Equity Distribution Acquisition Corp. - Annual Report: 2021 (Form 10-K)

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes   ☒    No   ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a filer, smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule of the Exchange Act).    Yes ☒    No ☐

We were originally formed in Delaware under the name Equity Distribution Acquisition Corp. in July 2020. Our executive offices are located at Two North Riverside Plaza, Suite 600, Chicago, IL, and our telephone number is Our corporate website address is Our website and the information contained on, or that can be accessed through, the website is not deemed to be incorporated by reference in, and is not considered part of, this Report. You should not rely on any such information in making your decision whether to invest in our securities.

Our Chairman is Sam Zell, investor, entrepreneur, and founder of the private investment firm, Equity Group Investments (“EGI”). Mr. Zell has a track record of founding multi-billion-dollar companies and growing many others, turning around troubled assets, leading industry consolidations, and bringing companies to the public markets. He has had an overarching impact on numerous industries.

Mr. Galvin, our Company’s Chief Executive Officer, served as Anixter’s President and Chief Executive Officer from July 2018 through June 2020, after having led various functions and businesses within the company during his tenure. He joined Anixter in 1984 and served as: President and Chief Operating Officer (2017 – 2018), Executive Vice President – Network and Security Solutions (2007 – 2017), and Senior Vice President – North America Enterprise Cabling Solutions Sales (2006 – 2007). In addition, Mr. Galvin served on Anixter’s Board of Directors.

Prior to its acquisition, Anixter was a leading global distributor of Network & Security Solutions, Electrical & Electronic Solutions and Utility Power Solutions. Anixter’s offerings included enterprise networks, industrial MRO (maintenance, repairs, operations) supply, video surveillance applications, and electric power distribution. The company provided customers across industrial and other with full-line solutions and intelligence, resulting in reliable, resilient systems that sustained businesses and communities. Anixter’s solutions helped lower the cost, risk, and complexity of customers’ supply chains through the company’s unmatched global distribution network, and supply chain and technical expertise.

Operationally, Mr. Galvin developed and implemented a gross margin expansion strategy, resulting in six consecutive quarters of year-over-year gross margin improvement, while investing in technology and innovation to position Anixter favorably for future growth. Strategically, Mr. Galvin shifted Anixter’s portfolio toward technology and service-centric markets through entry into new applications including cellular wireless solutions and expansion of existing businesses such as commercial security. Mr. Galvin also spearheaded multiple strategic acquisitions and subsequent integrations, including the acquisition of in 2014 for $420 million and the 2018 acquisitions of CSD, Inner Range and Atlas Gentech.

The industrial distribution market alone is in excess of $2.5 trillion in the United States, based on a publication by McKinsey & Company. Therefore, the total industrial market including manufacturers and service providers is even larger. The industrial market is broad, diverse and fragmented, with participants differentiating their individual offerings through a combination of technology, innovation, technical customer relationships and value-added services. Players within this market support and enable both the manufacturing supply chain as well as aftermarket activities including repair, replacement, service and maintenance across a range of end markets.

Customers are increasingly seeking digital experiences in the way they engage with industrial companies, and competitive customer solutions require a technology-first mentality. These solutions include optimized supply chain management, real-time vendor-managed inventory, delivery, private label products, kitting, and customization. We believe customers are willing to pay a premium for these solutions due to the operational efficiencies that the solutions provide. The combination of robust service capabilities and innovative technology advancements provide sustainable competitive advantages for leading industrial companies. We believe the favorable relative positioning of leading players within a highly fragmented market creates a unique need for industry consolidation.

Mr. Robert W. Grubbs was appointed to our Board of Directors in connection with our initial public offering. Mr. Grubbs served as the President and Chief Executive Officer of Anixter from 1998 to 2008, following a successful career with the company. From 1994 to 2008 Mr. Grubbs was also the President and Chief Executive Officer of Anixter Inc., a subsidiary of Anixter. During Mr. Grubbs’ tenure, Anixter saw tremendous growth in sales, profitability and shareholder returns. Mr. Grubbs continued to serve on the board of Anixter until May 2018. Mr. Grubbs currently serves on the board of Schneider National, a truckload, intermodal and logistics services provider, and is the Executive Chairman of Harrington Industrial Plastics, a process-solutions provider for corrosive and high-purity water systems. Previously, Mr. Grubbs served as the Chairman of GNAP, a leading specialty abrasives distributor, from 2016 until 2018 when Frontenac sold it to CenterOak Partners. Mr. Grubbs also has significant experience working with private equity firms, both through GNAP and Ohio Transmission Corporation, a leading technical distributor previously held by Irving Place Capital and currently held by Genstar Capital. Mr. Grubbs served as Chairman of Ohio Transmission Corporation from 2013 to 2019. Mr. Grubbs holds a BBA in business administration and marketing from the University of Missouri.

Mr. Charles Swoboda was appointed to our Board of Directors in connection with our initial public offering. Mr. Swoboda is currently the president and CEO of Vast Therapeutics, president of Cape Point Advisors and has served as the at Marquette University since 2019. Mr. Swoboda retired as Chairman and CEO of Cree in October of 2017, having led the company through an LED lighting revolution, a period of tremendous technological change within the lighting industry. During Mr. Swoboda’s tenure, Cree grew from just over $6 million in annual revenue in 1993 to more than $1.6 billion in 2016. In 2017, Mr. Swoboda founded Cape Point Advisors, a consulting company focused on innovation and technology disruption. Mr. Swoboda served on the board of Anixter and currently serves on the boards of Lonerider Brewing Company, a craft brewery; Vesper, a provider of MEMS microphones; and KNOW Bio, a life sciences company focused on a wide array of therapeutic applications. Ernst & Young named Mr. Swoboda Entrepreneur of the Year for the Carolinas in 2010, MIT Technology Review named Cree one of their 50 Smartest Companies for 2014, and Fast Company named Cree one of the World’s 50 Most Innovative Companies in 2015. Mr. Swoboda is the author of “The Innovator’s Spirit: Discover the Mindset to Pursue the Impossible,” a book on innovation. Mr. Swoboda graduated from Marquette University with a BS in Electrical Engineering.

In addition to any potential business candidates we may identify on our own, we anticipate other target business candidates will be brought to our attention from various unaffiliated sources, including investment market participants, private equity funds and large business enterprises seeking to divest assets or divisions. Our management also sees significant opportunity to pursue acquisitions across a broader set of industries, capabilities and product scope than the activities of our affiliates today.

Mr. Bill Galvin, our Chief Executive Officer and a director, is currently restricted by arrangements with WESCO (as to Anixter, a distributor of network and security solutions, electrical and electronic solutions and utility power solutions), which arrangements will be in effect until June 22, 2022, and which prohibit him from competing with the business of Anixter, its subsidiaries and affiliates. Our Chief Executive Officer is party to arrangements that will limit the types of companies that we can target for an initial Business Combination, among other restrictions, which could limit our prospects for an initial Business Combination or make us a less attractive buyer to certain target companies.

If we seek stockholder approval, we will complete our initial Business Combination only if a majority of the outstanding shares of common stock voted are voted in favor of the initial Business Combination. A quorum for such meeting will consist of the holder present in person or by proxy of shares of outstanding capital stock of the Company representing a majority of the voting power of all outstanding shares of capital stock of the Company entitled to vote at such meeting. Our initial stockholders will count towards this quorum and, pursuant to the terms of a letter agreement entered into with us, our sponsor and members of our management team have agreed to vote their founder shares and any public shares purchased during or after our initial public offering, in favor of our initial Business Combination. For purposes of seeking approval of the majority of our outstanding shares of common stock voted, will have no effect on the approval of our initial Business Combination once a quorum is obtained. As a result, in addition to our initial stockholders’ founder shares, we would need 15,525,001, or 37.5%, of the 41,400,000 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. These quorum and voting thresholds, and the voting agreements of our initial stockholders, may make it more likely that we will complete our initial Business Combination. Each public stockholder may elect to redeem its public shares irrespective of whether they vote for or against the proposed transaction or whether they were a stockholder on the record date for the stockholder meeting held to approve the proposed transaction. In addition, our sponsor, directors and each member of our management team, have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to their founder shares and public shares in connection with (i) the completion of a business combination and (ii) a stockholder vote to approve an amendment to our amended and restated certificate of incorporation that would affect the substance or timing of our obligation to allow redemption in connection with our initial Business Combination or to redeem 100% of our public shares if we have not completed an initial Business Combination within 24 months from the closing of our initial public offering.

Upon the public announcement of our initial Business Combination, we or our sponsor will terminate any plan established in accordance with to purchase Class A common stock in the open market if we elect to redeem our public shares through a tender offer, to comply with 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 under the Exchange Act, and we will not be permitted to complete our initial Business Combination until the expiration of the tender offer period. In addition, the tender offer will be conditioned on public stockholders not tendering more than the number of public shares we are permitted to redeem. If public stockholders tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete the initial Business Combination.

Our sponsor, officers and directors have agreed that we will have only 24 months from our initial public offering to complete an initial Business Combination. If we have not completed an initial Business Combination within 24 months from the closing of our initial public offering, 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 price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, if any (less up to $100,000 of interest to pay dissolution expenses), divided by the number of the then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we do not complete an initial Business Combination within 24 months from the closing of our initial public offering.

Our sponsor, executive officers and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation that would affect the substance or timing of our obligation to allow redemption in connection with our initial Business Combination or to redeem 100% of our public shares if we do not complete an initial Business Combination within 24 months from the closing of our initial public offering, unless we provide our public stockholders with the opportunity to redeem their public shares upon approval of any such amendment at a price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, if any (less up to $100,000 of interest to pay dissolution expenses) divided by the number of the then outstanding public shares. However, we may not redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we are not subject to the SEC’s “penny stock” rules). If this optional redemption right is exercised with respect to an excessive number of public shares such that we cannot satisfy the net tangible asset requirement, 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.

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 redemption amount received by stockholders upon our dissolution would be approximately $10.00. The proceeds deposited in the trust account could, however, become subject to the claims of our creditors which would have higher priority than the claims of our public stockholders. We cannot assure you that the actual redemption amount received by stockholders will not be substantially less than $10.00. Under Section 281(b) of the DGCL, our plan of dissolution must provide for all claims against us to be paid in full or make provision for payments to be made in full, as applicable, if there are sufficient assets. These claims must be paid or provided for before we make any distribution of our remaining assets to our stockholders. While we intend to pay such amounts, if any, we cannot assure you that we will have funds sufficient to pay or provide for all creditors’ claims.

In the event that the proceeds in the trust account are reduced below the lesser of (i) $10.00 per public share and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account if less than $10.00 per share, due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay our taxes, if any, and our sponsor asserts that it is unable to satisfy its indemnification obligations or that they have 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 redemption price will not be less than $10.00 per share.

Under the DGCL, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. The pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial Business Combination within 24 months from the closing of our initial public offering may be considered a liquidating distribution under Delaware law. If the corporation complies with certain procedures set forth in Section 280 of the DGCL intended to ensure that it makes reasonable provision for all claims against it, including a notice

period during which any third-party claims can be brought against the corporation, a period during which the corporation may reject any claims brought, and an additional waiting period before any liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution.

Furthermore, if the pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial Business Combination within 24 months from the closing of our initial public offering, is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful (potentially due to the imposition of legal proceedings that a party may bring or due to other circumstances that are currently unknown), then pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidating distribution. If we do not complete our initial Business Combination within 24 months from the closing of our initial public offering, 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 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 that may be released to us to pay our taxes, if any (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any) and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. Accordingly, it is our intention to redeem our public shares as soon as reasonably possible following our 24th month and, therefore, we do not intend to comply with those procedures. As such, our stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of our stockholders may extend well beyond the third anniversary of such date.

If we file a bankruptcy or petition or an involuntary bankruptcy or 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 stockholders. To the extent any bankruptcy claims deplete the trust account, we cannot assure you we will be able to return $10.00 per share to our public stockholders. Additionally, if we file a bankruptcy or petition or an involuntary bankruptcy or petition is filed against us that is not dismissed, any distributions received by stockholders 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 stockholders.

We are required to evaluate our internal control procedures for the fiscal year ended December 31, 2021 as required by the Sarbanes-Oxley Act. Only in the event we are deemed to be a large accelerated filer or an accelerated filer, and no longer qualify as an emerging growth company, will we be required to have our internal control procedures audited. A target company may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of their internal controls. The development of the internal controls of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such Business Combination. We have filed a Registration Statement on Form with the SEC to voluntarily register our securities under Section 12 of the Exchange Act. As a result, we are subject to the rules and regulations promulgated under the Exchange Act. We have no current intention of filing a Form 15 to suspend our reporting or other obligations under the Exchange Act prior or subsequent to the consummation of our initial Business Combination.

We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, or the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile.

We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following September 18, 2025 (the fifth anniversary of the completion of our initial public offering), (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our shares of Class A common stock that are held by exceeds $700 million as of the prior June 30th, and (2) the date on which we have issued more than $1.0 billion in debt during the prior three-year period. References herein to “emerging growth company” will have the meaning associated with it in the JOBS Act.

Our initial stockholders own, on an basis, 20% of our outstanding shares of Class A common stock. Our sponsor and members of our management team also may from time to time purchase Class A common stock prior to our initial Business Combination. Our amended and restated certificate of incorporation provides that, if we seek stockholder approval of an initial Business Combination, such initial Business Combination will be approved if we receive the affirmative vote of a majority of the shares voted at such meeting, including the founder shares. If we submit our initial Business Combination to our public stockholders for a vote, pursuant to the terms of a letter agreement entered into with us, our sponsor and members of our management team have agreed to vote their founder shares and any shares purchased during or after the offering, in favor of our initial Business Combination. As a result, in addition to our initial stockholders’ founder shares, we would only need 15,525,001, or 37.5%, of the 41,400,000 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 issued and outstanding shares are voted). Accordingly, if we seek stockholder 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 stockholder approval for such initial Business Combination.

At the time we enter into an agreement for our initial Business Combination, we will not know how many stockholders may exercise their redemption rights, and therefore will need to structure the transaction based on our expectations as to the number of shares that will be submitted for redemption. If our Business Combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price, or requires us to have a minimum amount of cash at closing, we will need to reserve a portion of the cash in the trust account to meet such requirements, or arrange for third party financing. In addition, if a larger number of shares are submitted for redemption than we initially expected, we may need to restructure the transaction to reserve a greater portion of the cash in the trust account or arrange for additional third party financing. Raising additional third party financing may involve dilutive equity issuances or the incurrence of indebtedness at higher than desirable levels. The above considerations may limit our ability to complete the most desirable Business Combination available to us or optimize our capital structure. The amount of the deferred underwriting commissions payable to the underwriters will not be adjusted for any shares that are redeemed in connection with an initial Business Combination. The amount we will distribute to stockholders who properly exercise their redemption rights will not be reduced by the deferred underwriting commission and after such redemptions, the amount held in trust will continue to reflect our obligation to pay the entire deferred underwriting commissions.

Our sponsor, officers and directors have agreed that we must complete our initial Business Combination within 24 months from the closing of our initial public offering. We may not be able to find a suitable target business and complete an initial Business Combination within 24 months after the closing of our initial public offering. Our ability to complete our initial Business Combination may be negatively impacted by general market conditions, volatility in the capital and debt markets and the other risks described herein. If we have not completed an initial Business Combination within such applicable time period, we will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, if any (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law; and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.

If the NYSE delists our securities from trading on its exchange and we are not able to list our securities on another national securities exchange, we expect our securities could be quoted on an market. If this were to occur, we could face significant material adverse consequences, including:

The funds available to us outside of the trust account to fund our working capital requirements may not be sufficient to allow us to operate for at least the next 24 months, assuming that our initial Business Combination is not completed during that time. We believe that the funds available to us outside of the trust account, together with funds available from loans from our sponsor will be sufficient to allow us to operate for at least the next 24 months; however, we cannot assure you that our estimate is accurate. 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 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 do not complete our initial Business Combination, our public stockholders may receive only approximately $10.00 per share on the liquidation of our trust account and our warrants will expire worthless. In certain circumstances, our public stockholders may receive less than $10.00 per share upon our liquidation.

In December 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China, which has and is continuing to spread throughout China and other parts of the world, including the United States and Europe. On January 30, 2020, the World Health Organization declared the outbreak of the coronavirus 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 the coronavirus, and on March 11, 2020, the World Health Organization characterized the outbreak as a “pandemic.” Outbreaks of and its variants have adversely affected, and other events (such as terrorist attacks, natural disasters, significant outbreak of other infectious diseases or other variants) could adversely affect, the economies and financial markets worldwide, and the business of any potential target business with which we consummate an Business Combination could be materially and adversely affected. Furthermore, we may be unable to complete a Business Combination if concerns relating to and its variants continue to restrict travel, limit the ability to have meetings with potential investors or the target company’s personnel, vendors and services providers are unavailable to negotiate and consummate a transaction in a timely manner. The extent to which and its variants impact 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 the pandemic and the actions to contain and its variants or treat its impact, among others. If the disruptions posed by its variants or other events (such as terrorist attacks, natural disasters, significant outbreak of other infectious diseases or other variants) 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. Finally, the outbreak of and its variants may also have the effect of heightening many of the other risks described in this “Risks Factors” section.

In addition, our ability to consummate a transaction may be dependent on the ability to raise equity and debt financing which may be impacted by its variants and other events (such as terrorist attacks, natural disasters, significant outbreak of other infectious diseases or variants), including as a result of increased market volatility, decreased market liquidity in third-party financing being unavailable on terms acceptable to us or at all.

Even if we conduct due diligence on a target business with which we combine, we cannot assure you that this diligence will surface 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 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 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 debt held by a target business or by virtue of our obtaining post-combination debt financing. Accordingly, any stockholders who choose to remain stockholders following the Business Combination could suffer a reduction in the value of their securities. Such stockholders are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction was due to the breach by our officers or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that the proxy solicitation or tender offer materials, as applicable, relating to the Business Combination contained an actionable material misstatement or material omission.

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 within 24 months from the closing of our initial public offering, 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 redemption amount received by public stockholders could be less than the $10.00 per public share initially held in the trust account, due to claims of such creditors. Pursuant to the letter agreement the form of which was filed as an exhibit to the registration statement for our initial public offering, 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) $10.00 per public share and (ii) the actual amount per share held in the trust account as of the date of the liquidation of the trust account if less than $10.00 per share due to reductions in the value of the trust assets, in each case net of the interest that may be withdrawn to pay our taxes, if any, 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 believe that our sponsor’s only assets are securities of our Company. Therefore, we cannot assure you that our sponsor would be able to satisfy those obligations. As a result, if any such claims were successfully made against the trust account, the funds available for our initial Business Combination and redemptions could be reduced to less than $10.00 per public share. In such event, we may not be able to complete our initial Business Combination, and you would receive such lesser amount per share in connection with any redemption of your public shares. None of our officers or directors will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.

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 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 share of the proceeds held in the trust account, plus any interest income, net of taxes paid or payable (less, in the case we are unable to complete our initial Business Combination, $100,000 of interest). Negative interest rates could reduce the value of the assets held in trust such that the redemption amount received by public shareholders may be less than $10.00 per share.

If, after we distribute the proceeds in the trust account to our public stockholders, we file a bankruptcy or petition or an involuntary bankruptcy or petition is filed against us that is not dismissed, any distributions received by stockholders 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 stockholders. In addition, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith, thereby exposing itself and us to claims of punitive damages, by paying public stockholders from the trust account prior to addressing the claims of creditors.

If, before distributing the proceeds in the trust account to our public stockholders, we file a bankruptcy or petition or an involuntary bankruptcy or 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 stockholders. To the extent any bankruptcy claims deplete the trust account, the amount that would otherwise be received by our stockholders in connection with our liquidation may be reduced.

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 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations. Pursuant to the trust agreement, the trustee is not permitted to invest in other securities or assets. By restricting the investment of the proceeds to these instruments, and by having a business plan targeted at acquiring and growing businesses for the long term (rather than on buying and selling businesses in the manner of a merchant bank or private equity fund), we intend to avoid being deemed an “investment company” within the meaning of the Investment Company Act. The trust account is intended as a holding place for funds pending the earliest to occur of either: (a) the completion of our initial Business Combination; (b) the redemption of any public shares properly tendered in connection with a stockholder vote to amend our amended and restated certificate of incorporation (i) to modify the substance or timing of our obligation to allow redemption in connection with our initial Business Combination or to redeem 100% of our public shares if we do not complete an initial Business Combination within 24 months from the closing of our initial public offering or (ii) with respect to any other provisions relating to the rights of holders of our Class A common stock; or (c) absent our completing an initial Business Combination within 24 months from the closing of our initial public offering, our return of the funds held in the trust account to our public stockholders as part of our redemption of the public shares. If we do not invest the proceeds as discussed above, we may be deemed to be subject to the Investment Company Act. If we were deemed to be subject to the Investment Company Act, compliance with these additional regulatory burdens would require additional expenses for which we have not allotted funds and may hinder our ability to complete a Business Combination. If we do not complete our initial Business Combination, our public stockholders may only receive their pro rata portion of the funds in the trust account that are available for distribution to public stockholders, and our warrants will expire worthless.

If we have not completed an initial Business Combination within 24 months from the closing of our initial public offering, 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 taxes, if any (less up to $100,000 of the interest to pay dissolution expenses), will be used to fund the redemption of our public shares, as further described herein. Any redemption of public stockholders from the trust account will be effected automatically by function of our amended and restated certificate of incorporation prior to any voluntary winding up. If we are required to liquidate the trust account and distribute such amount therein, pro rata, to our public stockholders, as part of any liquidation process, such winding up, liquidation and distribution must comply with the applicable provisions of the Delaware General Corporation Law (the “DGCL”). In that case, investors may be forced to wait beyond 24 months from the closing of our initial public offering before the redemption proceeds of our trust account become available to them, and they receive the return of their pro rata portion of the proceeds from our trust account. We have no obligation to return funds to investors prior to the date of our redemption or liquidation unless we complete our initial Business Combination prior thereto and only then in cases where investors have sought to redeem their Class A common stock. Only upon our redemption or any liquidation will public stockholders be entitled to distributions if we do not complete our initial Business Combination.

Under the DGCL, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. The pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial Business Combination within 24 months from the closing of our initial public offering may be considered a liquidating distribution under Delaware law. If a corporation complies with certain procedures set forth in Section 280 of the DGCL intended to ensure that it makes reasonable provision for all claims against it, including a notice period during which any third-party claims can be brought against the corporation, a period during which the corporation may reject any claims brought, and an additional waiting period before any liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution. However, it is our intention to redeem our public shares as soon as reasonably possible following the 24th month from the closing of our initial public offering in the event we do not complete our initial Business Combination and, therefore, we do not intend to comply with the foregoing procedures.

Mr. Galvin, our Chief Executive Officer and a director, is bound by and arrangements with WESCO (as to Anixter, a distributor of network and security solutions, electrical and electronic solutions and utility power solutions). These arrangements are in effect until June 22, 2022, and prohibit Mr. Galvin from (i) competing with the business of Anixter, its subsidiaries and affiliates in any U.S. state or any nation in which any of Anixter, its subsidiaries and affiliates conducted business immediately prior to June 22, 2020, and (ii) soliciting any of the employees, agents, consultants or representatives of such entities to leave such entities or become employees, agents, representatives or consultants of any other person or entity.

In light of these arrangements, we will not seek an initial Business Combination with any company with operations in Anixter’s businesses during the restricted period without the prior written consent of WESCO. In addition, if our initial Business Combination does not cause Mr. Galvin to violate the arrangements, no assurance can be given that the combined company would not in the future engage in competitive activities that would cause him to be in breach of the arrangements. If a court were to conclude that a violation of these arrangements had occurred, it could extend the term of the restrictions and/or enjoin Mr. Galvin from participating in our Company, or enjoin us from engaging in aspects of the business that compete with Anixter, as applicable. The court could also impose monetary damages against Mr. Galvin or us. This could materially harm our business and the trading prices of our securities.

Even if ultimately resolved in our favor, any litigation associated with the arrangements could be time consuming, costly and distract management’s focus from locating suitable acquisition candidates and operating our business.

As a result, included on our balance sheet as of December 31, 2020 contained elsewhere in this Annual Report are derivative liabilities related to embedded features contained within our warrants. Accounting Standards Codification 815, Derivatives and Hedging (“ASC 815”), provides for the remeasurement of the fair value of such derivatives at each balance sheet date, with a resulting gain or loss related to the change in the fair value being recognized in earnings in the statement of operations. As a result of the recurring fair value measurement, our financial statements and results of operations may fluctuate quarterly, based on factors, which are outside of our control. Due to the recurring fair value measurement, we expect that we will recognize gains or losses on our warrants each reporting period and that the amount of such gains or losses could be material.

We have identified a material weakness in our internal control over financial reporting related to the accounting for complex financial instruments. As a result of this material weakness, our management concluded that our internal control over financial reporting was not effective as of December 31, 2021. This material weakness resulted in a material misstatement of our warrant liabilities, change in fair value of warrant liabilities, additional capital, accumulated deficit and related financial disclosures for the affected periods. For a discussion of management’s consideration of the material weakness identified related to our accounting for a significant and unusual transaction related to the warrants we issued in connection with our initial public offering, see “Note 2” of the financial statements on Form as filed on December 22, 2021, as well as Part II, Item 9A: Controls and Procedures included in this Annual Report..

We have identified a material weakness in our internal control over financial reporting related to the Company’s application of ASC to its accounting classification of the Public Shares. As a result of this material weakness, our management has concluded that our internal control over financial reporting was not effective as of December 31, 2021. Historically, a portion of the Public Shares were classified as permanent equity to maintain stockholders’ equity greater than $5,000,000 on the basis that the Company will not redeem its Public Shares in an amount that would cause its net tangible assets to be less than $5,000,001, as described in the Charter. Pursuant to the Company’s of the Company’s application of ASC to its accounting classification of the Public Shares, the Company’s management has determined that the Public Shares include certain provisions that require classification of all of the Public Shares as temporary equity regardless of the net tangible assets redemption limitation contained in the Charter. For a discussion of management’s consideration of the material weakness identified related to the Company’s application of ASC to its accounting classification of the Public Shares, see “Note 2” to the accompanying financial statements, as well as Part II, Item 9A: Controls and Procedures included in this Annual Report.

We may issue a substantial number of additional shares of our Class A common stock or shares of preferred stock to complete our initial Business Combination or under an employee incentive plan after completion of our initial Business Combination. We may also issue Class A common stock to redeem the warrants or upon conversion of the Class B common stock at a ratio greater than at the time of our initial Business Combination as a result of the anti-dilution provisions contained in our amended and restated certificate of incorporation. However, our amended and restated certificate of incorporation provides, 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 stockholders prior to or in connection with the completion of an initial Business Combination. These provisions of our amended and restated certificate of incorporation, like all provisions of our amended and restated certificate of incorporation, may be amended with a stockholder vote. The issuance of additional shares of common stock or shares of preferred stock:

The founder shares will automatically convert into shares of our Class A common stock on the first business day following the completion of our initial Business Combination at a ratio such that the number of shares of our Class A common stock issuable upon conversion of all founder shares will equal, in the aggregate, on an basis, 20% of the sum of (i) the total number of shares of our Class A common stock issued and outstanding, plus (ii) the total number of shares of our Class A common stock 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 completion of the initial Business Combination, excluding any shares of our Class A common stock or equity-linked securities exercisable for or convertible into shares of our Class A common stock issued, or to be issued, to any seller in the initial Business Combination and any private placement warrants issued to our sponsor upon conversion of working capital loans. In no event will the shares of our Class B common stock convert into shares of our Class A common stock at a rate of less than one to one. This is different than most other similarly structured blank check companies in which our sponsor will only be issued an aggregate of 20% of the total number of shares to be outstanding prior to the initial Business Combination.

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. Moreover, certain of our directors and executive officers have time and attention requirements for private investment funds of which affiliates of EGI are the investment managers. We do not have an employment agreement with, or insurance on the life of, any of our directors or executive officers. The unexpected loss of the services of one or more of our directors or executive officers could have a detrimental effect on us.

On July 14, 2020, our sponsor paid an aggregate of $25,000, or approximately $0.002 per share, to cover certain of our offering costs in consideration of 10,350,000 shares of our Class B common stock, par value $0.0001 (after giving effect to a reverse stock split, effected July 21, 2020, and a forward stock split, effective September 17, 2020). In September 2020, our sponsor transferred 30,000 shares of Class B common stock to each of Messrs. Grubbs, Simon and Swoboda (36,000 shares, after giving effect to a forward stock split, effective September 17, 2020). Prior to the initial investment in the Company of $25,000 by our sponsor, the Company had no assets, tangible or intangible. The founder shares will be worthless if we do not complete an initial Business Combination. In addition, concurrent with the closing of our initial public offering, our sponsor purchased an aggregate of 6,853,333 private placement warrants, each exercisable for one share of our Class A common stock at $11.50 per share, for a purchase price of $1.50 per whole warrant, generating gross proceeds of $10,280,000. The private placement warrants will also be worthless if we do not complete a Business Combination. Holders of founder shares have agreed (A) to vote any shares owned by them in favor of any proposed Business Combination and (B) not to redeem any founder shares in connection with a stockholder vote to approve a proposed initial Business Combination. In addition, we may obtain loans from our sponsor, affiliates of our sponsor or an officer or director, and we may pay our sponsor, officers, directors and any of their respective affiliates fees and expenses in connection with identifying, investigating and completing an initial Business Combination.

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 anniversary of the closing of our initial public offering nears, which is the deadline for our completion of an initial Business Combination.

Although we have no commitments as of the date of this Report to issue any notes or other debt securities, or to otherwise incur outstanding debt, 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 amount available for redemption from the trust account. Nevertheless, the incurrence of debt could have a variety of negative effects, including:

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, changed industry focus 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 certificate of incorporation requires the approval of holders of 65% of our common stock, and amending our warrant agreement will require a vote of holders of at least 65% of the public warrants. In addition, our amended and restated certificate of incorporation requires us to provide our public stockholders with the opportunity to redeem their public shares for cash if we propose an amendment to our amended and restated certificate of incorporation that would affect the substance or timing of our obligation to allow redemption in connection with our initial Business Combination or to redeem 100% of our public shares if we do not complete an initial Business Combination within 24 months from the closing of our initial public offering or with respect to any other provisions relating to stockholders’ rights or Business Combination activity. To the extent any of such amendments would be deemed to fundamentally change the nature of any of the securities offered through this registration statement, 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 charter or governing instruments or extend the time to consummate an initial Business Combination in order to effectuate our initial Business Combination.

Some other blank check companies have a provision in their charter which prohibits the amendment of certain of its provisions, including those which relate to a company’s Combination activity, without approval by a certain percentage of the Company’s stockholders. In those companies, amendment of these provisions typically requires approval by 90% of the Company’s stockholders attending and voting at an annual meeting. Our amended and restated certificate of incorporation provides that any of its provisions related to Combination activity (including the requirement to deposit proceeds of our initial public offering and the private placement of warrants into the trust account and not release such amounts except in specified circumstances, and to provide redemption rights to public stockholders as described herein) may be amended if approved by holders of 65% of our common stock entitled to vote thereon and corresponding provisions of the trust agreement governing the release of funds from our trust account may be amended if approved by holders of at least 65% of our common stock entitled to vote thereon. In all other instances, our amended and restated certificate of incorporation may be amended by holders of a majority of our outstanding shares of common stock entitled to vote thereon, subject to applicable provisions of the DGCL or applicable stock exchange rules. Our initial stockholders and their permitted

transferees, if any, who collectively beneficially own, on an as converted basis, 20% of our Class A common stock, will participate in any vote to amend our amended and restated certificate of incorporation and/or trust agreement and will have the discretion to vote in any manner they choose. As a result, we may be able to amend the provisions of our amended and restated certificate of incorporation which govern our 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 stockholders may pursue remedies against us for any breach of our amended and restated certificate of incorporation.

Our sponsor, executive officers and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation that would affect the substance or timing of our obligation to allow redemption in connection with our initial Business Combination or to redeem 100% of our public shares if we do not complete an initial Business Combination within 24 months from the closing of our initial public offering, unless we provide our public stockholders with the opportunity to redeem their Class A common stock upon approval of any such amendment at a price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, if any (less up to $100,000 of interest to pay dissolution expenses) divided by the number of then outstanding public shares. These agreements are contained in letter agreements that we have entered into with our sponsor and each member of our management team. Our stockholders are not parties to, or third-party beneficiaries of, these agreements and, as a result, will not have the ability to pursue remedies against our sponsor, executive officers or directors for any breach of these agreements. As a result, in the event of a breach, our stockholders would need to pursue a stockholder derivative action, subject to applicable law.

Our sponsor owns, on an basis, approximately 20% of our issued and outstanding Class A common stock. Accordingly, our sponsor may exert a substantial influence on actions requiring a stockholder vote, potentially in a manner that you do not support, including amendments to our amended and restated certificate of incorporation. If our sponsor purchases any additional shares of our Class A common stock 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 common stock. In addition, our board of directors, whose members were elected by our sponsor, is divided into three classes, each of which will generally serve for a terms for three years with only one class of directors being elected in each year. We may not hold an annual meeting of stockholders to elect new directors prior to the completion of our initial Business Combination, in which case all of the current directors will continue in office until at least the completion of the Business Combination. If there is an annual meeting, as a consequence of our “staggered” board of directors, only a minority of the board of directors will be considered for election and our sponsor, because of its ownership position, will have considerable influence regarding the outcome. In addition, prior to the completion of an initial Business Combination, holders of a majority of our founder shares may remove a member of the board of directors for any reason. Accordingly, our sponsor will continue to exert control at least until the completion of our initial Business Combination.

Our initial stockholders currently own an aggregate of 10,350,000 founder shares. The founder shares are convertible into Class A common stock on a basis, subject to adjustment as set forth herein. In addition, if our sponsor makes any working capital loans, up to $1,500,000 of such loans may be converted into warrants, at the price of $1.50 per warrant at the option of the lender. Such warrants would be identical to the private placement warrants, including as to exercise price, exercisability and exercise period. Our public warrants are also redeemable by us for shares of our Class A common stock.

Each unit contains of one 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 shares of our Class A common stock to be issued to the warrant holder. This is different from other offerings similar to ours whose units include one share of common stock and one warrant to purchase one share of common stock. 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 third of the number of shares compared to units that each contain a whole warrant to purchase one share, thus making us, we believe, a more attractive merger partner for target businesses. Nevertheless, this unit structure may cause our units to be worth less than if it included a warrant to purchase one whole share.

We are an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. As a result, our stockholders may not have access to certain information they may deem important. We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier, including if the Market Value of our Class A common stock held by equals or exceeds $700.0 million as of any June 30th 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 growth companies but any such an election to opt out is irrevocable. We have elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accountant standards used.

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 for the year ended December 31, 2021. Only in the event we are deemed to be a large accelerated filer or an accelerated filer, and no longer qualify as an emerging growth company, will we be required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting. Further, for as long as we remain an emerging growth company, we will not be required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting. The fact that we are a blank check company makes compliance with the requirements of the Sarbanes-Oxley Act particularly burdensome on us as compared to other public companies because a target business with which we seek to complete our initial Business Combination may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of its internal controls. The development of the internal control of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition.

We do not own any real estate or other physical properties materially important to our operation. We currently maintain our principal executive offices at Two North Riverside Plaza, Suite 600, Chicago, Illinois 60606. The cost for this space is included in the $10,000 aggregate fee an affiliate of our sponsor charges us for office space, administrative and support services. We consider our current office space, combined with the other office space otherwise available to our executive officers, adequate for our current operations.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited financial statements and the notes related thereto which are included in “Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 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 “Cautionary Note Regarding Forward-Looking Statements,” “Item 1A. Risk Factors” and elsewhere in this Annual Report on Form

We have neither engaged in any operations nor generated any revenues to date. Our only activities from July 7, 2020 (inception) through December 31, 2021, were organizational activities, those necessary to prepare for the initial public offering, described below, and the search for a target company for a Business Combination. We do not expect to generate any operating revenues until after the completion of our Business Combination. We generate income in the form of interest income on marketable securities held after the initial public offering. 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.

We have no obligations, assets or liabilities, which would be considered sheet arrangements as of December 31, 2021. 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 sheet arrangements. We have not entered into any sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any assets.

On June 29, 2021, we issued an unsecured promissory note to our sponsor (the “Second Promissory Note”), pursuant to which we may borrow up to an aggregate principal amount of $2,500,000. The Second Promissory Note is bearing and payable on the earlier of (i) September 18, 2022, or (ii) the consummation of the Initial Business Combination. As of December 31, 2021, the outstanding balance under the Second Promissory Note was $750,000 and the remaining amount available to be drawn was $1,750,000.

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 capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a gain or loss within change in fair value of warrant liability on the statements of operations. The fair value of the warrants was initially estimated using a Monte Carlo Simulation approach. Subsequent measurement of the fair value of the warrants was estimated using the publicly traded price of our warrants.

Net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. We apply the method in calculating earnings per share. Accretion associated with the redeemable shares of Class A common stock is excluded from earnings per share as the redemption value approximates fair value.

In August 2020, the FASB issued ASU Debt—Debt with Conversion and Other Options (Subtopic and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. The ASU also removes certain settlement conditions that are required for equity-linked contracts to qualify for the derivative scope exception, and it simplifies the diluted earnings per share calculation in certain areas. The Company adopted ASU on January 1, 2021. Adoption of ASU did not impact the Company’s financial position, results of operations or cash flows.

is a founder and has served as Chairman of the Board of the Company since July 2020. Mr. Zell is the founder of Equity Group Investments, the private investment firm in Chicago he started more than 50 years ago. EGI invests opportunistically across industries and geographies throughout the capital structure. EGI’s current portfolio investments are in energy, waste and infrastructure, transportation and logistics, manufacturing, communications, healthcare, agribusiness, and real estate. EGI provides flexible capital and employs an engaged ownership approach to maximize the potential of its investments. In addition to his role as Chairman of the Company and EGI, Mr. Zell chairs three additional companies listed on the New York Stock Exchange: Equity Residential, a leading apartment REIT; Equity LifeStyle Properties, a manufactured home community and resort REIT; and Equity Commonwealth, an office REIT. Mr. Zell previously served as the Chairman of Covanta Holding Corporation, an international owner/operator of energy-from-waste and power generation facilities, from 2005 to November 2021. Mr. Zell also previously served as the Chairman of Anixter, a leading global provider of communications, security, and wire and cable products from 1986 through June 2020. Mr. Zell holds a JD degree and a BA degree from the University of Michigan. In 2017, Forbes recognized Mr. Zell as one of the 100 Greatest Living Business Minds.

is a founder and has served as Chief Executive Officer of the Company since July 2020. In addition, Mr. Galvin was appointed to our Board of Directors in connection with our initial public offering. Mr. Galvin is the former President and Chief Executive Officer of Anixter, a role that he held from July 2018 through June 2020. Prior to its acquisition, Anixter was a leading global distributor of Network & Security Solutions, Electrical & Electronic Solutions and Utility Power Solutions. Mr. Galvin joined Anixter in 1984 and held a variety of roles prior to his appointment as President and Chief Executive Officer, including President and Chief Operating Officer (2017 – 2018), Executive Vice President—Network and Security Solutions (2007 – 2017) and Senior Vice President—North America Enterprise Cabling Solutions Sales (2006 – 2007). In addition, Mr. Galvin served on Anixter’s Board of Directors. Mr. Galvin holds a BS from Manhattan College.

has served as Chief Financial Officer of the Company since July 2020. Mr. Tinkler is also the Chief Financial Officer of EGI and the Chief Financial Officer of Chai Trust Company, LLC (corporate trustee for the Zell family trusts). He serves as the chairman of the board of Veridiam, Inc., a specialty alloy manufacturer serving the nuclear power, medical, aerospace and industrial markets. He also serves on the board of EGI portfolio company Ardent Health Services, a provider of hospital and healthcare services. Since 1990, Mr. Tinkler has served in various leadership capacities for EGI and its affiliates. Among those roles was Chief Financial Officer of Danielson Holding Corporation, the predecessor of Covanta Holding Corporation, an international owner/operator of energy-from-waste and power generation facilities. Earlier in his career, Mr. Tinkler served as the Chief Executive Officer and Chief Financial Officer of First Capital Financial, LLC, and as the Managing General Partner of the First Capital real estate funds. He began his career at Ernst & Young. Philip holds an MST from DePaul University and a BS from Northern Illinois University.

has served as Secretary of the Company since July 2020. Mr. Miron is Chief Legal Officer and a Managing Director of EGI where he oversees all of EGI’s legal activities. He is also Chief Legal Officer of Chai Trust Company, LLC (corporate trustee for the Zell family trusts). Prior to joining EGI in 2017, Mr. Miron worked at Skadden, Arps, Slate, Meagher & Flom LLP in the corporate practice group from 1999. Earlier in his career, he was a manager in the consulting division of Arthur Andersen and in the legal and regulatory division of the Chicago Mercantile Exchange. He holds a JD summa cum laude from Chicago-Kent College of Law, an MBA with distinction in finance from DePaul University and a BA in financial administration from Michigan State University. Joe is a CPA, and a long-standing volunteer and advisor to the Chicago Lawyers’ Committee and the Community Law Project.

was appointed to our Board of Directors in connection with our initial public offering. Mr. Grubbs served as the President and Chief Executive Officer of Anixter from 1998 to 2008, following a successful career with the company. From 1994 to 2008 Mr. Grubbs was also the President and Chief Executive Officer of Anixter Inc., a subsidiary of Anixter. During Mr. Grubbs’ tenure, Anixter saw tremendous growth in sales, profitability and shareholder returns. Mr. Grubbs continued to serve on the board of Anixter until May 2018. Mr. Grubbs currently serves on the board of Schneider National, a truckload, intermodal and logistics services provider, and is the Executive Chairman of Harrington Industrial Plastics, a process-solutions provider for corrosive and high-purity water systems. Previously, Mr. Grubbs served as the Chairman of GNAP, a leading specialty abrasives distributor, from 2016 until 2018 when Frontenac sold it to CenterOak Partners. Mr. Grubbs also has significant experience working with private equity firms, both through GNAP and Ohio Transmission Corporation, a leading technical distributor previously held by Irving Place Capital and currently held by Genstar Capital. Mr. Grubbs served as Chairman of Ohio Transmission Corporation from 2013 to 2019. Mr. Grubbs holds a BBA in business administration and marketing from the University of Missouri.

was appointed to our Board of Directors in connection with our initial public offering. Ms. Havdala is a Managing Director with EGI and has worked in a variety of capacities for Mr. Zell’s affiliated companies since 1990. Ms. Havdala serves on the board of Ardent Health Services, a provider of hospital and healthcare services. Ms. Havdala focuses on sourcing potential investment transactions and meeting new capital sources. In addition, Ms. Havdala is responsible for establishing and overseeing the Zell Global Entrepreneurship Network, an organization designed to provide continuing education and mentorship for students and alumni of Mr. Zell’s three entrepreneurship education programs. During Ms. Havdala’s tenure with EGI, she has served on several boards, including SIRVA Worldwide, Inc., a provider of moving and relocation services; Rewards Network, Inc., a dining rewards company; and WRS Holding Company, an environmental construction and remediation company; Mrs. Havdala has also held the roles of Acting Chief Executive Officer at Rewards Network, Executive Vice President at Equity International, and Vice President of Scott Sports Group, Inc. Prior to joining Mr. Zell’s organization, Ms. Havdala was a financial analyst with The First Boston Corporation in New York City. Ms. Havdala graduated magna cum laude with a BA from Harvard College, and earned her Master of Divinity from the University of Chicago in 2016.

was appointed to our Board of Directors in connection with our initial public offering. Mr. Simon most recently served as Executive Vice President of Walmart and as President and Chief Executive Officer of Walmart U.S. from 2010 to 2014, and he remained a consultant to the firm through February 2015. As Chief Executive Officer, Mr. Simon was responsible for over $280 billion in revenue and 1.2 million associates. During his tenure at Walmart, Mr. Simon also served as Executive Vice President and Chief Operating Officer of Walmart U.S. and Executive Vice President of Professional Services and New Business Development. He also led the team that created and launched Walmart’s $4 prescription drug program. Mr. Simon is also a passionate supporter of veterans and was instrumental in Walmart’s pledge to hire any returning veteran. Prior to joining Walmart, Mr. Simon held several senior positions: Brinker International, Diageo, CadburySchweppes, PepsiCo and RJR-Nabisco. Mr. Simon served on the boards of Anixter, Agrium, Academy Sports and Outdoors Inc., Drizly, GameStop, and Chico’s and currently serves on the boards of Darden Restaurants, an American multi-brand restaurant operator of several recognizable brands in full-service dining; and Hanesbrands Inc., a multinational clothing company. Mr. Simon also serves as an advisor to KKR, an investment firm. He is also the Founder and President of the investment and consulting firm WSS Venture Holdings. Mr. Simon also served as a Member of the Baylor University Board of Regents as well as Executive in Residence and a member of the Faculty of the Baylor School of Business from 2015-2020.

was appointed to our Board of Directors in connection with our initial public offering. Mr. Swoboda is currently the president and CEO of Vast Therapeutics, president of Cape Point Advisors and has served as the at Marquette University since 2019. Mr. Swoboda retired as Chairman and CEO of Cree in October of 2017, having led the company through an LED lighting revolution, a period of tremendous technological change within the lighting industry. During Mr. Swoboda’s tenure, Cree grew from just over $6 million in annual revenue in 1993 to more than $1.6 billion in 2016. In 2017, Mr. Swoboda founded Cape Point Advisors, a consulting company focused on innovation and technology disruption. Mr. Swoboda served on the board of Anixter and currently serves on the boards of Lonerider Brewing Company, a craft brewery; Vesper, a provider of MEMS microphones; and KNOW Bio, a life sciences company focused on a wide array of therapeutic applications. Ernst & Young named Mr. Swoboda Entrepreneur of the Year for the Carolinas in 2010, MIT Technology Review named Cree one of their 50 Smartest Companies for 2014, and Fast Company named Cree one of the World’s 50 Most Innovative Companies in 2015. Mr. Swoboda is the author of “The Innovator’s Spirit: Discover the Mindset to Pursue the Impossible,” a book on innovation. Mr. Swoboda graduated from Marquette University with a BS in Electrical Engineering.

Our board of directors has three standing committees: an audit committee, a compensation committee and a corporate governance and nominating committee. The charter of each committee will be available on our website. Subject to rules and a limited exception, the rules of the NYSE and Rule 10A of the Exchange Act require that the audit committee of a listed company be comprised solely of independent directors. Subject to rules and a limited exception, the rules of the NYSE require that the compensation committee of a listed company be comprised solely of independent directors.

We have adopted a Code of Ethics applicable to our directors, officers and employees. We have filed a copy of our Code of Ethics and our audit and compensation committee charters as exhibits to the registration statement filed in connection with our initial public offering. You may review these documents by accessing our public filings at the SEC’s web site at . In addition, 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

Mr. Galvin, our Chief Executive Officer and a director, is bound by arrangements with WESCO (as to Anixter, a distributor of network and security solutions, electrical and electronic solutions and utility power solutions), which arrangements will be in effect until June 22, 2022, and which prohibit Mr. Galvin from competing with the business of Anixter, its subsidiaries and affiliates. In light of such arrangements, we will not seek an initial Business Combination with any company with operations in Anixter’s businesses during the restricted period without the prior written consent of WESCO. In addition, if our initial Business Combination does not cause Mr. Galvin to violate the arrangements, no assurance can be given that the combined company would not in the future engage in competitive activities that would cause him to be in breach of the arrangements. If a court were to conclude that a violation of the arrangements had occurred, it could extend the term of any or all of the restrictions and/or enjoin Mr. Galvin from participating in our Company, or enjoin us from engaging in aspects of the business that competes with Anixter, as applicable. The court could also impose monetary damages against Mr. Galvin or us. This could materially harm our business and the trading prices of our securities.

Even if ultimately resolved in our favor, any litigation associated with Mr. Galvin’s arrangements could be time consuming, costly and distract management’s focus from locating suitable acquisition candidates and operating our business.

Furthermore, if Mr. Galvin becomes aware of a Business Combination opportunity that is subject to his arrangements with Anixter, he will honor his contractual obligation and not present such opportunity to us. Our Chief Executive Officer is party to arrangements that will limit the types of companies that we can target for an initial Business Combination, among other restrictions, which could limit our prospects for an initial Business Combination or make us a less attractive buyer to certain target companies.

We have filed a copy of our form of Code of Ethics, our audit committee charter, our nominating committee charter and compensation committee charter as exhibits to our registration statement filed with the SEC in connection with our initial public offering. You may review these documents free of charge by accessing our public filings at the SEC’s web site at or by accessing our corporate website at . Our website and the information contained on, or that can be accessed through, the website is not deemed to be incorporated by reference in, and is not considered part of, this Report. We intend to disclose any amendments to or waivers of certain provisions of our Code of Ethics in a Current Report on Form

None of our executive officers or directors have received any cash compensation for services rendered to us. Commencing on the date that our securities were first listed on the NYSE through the earlier of completion of our initial Business Combination and our liquidation, we reimburse an affiliate of our sponsor for office space and administrative support services provided to us in the amount of $10,000 per month. In addition, our sponsor, executive officers and directors, or any of their respective affiliates will be reimbursed for any 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 will review on a quarterly basis all payments that were made to our sponsor, executive officers or directors, or our 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 expenses incurred in connection with our activities on our behalf in connection with identifying and completing 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 any of their respective affiliates, prior to completion of our initial Business Combination.

During the period ended July 14, 2020, our sponsor paid an aggregate of $25,000, or approximately $0.002 per share, to cover certain of our offering costs in consideration of 10,350,000 shares of Class B common stock, par value $0.0001 (after giving effect to a reverse stock split, effected July 21, 2020, and a forward stock split, effected September 17, 2020). In September 2020, our sponsor transferred 30,000 shares of Class B common stock to each of Messrs. Grubbs, Simon and Swoboda (36,000 shares, after giving effect to a forward stock split, effective September 17, 2020). The number of founder shares issued was determined based on the expectation that such founder shares would represent 20% of the outstanding shares upon completion of our initial public offering. The founder shares (including the Class A common stock issuable upon exercise thereof) may not, subject to certain limited exceptions, be transferred, assigned or sold by the holder.

No compensation of any kind, including finder’s and consulting fees, will be paid to our sponsor, officers and directors, or any of 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 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 will review on a quarterly basis all payments that were made to our sponsor, officers, directors or our 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 expenses incurred by such persons in connection with activities on our behalf.

On July 14, 2020, we issued an unsecured promissory note to our sponsor, pursuant to which the Company could borrow up to $300,000 to pay for certain initial public offering expenses. The promissory note was bearing and payable on the earlier of (i) January 31, 2021 or (ii) the consummation of our initial public offering. The outstanding balance under such promissory note of $157,250 was repaid at the closing of our initial public offering on September 18, 2020.

On June 29, 2021, we issued an unsecured promissory note to our sponsor (the “Second Promissory Note”), pursuant to which the Company may borrow up to an aggregate principal amount of $2,500,000. The Second Promissory Note was bearing and payable on the earlier of (i) September 18, 2022 or (ii) the consummation of the initial Business Combination. As of December 31, 2021, the outstanding balance under the Second Promissory Note was $750,000 and the remaining amount available to be drawn was $1,750,000.

The audit committee of our board of directors will adopt 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 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 the Company has already committed to, the business purpose of the transaction and the benefits of the transaction to the Company 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.

. Audit fees consist of fees billed for professional services rendered for the audit of our financial statements and services that are normally provided by Marcum in connection with regulatory filings. The aggregate fees billed by Marcum for professional services rendered for the audit of our annual financial statements, review of the financial information included in our Forms for the respective periods and other required filings with the SEC for the year ended December 31, 2021 and for the period from July 7, 2020 (inception) through December 31, 2020 totaled $99,910 and $38,213, respectively. The above amounts include interim procedures and audit fees, as well as attendance at audit committee meetings.

Audit-related services consist of fees billed for assurance and related services that are reasonably related to performance of the audit or review of our financial statements and are not reported under “Audit Fees.” These services include attest services that are not required by statute or regulation and consultations concerning financial accounting and reporting standards. We did not pay Marcum for consultations concerning financial accounting and reporting standards for the year ended December 31, 2021, and for the period from July 7, 2020 (inception) through December 31, 2020.

. For the year ended December 31, 2021, fees for tax planning and advice totaled $11,330. We did not pay Marcum for tax planning and tax advice for the period from July 7, 2020 (inception) through December 31, 2020.

. We did not pay Marcum for other services for the year ended December 31, 2021, and for the period from July 7, 2020 (inception) through December 31, 2020.

Our audit committee was formed upon the consummation of our initial public offering. As a result, the audit committee did not all of the foregoing services, although any services rendered prior to the formation of our audit committee were approved by our board of directors. Since the formation of our audit committee, and on a going-forward basis, the audit committee has and will all auditing services and permitted services to be performed for us by our auditors, including the fees and terms thereof (subject to the de minimis exceptions for services described in the Exchange Act which are approved by the audit committee prior to the completion of the audit).

We have served as the Company’s auditor since 2020

EQUITY DISTRIBUTION ACQUISITION CORP.

STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT