Item
1.Business.
Overview
We are a blank check company
incorporated as a Delaware corporation formed for the purpose of effecting our business combination.
While we may pursue an acquisition
opportunity in any business, industry, sector or geographical location, we have focused and will continue to focus on industries that
complement our management team’s background, and to capitalize on the ability of our management team to identify and acquire a business
focusing on technology growth companies in the northern part of Europe, including the Nordic and Scandinavian countries, the Baltic states,
United Kingdom and Ireland, Germany, France and the Benelux countries, where our management team has extensive experience. In particular,
we have prioritized and will continue to prioritize companies in the financial technology (“FinTech”) sector and within the
northern part of Europe where we believe there to be many potential targets, along with a secondary focus on other high-performing technology
companies in the northern part of Europe.
Initial Public Offering
On February 11, 2022, we consummated
our initial public offering of 15,000,000 units. Each unit consists of one share of Class A common stock, and one-half of one redeemable
warrant of the Company, with each warrant entitling the holder thereof to purchase one share of Class A common stock for $11.50 per whole
share. The units were sold at a price of $10.00 per unit, generating gross proceeds to us of $150,000,000.
Simultaneously with the closing
of the initial public offering, we completed the private sale of an aggregate of 850,000 shares of Class A common stock to our sponsor,
byNordic Holdings and byNordic Holdings II at a purchase price of $10.00 per private share, generating gross proceeds of $8,500,000.
We granted the underwriters
in the initial public offering a 45-day option to purchase up to 2,250,000 additional units to cover over-allotments, if any, in connection
with the initial public offering. On February 18, 2022, the underwriters exercised the over-allotment option in full by purchasing an
additional 2,250,000 units, generating an additional $22,500,000 of gross proceeds to us from the initial public offering. On February
18, 2022, in connection with the exercise by the underwriters of the over-allotment option in full, we completed the private sale of an
additional 90,000 shares of Class A common stock to our sponsor, byNordic Holdings and byNordic Holdings II at a purchase price of $10.00
per private share, generating an additional $900,000 of gross proceeds.
Of the gross proceeds received
from the consummation of the initial public offering and the simultaneous private placement of Class A common stock on the initial closing
date that occurred on February 11, 2022 and the gross proceeds received from the consummation of the fully exercised over-allotment option
and the simultaneous private sale of private shares on February 18, 2022, $175,950,000 was placed in the trust account maintained by Continental,
acting as trustee, at J.P. Morgan Chase Bank, N.A.
It is the job of our sponsor
and management team to complete our initial business combination. Our management team is led by Michael Hermansson, our Chief Executive
Officer, Thomas Fairfield, our Chief Operating Officer and Chief Financial Officer, Mats Karlsson, our Director of Acquisitions, Alexander
Lidgren, our Director of Marketing, and Christian Merheim, our Director of Technology. We must complete our initial business combination
by May 11, 2023, 15 months from the closing of our initial public offering. If our initial business combination is not consummated by
May 11, 2023, then our existence will terminate, and we will distribute all amounts in the trust account.
Industry Opportunity
While we may acquire a business
in any industry or geographic location, our focus has been and will continue to be on the FinTech and other technology sectors in the
northern part of Europe. We believe the technology industry, particularly the FinTech sector, is attractive for a number of reasons:
Large and Favorable Target
Market. The European FinTech industry represents a large target market, with more than $15 billion of
private capital invested in 2021, according to research from Atomico, Orrick & Slush. We believe that, in the past several years,
there has been a rise in the level of sophistication and interconnectivity between innovative technology and financial services providers.
We expect this trend to continue and potentially accelerate. Based on data compiled by Dealroom, the pipeline of European private technology
companies now exceeds $150 billion in combined enterprise value, with more than $50 billion in private FinTech companies. Large-scale movements
in the industry include the digitization of payments, the increased prevalence of “open-banking”, the application of artificial
intelligence in financial services, and the development of blockchain technology, among many other innovations.
Pace of Growth & Innovation. In
FinTech, we believe the pace of innovation in the private and public sectors is robust. This activity is evident in the rise in industry
research and development spending and in the number and diversity of technological and financial innovations in the pipeline. There has
been significant disruption and change in the delivery of financial services in recent years, including, among others:
| ● | Retail banking (e.g. mobile payments, Neo-Banks); |
| ● | Payments processing for consumers and businesses; |
| ● | Wealth management (e.g. robo advisors); |
| ● | Exchanges and trading platforms; |
| ● | Big data moving to the cloud, application programming interface
(“APIs”), data security; and |
| ● | Digital assets and blockchain technology. |
With increased adoption of
FinTech and technology solutions by both customers and businesses, we believe that the sector is poised for continued growth in both overall
market size and penetration. We believe that our extensive experience and demonstrated success in both investing and operating technology
businesses has culminated in a unique set of capabilities that will be utilized in generating stockholder returns.
Broad Universe of Potential
Targets. We have focused and will continue to focus our investment effort across the FinTech industry, with
a secondary focus on other high-performing technology markets. We believe that there are many potential targets within the FinTech
industry that could become attractive public companies. These potential targets exhibit a broad range of business models and financial
characteristics that range from very high growth innovative companies to more mature businesses with established franchises, recurring
revenues and strong cash flows. These market dynamics are espoused in the European market in particular.
Our management team has extensive
experience and knowledge in several other high-performing technology sectors, including enterprise software, health technology, energy
technology (Renewable energy, energy efficiency, energy storage), transport technology (e-mobility, logistics software & services,
autonomous driving, Transport as a Service) and food technology. These subsectors were all included among the top ten performing sectors,
ranked by amount of investment, according to the State of European Tech 2020 report, and will provide our team with additional potential
investment targets.
We believe that our investment
and operating expertise in technology across multiple industry verticals will give us a large addressable universe of potential targets.
Management believes that the diversity of the target universe and the number of largely uncorrelated sub-sectors increases the likelihood
that the management team will be able to identify and execute an attractive business combination.
Acquisition Strategy
We believe our management
team, with the assistance of our board of directors, is well positioned to identify unique opportunities within the FinTech and other
high-performing technology markets. Certain members of our management team have spent significant portions of their careers working
with businesses in the technology industry, and have developed a wide network of professional services contacts and business relationships
in that industry. Our selection process leverages our deep relationships with venture capitalists and private equity firms, leveraging
Mr. Lidgren’s expansive relationships from the former investor membership network he helped lead, as well as the relationships
of the broader team. Furthermore, the management team brings an extensive network of executives of private and public companies, investment
banking firms, and other professional services firms, which we believe should provide us with a key competitive advantage in sourcing
potential business combination targets.
Given our profile and dedicated
industry approach, target business candidates may be brought to our attention from various unaffiliated sources, and in particular, investors
in other private and public companies in our networks. Our management team is also proactively searching for opportunities that are best
positioned for our initial business combination. We also believe that our management team’s reputations, experience and track record
will make us a preferred partner for these potential targets in the northern part of Europe.
In Europe, both the level
of investment activity and the value creation of institutionally-backed technology companies has been increasing. For example, according
to PitchBook’s 2021 annual European Venture Report, venture capital investments in European businesses increased from €46.8 billion
(approximately $50.8 billion) in 2020 to €102.9 billion (approximately $111.8 billion) in 2021, an increase of 120%. €242.3 billion
(approximately $263.4 billion) of venture capital was invested in European companies since 2017 according to the report. Approximately
30% of the funding for venture capital investments in 2021 stemmed from investments in early-stage capital investments, as investors look
to capitalize on the growth of FinTech and other technology sectors in Europe and more than 80% of European venture capital investments
in 2021 went to the northern part of Europe according to the report. According to data from Atomico, during 2021, Europe added more than
$750 billion of public technology company market capitalization and surpassed $2 trillion in combined market value for public technology
companies. More than one-third of European public companies founded after 2015 chose to list on a securities exchange in the United States.
By focusing our search for
potential targets in the northern part of Europe, we leverage our existing business and investor network to identify and execute a business
combination. In addition to our vast network, we are highly knowledgeable about regional business philosophies and traditions, which we
believe gives us an advantage over outside investors. As a result, we believe the northern part of Europe will provide multiple target
company candidates.
Acquisition Criteria
The sourcing focus has been
and will continue to be on technology and FinTech companies known to our management and Board and proprietary in nature. Our focus has
been and will continue to be companies with enterprise valuations below $750 million, primarily those with enterprise values between
$450 million to $750 million. We believe that our experience, reputation and access to proprietary deal flow will enable us
to identify and complete a business combination with an enterprise that will be successful as a public company. We have identified the
following criteria to evaluate prospective target businesses. We may however, decide to enter into our initial business combination with
a target business that does not meet these criteria or is outside of our sourcing focus. We currently seek to acquire companies that we
believe:
| ● | have developed or are developing differentiated products
or services that address unmet needs and therefore represent significant growth opportunities serving the markets in which they operate
or intend to operate; |
| ● | have developed or are developing products or services that
have achieved a level of maturity such that the investment has been relatively de-risked and can be adequately evaluated; |
| ● | exhibit unrecognized value or other characteristics that
we believe have been misevaluated by the market based on the expertise of our directors and officers and our rigorous sourcing and due
diligence processes; |
| ● | will offer attractive risk-adjusted equity returns for
our stockholders; |
| ● | can benefit from access to public investors for additional
capital as well as our industry relationships and expertise; |
| ● | are ready to be public, with strong management, corporate
governance and reporting policies in place; and |
| ● | will likely be well received by public investors and are
expected to have good access to the public capital markets. |
We may use other criteria
as well. Any evaluation relating to the merits of a particular initial business combination may be based, to the extent relevant, on these
general guidelines as well as other considerations, factors and criteria that from time to time our management team may deem relevant.
In the event that we decide to enter into our initial business combination with a target business that does not meet the above criteria
and guidelines, we will disclose that the target business does not meet the above criteria in our stockholder communications related to
our initial business combination, which, as discussed in this Report, would be in the form of tender offer documents or proxy solicitation
materials that we would file with the SEC.
Initial Business Combination
Nasdaq rules require that
we must complete one or more business combinations having an aggregate fair market value of at least 80% of the value of the assets held
in the trust account (excluding the deferred underwriting commissions and taxes payable on the interest earned on the trust account) at
the time of our signing a definitive agreement in connection with our initial business combination. Our board of directors will make the
determination as to the fair market value of our initial business combination. If our board of directors is not able to independently
determine the fair market value of our initial business combination, we will obtain an opinion from an independent investment banking
firm or another independent entity that commonly renders valuation opinions with respect to the satisfaction of such criteria. While we
consider it unlikely that our board of directors will not be able to make an independent determination of the fair market value of our
initial business combination, it may be unable to do so if it is less familiar or experienced with the business of a particular target
or if there is a significant amount of uncertainty as to the value of a target’s assets or prospects. Additionally, pursuant to
Nasdaq rules, any initial business combination must be approved by a majority of our independent directors.
We anticipate structuring
our initial business combination either (i) in such a way so that the post-transaction company in which our public stockholders own
shares will own or acquire 100% of the equity interests or assets of the target business or businesses, or (ii) in such a way so that
the post-transaction company owns or acquires less than 100% of such interests or assets of the target business in order to meet
certain objectives of the target management team or stockholders, or for other reasons. However, we will only complete an initial business
combination if the post-transaction company owns or acquires 50% or more of the issued and outstanding voting securities of the target
or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under
the Investment Company Act of 1940. Even if the post-transaction company owns or acquires 50% or more of the voting securities of
the target, our stockholders prior to the initial business combination may collectively own a minority interest in the post-transaction company,
depending on valuations ascribed to the target and us in the initial business combination. For example, we could pursue a transaction
in which we issue a substantial number of new shares in exchange for all of the issued and outstanding capital stock of a target. In this
case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new
shares, our stockholders immediately prior to our initial business combination could own less than a majority of our issued and outstanding
shares subsequent to our initial business combination. If less than 100% of the equity interests or assets of a target business or businesses
are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what
will be taken into account for purposes of Nasdaq’s 80% fair market value test. If the initial business combination involves more
than one target business, the 80% fair market value test will be based on the aggregate value of all of the transactions and we will treat
the target businesses together as the initial business combination for purposes of a tender offer or for seeking stockholder approval,
as applicable.
Our Business Combination Process
We believe that conducting
comprehensive due diligence on prospective investments is particularly important within the technology industries, including FinTech.
In evaluating a prospective acquisition candidate, we conduct a thorough due diligence review which encompasses, among other things, meetings
with incumbent management, investors and employees, document reviews, inspection of facilities, as well as a review of scientific, regulatory,
operational, financial, legal and other information which will be made available to us. We have utilized and will continue to utilize
the diligence, rigor, and expertise of our officers and directors to evaluate potential targets’ strengths, weaknesses, and opportunities
to identify the relative risk and return profile of any potential target for our initial business combination. Given our management team’s
extensive tenure investing in northern European companies and in the technology and—in particular—the FinTech industry, we
are often familiar with a prospective target’s end-market, competitive landscape and business model.
We are not prohibited from
pursuing an initial business combination with a company that is affiliated with our sponsor, officers or directors. In the event we seek
to complete our initial business combination with a company that is affiliated with our sponsor, officers or directors we, or a committee
of independent directors, will obtain an opinion from an independent investment banking firm or another independent entity that commonly
renders valuation opinions that our initial business combination is fair to our company from a financial point of view.
Members of our management
team directly or indirectly own our founder shares, common stock and/or private shares following our initial public offering, and, accordingly,
may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate
our initial business combination. Further, each of our officers and directors may have a conflict of interest with respect to evaluating
a particular business combination if the retention or resignation of any such officers and directors were to be included by a target business
as a condition to any agreement with respect to our initial business combination.
Certain members of our officers
and directors presently have, and any of them in the future may have, fiduciary or contractual obligations to other entities pursuant
to which such officer or director is or will be required to present a business combination opportunity. Accordingly, if any of our officers
or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then-current fiduciary
or contractual obligations to present the opportunity to such entity, he or she will honor his or her fiduciary or contractual obligations
to present such opportunity to such entity. We believe, however, that the fiduciary duties or contractual obligations of our officers
or directors will not materially affect our ability to complete our initial business combination, as we believe any such opportunities
presented would be smaller than what we are interested in, in different fields than what we would be interested in, or that our obligations
are to entities that are not themselves in the business of engaging in business combinations. Our amended and restated certificate of
incorporation provides that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity
is expressly offered to such person solely in his or her capacity as a director or officer of our company and such opportunity is one
we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue, and to the extent the director
or officer is permitted to refer that opportunity to us without violating another legal obligation.
Our officers have agreed not
to become an officer or director of any other special purpose acquisition company with a class of securities registered under the Securities
Exchange Act of 1934, as amended, or the Exchange Act, until we have entered into a definitive agreement regarding our initial business
combination or we have failed to complete our initial business combination by May 11, 2023 or during any extension period. Notwithstanding
the foregoing, Thomas Fairfield, our Chief Financial Officer, Chief Operating Officer and Secretary, may become an officer or director
of another special purpose acquisition company which does not have a focus on acquiring a technology growth company in the northern part
of Europe.
Status as a Public Company
We believe our structure as
a public company makes us an attractive business combination partner to target businesses. As an existing public company, we offer a target
business an alternative to the traditional initial public offering through a merger or other business combination. In this situation,
the owners of the target business would exchange their shares of stock in the target business for shares of our stock or for a combination
of shares of our stock and cash, allowing us to tailor the consideration to the specific needs of the sellers. Although there are various
costs and obligations associated with being a public company, we believe target businesses will find this method a more certain and cost
effective method to becoming a public company than the typical initial public offering. In a typical initial public offering, there are
additional expenses incurred in marketing, road show and public reporting efforts that may not be present to the same extent in connection
with a business combination with us.
Furthermore, once a proposed
business combination is completed, the target business will have effectively become public, whereas an initial public offering is always
subject to the underwriters’ ability to complete the offering, as well as general market conditions, which could delay or prevent
the offering from occurring or could have negative valuation consequences. Once public, we believe the target business would then have
greater access to capital and an additional means of providing management incentives consistent with stockholders’ interests. It
can offer further benefits by augmenting a company’s profile among potential new customers and vendors and aid in attracting talented
employees.
We are an “emerging
growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As such, we are eligible to take
advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging
growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section
404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy
statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder
approval of any golden parachute payments not previously approved. If some investors find our securities less attractive as a result,
there may be a less active trading market for our securities and the prices of our securities may be more volatile.
In addition, Section 107 of
the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided
in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging
growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.
We intend to take advantage of the benefits of this extended transition period.
We will remain an emerging
growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of our initial
public offering (or February 11, 2022), (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which
we are deemed to be a large accelerated filer, which means the market value of our Class A common stock that is held by non-affiliates exceeds
$700 million as of the prior June 30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt
securities during the prior three-year period.
Financial Position
With funds available for a
business combination initially in the amount of $169,737,500, after payment of $6,037,500 of deferred underwriting fees and $175,000 of
deferred legal fees and up to $10,000,000 in gross proceeds from the sale of the forward purchase shares, in each case before fees and
expenses associated with our initial business combination and cash on deposit in the trust account that may be applied to the redemption
of our Class A common stock at the election of our shareholders, we offer a target business a variety of options such as creating a liquidity
event for its owners, providing capital for the potential growth and expansion of its operations or strengthening its balance sheet by
reducing its debt or leverage ratio. Because we are able to complete our business combination using our cash, debt or equity securities,
or a combination of the foregoing, we have the flexibility to use the most efficient combination that will allow us to tailor the consideration
to be paid to the target business to fit its needs and desires. However, we have not taken any steps to secure third party financing and
there can be no assurance it will be available to us.
Effecting Our Initial Business Combination
We are not presently engaged
in, and we will not engage in, any operations until we consummate our initial business combination. We intend to effectuate our initial
business combination using cash from the proceeds of our initial public offering, the private placement of the private shares, the private
placement of the forward purchase shares, the proceeds of the sale of our shares in connection with our initial business combination (pursuant
to forward purchase agreements or backstop agreements we may enter into following the closing of our initial public offering or otherwise),
shares issued to the owners of the target, debt issued to bank or other lenders or the owners of the target, or a combination of the foregoing.
If our initial business combination
is paid for using equity or debt securities, or not all of the funds released from the trust account are used for payment of the consideration
in connection with our initial business combination or used for redemptions of our Class A common stock, we may apply the balance of the
cash released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations of the
post-transaction company, the payment of principal or interest due on indebtedness incurred in completing our initial business combination,
to fund the purchase of other companies or for working capital.
We may seek to raise additional
funds through a private offering of debt or equity securities in connection with the completion of our initial business combination, and
we may effectuate our initial business combination using the proceeds of such offering rather than, or in addition to, using the amounts
held in the trust account. We intend to target businesses larger than we could acquire with solely the net proceeds of our initial public
offering and the sale of the private shares, and may as a result be required to seek additional financing to complete such proposed initial
business combination. Subject to compliance with applicable securities laws, we would expect to complete such financing simultaneously
with the completion of our initial business combination. In the case of an initial business combination funded with assets other than
the trust account assets, our proxy materials or tender offer documents disclosing the initial business combination would disclose the
terms of the financing and, only if required by law or the applicable rules of a national securities exchange, we would seek stockholder
approval of such financing. There are no prohibitions on our ability to raise funds privately or through loans in connection with our
initial business combination. At this time, other than the forward purchase agreement, we are not a party to any arrangement or understanding
with any third party with respect to raising any additional funds through the sale of securities or otherwise.
Although our management will
assess the risks inherent in a particular target business with which we may combine, we cannot assure you that this assessment will result
in our identifying all risks that a target business may encounter. Furthermore, some of those risks may be outside of our control, meaning
that we can do nothing to control or reduce the chances that those risks will adversely impact a target business.
Sources of Target Businesses
Target business candidates
may be brought to our attention from various unaffiliated sources, including investment bankers and investment professionals. Target businesses
may be brought to our attention by such unaffiliated sources as a result of being solicited by us by calls or mailings. These sources
may also introduce us to target businesses in which they think we may be interested on an unsolicited basis, since many of these sources
will have read our prospectus in connection with our initial public offering or this Report and know what types of businesses we are targeting.
Our officers and directors, as well as our sponsor and its affiliates, may also bring to our attention target business candidates that
they become aware of through their business contacts as a result of formal or informal inquiries or discussions they may have, as well
as attending trade shows or conventions. In addition, we expect to receive a number of proprietary deal flow opportunities that would
not otherwise necessarily be available to us as a result of the business relationships of our officers and directors and our sponsor and
their respective industry and business contacts as well as their affiliates. We may engage the services of professional firms or other
individuals that specialize in business acquisitions, in which event we may pay a finder’s fee, consulting fee, advisory fee or
other compensation to be determined in an arm’s length negotiation based on the terms of the transaction. In addition, the underwriters
may provide these services without additional compensation. We will formally engage a finder only to the extent our management determines
that the use of a finder may bring opportunities to us that may not otherwise be available to us or if finders approach us on an unsolicited
basis with a potential transaction that our management determines is in our best interest to pursue. Payment of finder’s fees is
customarily tied to completion of a transaction, in which case any such fee will be paid out of the funds held in the trust account. In
no event, however, will our sponsor or any of our existing officers or directors, or any entity with which our sponsor or officers are
affiliated, be paid any finder’s fee, reimbursement, consulting fee, monies in respect of any payment of a loan or other compensation
by the company prior to, or in connection with any services they render in order to effectuate the completion of our initial business
combination (regardless of the type of transaction that it is). Although none of our sponsor, executive officers or directors, or any
of their respective affiliates, will be allowed to receive any compensation, finder’s fees or consulting fees from a prospective
business combination target in connection with a contemplated initial business combination, we do not have a policy that prohibits our
sponsor, executive officers or directors, or any of their respective affiliates, from negotiating for the reimbursement of out-of-pocket expenses
by a target business. We pay our sponsor a total of $10,000 per month for office space, utilities and secretarial and administrative support
and will reimburse our sponsor for any out-of-pocket expenses related to identifying, investigating and completing an initial business
combination. Some of our officers and directors may enter into employment or consulting agreements with the post-transaction company
following our initial business combination. The presence or absence of any such fees or arrangements will not be used as a criterion in
our selection process of an initial business combination candidate.
We are not prohibited from
pursuing an initial business combination with a target that is affiliated with our sponsor, officers or directors or making the initial
business combination through a joint venture or other form of shared ownership with our sponsor, officers or directors. In the event we
seek to complete our initial business combination with an initial business combination target that is affiliated with our sponsor, officers
or directors, we, or a committee of independent directors, would obtain an opinion from an independent investment banking firm or from
another independent entity that commonly renders valuation opinions that such an initial business combination is fair to our company from
a financial point of view. We are not required to obtain such an opinion in any other context.
If any of our officers or
directors becomes aware of an initial business combination opportunity that falls within the line of business of any entity to which he
or she has pre-existing fiduciary or contractual obligations, he or she may be required to present such business combination opportunity
to such entity prior to presenting such business combination opportunity to us.
Selection of a Target Business and Structuring
of our Initial Business Combination
Nasdaq rules require that
we must complete one or more business combinations having an aggregate fair market value of at least 80% of the value of the assets held
in the trust account (excluding the deferred underwriting commissions and taxes payable on the interest earned on the trust account) at
the time of our signing a definitive agreement in connection with our initial business combination. The fair market value of our initial
business combination will be determined by our board of directors based upon one or more standards generally accepted by the financial
community, such as discounted cash flow valuation, a valuation based on trading multiples of comparable public businesses or a valuation
based on the financial metrics of M&A transactions of comparable businesses. If our board of directors is not able to independently
determine the fair market value of our initial business combination, we will obtain an opinion from an independent investment banking
firm or another independent entity that commonly renders valuation opinions with respect to the satisfaction of such criteria. While we
consider it unlikely that our board of directors will not be able to make an independent determination of the fair market value of our
initial business combination, it may be unable to do so if it is less familiar or experienced with the business of a particular target
or if there is a significant amount of uncertainty as to the value of a target’s assets or prospects. Additionally, pursuant to
Nasdaq rules, any initial business combination must be approved by a majority of our independent directors. We do not intend to purchase
multiple businesses in unrelated industries in conjunction with our initial business combination. Subject to this requirement, our management
will have virtually unrestricted flexibility in identifying and selecting one or more prospective target businesses, although we will
not be permitted to effectuate our initial business combination with another blank check company or a similar company with nominal operations.
We anticipate structuring
our initial business combination either (i) in such a way so that the post-transaction company in which our public stockholders own
shares will own or acquire 100% of the equity interests or assets of the target business or businesses, or (ii) in such a way so that
the post-transaction company owns or acquires less than 100% of such interests or assets of the target business in order to meet
certain objectives of the target management team or stockholders. However, we will only complete an initial business combination if the
post-transaction company owns or acquires 50% or more of the issued and outstanding voting securities of the target or otherwise
acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment
Company Act of 1940. Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our
stockholders prior to the initial business combination may collectively own a minority interest in the post-transaction company,
depending on valuations ascribed to the target and us in the initial business combination. For example, we could pursue a transaction
in which we issue a substantial number of new shares in exchange for all of the issued and outstanding capital stock of a target. In this
case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new
shares, our stockholders immediately prior to our initial business combination could own less than a majority of our issued and outstanding
shares subsequent to our initial business combination. If less than 100% of the equity interests or assets of a target business or businesses
are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what
will be taken into account for purposes of Nasdaq’s 80% fair market value test. If the initial business combination involves more
than one target business, the 80% fair market value test will be based on the aggregate value of all of the transactions and we will treat
the target businesses together as the initial business combination for purposes of a tender offer or for seeking stockholder approval,
as applicable.
The time required to select
and evaluate a target business and to structure and complete our initial business combination, and the costs associated with this process,
are not currently ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation of
a prospective target business with which our initial business combination is not ultimately completed will result in our incurring losses
and will reduce the funds we can use to complete another business combination.
Lack of Business Diversification
For an indefinite period of
time after the completion of our initial business combination, the prospects for our success may depend entirely on the future performance
of a single business. Unlike other entities that have the resources to complete business combinations with multiple entities in one or
several industries, it is probable that we will not have the resources to diversify our operations and mitigate the risks of being in
a single line of business. In addition, we have focused and will continue to focus our search for an initial business combination in a
single industry. By completing our initial business combination with only a single entity, our lack of diversification may:
| ● | subject us to negative economic, competitive and regulatory
developments, any or all of which may have a substantial adverse impact on the particular industry in which we operate after our initial
business combination, and |
| ● | cause us to depend on the marketing and sale of a single
product or limited number of products or services. |
Limited Ability to Evaluate the Target’s
Management Team
Although we closely scrutinize
the management of a prospective target business when evaluating the desirability of effecting our initial business combination with that
business, our assessment of the target business’ management may not prove to be correct. In addition, the future management may
not have the necessary skills, qualifications or abilities to manage a public company. Furthermore, the future role of members of our
management team, if any, in the target business cannot presently be stated with any certainty. The determination as to whether any of
the members of our management team will remain with the combined company will be made at the time of our initial business combination.
While it is possible that one or more of our directors will remain associated in some capacity with us following our initial business
combination, it is unlikely that any of them will devote their full efforts to our affairs subsequent to our initial business combination.
Moreover, we cannot assure you that members of our management team will have significant experience or knowledge relating to the operations
of the particular target business.
We cannot assure you that
any of our key personnel will remain in senior management or advisory positions with the combined company. The determination as to whether
any of our key personnel will remain with the combined company will be made at the time of our initial business combination.
Following an initial business
combination, we may seek to recruit additional managers to supplement the incumbent management of the target business. We cannot assure
you that we will have the ability to recruit additional managers, or that additional managers will have the requisite skills, knowledge
or experience necessary to enhance the incumbent management.
Stockholders May Not Have the Ability to Approve
Our Initial Business Combination
We may conduct redemptions
without a stockholder vote pursuant to the tender offer rules of the SEC. However, we will seek stockholder approval if it is required
by law or applicable stock exchange rule, or we may decide to seek stockholder approval for business or other legal reasons. Presented
in the table below is a graphic explanation of the types of initial business combinations we may consider and whether stockholder approval
is currently required under Delaware law for each such transaction.
Type of Transaction |
|
Whether Stockholder Approval is Required |
Purchase of assets |
|
No |
Purchase of stock of target not involving a merger with the company |
|
No |
Merger of target into a subsidiary of the company |
|
No |
Merger of the company with a target |
|
Yes |
Under Nasdaq’s listing
rules, stockholder approval would be required for our initial business combination if, for example:
| ● | we issue shares of Class A common stock that will be equal
to or in excess of 20% of the number of shares of our Class A common stock then issued and outstanding; |
| ● | any of our directors, officers or substantial stockholders
(as defined by Nasdaq rules) has a 5% or greater interest (or such persons collectively have a 10% or greater interest), directly or
indirectly, in the target business or assets to be acquired or otherwise and the present or potential issuance of common stock could
result in an increase in issued and outstanding common shares or voting power of 5% or more; or |
| ● | the issuance or potential issuance of common stock will result
in our undergoing a change of control. |
Permitted Purchases of our Securities
If we seek stockholder approval
of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to
the tender offer rules, our sponsor, initial stockholders, directors, executive officers or their affiliates may purchase shares or warrants
in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination.
There is no limit on the number of shares our initial stockholders, directors, officers or their affiliates may purchase in such transactions,
subject to compliance with applicable law and Nasdaq rules. However, they have no current commitments, plans or intentions to engage in
such transactions and have not formulated any terms or conditions for any such transactions. If they engage in such transactions, they
will not make any such purchases if such purchases are prohibited by Regulation M under the Exchange Act. We do not currently anticipate
that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction
subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases
that the purchases are subject to such rules, the purchasers will comply with such rules. Any such purchases will be reported pursuant
to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements. None of the
funds held in the trust account will be used to purchase shares or warrants in such transactions prior to completion of our initial business
combination.
The purpose of any such purchases
of shares could be to vote such shares in favor of the initial business combination and thereby increase the likelihood of obtaining stockholder
approval of the initial business combination or to satisfy a closing condition in an agreement with a target that requires us to have
a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement
would otherwise not be met. The purpose of any such purchases of warrants could be to reduce the number of warrants outstanding or to
vote such warrants on any matters submitted to the warrantholders for approval in connection with our initial business combination. Any
such purchases of our securities may result in the completion of our initial business combination that may not otherwise have been possible.
In addition, if such purchases are made, the public “float” of our shares of Class A common stock or warrants may be reduced
and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation,
listing or trading of our securities on a national securities exchange.
Our sponsor, officers, directors
and/or their affiliates anticipate that they may identify the stockholders with whom our sponsor, officers, directors or their affiliates
may pursue privately negotiated purchases by either the stockholders contacting us directly or by our receipt of redemption requests submitted
by stockholders following our mailing of proxy materials in connection with our initial business combination. To the extent that our sponsor,
officers, directors or their affiliates enter into a private purchase, they would identify and contact only potential selling stockholders
who have expressed their election to redeem their shares for a pro rata share of the trust account or vote against our initial business
combination, whether or not such stockholder has already submitted a proxy with respect to our initial business combination. Our sponsor,
officers, directors or their affiliates will only purchase shares if such purchases comply with Regulation M under the Exchange Act and
the other federal securities laws.
Any purchases by our sponsor,
officers, directors and/or their affiliates who are affiliated purchasers under Rule 10b-18 under the Exchange Act will only be made
to the extent such purchases are able to be made in compliance with Rule 10b-18, which is a safe harbor from liability for manipulation
under Section 9(a)(2) and Rule 10b-5 of the Exchange Act. Rule 10b-18 has certain technical requirements that must be complied
with in order for the safe harbor to be available to the purchaser. Our sponsor, officers, directors and/or their affiliates will not
make purchases of common stock if the purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act. Any such purchases
will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchases are subject to such reporting
requirements.
Redemption Rights for Public Stockholders upon
Completion of our Initial Business Combination
We will provide our public
stockholders with the opportunity to redeem all or a portion of their shares of Class A common stock in connection with the completion
of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust
account as of two business days prior to the consummation of the initial business combination including interest earned on the funds held
in the trust account and not previously released to us to pay our taxes, divided by the number of then issued and outstanding public shares,
subject to the limitations described herein. The amount in the trust account is initially anticipated to be approximately $10.20 per public
share. The per-share amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred
underwriting commissions we will pay to the underwriters. Our sponsor, byNordic Holdings, byNordic Holdings II and our executive officers
and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect
to their founder shares, the private shares and any public shares they may acquire during or after our initial public offering in connection
with the completion of our initial business combination or otherwise.
Manner of Conducting Redemptions
We will provide our public
stockholders with the opportunity to redeem all or a portion of their shares of Class A common stock in connection with the completion
of our initial business combination either (i) in connection with a stockholder meeting called to approve the initial business combination
or (ii) by means of a tender offer. The decision as to whether we will seek stockholder approval of a proposed initial business combination
or conduct a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of
the transaction and whether the terms of the transaction would require us to seek stockholder approval under the law or stock exchange
listing requirement. Under Nasdaq rules, asset acquisitions and stock purchases would not typically require stockholder approval while
direct mergers with our company where we do not survive and any transactions where we issue more than 20% of our issued and outstanding
common stock or seek to amend our amended and restated certificate of incorporation would require stockholder approval. If we structure
an initial business combination with a target company in a manner that requires stockholder approval, we will not have discretion as to
whether to seek a stockholder vote to approve the proposed initial business combination. We may conduct redemptions without a stockholder
vote pursuant to the tender offer rules of the SEC unless stockholder approval is required by law or stock exchange listing requirements
or we choose to seek stockholder approval for business or other legal reasons. So long as we obtain and maintain a listing for our securities
on Nasdaq, we will be required to comply with such rules.
Our anchor investors
have purchased approximately 84.9% of the units offered for sale in our initial public offering. If our anchor investors vote their
public shares in favor of our initial business combination, no affirmative votes from other public stockholders would be required to
approve our initial business combination. The anchor investors will potentially have different interests than our other public
stockholders in approving our initial business combination and otherwise exercising their rights as public stockholders because of
their ownership of our Class B common stock as further discussed in this Report. In particular, the anchor investors would have an
incentive to approve an initial business combination before the deadline for us to complete an initial business combination because
otherwise their Class B common stock will expire worthless. Since our sponsor and byNordic Holdings either transferred or forfeited
shares of our Class B common stock held by themselves without the issuance of additional shares of Class B common stock by us, there
was no additional dilutive impact on the other investors in our initial public offering from the sale of the Class B common stock to
the anchor investors. However, because our anchor investors are not obligated to continue owning any public shares following the
closing of our initial public offering and are not obligated to vote any public shares in favor of our initial business combination,
we cannot assure you that any of these anchor investors will be stockholders at the time our stockholders vote on our initial
business combination, and, if they are stockholders, we cannot assure you as to how such anchor investors will vote on any business
combination.
If a stockholder vote is not
required and we do not decide to hold a stockholder vote for business or other legal reasons, we will, pursuant to our amended and restated
certificate of incorporation:
| ● | conduct the redemptions pursuant to Rule 13e-4 and Regulation
14E of the Exchange Act, which regulate issuer tender offers, and |
| ● | file tender offer documents with the SEC prior to completing
our initial business combination which contain substantially the same financial and other information about the initial business combination
and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies. |
Upon the public announcement
of our initial business combination, we or our sponsor will terminate any plan established in accordance with Rule 10b5-1 to purchase
shares of our Class A common stock in the open market if we elect to redeem our public shares through a tender offer, to comply with Rule
14e-5 under the Exchange Act.
In the event we conduct redemptions
pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a)
under the Exchange Act, and we will not be permitted to complete our initial business combination until the expiration of the tender offer
period. In addition, the tender offer will be conditioned on public stockholders not tendering more than a specified number of public
shares which are not purchased by our sponsor, which number will be based on the requirement that we will only redeem our public shares
so long as (after such redemption) our net tangible assets will be at least $5,000,001 either immediately prior to or upon consummation
of our initial business combination and after payment of underwriters’ fees and commissions (so that we are not subject to the SEC’s
“penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating
to our initial business combination. If public stockholders tender more shares than we have offered to purchase, we will withdraw the
tender offer and not complete the initial business combination.
If, however, stockholder approval
of the transaction is required by law or stock exchange listing requirement, or we decide to obtain stockholder approval for business
or other legal reasons, we will, pursuant to our amended and restated certificate of incorporation:
| ● | conduct the redemptions in conjunction with a proxy solicitation
pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules,
and |
| ● | file proxy materials with the SEC. |
In the event that we seek
stockholder approval of our initial business combination, we will distribute proxy materials and, in connection therewith, provide our
public stockholders with the redemption rights described above upon completion of the initial business combination.
If we seek stockholder approval,
we will complete our initial business combination only if in addition to any other vote required by applicable law or stock exchange listing
requirements, a majority of the issued and outstanding shares of common stock voted are voted in favor of the initial business combination.
A quorum for such meeting will consist of the holders present in person or by proxy of shares of issued and outstanding capital stock
of the company representing a majority of the voting power of all issued and outstanding shares of capital stock of the company entitled
to vote at such meeting. Our initial stockholders will count toward this quorum and pursuant to the letter agreement, our sponsor, byNordic
Holdings, byNordic Holdings II and our executive officers and directors have agreed to vote the founder shares held by them and any public
shares purchased by them during or after our initial public offering (including in open market and privately negotiated transactions)
in favor of our initial business combination. For purposes of seeking approval of the majority of our issued and outstanding shares of
common stock voted, non-votes will have no effect on the approval of our initial business combination once a quorum is obtained.
Subject to the requirements of applicable law or stock exchange listing requirements which may require a higher vote threshold, in addition
to our initial stockholders’ founder shares and private shares and the anchor investors’ founder shares, we would need only
5,280,001 shares, or 30.6%, of the 17,250,000 public shares sold in our initial public offering to be voted in favor of an initial business
combination (assuming all issued and outstanding shares are voted and assuming our sponsor, officers and directors do not purchase any
public shares) in order to have our initial business combination approved. We intend to give approximately 30 days (but not less than
10 days nor more than 60 days) prior written notice of any such meeting, if required, at which a vote shall be taken to approve our initial
business combination. These quorum and voting thresholds, and the voting agreements of our initial stockholders, may make it more likely
that we will consummate our initial business combination. Each public stockholder may elect to redeem its public shares irrespective of
whether they vote for or against the proposed transaction. Our amended and restated certificate of incorporation provides that we will
only redeem our public shares so long as (after such redemption) our net tangible assets will be at least $5,000,001 either immediately
prior to or upon consummation of our initial business combination and after payment of underwriters’ fees and commissions (so that
we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which may
be contained in the agreement relating to our initial business combination. For example, the proposed initial business combination may
require: (i) cash consideration to be paid to the target or its owners, (ii) cash to be transferred to the target for working capital
or other general corporate purposes or (iii) the retention of cash to satisfy other conditions in accordance with the terms of the proposed
initial business combination. In the event the aggregate cash consideration we would be required to pay for all shares of Class A common
stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed
initial business combination exceed the aggregate amount of cash available to us, we will not complete the initial business combination
or redeem any shares, and all shares of Class A common stock submitted for redemption will be returned to the holders thereof.
Limitation on Redemption upon Completion
of our Initial Business Combination if we Seek Stockholder Approval
Notwithstanding the foregoing,
if we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business
combination pursuant to the tender offer rules, our amended and restated certificate of incorporation provides that a public stockholder,
together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group”
(as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate
of 15% of the shares sold in our initial public offering, which we refer to as the “Excess Shares.” Such restriction shall
also be applicable to our affiliates with respect to public shares they acquire in or after our initial public offering. We believe this
restriction will discourage stockholders from accumulating large blocks of shares, and subsequent attempts by such holders to use their
ability to exercise their redemption rights against a proposed initial business combination as a means to force us or our management to
purchase their shares at a significant premium to the then-current market price or on other undesirable terms. Absent this provision,
a public stockholder holding more than an aggregate of 15% of the shares sold in our initial public offering could threaten to exercise
its redemption rights if such holder’s shares are not purchased by us or our management at a premium to the then-current market
price or on other undesirable terms. By limiting our stockholders’ ability to redeem no more than 15% of the shares sold in our
initial public offering without our prior consent, we believe we will limit the ability of a small group of stockholders to unreasonably
attempt to block our ability to complete our initial business combination, particularly in connection with an initial business combination
with a target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. However, we would not
be restricting our stockholders’ ability to vote all of their shares (including Excess Shares) for or against our initial business
combination.
Tendering Stock Certificates in Connection
with Redemption Rights
We may require our public
stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,”
to either tender their certificates to our transfer agent prior to the meeting held to approve a proposed initial business combination
by a date set forth in the proxy materials mailed to such holders or to deliver their shares to the transfer agent electronically using
the DWAC System, at the holder’s option. The proxy materials that we will furnish to holders of our public shares in connection
with our initial business combination will indicate whether we are requiring public stockholders to satisfy such delivery requirements.
Accordingly, a public stockholder would have from the time we send out our proxy materials until the date set forth in such proxy materials
to tender its shares if it wishes to seek to exercise its redemption rights. Given the relatively short exercise period, it is advisable
for stockholders to use electronic delivery of their public shares.
There is a nominal cost associated
with the above-referenced tendering process and the act of certificating the shares or delivering them through the DWAC System. The
transfer agent will typically charge the tendering broker $80.00 and it would be up to the broker whether or not to pass this cost on
to the redeeming holder. However, this fee would be incurred regardless of whether or not we require holders seeking to exercise redemption
rights to tender their shares. The need to deliver shares is a requirement of exercising redemption rights regardless of the timing of
when such delivery must be effectuated.
The foregoing may be different
from the procedures used by other blank check companies. In order to perfect redemption rights in connection with their business combinations,
many blank check companies would distribute proxy materials for the stockholders’ vote on an initial business combination, and a
holder could simply vote against a proposed initial business combination and check a box on the proxy card indicating such holder was
seeking to exercise his or her redemption rights. After the initial business combination was approved, the company would contact such
stockholder to arrange for him or her to deliver his or her certificate to verify ownership. As a result, the stockholder then had an
“option window” after the completion of the initial business combination during which he or she could monitor the price of
the company’s stock in the market. If the price rose above the redemption price, he or she could sell his or her shares in the open
market before actually delivering his or her shares to the company for cancellation. As a result, the redemption rights, to which stockholders
were aware they needed to commit before the stockholder meeting, would become “option” rights surviving past the completion
of the initial business combination until the redeeming holder delivered its certificate.
Any request to redeem such
shares, once made, may be withdrawn at any time up to the date set forth in the proxy materials. Furthermore, if a holder of a public
share delivered its certificate in connection with an election of redemption rights and subsequently decides prior to the applicable date
not to elect to exercise such rights, such holder may simply request that the transfer agent return the certificate (physically or electronically).
It is anticipated that the funds to be distributed to holders of our public shares electing to redeem their shares will be distributed
promptly after the completion of our initial business combination.
If our initial business combination
is not approved or completed for any reason, then our public stockholders who elected to exercise their redemption rights would not be
entitled to redeem their shares for the applicable pro rata share of the trust account. In such case, we will promptly return any certificates
delivered by public holders who elected to redeem their shares.
If our initial proposed initial
business combination is not completed, we may continue to try to complete an initial business combination with a different target until
May 11, 2023 or during any extension period.
Redemption of Public Shares and Liquidation
if no Initial Business Combination
Our amended and restated certificate
of incorporation provides that we will have only 15 months from the closing of our initial public offering, or until May 11, 2023,
to complete our initial business combination as such deadline may be extended for an additional three month period for a total of up to
18 months, or until August 11, 2023, to complete our initial business combination in connection with our sponsor or any of its affiliates
or designees, upon five business days’ advance notice prior to the date of the deadline for completing our initial business combination,
paying an additional $0.10 per public share into the trust account ($1,725,000) in respect of such extension period on or prior to the
date of the deadline (in connection with which our stockholders will have no right to redeem their public shares), or by such other further
extended deadline that we may have to consummate an initial business combination beyond 18 months as a result of a stockholder vote
to amend our amended and restated certificate of incorporation (in connection with which our stockholders will have a right to redeem
their public shares as described herein) (such additional three month period as the same may be further extended as a result of the stockholder
vote being referred to herein as an extension period). If we are unable to complete our initial business combination by May 11, 2023 or
during any extension period, we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible
but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate
amount then on deposit in the trust account including interest earned on the funds held in the trust account and not previously released
to us to pay our taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then issued and outstanding
public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive
further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption,
subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our
obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption
rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to complete our initial business
combination by May 11, 2023 or during any extension period.
Our sponsor, byNordic Holdings,
byNordic Holdings II and our executive officers and directors have entered into a letter agreement with us, pursuant to which they have
waived their rights to liquidating distributions from the trust account with respect to the founder shares and the private shares held
by them if we fail to complete our initial business combination by May 11, 2023 or during any extension period. However, if they acquire
public shares in or after our initial public offering, they will be entitled to liquidating distributions from the trust account with
respect to such public shares if we fail to complete our initial business combination within the prescribed time frame.
Our sponsor, byNordic Holdings,
byNordic Holdings II and our executive officers and directors have agreed, pursuant to a letter agreement with us, that they will not
propose any amendment to our amended and restated certificate of incorporation (i) to modify the substance or timing of our obligation
to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete
our initial business combination by May 11, 2023 or during any extension period or (ii) with respect to any other provision relating
to stockholders’ rights or pre-initial business combination activity, unless we provide our public stockholders with the opportunity
to redeem their shares of Class A common stock upon approval of any such amendment at a per-share price, payable in cash, equal
to the aggregate amount then on deposit in the trust account including interest earned on the funds held in the trust account and not
previously released to us to pay our taxes divided by the number of then issued and outstanding public shares. However, we will only
redeem our public shares so long as (after such redemption) our net tangible assets will be at least $5,000,001 either immediately prior
to or upon consummation of our initial business combination and after payment of underwriters’ fees and commissions (so that we
are not subject to the SEC’s “penny stock” rules). If this optional redemption right is exercised with respect to an
excessive number of public shares such that we cannot satisfy the net tangible asset requirement (described above), we would not proceed
with the amendment or the related redemption of our public shares at such time.
If we do not consummate our
initial business combination by the deadline set forth in our amended and restated certificate of incorporation, we expect that all costs
and expenses associated with implementing our plan of dissolution, as well as payments to any creditors, will be funded from amounts
remaining out of the approximately $1,264,000 of proceeds held outside the trust account after completion of our initial public offering
and repayment of the promissory note to our sponsor, although we cannot assure you that there will be sufficient funds for such purpose.
We will depend on sufficient interest being earned on the proceeds held in the trust account to pay any tax obligations we may owe. However,
if those funds are not sufficient to cover the costs and expenses associated with implementing our plan of dissolution, to the extent
that there is any interest accrued in the trust account not required to pay taxes, we may request the trustee to release to us an additional
amount of up to $100,000 of such accrued interest to pay those costs and expenses.
If we were to expend all
of the net proceeds of our initial public offering and the sale of the private shares, other than the proceeds deposited in the trust
account, and without taking into account interest, if any, earned on the trust account, the per-share redemption amount received
by stockholders upon our dissolution would be approximately $10.20 (or, if we exercise our right to make an additional deposit to the
trust account in order to extend the deadline for the consummation of our initial business combination by an additional three months,
$10.30 per share). The proceeds deposited in the trust account could, however, become subject to the claims of our creditors which would
have higher priority than the claims of our public stockholders. We cannot assure you that the actual per-share redemption amount
received by stockholders will not be substantially less than $10.20 (or $10.30, if applicable). Under Section 281(b) of the DGCL,
our plan of dissolution must provide for all claims against us to be paid in full or make provision for payments to be made in full,
as applicable, if there are sufficient assets. These claims must be paid or provided for before we make any distribution of our remaining
assets to our stockholders. While we intend to pay such amounts, if any, we cannot assure you that we will have funds sufficient to pay
or provide for all creditors’ claims.
Although we will seek to
have all vendors, service providers, prospective target businesses or other entities with which we do business execute agreements with
us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public
stockholders, there is no guarantee that they will execute such agreements or even if they execute such agreements that they would be
prevented from bringing claims against the trust account including but not limited to fraudulent inducement, breach of fiduciary responsibility
or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain an advantage with
respect to a claim against our assets, including the funds held in the trust account. If any third party refuses to execute an agreement
waiving such claims to the monies held in the trust account, our management will perform an analysis of the alternatives available to
it and will only enter into an agreement with a third party that has not executed a waiver if management believes that such third party’s
engagement would be significantly more beneficial to us than any alternative. Examples of possible instances where we may engage a third
party that refuses to execute a waiver include the engagement of a third-party consultant whose particular expertise or skills are
believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where
management is unable to find a service provider willing to execute a waiver. Marcum, our independent registered public accounting firm,
and the underwriters of our initial public offering will not execute agreements with us waiving such claims to the monies held in the
trust account.
In addition, there is no
guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations,
contracts or agreements with us and will not seek recourse against the trust account for any reason. Our sponsor has agreed that it will
be liable to us if and to the extent any claims by a third party for services rendered or products sold to us, or a prospective target
business with which we have entered into a written letter of intent, confidentiality or similar agreement or business combination agreement,
reduce the amount of funds in the trust account to below the lesser of (i) $10.20 per public share (or, if we exercise our right to make
an additional deposit to the trust account in order to extend the deadline for the consummation of our initial business combination by
an additional three months, $10.30 per share) and (ii) the actual amount per public share held in the trust account as of the date of
the liquidation of the trust account, if less than $10.20 per share (or $10.30 per share, if applicable) due to reductions in the value
of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target
business who executed a waiver of any and all rights to the monies held in the trust account (whether or not such waiver is enforceable)
nor will it apply to any claims under our indemnity of the underwriters of our initial public offering against certain liabilities, including
liabilities under the Securities Act. However, we have not asked our sponsor to reserve for such indemnification obligations, nor have
we independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and believe that our sponsor’s
only assets are securities of our company. Therefore, we cannot assure you that our sponsor would be able to satisfy those obligations.
None of our officers or directors will indemnify us for claims by third parties including, without limitation, claims by vendors and
prospective target businesses.
In the event that the proceeds
in the trust account are reduced below (i) $10.20 per public share (or $10.30 per share, if applicable) or (ii) such lesser amount per
public share held in the trust account as of the date of the liquidation of the trust account, due to reductions in value of the trust
assets, in each case net of the amount of interest which may be withdrawn to pay taxes, and our sponsor asserts that it is unable to
satisfy its indemnification obligations or that it has no indemnification obligations related to a particular claim, our independent
directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations. While we currently
expect that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification obligations
to us, it is possible that our independent directors in exercising their business judgment may choose not to do so if, for example, the
cost of such legal action is deemed by the independent directors to be too high relative to the amount recoverable or if the independent
directors determine that a favorable outcome is not likely. We have not asked our sponsor to reserve for such indemnification obligations
and we cannot assure you that our sponsor would be able to satisfy those obligations. Accordingly, we cannot assure you that due to claims
of creditors the actual value of the per-share redemption price will not be less than $10.20 per public share (or $10.30 per share,
if applicable).
Upon the completion of our
initial public offering and repayment of the promissory note to our sponsor, we had approximately $1,264,000 of cash held outside the
trust account. We have used or will use these funds for (i) legal, accounting, due diligence, travel and other expenses related
to identifying, evaluating, negotiating and completing an initial business combination, (ii) legal and accounting fees related to regulatory
reporting requirements, (iv) office space, utilities and secretarial and administrative support, and (v) working capital used for miscellaneous
expenses and reserves.
Any potential claims (including
costs and expenses incurred in connection with our liquidation, currently estimated to be no more than approximately $100,000, which
amount will be available from interest earned on the funds held in the trust account) may only be paid from funds held outside of the
trust account.
Under the DGCL, our stockholders
may be held liable for claims by third parties with priority claims over our stockholders in the event that we do not complete our initial
business combination by May 11, 2023 as such deadline may be extended by the extension period as described herein to the extent of distributions
received by our stockholders in a dissolution resulting from our failure to complete our initial business combination by such deadline.
The pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event
we do not complete our initial business combination by May 11, 2023 or during any extension period may be considered a liquidating distribution
under Delaware law. In the event that we liquidate and it is subsequently determined that the reserve for claims and liabilities is insufficient,
stockholders who received funds from our trust account could be liable for claims made by creditors. If the corporation complies with
certain procedures set forth in Section 280 of the DGCL intended to ensure that it makes reasonable provision for all claims against
it, including a 60-day notice period during which any third-party claims can be brought against the corporation, a 90-day period
during which the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating distributions
are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s
pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after
the third anniversary of the dissolution.
Furthermore, if the pro rata
portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete
our initial business combination by May 11, 2023 or during any extension period is not considered a liquidating distribution under Delaware
law and such redemption distribution is deemed to be unlawful (potentially due to the imposition of legal proceedings that a party may
bring or due to other circumstances that are currently unknown), then pursuant to Section 174 of the DGCL, the statute of limitations
for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of
a liquidating distribution. If we are unable to complete our initial business combination by May 11, 2023 or during any extension period,
we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten
business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on
deposit in the trust account including interest earned on the funds held in the trust account and not previously released to us to pay
our taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then issued and outstanding public
shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive
further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption,
subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our
obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. Accordingly, it is our
intention to redeem our public shares as soon as reasonably possible following May 11, 2023 or during any extension period and, therefore,
we do not intend to comply with those procedures. As such, our stockholders could potentially be liable for any claims to the extent
of distributions received by them (but no more) and any liability of our stockholders may extend well beyond the third anniversary of
such date.
Because we will not be complying
with Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time, that will provide
for our payment of all existing and pending claims or claims that may be potentially brought against us within the subsequent 10 years.
However, because we are a blank check company, rather than an operating company, and our operations will be limited to searching for
prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment bankers,
etc.) or prospective target businesses. As described above, pursuant to the obligation contained in our underwriting agreement, we will
seek to have all vendors, service providers, prospective target businesses or other entities with which we do business execute agreements
with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account. As a result of this obligation,
the claims that could be made against us are significantly limited and the likelihood that any claim that would result in any liability
extending to the trust account is remote. Further, our sponsor may be liable only to the extent necessary to ensure that the amounts
in the trust account are not reduced below (i) $10.20 per public share (or, if we exercise our right to make an additional deposit to
the trust account in order to extend the deadline for the consummation of our initial business combination by an additional three months,
$10.30 per share) or (ii) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust
account, due to reductions in value of the trust assets, in each case net of the amount of interest withdrawn to pay taxes and will not
be liable as to any claims under our indemnity of the underwriters of our initial public offering against certain liabilities, including
liabilities under the Securities Act. In the event that an executed waiver is deemed to be unenforceable against a third party, our sponsor
will not be responsible to the extent of any liability for such third-party claims.
If we file a bankruptcy petition
or an involuntary bankruptcy petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject
to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over
the claims of our stockholders. To the extent any bankruptcy claims deplete the trust account, we cannot assure you we will be able to
return $10.20 per share (or $10.30 per share, if applicable) to our public stockholders. Additionally, if we file a bankruptcy petition
or an involuntary bankruptcy petition is filed against us that is not dismissed, any distributions received by stockholders could be
viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent
conveyance.” As a result, a bankruptcy court could seek to recover some or all amounts received by our stockholders. Furthermore,
our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or may have acted in bad faith, thereby
exposing itself and our company to claims of punitive damages, by paying public stockholders from the trust account prior to addressing
the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons.
Our public stockholders will
be entitled to receive funds from the trust account only upon the earlier to occur of: (i) the completion of our initial business combination,
(ii) the redemption of any public shares properly tendered in connection with a stockholder vote to amend any provisions of our amended
and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemption in connection with
our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination by May
11, 2023 or during any extension period or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business
combination activity, and (iii) the redemption of all of our public shares if we are unable to complete our business combination by May
11, 2023 or during any extension period, subject to applicable law. Stockholders who do not exercise their redemption rights in connection
with an amendment to our amended and restated certificate of incorporation would still be able to exercise their redemption rights in
connection with a subsequent business combination. In no other circumstances will a stockholder have any right or interest of any kind
to or in the trust account. In the event we seek stockholder approval in connection with our initial business combination, a stockholder’s
voting in connection with the initial business combination alone will not result in a stockholder’s redeeming its shares to us
for an applicable pro rata share of the trust account. Such stockholder must have also exercised its redemption rights as described above.
These provisions of our amended and restated certificate of incorporation, like all provisions of our amended and restated certificate
of incorporation, may be amended with a stockholder vote.
Competition
In identifying, evaluating and selecting a target
business for our initial business combination, we may encounter competition from other entities having a business objective similar to
ours, including other blank check companies, private equity groups and leveraged buyout funds, and operating businesses seeking strategic
business combinations. Many of these entities are well established and have extensive experience identifying and effecting business combinations
directly or through affiliates. Moreover, many of these competitors possess greater financial, technical, human and other resources than
we do. Our ability to acquire larger target businesses will be limited by our available financial resources. This inherent limitation
gives others an advantage in pursuing the initial business combination of a target business. Furthermore, our obligation to pay cash
in connection with our public stockholders who exercise their redemption rights may reduce the resources available to us for our initial
business combination and our outstanding warrants, and the future dilution they potentially represent, may not be viewed favorably by
certain target businesses. Either of these factors may place us at a competitive disadvantage in successfully negotiating an initial
business combination.
Employees
We currently have five officers.
These individuals are not obligated to devote any specific number of hours to our matters but they devote as much of their time as they
deem necessary to our affairs until we have completed our initial business combination. The amount of time they devote in any time period
varies based on whether a target business has been selected for our initial business combination and the stage of the initial business
combination process we are in. We do not intend to have any full-time employees prior to the completion of our initial business
combination.
Periodic Reporting and Financial Information
Our units, Class A common
stock, and warrants are registered under the Exchange Act, and as a result, we have reporting obligations, including the requirement
that we file annual, quarterly and current reports with the SEC. In accordance with the requirements of the Exchange Act, our annual
reports, including this Report, contain financial statements audited and reported on by our independent registered public accountants.
We will provide stockholders
with audited financial statements of the prospective target business as part of the tender offer materials or proxy solicitation materials
sent to stockholders to assist them in assessing the target business. In all likelihood, these financial statements will need to be prepared
in accordance with, or reconciled to, GAAP, or IFRS, depending on the circumstances, and the historical financial statements may be required
to be audited in accordance with the standards of the PCAOB. These financial statement requirements may limit the pool of potential targets
we may conduct an initial business combination with because some targets may be unable to provide such statements in time for us to disclose
such statements in accordance with federal proxy rules and complete our initial business combination within the prescribed time frame.
We cannot assure you that any particular target business identified by us as a potential business combination candidate will have financial
statements prepared in accordance with GAAP or that the potential target business will be able to prepare its financial statements in
accordance with the requirements outlined above. To the extent that these requirements cannot be met, we may not be able to acquire the
proposed target business. While this may limit the pool of potential business combination candidates, we do not believe that this limitation
will be material.
We will be required to evaluate
our internal control procedures for the fiscal year ending December 31, 2022 as required by the Sarbanes-Oxley Act. Only in
the event we are deemed to be a large accelerated filer or an accelerated filer, and no longer qualify as an emerging growth company,
will we be required to have our internal control procedures audited. A target company may not be in compliance with the provisions of
the Sarbanes-Oxley Act regarding adequacy of their internal controls. The development of the internal controls of any such entity
to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such business combination.
We have filed a Registration Statement on Form 8-A with the SEC to voluntarily register our securities under Section 12 of the Exchange
Act. As a result, we will be subject to the rules and regulations promulgated under the Exchange Act. We have no current intention of
filing a Form 15 to suspend our reporting or other obligations under the Exchange Act prior or subsequent to the consummation of our
initial business combination.
We will remain an emerging
growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of our
initial public offering (February 11, 2022), (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in
which we are deemed to be a large accelerated filer, which means the market value of our shares of Class A common stock that are held
by non-affiliates exceeds $700 million as of the prior June 30th, and (2) the date on which we have issued
more than $1.0 billion in non-convertible debt during the prior three-year period.