable common stock
|
$
|
1.71
|
||
|
Diluted net income per share, Class B non-redeemable common stock
|
$
|
1.51
|
||
Recent Accounting Standards
In August 2020, the FASB issued Accounting Standards Update (“ASU”) 2020-06, “Debt — Debt with Conversion and Other Options (Subtopic 470-20)”
and “Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40: Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity)” (“ASU 2020-06”) to simplify accounting for
certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to
equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends
the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 is effective on January 1, 2022 and should be applied on a full or modified retrospective basis, with
early adoption permitted beginning on January 1, 2021. The Company adopted ASU 2020-06 effective on May 6, 2021 (inception) and it did not have a material impact on its financial position, results of operations or cash flows.
Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statement.
NOTE 3 — INITIAL PUBLIC OFFERING
Pursuant to the Initial Public Offering, the Company sold 28,750,000 Units, including 3,750,000 Units issued pursuant to the full exercise by the underwriters of their over-allotment option at a purchase
price of $10.00 per Unit. Each Unit consists of one Class A ordinary share of the Company and one-half of one redeemable warrant (“Public Warrant”). Each Public Warrant will entitle the holder to purchase one Class A ordinary share at an exercise
price of $11.50 per whole share, subject to adjustment (see Note 8).
NOTE 4 — PRIVATE PLACEMENT
Upon the closing of the Initial Public Offering, the underwriters fully exercised their over-allotment option. The Sponsor and underwriters purchased 9,000,000 warrants (including 1,000,000 warrants
issued pursuant to the full exercise by the underwriters of their over-allotment), at a price of $1.50 per Private Placement Warrant, for an aggregate purchase price of $13,500,000. Each Private Placement Warrant is exercisable to purchase one Class
A ordinary share at a price of $11.50 per share, subject to adjustment (see Note 8).
A portion of the gross proceeds from the Private Placement Warrants was added to the proceeds from the Initial Public Offering held in the Trust Account, while the remaining proceeds were used for working
capital purposes. If the Company does not complete a Business Combination within the Combination Period, the proceeds from the sale of the Private Placement Warrants will be used to fund the redemption of the Public Shares (subject to the
requirements of applicable law) and the Private Placement Warrants will expire worthless.
Subject to certain limitations, the Sponsor, officers, directors and underwriters have agreed to not transfer, assign or sell the Private Placement Warrants until 30 days after the completion of the
Company’s Initial Public Offering.
NOTE 5 — RELATED PARTY TRANSACTIONS
Founder Shares
On May 11, 2021, the Prior Sponsor purchased 7,187,500 Class B ordinary shares of the Company (the “Founder Shares”), including an aggregate of up to 937,500 shares subject to forfeiture to the extent
that the underwriters’ overallotment was not exercised in full or in part, for an aggregate purchase price of $25,000, which covered deferred offering costs paid directly by the Prior Sponsor. Upon the completion of the Initial Public Offering on
December 13, 2021, the underwriters fully exercised their over-allotment option and therefore 937,500 Founder Shares are no longer subject to forfeiture. On December 8, 2021, the Prior Sponsor transferred 12,500 Class B ordinary shares to each of the
Company’s independent directors and, on June 8, 2022, it transferred its remaining 7,150,000 Class B ordinary shares to the Sponsor.
The Sponsor has agreed, subject to certain limited exceptions, not to transfer, assign or sell any of the Founder Shares until the earlier to occur of: (i) one year after the completion of a Business
Combination, and (ii) subsequent to the Business Combination, (A) if the last reported sale price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and
the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after a Business Combination, or (B) the date on which the Company completes a liquidation, merger, capital stock exchange or other similar transaction
that results in all of the Company’s shareholders having the right to exchange their ordinary shares for cash, securities or other property.
Administrative Services Agreement
The Company is party to an agreement to pay the Sponsor a total of up to $5,000 per month for business and administrative support services. Upon completion of the Business Combination or the Company’s
liquidation, the Company will cease paying these monthly fees, to the extent they have been incurred.
Promissory Note — Related Party
On May 13, 2021, the Prior Sponsor agreed to loan the Company an aggregate of up to $300,000 to cover expenses related to the Initial Public Offering pursuant to a promissory note (the “Note”). The Note
was non-interest bearing and payable on the earlier of December 31, 2021 or the completion of the Initial Public Offering. The Company borrowed a total of $275,000 under the Note during 2021 and, on December 13, 2021, the Company repaid $275,000
using proceeds from the Initial Public Offering to pay off the borrowings outstanding under the Note.
Related Party Loans
In order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor or certain of the Company’s directors and officers may enter into agreements
to loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise,
the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working
Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with
respect to such loans. The Working Capital Loans would be repaid upon consummation of a Business Combination, without interest. As of December 31, 2021, no Working Capital Loans were outstanding. On September 9, 2022, we entered into a Working
Capital Loan with our Sponsor in the form of a promissory note (the “2022 Note”). Pursuant to the 2022 Note, we may borrow from the Sponsor, from time to time, up to an aggregate of $1,500,000. Borrowings under the 2022 Note will not bear interest.
The 2022 Note will mature on the earlier to occur of (i) the effective date of our Business Combination or (ii) the date that the winding up of the Company becomes effective. The 2022 Note contains customary events of default, including those
relating to our failure to repay the principal amount due upon maturity of the 2022 Note and certain bankruptcy events. $561,996 has been drawn and is outstanding under the 2022 Note as of the date that the financial statements were issued (see
Note 10 for additional information).
NOTE 6 — COMMITMENTS
Registration Rights
The holders of the Founder Shares and the Private Placement Warrants (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon
conversion of the Founder Shares) will be entitled to registration rights pursuant to a registration rights agreement requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to the Class
A ordinary shares). The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect
to registration statements filed subsequent to the completion of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement
will provide that the Company will not be required to effect or permit any registration or cause any registration statement to become effective until termination of the applicable lock-up period. The Company will bear the expenses incurred in
connection with the filing of any such registration statements. A contingent obligation would be recognized once a demand is received, as the amount of the contingency could then be reasonably estimated. As of December 31, 2021, the Company has not
recorded a registration right contingent obligation, as no demands have come forth.
Underwriting Agreement
The Company granted the underwriters a 45-day option to purchase up to 3,750,000 additional Units to cover over-allotments at the Initial Public Offering price, less the underwriting discounts and
commissions. The underwriters fully exercised their over-allotment option upon the closing of the Initial Public Offering.
The underwriters were paid a cash underwriting discount of $0.20 per Unit, or $5,750,000 in the aggregate, upon the closing of the Initial Public Offering. The underwriters are also entitled to a deferred
fee of $0.35 per Unit, or $10,062,500. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting
agreement.
In addition to the underwriting discount, the Company has agreed to pay for the FINRA-related fees and expenses of the underwriters’ legal counsel and certain diligence and other fees. The Company will
also reimburse the underwriters for background checks on our directors, director nominees and executive officers.
NOTE 7 — SHAREHOLDERS’ DEFICIT
Preference Shares — The Company is authorized to issue 1,000,000 preference shares with a par value of $0.0001 per share, with such
designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. At December 31, 2021, there were no shares of preferred stock issued or outstanding.
Class A Ordinary Shares — The Company is authorized to issue up to 300,000,000 Class A ordinary shares, par value $0.0001 per share. Holders of
the Company’s Class A ordinary shares are entitled to one vote per share. At December 31, 2021, there were 28,750,000 Class A ordinary shares issued and outstanding. The Company’s Class A ordinary shares are considered conditionally redeemable shares
and are classified as temporary equity in accordance with guidance under ASC 480.
Class B Ordinary Shares — The Company is authorized to issue up to 30,000,000 Class B ordinary shares, par value $0.0001 per share. Holders
of the Company’s Class B ordinary shares are entitled to one vote per share. At December 31, 2021, there were 7,187,500 Class B ordinary shares issued and outstanding.
Upon the consummation of the IPO, the Prior Sponsor transferred 12,500 Class B shares to each of the Company’s three independent directors (the “Transferred Shares”). The Transferred Shares were
evaluated under ASC 718, “Stock Compensation” (“ASC 718”) for potential recording of stock-based compensation. The Company determined that the Transferred Shares are equity-classified awards that would only
be recognized when it is probable that a Business Combination will occur. At the grant date of December 8, 2021, the 37,500 Transferred Shares had a fair value of $6.50 per share, with total estimated fair value of $243,750.
Prior to the consummation of a Business Combination, only holders of Class B ordinary shares have the right to vote on the election of directors. Holders of Class A ordinary shares and Class B ordinary
shares will vote together as a single class on all other matters submitted to a vote of shareholders, except as required by law.
The Class B ordinary shares will automatically convert into Class A ordinary shares at the time of a Business Combination, or earlier at the option of the holder, at a ratio such that the number of Class
A ordinary shares issuable upon conversion of all Class B ordinary shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of the total number of all ordinary shares outstanding upon completion of the Initial Public Offering
plus all Class A ordinary shares issued, or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of a Business
Combination (excluding any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, or to be issued, to any seller in a Business Combination). In no event will the Class B ordinary shares
convert into Class A ordinary shares at a rate of less than one-to-one.
NOTE 8 — WARRANT LIABILITY
Public Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Public Warrants. The Public Warrants will become exercisable on the later of
(a) 30 days after the consummation of a Business Combination or (b) 12 months from the closing of the Initial Public Offering. The Public Warrants will expire five years from the consummation of a Business Combination or earlier upon redemption or
liquidation.
The Company will not be obligated to deliver any Class A ordinary shares pursuant to the exercise of a Public Warrant and will have no obligation to settle such Public Warrant exercise unless a
registration statement under the Securities Act covering the issuance of the Class A ordinary shares issuable upon exercise of the Public Warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its
obligations with respect to registration. No warrant will be exercisable and the Company will not be obligated to issue any Class A ordinary shares upon exercise of a warrant unless the Class A ordinary shares issuable upon such warrant exercise has
been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants.
The Company has agreed that as soon as practicable, but in no event later than 20 business days after the closing of a Business Combination, it will use its commercially reasonable efforts to file with
the SEC a registration statement covering the issuance, under the Securities Act, of the Class A ordinary shares issuable upon exercise of the warrants. The Company will use its commercially reasonable efforts to cause the same to become effective
within 60 business days after the closing of a Business Combination and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the warrants in accordance with the provisions of
the warrant agreement. If any such registration statement has not been declared effective by the 60th business day following the closing of a Business Combination, holders of the warrants will have the right, during the period beginning on the 61st
business day after the closing of a Business Combination and ending upon such registration statement being declared effective by the SEC, and during any other period when the company fails to have maintained an effective registration statement
covering the issuance of the Class A ordinary shares issuable upon exercise of the warrants, to exercise such warrants on a “cashless basis.” Notwithstanding the above, if the Class A ordinary shares are, at the time of any exercise of a warrant, not
listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do
so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elect, the Company will not be required to file or maintain in effect a registration statement, but will use its commercially
reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.
Redemption of warrants when the price per Class A ordinary share equals or exceeds $18.00: Once the warrants become exercisable, the Company may redeem the
outstanding warrants (except with respect to the Private Placement Warrants):
| • |
in whole and not in part;
|
| • |
at a price of $0.01 per Public Warrant;
|
| • |
upon not less than 30 days’ prior written notice of redemption to each warrant holder; and
|
| • |
if, and only if, the reported last sale price of the Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like)
for any 20 trading days within a 30-trading day period commencing once the warrants become exercisable and ending three business days before the Company sends the notice of redemption to the warrant holders.
|
Redemption of warrants when the price per Class A ordinary share equals or exceeds $10.00: Once the warrants become exercisable, the Company may redeem the
outstanding warrants (except with respect to the Private Placement Warrants):
| • |
in whole and not in part;
|
| • |
at $0.10 per warrant;
|
| • |
upon a minimum of 30 days’ prior written notice of redemption to each warrant holder; and
|
| • |
if, and only if, the reference value equals or exceeds $10.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) and the Private Placement warrants are
called for redemption on the same terms as the outstanding Public Warrants.
|
During the 30-day redemption period, each warrant holder may elect to exercise their warrants on a cashless basis and receive a number of ordinary shares as defined in the warrant agreement, based on
the redemption date and the volume weighted average price of the Ordinary Shares for the ten (10) trading days immediately following the date on which notice of redemption is sent to the warrant holders.
If and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if the Company is unable to register or qualify the underlying securities for sale under
all applicable state securities laws.
The exercise price and number of Class A ordinary shares issuable upon exercise of the Public Warrants may be adjusted in certain circumstances including in the event of a stock dividend, extraordinary
dividend or recapitalization, reorganization, merger or consolidation. However, except as described below, the Public Warrants will not be adjusted for issuances of Class A ordinary shares at a price below its exercise price. Additionally, in no
event will the Company be required to net cash settle the Public Warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of Public
Warrants will not receive any of such funds with respect to their Public Warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such Public Warrants. Accordingly, the Public
Warrants may expire worthless.
In addition, if (x) the Company issues additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of its initial Business Combination at an
issue price or effective issue price of less than $9.20 per Class A ordinary share (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor
or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60%
of the total equity proceeds, and interest thereon, available for the funding of the Company’s initial Business Combination on the date of the consummation of such initial Business Combination (net of redemptions), and (z) the volume weighted average
trading price of the Company’s ordinary shares during the 20 trading day period starting on the trading day prior to the day on which the Company consummates its initial Business Combination (such price, the “Market Value”) is below $9.20 per share,
the exercise price of the warrants will be adjusted (to the nearest cent) 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 price described above will be adjusted (to the
nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price.
The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants and Class A ordinary shares
issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or saleable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement
Warrants will be exercisable on a cashless basis and will be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or
their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.
The Company accounts for the 23,375,000 warrants issued in connection with the Initial Public Offering (consisting of 14,375,000 Public Warrants and 9,000,000 Private Placement Warrants) in accordance
with the guidance contained in ASC 815-40. Such guidance provides that because the warrants do not meet the criteria for equity treatment thereunder, each warrant must be recorded as a liability.
NOTE 9 — FAIR VALUE MEASUREMENTS
The Company follows the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period-end, and non-financial assets and liabilities
that are re-measured and reported at fair value at least annually.
The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in
connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of
observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities).
The following table presents information about the Company’s assets and liabilities that are measured at fair value at December 31, 2021, and indicates the level in the fair value hierarchy of the
valuation inputs the Company utilized to determine such fair value:
|
At December 31, 2021
Description
|
Quoted Prices in
Active Markets
(Level 1)
|
Significant Other
Observable Inputs
(Level 2)
|
Significant Other
Unobservable Inputs
(Level 3)
|
|||||||||
|
Assets:
|
||||||||||||
|
Investments held in Trust Account
|
$
|
293,251,371
|
$
|
—
|
$
|
—
|
||||||
|
|
||||||||||||
|
Liabilities:
|
||||||||||||
|
Public Warrants
|
$
|
—
|
$
|
—
|
$
|
8,481,250
|
||||||
|
Private Placement Warrants
|
—
|
—
|
5,400,000
|
|||||||||
|
Total warrant liabilities
|
$
|
—
|
$
|
—
|
$
|
13,881,250
|
||||||
Investments Held in Trust Account
At December 31, 2021, the entire $293.3 million balance in the Trust Account was held in cash and marketable securities.
Warrant Liabilities
The accounting treatment of derivative financial instruments requires that the Company record a derivative liability upon the closing of the Initial Public Offering. Accordingly, the Company has classified both the
Public Warrants and Private Placement Warrants as liabilities at their fair value, as determined by the Monte Carlo simulation model. These liabilities are subject to re-measurement at each balance sheet date. With each such re-measurement, the
warrant liabilities will be adjusted to fair value, with the change in fair value recognized in the Company’s statement of operations. The Company will reassess the classification at each balance sheet date. If the classification changes as a result
of events during the period, the warrants will be reclassified as of the date of the event that causes the reclassification.
The estimated fair value of the Public Warrant and Private Placement Warrant liabilities are determined using Level 3 inputs. Inherent in a Monte Carlo simulation model are assumptions related to expected stock-price
volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility of its common stock based on historical volatility of select peer companies’ common stock that matches the expected remaining life of the
warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the warrants. The expected life of the warrants is assumed to be equivalent to
their remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates will remain at zero.
The following table provides quantitative information regarding Level 3 fair value measurements as of December 31, 2021:
|
Public Warrants
|
Private Placement
Warrants
|
|||||||
|
Exercise price
|
$
|
11.50
|
$
|
11.50
|
||||
|
Share price
|
$
|
9.71
|
$
|
9.71
|
||||
|
Volatility
|
11.0
|
%
|
11.0
|
%
|
||||
|
Expected term
|
6.0
|
6.0
|
||||||
|
Risk-free rate
|
1.35
|
%
|
1.35
|
%
|
||||
|
Dividend yield
|
—
|
%
|
—
|
%
|
||||
The change in fair value of the warrant liabilities during the period from May 6, 2021 (inception) through December 31, 2021 is summarized as follows:
|
Warrant liabilities at May 6, 2021 (inception)
|
$
|
—
|
||
|
Initial measurement on December 13, 2021
|
29,308,750
|
|||
|
Change in fair value of warrant liabilities
|
(15,427,500
|
)
|
||
|
Warrant liabilities at December 31, 2021
|
$
|
13,881,250
|
There were no transfers in or out of Level 3 from other levels in the fair value hierarchy.
NOTE 10 — SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions that occurred after the balance sheet date through September 12, 2022, the date that the financial statements were issued. Based upon this
review, other than as described within these financial statements, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements other than those disclosed below and the change in
sponsor on June 8, 2022 (disclosed in Note 1).
Risks and Uncertainties
Conflict in Ukraine
In February 2022, the Russian Federation and Belarus commenced military action with the country of Ukraine. As a result of this action, various nations have instituted economic sanctions against the
Russian Federation and Belarus. Further, the impact of this action and related sanctions on the world economy are not determinable as of the date of these financial statements, and the Company is evaluating their specific impacts on the Company’s
ability to pursue a Business Combination within Western Europe, CEE, the CIS (excluding Russia and Belarus) or Latin America.
Changes in Management
On March 23, 2022, the Board of Directors appointed Jonathan Neill as our Chief Financial Officer (“CFO”) and a director, effective March 23, 2022. On March 23, 2022, the Board of Directors accepted the resignation of
Bernard Abdelmalak as CFO and a director, effective March 23, 2022. There were no disagreements, no arguments, no conflicts and no disputes with our officers, directors, auditors and other professional service providers in connection with Mr.
Abdelmalak’s decision to step down as CFO and director.
On April 21, 2022, the Board of Directors accepted the resignation of Riccardo Orcel as our Chief Executive Officer (“CEO”) and director, effective April 21, 2022. On April 21, 2022, the Board of
Directors appointed Jonathan Neill as our interim CEO, effective April 21, 2022. Concurrently with his appointment as interim CEO, Mr. Neill resigned from his position as CFO but remained a director. On April 21, 2022, the Board of Directors
appointed Christopher Edwards as our interim CFO and director, effective April 21, 2022. There were no disagreements, no arguments, no conflicts and no disputes with our officers, directors, auditors and other professional service providers in
connection with Mr. Orcel’s decision to step down as CEO and director.
Related Party Loans
On September 1, 2022, the Company received a Working Capital Loan from the Sponsor in the amount of $561,996 pursuant to the 2022 Note, the proceeds of which were used to settle outstanding
invoices from various service providers. Borrowings under the 2022 Note will not bear interest. The 2022 Note will mature on the earlier to occur of (i) the effective date of our Business Combination or (ii) the date that the winding up of the
Company becomes effective.
F-20