Item
1 Business
Our
Company
We
are a blank check company newly incorporated as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange,
asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities, which we refer
to throughout this Annual Report on Form 10-K as our initial business combination. To date, our efforts have been limited to organizational
activities as well as activities related to the Initial Public Offering. We have not selected any potential business combination target
and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any potential business
combination target. We have generated no operating revenues to date and we do not expect that we will generate operating revenues until
we consummate our initial business combination.
Our
sponsor is affiliated with Lead Edge, a growth equity investment firm based in New York, NY and Santa Barbara, CA which has raised $3
billion in capital since inception. Lead Edge’s primary business is investing in public and private software, Internet and technology-enabled
services companies globally. Mitchell H. Green, our Chairman and Chief Executive Officer, is the founder and Managing Partner of Lead
Edge. Nimay Mehta, our President and CFO, and Brian Neider, our Chief Operating Officer, are General Partners at Lead Edge and members
the Investment Committee for all Lead Edge funds.
Our
objective is to pursue opportunities with high-quality software, Internet and technology-enabled companies. We believe the combination
of experience in sourcing, investing, product and operating uniquely position our team to execute on a compelling business combination.
Founded
in 2012, Lead Edge has experience investing at the intersection of public and private companies in the broader technology sector, having
invested in companies such as Alibaba Group, Ant Financial, Asana, Bazaarvoice, Delivery Hero, Duo Security, Marketo, Mindbody, Red Ventures,
Spotify, Toast, TransferWise, Uber and Xamarin.
Lead
Edge differentiates itself from other firms by offering entrepreneurs a model for value creation through its strategic limited partner
(“LP”) base of more than 500 successful executives and entrepreneurs, to seek to drive value to its portfolio companies and
prospective investments. These LPs are geographically diverse and represent a wide range of functional skillsets across different industries.
The
Lead Edge investment team takes a proactive approach to sourcing prospective investments, using proprietary technology tools to enable
conversations with thousands of entrepreneurs and management teams each year. From 2019 to 2020, the team conducted over 10,000 phone
calls and 1,500 meetings with prospective companies.
As
an affiliate of our sponsor, Lead Edge will be providing us with access to its infrastructure and network to pursue our initial business
combination. We believe the sophistication of the Lead Edge sourcing engine and breadth of the Lead Edge LP network will be meaningful
differentiators.
Our
Management Team
Our
management team consists of Mitchell H. Green, our Chairman and Chief Executive Officer, Nimay Mehta, our President and Chief Financial
Officer, Brian Neider, our Chief Operating Officer, and Lorrie Norrington, our Special Advisor, who will be supported by the Lead Edge
investment team, the broader Lead Edge organization and our independent directors, as described further below.
Mitchell H. Green
Mitchell H. Green serves as our Chairman and
Chief Executive Officer. Mr. Green is the founder of Lead Edge and currently serves as one of the firm’s three General Partners.
He founded Lead Edge in 2012 with the private equity team from Eastern Advisors Capital Group, LLC and is a member of the Investment Committee
for all Lead Edge funds. Mr. Green has led investments in companies such as Alibaba Group (IPO), Amplitude (Direct Listing), Appirio
(acquired), Asana (Direct Listing), Bazaarvoice (IPO), BlaBlaCar (exited), Drillinginfo (acquired), Marketo (IPO), Mindbody (IPO), Monetate
(acquired), Serena & Lily (acquired), Spotify (Direct Listing), Uber (IPO), Xamarin (acquired), Benchling, ID.me, LaunchDarkly,
Material Bank and Red Ventures. Prior to founding Lead Edge, Mr. Green was on the investment teams at Eastern Advisors, a Tiger hedge
fund seeded by Julian Robertson, and Bessemer Venture Partners. Mr. Green holds an M.B.A. in Marketing from The Wharton School of
the University of Pennsylvania and a B.A. in Economics from Williams College.
Nimay Mehta
Nimay Mehta serves as our President and Chief
Financial Officer. Mr. Mehta is a General Partner at Lead Edge Capital, which he joined in 2012, and a member of the Investment Committee
for all Lead Edge funds. Mr. Mehta has led investments in companies such as BlaBlaCar (exited), Bumble (IPO), Delivery Hero (IPO),
Drillinginfo (acquired), iParadigms (acquired), Marketo (IPO), Mindbody (IPO), Spotify (Direct Listing), TransferWise (Direct Listing),
Uber (IPO), VivaReal (acquired), Weave (IPO), Arrive Logistics, Azul Systems, ClearScore, Ensighten, eSSENTIAL Accessibility, GlobalVetLINK,
Help Scout, Lean Solutions, LiveView Technologies and SafeSend. Prior to Lead Edge, Nimay was an analyst at Insight Venture Partners where
he focused on growth-stage software and internet businesses. He holds an A.B. in Economics from Harvard University.
Brian Neider
Brian Neider serves as our Chief Operating
Officer. Mr. Neider joined Lead Edge in 2012 and is a member of the Investment Committee for all Lead Edge funds. Mr. Neider
has led investments in companies such as Amplitude (Direct Listing), Anaqua (acquired), Asana (Direct Listing), Compass (exited), Duo
Security (acquired), Kapost (acquired), Signal Sciences (acquired), Toast (IPO), Xamarin (acquired), Catawiki, EBANX, Immedis, Lucid Software,
SafeSend, Workhuman and Yousign. Prior to joining Lead Edge, Mr. Neider was a Vice President in the New York office of FTV Capital.
While at FTV, he focused on middle-market growth investments in the software and business services sector. Prior to earning his M.B.A.,
Mr. Neider was a New York-based investment professional with Bessemer Venture Partners. Mr. Neider holds an M.B.A. in Finance
from Columbia Business School and a B.S. in Economics from the Wharton School at the University of Pennsylvania.
Our
Board of Directors
In
addition to the value-add brought on by the Lead Edge LP network, we have nominated four independent directors that we think bring
meaningful value to our sponsor in both deal prospecting and target company growth.
Margaret C. Whitman
Margaret C. Whitman serves as a member
of our board of directors. Ms. Whitman is a business executive, former political candidate, and philanthropist. Based in Colorado,
Ms. Whitman currently serves as a member of the board of directors for The Procter & Gamble Company and General Motors. Most
recently, Ms. Whitman served as Chief Executive Officer for Quibi. Prior to joining Quibi, Ms. Whitman served as the Chief Executive
Officer for Hewlett Packard Enterprise Company, or HPE, a multinational enterprise information technology company, and as its
President and Chief Executive Officer from 2015 to June 2017. From 2014 to 2015, Ms. Whitman served as President, Chief Executive
Officer, and Chairman for Hewlett-Packard Company (now known as HP Inc.), the former parent of Hewlett Packard Enterprise Company,
and as its President and Chief Executive Officer from 2011 to 2015. Prior to joining HP Inc., Ms. Whitman was the Republican
Party’s nominee for the 2010 gubernatorial race in California. From 1998 to 2008, Ms. Whitman served as President and Chief
Executive Officer of eBay Inc. Ms. Whitman previously served as a member of the board of directors for HP Inc., Hewlett Packard
Enterprise Company, and for a number of private companies. Ms. Whitman currently serves as the Nation Board Chair for Teach For
America. Ms. Whitman holds an M.B.A. from Harvard Business School and an A.B. in Economics from Princeton University.
Nick Mehta
Nick Mehta serves as a member of our board
of directors. Mr. Mehta has served as the Chief Executive Officer of Gainsight, a leading provider of customer relationship management
software that was acquired by Vista Equity in November 2020. Mr. Mehta also serves on the board of F5 Networks, Inc. (NASDAQ: FFIV)
and a Fellow at Tidemark Capital in Palo Alto, California. Prior to Gainsight, Mr. Mehta served as an Executive-in-Residence at
Accel Partners and as the Chief Executive Officer of LiveOffice prior to its acquisition by Symantec. Mr. Mehta holds an M.S. in
Computer Science from Harvard University and a B.A. in Biochemistry from Harvard College.
Sydney Carey
Sydney Carey serves as a member of our board
of directors. Ms. Carey is an accomplished Chief Financial Officer with deep public markets, corporate finance, and strategy expertise.
Ms. Carey is currently the CFO at Talkdesk, a cloud contact center business based in San Francisco, and is on the board of Asana (NYSE:
ASAN) where she is Audit Committee Chair. Most recently, Ms. Carey served as the Chief Financial Officer of Sumo Logic (NASDAQ:SUMO).
Ms. Carey has extensive experience in leading public companies and pre-IPO organizations, as both an executive and a board member. A
Stevie Award Winner for Women in Business – Best Executive, and a San Francisco Business Times’ Bay Area CFO of the Year,
Ms. Carey’s broad financial experience includes two decades of operational and strategic leadership roles. Previously, Ms. Carey
served as the Chief Financial Officer at Duo Security, which was acquired by Cisco Systems in 2018. Before Duo, she was Chief Financial
Officer to the high-growth private SaaS companies Apttus, from June 2016 to December 2017, a leading, international provider of Quote-to-Cash (QTC)
software, Zscaler, from 2015 to June 2016, a global provider of cloud-based information security, and MongoDB, provider of a leading
open source database. Prior to MongoDB, she spent nine years at TIBCO Software, a multi-billion public software company, with three
years as Executive Vice President and Chief Financial Officer. Ms. Carey also recently served on the board of directors of Bazaarvoice,
a leader in social software and data analytics, and oversaw its acquisition by Marlin Equity Partners. Ms. Carey holds a bachelor’s
degree in economics from Stanford University, and is a passionate advocate for female leadership in finance/IT, as well as STEAM education.
Russell D. Fradin
Russell D. Fradin serves as a member of our board of directors.
Mr. Fradin is a technology founder, executive and investor who has been working across the startup industry since 1996. Based in
Silicon Valley, Mr. Fradin currently serves as Chairman of Carbon Health, a tech-enabled healthcare company in San Francisco. Before
Carbon Health, Mr. Fradin was Chairman of Dynamic Signal, a business he founded and ran as CEO for ten years. He also previously served
as a director for TubeMogul until 2016 and as a director for comScore until 2017. Prior to founding Dynamic Signal, Mr. Fradin was
an early employee at the first online advertising network, Flycast Communications, which went public in the late 1990’s before being
acquired by CMGI. He was also a pre-launch executive at comScore and Wine.com, as well as the founder and CEO of Adify, which he
sold to Cox Enterprises in 2008. Mr. Fradin is an active angel investor, working with companies including Chime, Carbon Health, Funzio
(acquired), LiveRamp (acquired), Milo (acquired), Playdom (acquired), Smarterer (acquired) Snappy.tv (acquired), Stance, Trunkk Club (acquired)
and Udemy. He has served on two public boards, ten private boards and is also on the board of CoachArt, a non-profit in California.
Mr. Fradin holds a B.S. in Economics from The Wharton School of the University of Pennsylvania.
We
believe that our management team is well positioned to identify attractive business combination opportunities with a compelling industry
backdrop and an opportunity for transformational growth. Our objectives are to generate attractive returns for our shareholders and enhance
value by improving the operational performance of the acquired company.
With
respect to the above, past experience or performance of our management team and their respective affiliates is not a guarantee of either
(i) our ability to successfully identify and execute a transaction or (ii) success with respect to any business combination
that we may consummate. You should not rely on the historical record of our management team or their respective affiliates as indicative
of future performance. Our management team and their respective affiliates have been involved with a large number of public and private
companies in addition to those identified above, not all of which have achieved similar performance levels. See “Item 1A - Risk
Factors — Past performance by our management team or their respective affiliates may not be indicative of future performance of
an investment in us.” No member of our management team has any experience in operating special purpose acquisition companies. For
a complete list of our executive officers and entities for which a conflict of interest may or does exist between such officers and the
company, please refer to “Management — Conflicts of Interest.”
Our
Forward Purchase Agreement and Committed Capital
We
believe our ability to complete our initial business combination will be enhanced by the certainty associated with entering into a forward
purchase agreement with LEC V. Under the agreement, LEC V has agreed to purchase up to $50,000,000 of units, with each unit consisting
of one Class A ordinary share and one-fourth of one warrant to purchase one Class A ordinary share at $11.50 per share,
subject to adjustment, for a purchase price of $10.00 per unit, in a private placement to occur concurrently with the closing of our
initial business combination.
The
terms of the forward purchase shares and forward purchase warrants, respectively, will generally be identical to the terms of the Class A
ordinary shares and the redeemable warrants included in the units being issued in the Initial Public Offering, except that the forward
purchase securities will have certain registration rights, as described herein.
We
believe our committed capital will make us more attractive to a potential business combination target.
Technology
Companies and the Public Markets
The
software, Internet and technology sectors are beneficiaries of secular tailwinds. We believe that these favorable tailwinds, combined
with superior business attributes, will propel these sectors to outperform well into the future, generating strong returns for investors.
Organizations
today operate in highly complex environments that are evolving at an increasing rate. Operational teams are being forced to do more with
less and require tools to enable that. Software has become the solution to this problem and the backbone of every industry, transforming
how organizations engage with customers and operate their businesses. Historical IT spend on software has increased substantially in
recent years, growing 14.8% from 2018 to 2019. This is expected to continue, with a forecasted compound annual growth rate (“CAGR”)
of 8.5% from 2019 – 2024 according to Gartner. Additionally, Software-as-a-Service (“SaaS”) (subscription,
cloud-hosted software) is projected by Gartner to grow at a 12.9% CAGR from 2019 – 2024. We believe such strong underlying
growth rates will translate to sustainable outperformance by software/SaaS businesses.
The
Gartner content described herein (the “Gartner Content”) represent(s) research opinion or viewpoints published, as part of
a syndicated subscription service, by Gartner, Inc. (“Gartner”), and are not representations of fact. Gartner Content speaks
as of its original publication date (and not as of the date of this S-1), and the opinions expressed in the Gartner Content are subject
to change without notice.
The
growth of the Internet is something everyone has witnessed first-hand, and a growing part of each day is spent utilizing the world
wide web. Although the Internet has been around since the 1960s, access and use have increased significantly in recent years, with
user counts growing from 361 million in 2000 to over 4.8 billion in 2020, according to a Broadband Search market report.
The Internet has redefined the daily lives of individuals, changing how goods, services and entertainment are distributed. Digital
consumption has more than doubled since 2008 and has accelerated in the era of the COVID-19 pandemic. As individuals spend more
time online, new business opportunities have emerged and all industries are adapting.
Amidst
these secular tailwinds, we recognize the transformation taking place in how private companies access the public markets. Recent volatility
and uncertainty have added layers of friction to the traditional IPO process that already requires a meaningful commitment of resources
and time. In conjunction, the number of high-quality companies that are ready for the public markets continues to grow through robust
private investment and maintained innovation. This creates an environment where alternative options are being explored.
We
believe the accelerating adoption of alternative routes to the public markets combined with the inherently high quality of software and
Internet businesses places our sponsor at a unique point of inflection on which we are determined to capitalize.
Our
Business Strategy and Investment Criteria
Our
business strategy consists of identifying and completing a business combination that can create meaningful value for our shareholders
over time. We believe this can be achieved through identifying a high-quality technology company that fulfills our investment criteria
as outlined below and using our operational expertise to drive sustainable value creation over time.
We
recognize that a balance of investing acumen, operating experience and networking capabilities are requirements to successfully execute
a business combination. Considering the track record of Lead Edge, as well as the collective investment experience and operating experience
of our management team and independent directors, we believe our team excels in each of these categories.
As
we leverage our competitive advantages to source and evaluate opportunities, we will apply Lead Edge’s investment philosophy that
compares a set of eight criteria, the “Lead Edge 8” — while a perfect eight criteria business is rare and
trade-offs must be made, we will aim for our investments to fill five to seven of the Lead Edge 8:
| ● | Capital
Efficiency. We will look for businesses that have burned, in aggregate historically, less than $1 for every
$1 of revenue. We believe this is one of the best approximations for the physical fitness of a business. |
| ● | Meaningful
Revenue Traction. Lead Edge calibrates its investments around businesses that have achieved certain milestones
in revenue and are thus definitionally past the stage of product market fit. We will apply this rationale to our prospecting in the context
of the potential scale of our initial business combination. |
| ● | Meaningful
Annual Growth. An attractive investment opportunity has a few years of sustained historical growth —
“one in a row” does not get us excited. We expect returns will be generated through growth as opposed to financial engineering
and will place a premium on top-line performance. |
| ● | High
Gross Margins. Gross margins are an indicator of the value a company is supplying to its customers. Ultimately,
these high gross margins have a stronger likelihood of scalability and potential for future net profits. |
| ● | Recurring
Revenue. Good businesses have contractually or transactionally recurring revenue streams, which give predictability
into future forecasting. |
| ● | High
Retention. Retention measures the strength of a business’s recurring revenue streams. A business with
over 90% annual gross retention is best in class. |
| ● | Diversified
Customer Base. We generally avoid businesses where more than 15% of revenue comes from one customer as this
presents a risk that the business could be materially impaired by the loss of a single customer. |
| ● | Profitable/Breakeven.
This goes hand-in-hand with capital efficiency and we understand there tends to be an inverse correlation between profitability
and growth in the technology space. |
Prospecting
and the Lead Edge Sourcing Engine
As
we consider the universe of prospects for our initial business combination, we view three buckets as our main areas of focus: (a) high-growth venture-backed businesses,
(b) private equity-owned/operated businesses and (c) bootstrapped or under-the-radar businesses. We think the tools and
workflows Lead Edge has developed over the years will ensure our exposure to buckets (a) and (c) while the networks and relationships
of our management team and Lead Edge more broadly will uniquely position us for deals in bucket (b), which we think represents an exciting
and under-penetrated corner of the target universe.
Over
the last decade, Lead Edge has built out a proprietary sourcing engine that includes a customized technology platform which aggregates
data sources, formulaic workflows to drive throughput on top prospects and a database to track all ongoing and historical touch points.
The Lead Edge sourcing engine represents a sophisticated competitive advantage to lead identification for our sponsor.
The
Lead Edge LP Network
One
of Lead Edge’s key differentiators is its investor network. Rather than raising capital solely from institutions, Lead Edge raises
its capital primarily from individuals. The vast majority of Lead Edge’s LPs are experienced operating executives, entrepreneurs
and industry personnel. Since inception, the Lead Edge LP base has grown from 80 individuals to over 500. Lead Edge has continued to
expand this network with each subsequent fund, curating the quality of the pool while carefully considering three vectors of value:
| — | Geography: Lead Edge
has LPs from across the top 50 metro-areas in the US, Europe and Asia, allowing for strong coverage. |
| — | Functional
Skillsets: Lead Edge possesses investors with varying operational backgrounds and expertise (e.g. CEO, CFO,
CIO, CMO, sales and Board of Directors). |
| — | Industry: Lead Edge
has investors with operating backgrounds across many different industries. |
Lead
Edge can facilitate a multitude of relevant introductions per year between companies and LPs to enable potential advisory engagements,
recruiting assistance or business development. This resonates with entrepreneurs regardless of what sector in which they operate, and
we view it as a meaningful competitive advantage for our sponsor.
Our
Acquisition Process
In
evaluating a prospective target business, we expect to conduct an extensive due diligence review which may encompass, as applicable and
among other things, meetings with incumbent management and employees, document reviews, interviews of customers and suppliers, inspection
of facilities and a review of financial and other information about the target and its industry. We will also utilize our management
team’s operational and capital planning experience.
Each
of our directors and officers will, directly or indirectly, own founder shares and/or private placement warrants following the 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, such 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 was included
by a target business as a condition to any agreement with respect to our initial business combination.
Lead
Edge and certain of our officers and directors presently have, and any of them in the future may have additional, fiduciary or contractual
obligations to other entities pursuant to which Lead Edge or such officer or director is or will be required to present a business combination
opportunity to such entity subject to his, her or its fiduciary duties under Cayman Islands law. As a result, if Lead Edge or any of
our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he, she or it
has then-current fiduciary or contractual obligations, then, subject to Lead Edge’s or such officer’s and director’s
fiduciary duties under Cayman Islands law, he, she or it will need to honor such fiduciary or contractual obligations to present such
business combination opportunity to such entity, before we can pursue such opportunity. If these other entities decide to pursue any
such opportunity, we may be precluded from pursuing the same. However, we do not expect these duties to materially affect our ability
to complete our initial business combination. Our amended and restated memorandum and articles of association provide that, to the fullest
extent permitted by applicable law: (i) no individual serving as a director or an officer shall have any duty, except and to the extent
expressly assumed by contract, to refrain from engaging directly or indirectly in the same or similar business activities or lines of
business as us; and (ii) we renounce any interest or expectancy in, or in being offered an opportunity to participate in, any potential
transaction or matter which may be a corporate opportunity for any director or officer, on the one hand, and us, on the other.
Initial
Business Combination
So
long as our securities are then listed on Nasdaq, our initial business combination must occur with one or more target businesses that
together have an aggregate fair market value of at least 80% of the net assets held in the trust account (excluding the deferred underwriting
commissions and taxes payable on the interest earned on the trust account) at the time of signing a definitive agreement in connection
with our initial business combination. We refer to this as the 80% of fair market value test. The fair market value of the target or
targets will be determined by our board of directors based upon one or more standards generally accepted by the financial community (such
as actual and potential sales, earnings, cash flow and/or book value). Even though our board of directors will rely on generally accepted
standards, our board of directors will have discretion to select the standards employed. In addition, the application of the standards
generally involves a substantial degree of judgment. Accordingly, investors will be relying on the business judgment of the board of
directors in evaluating the fair market value of the target or targets. The proxy solicitation materials or tender offer documents used
by us in connection with any proposed transaction will provide public shareholders with our analysis of our satisfaction of the 80% of
fair market value test, as well as the basis for our determinations. If our board of directors is not able to independently determine
the fair market value of the target business or businesses, we will obtain an opinion from an independent investment banking firm that
is a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”), or an independent valuation or appraisal firm
with respect to the satisfaction of such criteria. While we consider it unlikely that our board will not be able to make an independent
determination of the fair market value of a target business or businesses, it may be unable to do so if the board is less familiar or
experienced with the target company’s business, there is a significant amount of uncertainty as to the value of the company’s
assets or prospects, including if such company is at an early stage of development, operations or growth, or if the anticipated transaction
involves a complex financial analysis or other specialized skills and the board determines that outside expertise would be helpful or
necessary in conducting such analysis. Since any opinion, if obtained, would merely state that the fair market value of the target business
meets the 80% of the fair market value test, unless such opinion includes material information regarding the valuation of a target business
or the consideration to be provided, it is not anticipated that copies of such opinion would be distributed to our shareholders. However,
if required under applicable law, any proxy statement that we deliver to shareholders and file with the SEC in connection with a proposed
transaction will include such opinion.
We
anticipate structuring our initial business combination so that the post-business combination company in which our public shareholders
own shares will own or acquire 100% of the equity interests or assets of the target business or businesses. We may, however, structure
our initial business combination such that the post-business combination company owns or acquires less than 100% of such interests
or assets of the target business in order to meet certain objectives of the target management team or shareholders or for other reasons,
but we will only complete such business combination if the post-business combination company owns or acquires 50% or more of the
outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required
to register as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”).
Even if the post-business combination company owns or acquires 50% or more of the voting securities of the target, our shareholders
prior to the business combination may collectively own a minority interest in the post- business combination company, depending on valuations
ascribed to the target and us in the business combination. For example, we could pursue a transaction in which we issue a substantial
number of new shares in exchange for all of the outstanding capital stock, shares or other equity interests of a target business, or
issue a substantial number of new shares to third-parties in connection with financing our initial business combination. In this
case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new
shares, our shareholders immediately prior to our initial business combination could own less than a majority of our outstanding shares
subsequent to our initial business combination. If less than 100% of the equity interests or assets of a target business or businesses
are owned or acquired by the post- business combination company, the portion of such business or businesses that is owned or acquired
is what will be valued for purposes of the 80% of fair market value test. If the business combination involves more than one target business,
the 80% of fair market value test will be based on the aggregate value of all of the target businesses. In addition, we have agreed not
to enter into a definitive agreement regarding an initial business combination without the prior consent of our sponsor. If our securities
are not then listed on Nasdaq for whatever reason, we would no longer be required to meet the foregoing 80% of fair market value test.
If the business combination involves more than one target business, the 80% of fair market value test will be based on the aggregate
value of all of the target businesses and we will treat the target businesses together as the initial business combination for purposes
of a tender offer or for seeking shareholder approval, as applicable. In addition, we have agreed not to enter into a definitive agreement
regarding an initial business combination without the prior consent of our sponsor.
To
the extent we effect our initial business combination with a company or business that may be financially unstable or in its early stages
of development or growth, we may be affected by numerous risks inherent in such company or business. Although our management will endeavor
to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all significant
risk factors.
The
time required to select and evaluate a target business and to structure and complete our initial business combination, and the costs
associated with this process, are not currently ascertainable with any degree of certainty. Any costs incurred with respect to the identification
and evaluation of a prospective target business with which our initial business combination is not ultimately completed will result in
our incurring losses and will reduce the funds we can use to complete another business combination.
Other
Considerations
We
are not prohibited from pursuing an initial business combination with a company that is affiliated with Lead Edge, our sponsor, or our
officers or directors. In the event we seek to complete our initial business combination with a company that is affiliated with, Lead
Edge, our sponsor, or any of our officers or directors, we, or a committee of independent directors, will obtain an opinion from an independent
investment banking firm that is a member of FINRA or an accounting firm that such 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.
We
currently do not have any specific business combination under consideration. Our officers and directors have neither individually selected
nor considered a target business nor have they had any substantive discussions regarding possible target businesses among themselves
or with our underwriters or other advisors. Our management team is regularly made aware of potential business opportunities, one or more
of which we may desire to pursue for a business combination, but we have not (nor has anyone on our behalf) contacted any prospective
target business or had any substantive discussions, formal or otherwise, with respect to a business combination transaction with our
company. Additionally, we have not, nor has anyone on our behalf, taken any substantive measure, directly or indirectly, to identify
or locate any suitable acquisition candidate for us, nor have we engaged or retained any agent or other representative to identify or
locate any such acquisition candidate.
In
addition, Lead Edge, and certain of our officers and directors presently have, and any of them in the future may have additional, fiduciary
and contractual duties to other entities. As a result, if Lead Edge or any of our officers or directors becomes aware of a business combination
opportunity which is suitable for an entity to which he, she or it has then-current fiduciary or contractual obligations, then,
subject to their fiduciary duties under Cayman Islands law, he, she or it will need to honor such fiduciary or contractual obligations
to present such business combination opportunity to such entity, before we can pursue such opportunity. If these other entities decide
to pursue any such opportunity, we may be precluded from pursuing the same. However, we do not expect these duties to materially affect
our ability to identify and pursue business combination opportunities or to complete our initial business combination. Our amended and
restated memorandum and articles of association provide that, to the fullest extent permitted by applicable law: (i) no individual serving
as a director or an officer shall have any duty, except and to the extent expressly assumed by contract, to refrain from engaging directly
or indirectly in the same or similar business activities or lines of business as us; and (ii) we renounce any interest or expectancy
in, or in being offered an opportunity to participate in, any potential transaction or matter which may be a corporate opportunity for
any director or officer, on the one hand, and us, on the other.
Lead
Edge, our sponsor, and our officers and directors may sponsor, form or participate in other blank check companies similar to ours during
the period in which we are seeking an initial business combination. Any such companies may present additional conflicts of interest in
pursuing an acquisition target, particularly in the event there is overlap among investment mandates. However, we do not currently expect
that any such other blank check company would materially affect our ability to identify and pursue business combination opportunities
or to complete our initial business combination. In addition, neither Lead Edge, our sponsor, or our officers or directors, are required
to commit any specified amount of time to our affairs, and, accordingly, will have conflicts of interest in allocating management time
among various business activities, including identifying potential business combinations and monitoring the related due diligence.
Corporate
Information
Our
executive offices are located at 96 Spring St., 5th Floor New York, NY 10012, and our telephone number is (212)
984-2421. The information contained on or accessible through our corporate website or any other website that we may maintain is not part
of this Annual Report on Form 10-K.
We
are a Cayman Islands exempted company. Exempted companies are Cayman Islands companies conducting business mainly outside the Cayman
Islands and, as such, are exempted from complying with certain provisions of the Companies Act. As an exempted company, we have applied
for and have received, a tax exemption undertaking from the Cayman Islands government that, in accordance with Section 6 of the
Tax Concessions Act (2018 Revision) of the Cayman Islands, for a period of 20 years from the date of the undertaking, no law which
is enacted in the Cayman Islands imposing any tax to be levied on profits, income, gains or appreciations will apply to us or our operations
and, in addition, that no tax to be levied on profits, income, gains or appreciations or which is in the nature of estate duty or inheritance
tax will be payable (i) on or in respect of our shares, debentures or other obligations or (ii) by way of the withholding in
whole or in part of a payment of dividend or other distribution of income or capital by us to our shareholders or a payment of principal
or interest or other sums due under a debenture or other obligation of us.
We
are an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, or the Securities
Act, as modified by the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. As such, we are eligible to take advantage
of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging
growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404
of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive
compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory
vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. If some investors find
our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities
may be more volatile.
In
addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of
the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised
accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards
until those standards would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition
period.
We
will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary
of the completion of the Initial Public Offering, (b) in which we have total annual gross revenue of at least $1.07 billion,
or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Class A ordinary shares
that are held by non-affiliates equals or exceeds $700 million as of the prior June 30, and (2) the date on which
we have issued more than $1.0 billion in non-convertible debt during the prior three-year period. References herein to
“emerging growth company” have the meaning associated with it in the JOBS Act.
Additionally,
we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies
may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial
statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our
ordinary shares held by non-affiliates equals or exceeds $250 million as of the prior June 30, and (2) our annual
revenues equaled or exceeded $100 million during such completed fiscal year or the market value of our ordinary shares held by non-affiliates equals
or exceeds $700 million as of the prior June 30.
Item
1A. Risk Factors
An
investment in our securities involves a high degree of risk. You should consider carefully all of the risks described below, together
with the other information contained in this Annual Report on Form 10-K, before making a decision to invest in our units. If any of the
following events occur, our business, financial condition and operating results may be materially adversely affected. In that event,
the trading price of our securities could decline, and you could lose all or part of your investment.
Risks
Relating to our Search for, Consummation of, or Inability to Consummate, a Business Combination and Post-Business Combination Risks
Our
shareholders may not be afforded an opportunity to vote on our proposed initial business combination, which means we may complete our
initial business combination even though a majority of our shareholders do not support such a combination.
We
may choose not to hold a shareholder vote before we complete our initial business combination if the business combination would not require
shareholder approval under applicable law or stock exchange listing requirement. For instance, if we were seeking to acquire a target
business where the consideration we were paying in the transaction was all cash, we would typically not be required to seek shareholder
approval to complete such a transaction. Except for as required by applicable law or stock exchange listing requirement, the decision
as to whether we will seek shareholder approval of a proposed business combination or will allow shareholders to sell their shares to
us in a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors, such as the timing of the
transaction and whether the terms of the transaction would otherwise require us to seek shareholder approval. Accordingly, we may complete
our initial business combination even if holders of a majority of our issued and outstanding ordinary shares do not approve of the business
combination we complete.
Your
only opportunity to affect the investment decision regarding a potential business combination may be limited to the exercise of your
right to redeem your shares from us for cash.
At
the time of your investment in us, you will not be provided with an opportunity to evaluate the specific merits or risks of any target
businesses. Since our board of directors may complete a business combination without seeking shareholder approval, public shareholders
may not have the right or opportunity to vote on the business combination, unless we seek such shareholder approval. Accordingly, your
only opportunity to affect the investment decision regarding a potential business combination may be limited to exercising your redemption
rights within the period of time (which will be at least 20 business days) set forth in our tender offer documents mailed to our public
shareholders in which we describe our initial business combination.
If
we seek shareholder approval of our initial business combination, our sponsor and members of our management team have agreed to vote
in favor of such initial business combination, regardless of how our public shareholders vote.
Our
sponsor will own, on an as-converted basis, 20% of our outstanding ordinary shares immediately following the completion of the Initial
Public Offering. Our sponsor and members of our management team also may from time to time purchase Class A ordinary shares prior
to our initial business combination. Our amended and restated memorandum and articles of association provide that, if we seek shareholder
approval, we will complete our initial business combination only if a majority of the ordinary shares, represented in person or by proxy
and entitled to vote thereon and who vote at a shareholder meeting, are voted in favor of the business combination. As a result, in addition
to our initial shareholders’ founder shares, we would need 11,250,001, or 37.5% (assuming all issued and outstanding shares are
voted and the over-allotment option is not exercised), or 1,875,001, or 6.25% (assuming only the minimum number of shares representing
a quorum are voted and the over-allotment option is not exercised), of the 30,000,000 public shares sold in the Initial Public Offering
to be voted in favor of an initial business combination in order to have our initial business combination approved. Accordingly, if we
seek shareholder approval of our initial business combination, the agreement by our sponsor and each member of our management team to
vote in favor of our initial business combination will increase the likelihood that we will receive the requisite shareholder approval
for such initial business combination.
In
evaluating a prospective target business for our initial business combination, our management will rely on the availability of all of
the funds from the sale of the forward purchase securities to be used as part of the consideration to the sellers in the initial business
combination. If the sale of the forward purchase securities does not close, we may lack sufficient funds to consummate our initial business
combination.
In
connection with the consummation of the Initial Public Offering, we entered into a forward purchase agreement with LEC V, which provides
for the purchase of up to $50,000,000 of units, with each unit consisting of one Class A ordinary share and one-fourth of
one warrant to purchase one Class A ordinary share at $11.50 per share, subject to adjustment, for a purchase price of $10.00 per
unit, in a private placement to occur concurrently with the closing of our initial business combination. However, if the sale of
the forward purchase securities does not close, we may lack sufficient funds to consummate our initial business combination. The forward
purchase agreement contains customary closing conditions, the fulfillment of which is a condition for our sponsor to purchase the forward
purchase securities, including that our initial business combination must be consummated substantially concurrently with, and immediately
following, the purchase of forward purchase securities.
The
ability of our public shareholders to redeem their shares for cash may make our financial condition unattractive to potential business
combination targets, which may make it difficult for us to enter into a business combination with a target.
We
may seek to enter into a business combination transaction agreement with a prospective target that requires as a closing condition that
we have a minimum net worth or a certain amount of cash. If too many public shareholders exercise their redemption rights, we would not
be able to meet such closing condition and, as a result, would not be able to proceed with the business combination. Furthermore, in
no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 upon consummation
of our initial business combination and payment of deferred underwriting commissions (so that we do not then become subject to the SEC’s
“penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating
to our initial business combination. Consequently, if accepting all properly submitted redemption requests would cause our net tangible
assets to be less than $5,000,001 upon consummation of our initial business combination and payment of deferred underwriting commissions
or such greater amount necessary to satisfy a closing condition as described above, we would not proceed with such redemption and the
related business combination and may instead search for an alternate business combination. Prospective targets will be aware of these
risks and, thus, may be reluctant to enter into a business combination transaction with us.
The
ability of our public shareholders to exercise redemption rights with respect to a large number of our shares may not allow us to complete
the most desirable business combination or optimize our capital structure.
At
the time we enter into an agreement for our initial business combination, we will not know how many shareholders may exercise their redemption
rights, and therefore will need to structure the transaction based on our expectations as to the number of shares that will be submitted
for redemption. If our initial business combination agreement requires us to use a portion of the cash in the trust account to pay the
purchase price, or requires us to have a minimum amount of cash at closing, we will need to reserve a portion of the cash in the trust
account to meet such requirements, or arrange for third-party financing. In addition, if a large number of shares are submitted
for redemption, we may need to restructure the transaction to reserve a greater portion of the cash in the trust account or arrange for
additional third-party financing. Raising additional third-party financing may involve dilutive equity issuances or the incurrence
of indebtedness at higher than desirable levels. Furthermore, this dilution would increase to the extent that the anti-dilution provisions
of the Class B ordinary shares result in the issuance of Class A ordinary shares on a greater than one-to-one basis upon
conversion of the Class B ordinary shares at the time of our business combination. The above considerations may limit our ability
to complete the most desirable business combination available to us or optimize our capital structure. The amount of the deferred underwriting
commissions payable to the underwriters will not be adjusted for any shares that are redeemed in connection with an initial business
combination. The per-share amount we will distribute to shareholders who properly exercise their redemption rights will not be reduced
by the deferred underwriting commission and after such redemptions, the amount held in trust will continue to reflect our obligation
to pay the entire deferred underwriting commissions.
The
ability of our public shareholders to exercise redemption rights with respect to a large number of our shares could increase the probability
that our initial business combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your shares.
If
our initial business combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price, or
requires us to have a minimum amount of cash at closing, the probability that our initial business combination would be unsuccessful
is increased. If our initial business combination is unsuccessful, you would not receive your pro rata portion of the funds in the trust
account until we liquidate the trust account. If you are in need of immediate liquidity, you could attempt to sell your shares in the
open market; however, at such time our shares may trade at a discount to the pro rata amount per share in the trust account. In either
situation, you may suffer a material loss on your investment or lose the benefit of funds expected in connection with our redemption
until we liquidate or you are able to sell your shares in the open market.
The
requirement that we consummate an initial business combination within 24 months after the closing of the Initial Public Offering may
give potential target businesses leverage over us in negotiating a business combination and may limit the time we have in which to conduct
due diligence on potential business combination targets, in particular as we approach our dissolution deadline, which could undermine
our ability to complete our initial business combination on terms that would produce value for our shareholders.
Any
potential target business with which we enter into negotiations concerning a business combination will be aware that we must consummate
an initial business combination within 24 months from the closing of the Initial Public Offering. Consequently, such target business
may obtain leverage over us in negotiating a business combination, knowing that if we do not complete our initial business combination
with that particular target business, we may be unable to complete our initial business combination with any target business. This risk
will increase as we get closer to the time frame described above. In addition, we may have limited time to conduct due diligence and
may enter into our initial business combination on terms that we would have rejected upon a more comprehensive investigation.
Our
search for a business combination, and any target business with which we ultimately consummate a business combination, may be materially
adversely affected by current or anticipated military conflict, including between Russia and Ukraine, terrorism, sanctions or other
geopolitical events globally, the coronavirus (COVID-19) pandemic, including new variant strains of the underlying virus, and the status
of debt and equity markets.
Our
ability to consummate a business combination may be dependent on our ability to raise equity and debt financing which may be impacted
by current or anticipated military conflict, including between Russia and Ukraine, terrorism, sanctions, the COVID-19 pandemic and
other events, including as a result of increased market volatility, decreased market liquidity and third-party financing being unavailable
on terms acceptable to us or at all. Economic uncertainty in various global markets caused by political instability may result in weakened
demand for products sold by potential target businesses and difficulty in forecasting financial results on which we rely in the evaluation
of potential target businesses. Global conflicts, including the military conflict between Russia and Ukraine, as well as economic sanctions
implemented by the United States and European Union against Russia in response thereto, may negatively impact markets, increase energy
and transportation costs and cause weaker macro-economic conditions. Political developments impacting government spending, and international
trade, including inflation or raising interest rates, may also negatively impact markets and cause weaker macro-economic conditions.
The effect of any or all of these events could adversely impact our ability to find a suitable business combination, as it may affect
demand for potential target companies’ products or the cost of manufacturing thereof, harm their operations and weaken their financial
results.
Additionally,
the COVID-19 outbreak has resulted, and a significant outbreak of other infectious diseases could result, in a widespread health crisis
that has affected, or could adversely affect, the economies and financial markets worldwide, and the business of any potential target
business with which we consummate a business combination could be materially and adversely affected. The extent to which COVID-19 impacts
our search for a business combination will depend on future developments, which are highly uncertain and cannot be predicted, including
new variant strains of the underlying disease that may develop, new information which may emerge concerning the severity of COVID-19
and the actions to contain COVID-19 or treat its impact, among others. If the disruptions posed by COVID-19 or other matters of global
concern continue for an extensive period of time, our ability to consummate a business combination or the operations of a target business
with which we ultimately consummate a business combination, may be materially adversely affected. If the disruptions posed by COVID-19
or other matters of global concern continue for an extensive period of time, our ability to consummate a business combination, or the
operations of a target business with which we ultimately consummate a business combination, may be materially adversely affected.
Finally,
the outbreak of COVID-19 and ongoing geopolitical events may also have the effect of heightening many of the other risks described in
this “Risk Factors” section, such as those related to the market for our securities and cross-border transactions.
We
may not be able to consummate an initial business combination within 24 months after the closing of the Initial Public Offering, in which
case we would cease all operations except for the purpose of winding up and we would redeem our public shares and liquidate.
We
may not be able to find a suitable target business and consummate an initial business combination within 24 months after the closing
of the Initial Public Offering. Our ability to complete our initial business combination may be negatively impacted by general market
conditions, volatility in the capital and debt markets and the other risks described herein. For example, the outbreak of COVID-19 continues
to grow both in the U.S. and globally and, while the extent of the impact of the outbreak on us will depend on future developments, it
could limit our ability to complete our initial business combination, including as a result of increased market volatility, decreased
market liquidity and third-party financing being unavailable on terms acceptable to us or at all. Additionally, the outbreak of
COVID-19 may negatively impact businesses we may seek to acquire. If we have not consummated an initial business combination within
such applicable time period, we will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably
possible but not more than ten business days thereafter, redeem the public shares, at a 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, if any (less up to $100,000 of interest to pay dissolution expenses) divided by the number
of the then-outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders
(including the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably possible following
such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in
the case of clauses (ii) and (iii), to our obligations under Cayman Islands law to provide for claims of creditors and the requirements
of other applicable law. Our amended and restated memorandum and articles of association provide that, if we wind up for any other reason
prior to the consummation of our initial business combination, we will follow the foregoing procedures with respect to the liquidation
of the trust account as promptly as reasonably possible but not more than ten business days thereafter, subject to applicable Cayman
Islands law. In either such case, our public shareholders may receive only $10.00 per public share, or less than $10.00 per public share,
on the redemption of their shares, and our warrants will expire worthless. If third parties bring claims against us, the proceeds held
in the trust account could be reduced and the per-share redemption amount received by shareholders may be less than $10.00 per public
share” and other risk factors herein.
If
we seek shareholder approval of our initial business combination, our sponsor, directors, executive officers, advisors and their affiliates
may elect to purchase public shares or warrants, which may influence a vote on a proposed business combination and reduce the public
“float” of our Class A ordinary shares or public warrants.
If
we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business
combination pursuant to the tender offer rules, our sponsor, directors, executive officers, advisors or their affiliates may purchase
public shares or warrants in privately negotiated transactions or in the open market either prior to or following the completion of our
initial business combination, although they are under no obligation to do so. However, they have no current commitments, plans or intentions
to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds in the trust
account will be used to purchase public shares or warrants in such transactions.
In
the event that our sponsor, directors, executive officers, advisors or their affiliates purchase shares in privately negotiated transactions
from public shareholders who have already elected to exercise their redemption rights, such selling shareholders would be required to
revoke their prior elections to redeem their shares. The purpose of any such transaction could be to (1) vote in favor of the business
combination and thereby increase the likelihood of obtaining shareholder approval of the business combination, (2) reduce the number
of public warrants outstanding or vote such warrants on any matters submitted to the warrant holders for approval in connection with
our initial business combination or (3) satisfy a closing condition in an agreement with a target that requires us to have a minimum
net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would
otherwise not be met. Any such purchases of our securities may result in the completion of our initial business combination that may
not otherwise have been possible. In addition, if such purchases are made, the public “float” of our Class A ordinary
shares or public warrants may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult
to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange. Any such purchases will
be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to
such reporting requirements.
If
a shareholder fails to receive notice of our offer to redeem our public shares in connection with our initial business combination, or
fails to comply with the procedures for tendering its shares, such shares may not be redeemed.
We
will comply with the proxy rules or tender offer rules, as applicable, when conducting redemptions in connection with our initial business
combination. Despite our compliance with these rules, if a shareholder fails to receive our proxy solicitation or tender offer materials,
as applicable, such shareholder may not become aware of the opportunity to redeem its shares. In addition, the proxy solicitation or
tender offer materials, as applicable, that we will furnish to holders of our public shares in connection with our initial business combination
will describe the various procedures that must be complied with in order to validly redeem or tender public shares. In the event that
a shareholder fails to comply with these procedures, its shares may not be redeemed.
You
will not have any rights or interests in funds from the trust account, except under certain limited circumstances. Therefore, to liquidate
your investment, you may be forced to sell your public shares or warrants, potentially at a loss.
Our
public shareholders are entitled to receive funds from the trust account only upon the earliest to occur of: (i) our completion
of an initial business combination, and then only in connection with those Class A ordinary shares that such shareholder properly
elected to redeem, subject to the limitations described herein, (ii) the redemption of any public shares properly tendered in connection
with a shareholder vote to amend our amended and restated memorandum and articles of association (A) to modify the substance or
timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection
with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within
24 months from the closing of the Initial Public Offering or (B) with respect to any other provision relating to the rights
of holders of our Class A ordinary shares or pre-initial business combination activity, and (iii) the redemption of our
public shares if we have not consummated an initial business within 24 months from the closing of the Initial Public Offering, subject
to applicable law and as further described herein. Public shareholders who redeem their Class A ordinary shares in connection with
a shareholder vote described in clause (ii) in the preceding sentence shall not be entitled to funds from the trust account
upon the subsequent completion of an initial business combination or liquidation if we have not consummated an initial business combination
within 24 months from the closing of the Initial Public Offering, with respect to such Class A ordinary shares so redeemed.
In no other circumstances will a public shareholder have any right or interest of any kind in the trust account. Holders of warrants
will not have any right to the proceeds held in the trust account with respect to the warrants. Accordingly, to liquidate your investment,
you may be forced to sell your public shares or warrants, potentially at a loss.
You
will not be entitled to protections normally afforded to investors of many other blank check companies.
Since
the net proceeds of the Initial Public Offering and the sale of the private placement warrants are intended to be used to complete an
initial business combination with a target business that has not been selected, we may be deemed to be a “blank check” company
under the United States securities laws. However, because we will have net tangible assets of at least $5,000,001 upon the completion
of the Initial Public Offering and the sale of the private placement warrants and will file a Current Report on Form 8-K, including
an audited balance sheet demonstrating this fact, we are exempt from rules promulgated by the SEC to protect investors in blank check
companies, such as Rule 419. Accordingly, investors will not be afforded the benefits or protections of those rules. Among other
things, this means our units will be immediately tradable and we will have a longer period of time to complete our initial business combination
than do companies subject to Rule 419. Moreover, if the Initial Public Offering were subject to Rule 419, that rule would prohibit
the release of any interest earned on funds held in the trust account to us unless and until the funds in the trust account were released
to us in connection with our completion of an initial business combination. For a more detailed comparison of our offering to offerings
that comply with Rule 419.”
Because
of our limited resources and the significant competition for business combination opportunities, it may be more difficult for us to complete
our initial business combination. If we have not consummated our initial business combination within the required time period, our public
shareholders may receive only approximately $10.00 per public share, or less in certain circumstances, on the liquidation of our trust
account and our warrants will expire worthless.
We
expect to encounter intense competition from other entities having a business objective similar to ours, including private investors
(which may be individuals or investment partnerships), other blank check companies and other entities, domestic and international, competing
for the types of businesses we intend to acquire. Many of these individuals and entities are well established and have extensive experience
in identifying and effecting, directly or indirectly, acquisitions of companies operating in or providing services to various industries.
Many of these competitors possess greater technical, human and other resources or more local industry knowledge than we do and our financial
resources will be relatively limited when contrasted with those of many of these competitors. While we believe there are numerous target
businesses we could potentially acquire with the net proceeds of the Initial Public Offering and the sale of the private placement warrants,
our ability to compete with respect to the acquisition of certain target businesses that are sizable will be limited by our available
financial resources. This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses.
Furthermore, we are obligated to offer holders of our public shares the right to redeem their shares for cash at the time of our initial
business combination in conjunction with a shareholder vote or via a tender offer. Target companies will be aware that this may reduce
the resources available to us for our initial business combination. Any of these obligations may place us at a competitive disadvantage
in successfully negotiating a business combination. If we have not consummated our initial business combination within the required time
period, our public shareholders may receive only approximately $10.00 per public share, or less in certain circumstances, on the liquidation
of our trust account and our warrants will expire worthless. If third parties bring claims against us, the proceeds held in the trust
account could be reduced and the per-share redemption amount received by shareholders may be less than $10.00 per public share”
and other risk factors herein.
If
the net proceeds of the Initial Public Offering and the sale of the private placement warrants not being held in the trust account are
insufficient to allow us to operate for the 24 months following the closing of the Initial Public Offering, it could limit the amount
available to fund our search for a target business or businesses and our ability to complete our initial business combination, and we
will depend on loans from our sponsor, its affiliates or members of our management team to fund our search and to complete our initial
business combination.
Of
the net proceeds of the Initial Public Offering and the sale of the private placement warrants, only approximately $1,000,000 will be
available to us initially outside the trust account to fund our working capital requirements. We believe that, upon the closing of the
Initial Public Offering, the funds available to us outside of the trust account, together with funds available from loans from our sponsor,
its affiliates or members of our management team will be sufficient to allow us to operate for at least the 24 months following
the closing of the Initial Public Offering; however, we cannot assure you that our estimate is accurate, and our sponsor, its affiliates
or members of our management team are under no obligation to advance funds to us in such circumstances. Of the funds available to us,
we expect to use a portion of the funds available to us to pay fees to consultants to assist us with our search for a target business.
We could also use a portion of the funds as a down payment or to fund a “no-shop” provision (a provision in letters of intent
designed to keep target businesses from “shopping” around for transactions with other companies or investors on terms more
favorable to such target businesses) with respect to a particular proposed business combination, although we do not have any current
intention to do so. If we entered into a letter of intent where we paid for the right to receive exclusivity from a target business and
were subsequently required to forfeit such funds (whether as a result of our breach or otherwise), we might not have sufficient funds
to continue searching for, or conduct due diligence with respect to, a target business.
In
the event that our offering expenses exceed our estimate of $1,500,000, we may fund such excess with funds not to be held in the trust
account. In such case, unless funded by the proceeds of loans available from our sponsor, its affiliates or members of our management
team the amount of funds we intend to be held outside the trust account would decrease by a corresponding amount. Conversely, in the
event that the offering expenses are less than our estimate of $1,500,000, the amount of funds we intend to be held outside the trust
account would increase by a corresponding amount. The amount held in the trust account will not be impacted as a result of such increase
or decrease. If we are required to seek additional capital, we would need to borrow funds from our sponsor, its affiliates, members of
our management team or other third parties to operate or may be forced to liquidate. Neither our sponsor, members of our management team
nor their affiliates is under any obligation to us in such circumstances. Any such advances may be repaid only from funds held outside
the trust account or from funds released to us upon completion of our initial business combination. Up to $1,500,000 of such loans may
be convertible into warrants of the post-business combination entity at a price of $1.50 per warrant at the option of the lender.
The warrants would be identical to the private placement warrants. Prior to the completion of our initial business combination, we do
not expect to seek loans from parties other than our sponsor, its affiliates or members of our management team as we do not believe third
parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.
If we have not consummated our initial business combination within the required time period because we do not have sufficient funds available
to us, we will be forced to cease operations and liquidate the trust account. Consequently, our public shareholders may only receive
an estimated $10.00 per public share, or possibly less, on our redemption of our public shares, and our warrants will expire worthless.
If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount
received by shareholders may be less than $10.00 per public share” and other risk factors herein.
Subsequent
to our completion of our initial business combination, we may be required to take write-downs or write-offs, restructuring and impairment
or other charges that could have a significant negative effect on our financial condition, results of operations and the price of our
securities, which could cause you to lose some or all of your investment.
Even
if we conduct extensive due diligence on a target business with which we combine, we cannot assure you that this diligence will identify
all material issues with a particular target business, that it would be possible to uncover all material issues through a customary amount
of due diligence, or that factors outside of the target business and outside of our control will not later arise. As a result of these
factors, we may be forced to later write-down or write-off assets, restructure our operations, or incur impairment or other
charges that could result in our reporting losses. Even if our due diligence successfully identifies certain risks, unexpected risks
may arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis. Even though these
charges may be non-cash items and not have an immediate impact on our liquidity, the fact that we report charges of this nature
could contribute to negative market perceptions about us or our securities. In addition, charges of this nature may cause us to violate
net worth or other covenants to which we may be subject as a result of assuming pre-existing debt held by a target business or by
virtue of our obtaining post-combination debt financing. Accordingly, any holders who choose to retain their securities following
the business combination could suffer a reduction in the value of their securities. Such holders are unlikely to have a remedy for such
reduction in value.
If
third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received
by shareholders may be less than $10.00 per public share.
Our
placing of funds in the trust account may not protect those funds from third-party claims against us. Although we will seek to have
all vendors, service providers (other than our independent registered public accounting firm), prospective target businesses and other
entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies
held in the trust account for the benefit of our public shareholders, such parties may not execute such agreements, or even if they execute
such agreements, they may not be prevented from bringing claims against the trust account, including, but not limited to, fraudulent
inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver,
in each case in order to gain advantage with respect to a claim against our assets, including the funds held in the trust account. If
any third-party refuses to execute an agreement waiving such claims to the monies held in the trust account, our management will
perform an analysis of the alternatives available to it and will only enter into an agreement with a third-party that has not executed
a waiver if management believes that such third-party’s engagement would be significantly more beneficial to us than any alternative.
Examples
of possible instances where we may engage a third-party that refuses to execute a waiver include the engagement of a third-party consultant
whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would
agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. In addition,
there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of,
any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason. Upon redemption
of our public shares, if we have not consummated an initial business combination within 24 months from the closing of the Initial
Public Offering, or upon the exercise of a redemption right in connection with our initial business combination, we will be required
to provide for payment of claims of creditors that were not waived that may be brought against us within the ten years following redemption.
Accordingly, the per-share redemption amount received by public shareholders could be less than the $10.00 per public share initially
held in the trust account, due to claims of such creditors. Pursuant to the letter agreement the form of which is filed as an exhibit
to this Annual Report on Form 10-K forms a part, our sponsor has agreed that it will be liable to us if and to the extent any claims
by a third-party (other than our independent auditors) for services rendered or products sold to us, or a prospective target business
with which we have discussed entering into a transaction agreement, reduce the amounts in the trust account to below the lesser of (i)
$10.00 per public share and (ii) the actual amount per public share held in the trust account as of the date of the liquidation
of the trust account if less than $10.00 per public share due to reductions in the value of the trust assets, in each case net of the
interest that may be withdrawn to pay our tax obligations, provided that such liability will not apply to any claims
by a third-party or prospective target business that executed a waiver of any and all rights to seek access to the trust account
nor will it apply to any claims under our indemnity of the underwriters of the Initial Public Offering against certain liabilities, including
liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third-party,
our sponsor will not be responsible to the extent of any liability for such third-party claims.
However,
we have not asked our sponsor to reserve for such indemnification obligations, nor have we independently verified whether our sponsor
has sufficient funds to satisfy its indemnity obligations and we believe that our sponsor’s only assets are securities of our company.
Therefore, we cannot assure you that our sponsor would be able to satisfy those obligations. As a result, if any such claims were successfully
made against the trust account, the funds available for our initial business combination and redemptions could be reduced to less than
$10.00 per public share. In such event, we may not be able to complete our initial business combination, and you would receive such lesser
amount per share in connection with any redemption of your public shares. None of our officers or directors will indemnify us for claims
by third parties including, without limitation, claims by vendors and prospective target businesses.
Our
directors may decide not to enforce the indemnification obligations of our sponsor, resulting in a reduction in the amount of funds in
the trust account available for distribution to our public shareholders.
In
the event that the proceeds in the trust account are reduced below the lesser of (i) $10.00 per public share and (ii) the actual
amount per public share held in the trust account as of the date of the liquidation of the trust account if less than $10.00 per public
share due to reductions in the value of the trust assets, in each case net of the interest that may be withdrawn to pay our tax obligations,
and our sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular
claim, our independent directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations.
While we currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification
obligations to us, it is possible that our independent directors in exercising their business judgment and subject to their fiduciary
duties may choose not to do so in any particular instance. If our independent directors choose not to enforce these indemnification obligations,
the amount of funds in the trust account available for distribution to our public shareholders may be reduced below $10.00 per public
share.
We
may not have sufficient funds to satisfy indemnification claims of our directors and executive officers.
We
have agreed to indemnify our officers and directors to the fullest extent permitted by law. However, our officers and directors have
agreed to waive any right, title, interest or claim of any kind in or to any monies in the trust account and to not seek recourse against
the trust account for any reason whatsoever (except to the extent they are entitled to funds from the trust account due to their ownership
of public shares). Accordingly, any indemnification provided will be able to be satisfied by us only if (i) we have sufficient funds
outside of the trust account or (ii) we consummate an initial business combination. Our obligation to indemnify our officers and
directors may discourage shareholders from bringing a lawsuit against our officers or directors for breach of their fiduciary duty. These
provisions also may have the effect of reducing the likelihood of derivative litigation against our officers and directors, even though
such an action, if successful, might otherwise benefit us and our shareholders. Furthermore, a shareholder’s investment may be
adversely affected to the extent we pay the costs of settlement and damage awards against our officers and directors pursuant to these
indemnification provisions.
Changes
in the market for directors and officers liability insurance could make it more difficult and more expensive for us to negotiate and
complete an initial business combination.
In
recent months, the market for directors and officers liability insurance for special purpose acquisition companies has changed in ways
adverse to us and our management team. Fewer insurance companies are offering quotes for directors and officers liability coverage, the
premiums charged for such policies have generally increased and the terms of such policies have generally become less favorable. These
trends may continue into the future.
The
increased cost and decreased availability of directors and officers liability insurance could make it more difficult and more expensive
for us to negotiate an initial business combination. In order to obtain directors and officers liability insurance or modify its coverage
as a result of becoming a public company, the post-business combination entity might need to incur greater expense, accept less
favorable terms or both. However, any failure to obtain adequate directors and officers liability insurance could have an adverse impact
on the post-business combination’s ability to attract and retain qualified officers and directors.
In
addition, even after we were to complete an initial business combination, our directors and officers could still be subject to potential
liability from claims arising from conduct alleged to have occurred prior to the initial business combination. As a result, in order
to protect our directors and officers, the post-business combination entity may need to purchase additional insurance with respect
to any such claims (“run-off insurance”). The need for run-off insurance would be an added expense for the post-business combination
entity, and could interfere with or frustrate our ability to consummate an initial business combination on terms favorable to our investors.
If,
after we distribute the proceeds in the trust account to our public shareholders, we file a bankruptcy or winding-up petition or an involuntary
bankruptcy or winding-up petition is filed against us that is not dismissed, a bankruptcy or insolvency court may seek to recover such
proceeds, and the members of our board of directors may be viewed as having breached their fiduciary duties to our creditors, thereby
exposing the members of our board of directors and us to claims of punitive damages.
If,
after we distribute the proceeds in the trust account to our public shareholders, we file a bankruptcy or winding-up petition or
an involuntary bankruptcy or winding-up petition is filed against us that is not dismissed, any distributions received by shareholders
could be viewed under applicable debtor/creditor and/or bankruptcy or insolvency laws as either a “preferential transfer”
or a “fraudulent conveyance.” As a result, a bankruptcy or insolvency court could seek to recover some or all amounts received
by our shareholders. In addition, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or
having acted in bad faith, thereby exposing itself and us to claims of punitive damages, by paying public shareholders from the trust
account prior to addressing the claims of creditors.
If,
before distributing the proceeds in the trust account to our public shareholders, we file a bankruptcy or winding-up petition or an involuntary
bankruptcy or winding-up petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority
over the claims of our shareholders and the per-share amount that would otherwise be received by our shareholders in connection with
our liquidation may be reduced.
If,
before distributing the proceeds in the trust account to our public shareholders, we file a bankruptcy or winding-up petition or
an involuntary bankruptcy or winding-up petition is filed against us that is not dismissed, the proceeds held in the trust account
could be subject to applicable bankruptcy or insolvency law, and may be included in our bankruptcy estate and subject to the claims of
third parties with priority over the claims of our shareholders. To the extent any bankruptcy claims deplete the trust account, the per-share amount
that would otherwise be received by our shareholders in connection with our liquidation may be reduced.
Our
shareholders may be held liable for claims by third parties against us to the extent of distributions received by them upon redemption
of their shares.
If
we are forced to enter into an insolvent liquidation, any distributions received by shareholders could be viewed as an unlawful payment
if it was proved that immediately following the date on which the distribution was made, we were unable to pay our debts as they fall
due in the ordinary course of business. As a result, a liquidator could seek to recover some or all amounts received by our shareholders.
Furthermore, our directors may be viewed as having breached their fiduciary duties to us or our creditors and/or may have acted in bad
faith, thereby exposing themselves and our company to claims, by paying public shareholders from the trust account prior to addressing
the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons. We and our directors and
officers who knowingly and willfully authorized or permitted any distribution to be paid out of our share premium account while we were
unable to pay our debts as they fall due in the ordinary course of business would be guilty of an offence and may be liable for a fine
of $18,292.68 and imprisonment for five years in the Cayman Islands.
We
may not hold an annual general meeting until after the consummation of our initial business combination.
In
accordance with Nasdaq corporate governance requirements, we are not required to hold a general meeting until one year after our first
fiscal year end following our listing on Nasdaq. There is no requirement under the Companies Act for us to hold annual or extraordinary
general meetings to elect directors. Until we hold an annual general meeting, public shareholders may not be afforded the opportunity
to elect directors and to discuss company affairs with management. Our board of directors is divided into three classes with only one
class of directors being elected in each year and each class (except for those directors appointed prior to our first general meeting)
serving a three-year term.
Because
we are neither limited to evaluating a target business in a particular industry, sector or geographic area nor have we selected any specific
target businesses with which to pursue our initial business combination, you will be unable to ascertain the merits or risks of any particular
target business’s operations.
We
may pursue business combination opportunities in any industry, sector or geographic area, except that we will not, under our amended
and restated memorandum and articles of association, be permitted to effectuate our initial business combination solely with another
blank check company or similar company with nominal operations. Because we have not yet selected or approached any specific target business
with respect to a business combination, there is no basis to evaluate the possible merits or risks of any particular target business’s
operations, results of operations, cash flows, liquidity, financial condition or prospects. To the extent we complete our initial business
combination, we may be affected by numerous risks inherent in the business operations with which we combine. For example, if we combine
with a financially unstable business or an entity lacking an established record of sales or earnings, we may be affected by the risks
inherent in the business and operations of a financially unstable or a development stage entity. Although our officers and directors
will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or
assess all of the significant risk factors or that we will have adequate time to complete due diligence. Furthermore, some of these risks
may be outside of our control and leave us with no ability to control or reduce the chances that those risks will adversely impact a
target business. We also cannot assure you that an investment in our units will ultimately prove to be more favorable to investors than
a direct investment, if such opportunity were available, in a business combination target. Accordingly, any holders who choose to retain
their securities following the business combination could suffer a reduction in the value of their securities. Such holders are unlikely
to have a remedy for such reduction in value.
As
the number of special purpose acquisition companies evaluating targets increases, attractive targets may become scarcer and there may
be more competition for attractive targets. This could increase the cost of our initial business combination and could even result in
our inability to find a target or to consummate an initial business combination.
In
recent years, the number of special purpose acquisition companies that have been formed has increased substantially. Many potential targets
for special purpose acquisition companies have already entered into an initial business combination, and there are still many special
purpose acquisition companies preparing for an initial public offering, as well as many such companies currently in registration. As
a result, at times, fewer attractive targets may be available to consummate an initial business combination.
In
addition, because there are more special purpose acquisition companies seeking to enter into an initial business combination with available
targets, the competition for available targets with attractive fundamentals or business models may increase, which could cause target
companies to demand improved financial terms. Attractive deals could also become scarcer for other reasons, such as economic or industry
sector downturns, geopolitical tensions, or increases in the cost of additional capital needed to close business combinations or operate
targets post-business combination. This could increase the cost of, delay or otherwise complicate or frustrate our ability to find
and consummate an initial business combination, and may result in our inability to consummate an initial business combination on terms
favorable to our investors altogether.
Members
of our management team have significant experience as founders, board members, officers or executives of other companies or organizations.
As a result, certain of those persons have been or may become involved in proceedings, investigations, litigation, negative publicity
or other events that could adversely affect us and impede our ability to consummate an initial business combination.
During
the course of their careers, members of our management team have had significant experience as founders, board members, officers or executives
of other companies or organizations. As a result of their involvement and positions in these companies or organizations, some members
of our management team have been, and may in the future be, involved in litigation, investigations, proceedings, negative publicity or
other events arising out of or relating to the operations of such companies or organizations or transactions entered into by such companies
or organizations. Involvement of one or more members of our management in litigation, investigations, proceedings or negative publicity
may be detrimental to our reputation and could materially impact our ability to identify and complete our initial business combination,
including as a result of perception of target businesses, as well as divert our management team’s attention and resources away
from identifying and consummating our initial business combination.
We
may seek acquisition opportunities in industries or sectors which may or may not be outside of our management’s area of expertise.
We
will consider a business combination outside of our management’s area of expertise if a business combination target is presented
to us and we determine that such candidate offers an attractive acquisition opportunity for our company. Although our management will
endeavor to evaluate the risks inherent in any particular business combination target, we cannot assure you that we will adequately ascertain
or assess all of the significant risk factors. We also cannot assure you that an investment in our units will not ultimately prove to
be less favorable to investors in the Initial Public Offering than a direct investment, if an opportunity were available, in a business
combination target. In the event we elect to pursue an acquisition outside of the areas of our management’s expertise, our management’s
expertise may not be directly applicable to its evaluation or operation, and the information contained in this Annual Report on Form
10-K regarding the areas of our management’s expertise would not be relevant to an understanding of the business that we elect
to acquire. As a result, our management may not be able to adequately ascertain or assess all of the significant risk factors. Accordingly,
any holders who choose to retain their securities following the business combination could suffer a reduction in the value of their securities.
Such holders are unlikely to have a remedy for such reduction in value.
Although
we have identified general criteria and guidelines that we believe are important in evaluating prospective target businesses, we may
enter into our initial business combination with a target that does not meet such criteria and guidelines, and as a result, the target
business with which we enter into our initial business combination may not have attributes entirely consistent with our general criteria
and guidelines.
Although
we have identified general criteria and guidelines for evaluating prospective target businesses, it is possible that a target business
with which we enter into our initial business combination will not have all of these positive attributes. If we complete our initial
business combination with a target that does not meet some or all of these guidelines, such combination may not be as successful as a
combination with a business that does meet all of our general criteria and guidelines. In addition, if we announce a prospective business
combination with a target that does not meet our general criteria and guidelines, a greater number of shareholders may exercise their
redemption rights, which may make it difficult for us to meet any closing condition with a target business that requires us to have a
minimum net worth or a certain amount of cash. In addition, if shareholder approval of the transaction is required by applicable law
or stock exchange listing requirements, or we decide to obtain shareholder approval for business or other reasons, it may be more difficult
for us to attain shareholder approval of our initial business combination if the target business does not meet our general criteria and
guidelines. If we have not consummated our initial business combination within the required time period, our public shareholders may
receive only approximately $10.00 per public share, or less in certain circumstances, on the liquidation of our trust account and our
warrants will expire worthless.
We
are not required to obtain an opinion from an independent accounting or investment banking firm, and consequently, you may have no assurance
from an independent source that the price we are paying for the business is fair to our shareholders from a financial point of view.
Unless
we complete our initial business combination with an affiliated entity, we are not required to obtain an opinion from an independent
accounting firm or independent investment banking firm that is a member of FINRA that the price we are paying is fair to our shareholders
from a financial point of view. If no opinion is obtained, our shareholders will be relying on the judgment of our board of directors,
who will determine fair market value based on standards generally accepted by the financial community. Such standards used will be disclosed
in our proxy solicitation or tender offer materials, as applicable, related to our initial business combination.
We
may engage the underwriters or one of their affiliates to provide additional services to us after the Initial Public Offering, which
may include acting as financial advisor in connection with an initial business combination or as placement agent in connection with a
related financing transaction. The underwriters are entitled to receive deferred commissions that will be released from the trust only
on the completion of an initial business combination. These financial incentives may cause the underwriters to have potential conflicts
of interest in rendering any such additional services to us after the Initial Public Offering, including, for example, in connection
with the sourcing and consummation of an initial business combination.
We
may engage the underwriters or one of their affiliates to provide additional services to us after the Initial Public Offering, including,
for example, identifying potential targets, providing financial advisory services, acting as a placement agent in a private offering
or arranging debt financing. We may pay the underwriters or their affiliate fair and reasonable fees or other compensation that would
be determined at that time in an arm’s length negotiation; provided that no agreement will be entered into with the underwriters
or their affiliates and no fees or other compensation for such services will be paid to the underwriters or their affiliates prior to
the date that is 60 days from the date of this Annual Report on Form 10-K, unless such payment would not be deemed underwriters’
compensation in connection with the Initial Public Offering. The underwriters are also entitled to receive deferred commissions that
are conditioned on the completion of an initial business combination. The fact that the underwriters or their affiliates’ financial
interests are tied to the consummation of a business combination transaction may give rise to potential conflicts of interest in providing
any such additional services to us, including potential conflicts of interest in connection with the sourcing and consummation of an
initial business combination.
Because
we must furnish our shareholders with target business financial statements, we may lose the ability to complete an otherwise advantageous
initial business combination with some prospective target businesses.
The
federal proxy rules require that a proxy statement with respect to a vote on a business combination meeting certain financial significance
tests include historical and/or pro forma financial statement disclosure in periodic reports. We will include the same financial statement
disclosure in connection with our tender offer documents, whether or not they are required under the tender offer rules. These financial
statements may be required to be prepared in accordance with, or be reconciled to, accounting principles generally accepted in the United States
of America, or GAAP, or international financial reporting standards as issued by the International Accounting Standards Board, or IFRS,
depending on the circumstances and the historical financial statements may be required to be audited in accordance with the standards
of the Public Company Accounting Oversight Board (United States), or PCAOB. These financial statement requirements may limit the
pool of potential target businesses we may acquire because some targets may be unable to provide such 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.
Resources
could be wasted in researching acquisitions that are not completed, which could materially adversely affect subsequent attempts to locate
and acquire or merge with another business. If we have not consummated our initial business combination within the required time period,
our public shareholders may receive only approximately $10.00 per public share, or less in certain circumstances, on the liquidation
of our trust account and our warrants will expire worthless.
We
anticipate that the investigation of each specific target business and the negotiation, drafting and execution of relevant agreements,
disclosure documents and other instruments will require substantial management time and attention and substantial costs for accountants,
attorneys and others. If we decide not to complete a specific initial business combination, the costs incurred up to that point for the
proposed transaction likely would not be recoverable. Furthermore, if we reach an agreement relating to a specific target business, we
may fail to complete our initial business combination for any number of reasons including those beyond our control. Any such event will
result in a loss to us of the related costs incurred which could materially adversely affect subsequent attempts to locate and acquire
or merge with another business. If we have not consummated our initial business combination within the required time period, our public
shareholders may receive only approximately $10.00 per public share, or less in certain circumstances, on the liquidation of our trust
account and our warrants will expire worthless.
Compliance
obligations under the Sarbanes-Oxley Act may make it more difficult for us to effectuate a business combination, require substantial
financial and management resources, and increase the time and costs of completing an acquisition.
Section 404
of the Sarbanes-Oxley Act requires that we evaluate and report on our system of internal controls beginning with our Annual
Report on Form 10-K for the year ending December 31, 2022. Only in the event we are deemed to be a large accelerated filer
or an accelerated filer and no longer qualify as an emerging growth company, will we not be required to comply with the independent registered
public accounting firm attestation requirement on our internal control over financial reporting. The fact that we are a blank check company
makes compliance with the requirements of the Sarbanes-Oxley Act particularly burdensome on us as compared to other public
companies because a target business with which we seek to complete our initial business combination may not be in compliance with the
provisions of the Sarbanes-Oxley Act regarding adequacy of its internal controls. The development of the internal control
of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete
any such acquisition.
We
do not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for us to complete
our initial business combination with which a substantial majority of our shareholders do not agree.
Our
amended and restated memorandum and articles of association do not provide a specified maximum redemption threshold, except that in no
event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we do
not then become subject to the SEC’s “penny stock” rules). As a result, we may be able to complete our initial business
combination even though a substantial majority of our public shareholders do not agree with the transaction and have redeemed their shares
or, if we seek shareholder approval of our initial business combination and do not conduct redemptions in connection with our initial
business combination pursuant to the tender offer rules, have entered into privately negotiated agreements to sell their shares to our
sponsor, officers, directors, advisors or their affiliates. In the event the aggregate cash consideration we would be required to pay
for all Class A ordinary shares that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant
to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the business
combination or redeem any shares, all Class A ordinary shares submitted for redemption will be returned to the holders thereof,
and we instead may search for an alternate business combination.
In
order to effectuate an initial business combination, blank check companies have, in the recent past, amended various provisions of their
charters and other governing instruments, including their warrant agreements. We cannot assure you that we will not seek to amend our
amended and restated memorandum and articles of association or governing instruments in a manner that will make it easier for us to complete
our initial business combination that our shareholders may not support.
In
order to effectuate a business combination, blank check companies have, in the recent past, amended various provisions of their charters
and governing instruments, including their warrant agreements. For example, blank check companies have amended the definition of business
combination, increased redemption thresholds, extended the time to consummate an initial business combination and, with respect to their
warrants, amended their warrant agreements to require the warrants to be exchanged for cash and/or other securities. Amending our amended
and restated memorandum and articles of association requires at least a special resolution of our shareholders as a matter of Cayman
Islands law, meaning the approval of holders of at least two-thirds of our shareholders who attend and vote at a general meeting
of the company, and amending our warrant agreement requires a vote of holders of at least 65% of the public warrants and, solely with
respect to any amendment to the terms of the private placement warrants or any provision of the warrant agreement with respect to the
private placement warrants, 65% of the number of the then outstanding private placement warrants. In addition, our amended and restated
memorandum and articles of association require us to provide our public shareholders with the opportunity to redeem their public shares
for cash if we propose an amendment to our amended and restated memorandum and articles of association (A) that would modify the
substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed
in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business
combination within 24 months from the closing of the Initial Public Offering or (B) with respect to any other provision relating
to the rights of holders of our Class A ordinary shares or pre-initial business combination activity. To the extent any of
such amendments would be deemed to fundamentally change the nature of any of the securities offered through the Initial Public Offering,
we would register, or seek an exemption from registration for, the affected securities.
The
provisions of our amended and restated memorandum and articles of association that relate to our pre-business combination activity (and
corresponding provisions of the agreement governing the release of funds from our trust account) may be amended with the approval of
a special resolution which requires the approval of the holders of at least two-thirds of our shareholders who attend and vote at a general
meeting of the company, which is a lower amendment threshold than that of some other blank check companies. It may be easier for us,
therefore, to amend our amended and restated memorandum and articles of association to facilitate the completion of an initial business
combination that some of our shareholders may not support.
Some
other blank check companies have a provision in their charter which prohibits the amendment of certain of its provisions, including those
which relate to a company’s pre-business combination activity, without approval by a certain percentage of the company’s
shareholders. In those companies, amendment of these provisions typically requires approval by between 90% and 100% of the company’s
shareholders. Our amended and restated memorandum and articles of association provide that any of its provisions related to pre-business combination
activity (including the requirement to deposit proceeds of the Initial Public Offering and the private placement of warrants into the
trust account and not release such amounts except in specified circumstances, and to provide redemption rights to public shareholders
as described herein) may be amended if approved by special resolution, meaning holders of at least two-thirds of our shareholders
who attend and vote at a general meeting of the company, and corresponding provisions of the trust agreement governing the release of
funds from our trust account may be amended if approved by holders of at least 65% of our ordinary shares; provided that
the provisions of our amended and restated memorandum and articles of association governing the appointment or removal of directors prior
to our initial business combination may only be amended by a special resolution passed by not less than two-thirds of our shareholders
who attend and vote at our general meeting which shall include the affirmative vote of a simple majority of our Class B ordinary
shares. Our sponsor and its permitted transferees, if any, who will collectively beneficially own, on an as-converted basis, 20%
of our Class A ordinary shares upon the closing of the Initial Public Offering (assuming they do not purchase any units in the Initial
Public Offering), will participate in any vote to amend our amended and restated memorandum and articles of association and/or trust
agreement and will have the discretion to vote in any manner they choose. As a result, we may be able to amend the provisions of our
amended and restated memorandum and articles of association which govern our pre-business combination behavior more easily than
some other blank check companies, and this may increase our ability to complete a business combination with which you do not agree. Our
shareholders may pursue remedies against us for any breach of our amended and restated memorandum and articles of association.
Our
sponsor, executive officers and directors have agreed, pursuant to agreements with us, that they will not propose any amendment to our
amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide
holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination
or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing
of the Initial Public Offering or (B) with respect to any other provision relating to the rights of holders of our Class A
ordinary shares or pre-initial business combination activity, unless we provide our public shareholders with the opportunity to
redeem their Class A ordinary shares upon approval of any such amendment at a per-share price, payable in cash, equal to the
aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously
released to us to pay our taxes, if any, divided by the number of the then-outstanding public shares. Our shareholders are not parties
to, or third-party beneficiaries of, these agreements and, as a result, will not have the ability to pursue remedies against our
sponsor, executive officers and directors for any breach of these agreements. As a result, in the event of a breach, our shareholders
would need to pursue a shareholder derivative action, subject to applicable law.
We
may be unable to obtain additional financing to complete our initial business combination or to fund the operations and growth of a target
business, which could compel us to restructure or abandon a particular business combination. If we have not consummated our initial business
combination within the required time period, our public shareholders may receive only approximately $10.00 per public share, or less
in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless.
Although
we net proceeds of the Initial Public Offering and the sale of the private placement warrants are be sufficient to allow us to complete
our initial business combination, because we have not yet selected any prospective target business we cannot ascertain the capital requirements
for any particular transaction. If the net proceeds of the Initial Public Offering and the sale of the private placement warrants prove
to be insufficient, either because of the size of our initial business combination, the depletion of the available net proceeds in search
of a target business, the obligation to redeem for cash a significant number of shares from shareholders who elect redemption in connection
with our initial business combination or the terms of negotiated transactions to purchase shares in connection with our initial business
combination, we may be required to seek additional financing or to abandon the proposed business combination. We cannot assure you that
such financing will be available on acceptable terms, if at all. The current economic environment may make it difficult for companies
to obtain acquisition financing. To the extent that additional financing proves to be unavailable when needed to complete our initial
business combination, we would be compelled to either restructure the transaction or abandon that particular business combination and
seek an alternative target business candidate. If we have not consummated our initial business combination within the required time period,
our public shareholders may receive only approximately $10.00 per public share, or less in certain circumstances, on the liquidation
of our trust account and our warrants will expire worthless. In addition, even if we do not need additional financing to complete our
initial business combination, we may require such financing to fund the operations or growth of the target business. The failure to secure
additional financing could have a material adverse effect on the continued development or growth of the target business. None of our
officers, directors or shareholders is required to provide any financing to us in connection with or after our initial business combination.
We
may seek business combination opportunities with a high degree of complexity that require significant operational improvements, which
could delay or prevent us from achieving our desired results.
We
may seek business combination opportunities with large, highly complex companies that we believe would benefit from operational improvements.
While we implement such improvements, to the extent that our efforts are delayed or we are unable to achieve the desired improvements,
the business combination may not be as successful as we anticipate.
To
the extent we complete our initial business combination with a large complex business or entity with a complex operating structure, we
may also be affected by numerous risks inherent in the operations of the business with which we combine, which could delay or prevent
us from implementing our strategy. Although our management team will endeavor to evaluate the risks inherent in a particular target business
and its operations, we may not be able to properly ascertain or assess all of the significant risk factors until we complete our business
combination. If we are not able to achieve our desired operational improvements, or the improvements take longer to implement than anticipated,
we may not achieve the gains that we anticipate. Furthermore, some of these risks and complexities may be outside of our control and
leave us with no ability to control or reduce the chances that those risks and complexities will adversely impact a target business.
Such combination may not be as successful as a combination with a smaller, less complex organization.
We
may have a limited ability to assess the management of a prospective target business and, as a result, may affect our initial business
combination with a target business whose management may not have the skills, qualifications or abilities to manage a public company.
When
evaluating the desirability of effecting our initial business combination with a prospective target business, our ability to assess the
target business’s management may be limited due to a lack of time, resources or information. Our assessment of the capabilities
of the target business’s management, therefore, may prove to be incorrect and such management may lack the skills, qualifications
or abilities we suspected. Should the target business’s management not possess the skills, qualifications or abilities necessary
to manage a public company, the operations and profitability of the post-combination business may be negatively impacted. Accordingly,
any holders who choose to retain their securities following the business combination could suffer a reduction in the value of their securities.
Such holders are unlikely to have a remedy for such reduction in value.
We
may issue notes or other debt securities, or otherwise incur substantial debt, to complete a business combination, which may adversely
affect our leverage and financial condition and thus negatively impact the value of our shareholders’ investment in us.
Although
we have no commitments as of the date of this Annual Report on Form 10-K to issue any notes or other debt securities, or to otherwise
incur outstanding debt following the Initial Public Offering, we may choose to incur substantial debt to complete our initial business
combination. We and our officers have agreed that we will not incur any indebtedness unless we have obtained from the lender a waiver
of any right, title, interest or claim of any kind in or to the monies held in the trust account. As such, no issuance of debt will affect
the per-share amount available for redemption from the trust account. Nevertheless, the incurrence of debt could have a variety
of negative effects, including:
| ● | default
and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations; |
| ● | acceleration
of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants
that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant; |
| ● | our
immediate payment of all principal and accrued interest, if any, if the debt is payable on demand; |
| ● | our
inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing while
the debt is outstanding; |
| ● | our
inability to pay dividends on our Class A ordinary shares; |
| ● | using
a substantial portion of our cash flow to pay principal and interest on our debt, which reduces the funds available for dividends on
our Class A ordinary shares if declared, expenses, capital expenditures, acquisitions and other general corporate purposes; |
| ● | limitations
on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate; |
| ● | increased
vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation;
and |
| ● | limitations
on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of
our strategy and other purposes and other disadvantages compared to our competitors who have less debt. |
We
may only be able to complete one business combination with the proceeds of the Initial Public Offering and the sale of the private placement
warrants, which causes us to be solely dependent on a single business which may have a limited number of products or services. This lack
of diversification may negatively impact our operations and profitability.
The
net proceeds from the Initial Public Offering and the sale of the private placement warrants provided us with $289,500,000, on April
13th, 2021, the over-allotment was exercised and an additional $43,425,000 was provided and placed into the trust account,
total net proceeds generated from the Initial Public Offering & Over-Allotment was $332,925,000. We may use these funds to complete
our initial business combination (after taking into account $12,075,000 of deferred underwriting commissions being held in the trust
account and the estimated expenses of the Initial Public Offering and over-allotment). In addition, in connection with the consummation
of the Initial Public Offering, we entered into a forward purchase agreement with LEC V, which provides for the purchase by LEC V of
up to $50,000,000, of units, with each unit consisting of one Class A ordinary share and one-fourth of one warrant to purchase
one Class A ordinary share at $11.50 per share, subject to adjustment, for a purchase price of $10.00 per unit, in a private placement
to occur concurrently with the closing of our initial business combination. The forward purchase securities will be issued only in connection
with the closing of the initial business combination. The proceeds from the sale of forward purchase securities may be used as part of
the consideration to the sellers in our initial business combination, expenses in connection with our initial business combination or
for working capital in the post-transaction company. There can be no assurance that the forward purchase will close.
We
may effectuate our initial business combination with a single-target business or multiple-target businesses simultaneously
or within a short period of time. However, we may not be able to effectuate our initial business combination with more than one target
business because of various factors, including the existence of complex accounting issues and the requirement that we prepare and file
pro forma financial statements with the SEC that present operating results and the financial condition of several target businesses as
if they had been operated on a combined basis. By completing our initial business combination with only a single entity, our lack of
diversification may subject us to numerous economic, competitive and regulatory developments. Further, we would not be able to diversify
our operations or benefit from the possible spreading of risks or offsetting of losses, unlike other entities which may have the resources
to complete several business combinations in different industries or different areas of a single industry. Accordingly, the prospects
for our success may be:
| ● | solely
dependent upon the performance of a single business, property or asset; or |
| ● | dependent
upon the development or market acceptance of a single or limited number of products, processes or services. |
This
lack of diversification may subject us to numerous economic, competitive and regulatory risks, any or all of which may have a substantial
adverse impact upon the particular industry in which we may operate subsequent to our initial business combination.
We
may attempt to simultaneously complete business combinations with multiple prospective targets, which may hinder our ability to complete
our initial business combination and give rise to increased costs and risks that could negatively impact our operations and profitability.
If
we determine to simultaneously acquire several businesses that are owned by different sellers, we will need for each of such sellers
to agree that our purchase of its business is contingent on the simultaneous closings of the other business combinations, which may make
it more difficult for us, and delay our ability, to complete our initial business combination. With multiple business combinations, we
could also face additional risks, including additional burdens and costs with respect to possible multiple negotiations and due diligence
(if there are multiple sellers) and the additional risks associated with the subsequent assimilation of the operations and services or
products of the acquired companies in a single operating business. If we are unable to adequately address these risks, it could negatively
impact our profitability and results of operations.
We
may attempt to complete our initial business combination with a private company about which little information is available, which may
result in a business combination with a company that is not as profitable as we suspected, if at all.
In
pursuing our acquisition strategy, we may seek to effectuate our initial business combination with a privately held company. Very little
public information generally exists about private companies, and we could be required to make our decision on whether to pursue a potential
initial business combination on the basis of limited information, which may result in a business combination with a company that is not
as profitable as we suspected, if at all.
Risks
Relating to our Securities
The
securities in which we invest the funds held in the trust account could bear a negative rate of interest, which could reduce the value
of the assets held in trust such that the per-share redemption amount received by public shareholders may be less than $10.00 per share.
The
proceeds held in the trust account will be invested only in U.S. government treasury obligations with a maturity of 185 days or
less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act, which invest
only in direct U.S. government treasury obligations. While short-term U.S. government treasury obligations currently yield a positive
rate of interest, they have briefly yielded negative interest rates in recent years. Central banks in Europe and Japan pursued interest
rates below zero in recent years, and the Open Market Committee of the Federal Reserve has not ruled out the possibility that it may
in the future adopt similar policies in the United States. In the event that we are unable to complete our initial business combination
or make certain amendments to our amended and restated memorandum and articles of association, our public shareholders are entitled to
receive their pro-rata share of the proceeds held in the trust account, plus any interest income, net of taxes paid or payable (less,
in the case we are unable to complete our initial business combination, $100,000 of interest). Negative interest rates could reduce the
value of the assets held in trust such that the per-share redemption amount received by public shareholders may be less than $10.00
per share.
If
we are deemed to be an investment company under the Investment Company Act, we may be required to institute burdensome compliance
requirements and our activities may be restricted, which may make it difficult for us to complete our initial business combination.
If
we are deemed to be an investment company under the Investment Company Act, our activities may be restricted, including:
| ● | restrictions
on the nature of our investments; and |
| ● | restrictions
on the issuance of securities, |
each
of which may make it difficult for us to complete our initial business combination.
In
addition, we may have imposed upon us burdensome requirements, including:
| ● | registration
as an investment company with the SEC; |
| ● | adoption
of a specific form of corporate structure; and |
| ● | reporting,
record keeping, voting, proxy and disclosure requirements and other rules and regulations that we are currently not subject to. |
In
order not to be regulated as an investment company under the Investment Company Act, unless we can qualify for an exclusion, we
must ensure that we are engaged primarily in a business other than investing, reinvesting or trading of securities and that our activities
do not include investing, reinvesting, owning, holding or trading “investment securities” constituting more than 40% of our
assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. Our business will be to identify and complete
a business combination and thereafter to operate the post-transaction business or assets for the long term. We do not plan to buy
businesses or assets with a view to resale or profit from their resale. We do not plan to buy unrelated businesses or assets or to be
a passive investor.
We
do not believe that our anticipated principal activities will subject us to the Investment Company Act. To this end, the proceeds
held in the trust account may only be invested in United States “government securities” within the meaning of Section 2(a)(16)
of the Investment Company Act having a maturity of 185 days or less or in money market funds meeting certain conditions
under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury
obligations. Pursuant to the trust agreement, the trustee is not permitted to invest in other securities or assets. By restricting the
investment of the proceeds to these instruments, and by having a business plan targeted at acquiring and growing businesses for the long
term (rather than on buying and selling businesses in the manner of a merchant bank or private equity fund), we intend to avoid being
deemed an “investment company” within the meaning of the Investment Company Act. The trust account is a holding place
for funds pending the earliest to occur of either: (i) the completion of our initial business combination; (ii) the redemption
of any public shares properly tendered in connection with a shareholder vote to amend our amended and restated memorandum and articles
of association (A) to modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the
right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we
do not complete our initial business combination within 24 months from the closing of the Initial Public Offering or (B) with
respect to any other provision relating to the rights of holders of our Class A ordinary shares or pre-initial business combination
activity; or (iii) absent our completing an initial business combination within 24 months from the closing of this offering,
our return of the funds held in the trust account to our public shareholders as part of our redemption of the public shares. If we do
not invest the proceeds as discussed above, we may be deemed to be subject to the Investment Company Act. If we were deemed to be
subject to the Investment Company Act, compliance with these additional regulatory burdens would require additional expenses for
which we have not allotted funds and may hinder our ability to complete a business combination. If we have not consummated our initial
business combination within the required time period, our public shareholders may receive only approximately $10.00 per public share,
or less in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless.
If
we seek shareholder approval of our initial business combination and we do not conduct redemptions pursuant to the tender offer rules,
and if you or a “group” of shareholders are deemed to hold in excess of 15% of our Class A ordinary shares, you will
lose the ability to redeem all such shares in excess of 15% of our Class A ordinary shares.
If
we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business
combination pursuant to the tender offer rules, our amended and restated memorandum and articles of association provide that a public
shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as
a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with
respect to more than an aggregate of 15% of the shares sold in the Initial Public Offering, which we refer to as the “Excess Shares,”
without our prior consent. However, we would not be restricting our shareholders’ ability to vote all of their shares (including
Excess Shares) for or against our initial business combination. Your inability to redeem the Excess Shares will reduce your influence
over our ability to complete our initial business combination and you could suffer a material loss on your investment in us if you sell
Excess Shares in open market transactions. Additionally, you will not receive redemption distributions with respect to the Excess Shares
if we complete our initial business combination. And as a result, you will continue to hold that number of shares exceeding 15% and,
in order to dispose of such shares, would be required to sell your shares in open market transactions, potentially at a loss.
Nasdaq
may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities
and subject us to additional trading restrictions.
We
have been approved to list our units on Nasdaq as of the date of this Annual Report on Form 10-K and our Class A ordinary shares
and warrants are listed on Nasdaq on or promptly after their date of separation. Although after giving effect to the Initial Public Offering
we expect to meet, on a pro forma basis, the minimum initial listing standards set forth in Nasdaq listing standards, we cannot assure
you that our securities will continue to be listed on Nasdaq in the future or prior to our initial business combination. In order to
continue listing our securities on Nasdaq prior to our initial business combination, we must maintain certain financial, distribution
and share price levels. Generally, we must maintain a minimum market capitalization (generally $50,000,000) and a minimum number of holders
of our securities (generally 300 public holders).
Additionally,
our units will not be traded after completion of our initial business combination and, in connection with our initial business combination,
we will be required to demonstrate compliance with Nasdaq initial listing requirements, which are more rigorous than Nasdaq continued
listing requirements, in order to continue to maintain the listing of our securities on Nasdaq.
For
instance, the share price of our securities would generally be required to be at least $4.00 per share and our shareholders’ equity
would generally be required to be at least $5,000,000 and we would be required to have a minimum of 300 round-lot holders (with
at least 50% of such round lot holders holding securities with a market value of at least $2,500). We may not be able to meet those initial
listing requirements at that time.
If Nasdaq delists any of our securities from trading
on its exchange and we are not able to list our securities on another national securities exchange, such securities could be quoted on
an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including:
| ● | a limited availability of market quotations for our securities; |
| ● | reduced liquidity for our securities; |
| ● | a determination that our Class A ordinary shares are
a “penny stock” which requires brokers trading in our Class A ordinary shares to adhere to more stringent rules and
possibly result in a reduced level of trading activity in the secondary trading market for our securities; |
| ● | a limited amount of news and analyst coverage; and |
| ● | a decreased ability to issue additional securities or obtain
additional financing in the future. |
The National Securities Markets Improvement Act
of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred
to as “covered securities.” Class A ordinary shares and warrants qualify as covered securities under the statute. Although
the states are preempted from regulating the sale of covered securities, the federal statute does allow the states to investigate companies
if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered
securities in a particular case. While we are not aware of a state having used these powers to prohibit or restrict the sale of securities
issued by blank check companies, other than the State of Idaho, certain state securities regulators view blank check companies unfavorably
and might use these powers, or threaten to use these powers, to hinder the sale of securities of blank check companies in their states.
Further, if we were no longer listed on Nasdaq, our securities would not qualify as covered securities under the statute and we would
be subject to regulation in each state in which we offer our securities.
We may issue additional Class A ordinary shares or preference
shares to complete our initial business combination or under an employee incentive plan after completion of our initial business combination.
We may also issue Class A ordinary shares upon the conversion of the founder shares at a ratio greater than one-to-one at the time
of our initial business combination as a result of the anti-dilution provisions contained in our amended and restated memorandum and articles
of association. Any such issuances would dilute the interest of our shareholders and likely present other risks.
Our amended and restated memorandum and articles
of association authorize the issuance of up to 350,000,000 Class A ordinary shares, par value $0.0001 per share, 35,000,000 Class B
ordinary shares, par value $0.0001 per share, and 1,000,000 preference shares, par value $0.0001 per share. After the Initial Public Offering,
there are 320,000,000 and 27,500,000 authorized but unissued Class A ordinary shares and Class B ordinary shares, respectively,
available for issuance which amount does not take into account shares reserved for issuance upon exercise of outstanding warrants or shares
issuable upon conversion of the Class B ordinary shares, if any. The Class B ordinary shares will automatically convert into
Class A ordinary shares at the time of our initial business combination as described herein and in our amended and restated memorandum
and articles of association. Immediately after the Initial Public Offering, there will be no preference shares issued and outstanding.
We may issue a substantial number of additional
Class A ordinary shares or preference shares to complete our initial business combination or under an employee incentive plan after
completion of our initial business combination. We may also issue Class A ordinary shares in connection with our redeeming the warrants
as described in “Description of Securities — Warrants — Public Shareholders’ Warrants — Redemption of Warrants
for Class A Ordinary Shares” or upon conversion of the Class B ordinary shares at a ratio greater than one-to-one at
the time of our initial business combination as a result of the anti-dilution provisions as set forth herein. However, our amended
and restated memorandum and articles of association provide, among other things, that prior to or in connection with our initial business
combination, we may not issue additional shares that would entitle the holders thereof to (i) receive funds from the trust account
or (ii) vote on any initial business combination or on any other proposal presented to shareholders prior to or in connection with
the completion of an initial business combination. These provisions of our amended and restated memorandum and articles of association,
like all provisions of our amended and restated memorandum and articles of association, may be amended with a shareholder vote. The issuance
of additional ordinary or preference shares:
| ● | may significantly dilute the equity interest of investors
in the Initial Public Offering, which dilution would increase if the anti-dilution provisions in the Class B ordinary shares
resulted in the issuance of Class A ordinary shares on a greater than one-to-one basis upon conversion of the Class B
ordinary shares; |
| ● | may subordinate the rights of holders of Class A ordinary
shares if preference shares are issued with rights senior to those afforded our Class A ordinary shares; |
| ● | could cause a change in control if a substantial number of
Class A ordinary shares are issued, which may affect, among other things, our ability to use our net operating loss carry forwards,
if any, and could result in the resignation or removal of our present officers and directors; |
| ● | may have the effect of delaying or preventing a change of
control of us by diluting the share ownership or voting rights of a person seeking to obtain control of us; |
| ● | may adversely affect prevailing market prices for our units,
Class A ordinary shares and/or warrants; and |
| ● | may not result in adjustment to the exercise price of our
warrants. |
Unlike some other similarly structured blank check companies, our
sponsor will receive additional Class A ordinary shares if we issue shares to consummate an initial business combination.
The founder shares will automatically convert into
our Class A ordinary shares at the time of our initial business combination at a ratio such that the number of Class A ordinary
shares issuable upon conversion of all founder shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of (i) the
total number of ordinary shares issued and outstanding upon completion of the Initial Public Offering, plus (ii) the total number
of Class A ordinary shares issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities or
rights issued or deemed issued, by the company in connection with or in relation to the consummation of the initial business combination
(not including the forward purchase shares or forward purchase warrants), excluding any Class A ordinary shares or equity-linked securities
exercisable for or convertible into Class A ordinary shares issued, deemed issued, or to be issued, to any seller in the initial
business combination and any private placement warrants issued to our sponsor, any of its affiliates or any members of our management
team upon conversion of working capital loans. In no event will the Class B ordinary shares convert into Class A ordinary shares
at a rate of less than one-to-one. This is different than some other similarly structured blank check companies in which the initial shareholders
will only be issued an aggregate of 20% of the total number of shares to be outstanding prior to the initial business combination.
We are not registering the Class A ordinary shares issuable
upon exercise of the warrants under the Securities Act or any state securities laws at this time, and such registration may
not be in place when an investor desires to exercise warrants, thus precluding such investor from being able to exercise its warrants
and causing such warrants to expire worthless.
We are not registering the Class A ordinary
shares issuable upon exercise of the warrants under the Securities Act or any state securities laws at this time. However, under
the terms of the warrant agreement, we have agreed that, as soon as practicable, but in no event later than 20 business days after the
closing of our initial business combination, we will use our commercially reasonable efforts to file with the SEC a registration statement
covering the issuance of such shares, and we will use our commercially reasonable efforts to cause the same to become effective within
60 business days after the closing of our initial business combination and to maintain the effectiveness of such registration statement
and a current Annual Report on Form 10-K relating to those Class A ordinary shares until the warrants expire or are redeemed. We
cannot assure you that we will be able to do so if, for example, any facts or events arise which represent a fundamental change in the
information set forth in the registration statement or Annual Report on Form 10-K, the financial statements contained or incorporated
by reference therein are not current, complete or correct or the SEC issues a stop order. If the shares issuable upon exercise of the
warrants are not registered under the Securities Act in accordance with the above requirements, we will be required to permit
holders to exercise their warrants on a cashless basis, in which case, the number of Class A ordinary shares that you will receive
upon cashless exercise will be based on a formula subject to a maximum amount of shares equal to 0.361 Class A ordinary shares per
warrant (subject to adjustment). However, no warrant will be exercisable for cash or on a cashless basis, and we will not be obligated
to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered
or qualified under the securities laws of the state of the exercising holder, or an exemption from registration is available. Notwithstanding
the above, if our Class A ordinary shares are at the time of any exercise of a warrant not listed on a national securities exchange
such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may,
at our option, require holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance
with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in
effect a registration statement, but we will use our commercially reasonable efforts to register or qualify the shares under applicable
blue sky laws to the extent an exemption is not available. Exercising the warrants on a cashless basis could have the effect of reducing
the potential “upside” of the holder’s investment in our company because the warrant holder will hold a smaller number
of Class A ordinary shares upon a cashless exercise of the warrants they hold. In no event will we be required to net cash settle
any warrant, or issue securities or other compensation in exchange for the warrants in the event that we are unable to register or qualify
the shares underlying the warrants under applicable state securities laws and no exemption is available. If the issuance of the shares
upon exercise of the warrants is not so registered or qualified or exempt from registration or qualification, the holder of such warrant
shall not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In such event, holders who acquired
their warrants as part of a purchase of units will have paid the full unit purchase price solely for the Class A ordinary shares
included in the units. There may be a circumstance where an exemption from registration exists for holders of our private placement warrants
to exercise their warrants while a corresponding exemption does not exist for holders of the public warrants included as part of units
sold in the Initial Public Offering. In such an instance, our sponsor and its permitted transferees (which may include our directors and
executive officers) would be able to exercise their warrants and sell the ordinary shares underlying their warrants while holders of our
public warrants would not be able to exercise their warrants and sell the underlying ordinary shares. If and when the warrants become
redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying Class A ordinary
shares for sale under all applicable state securities laws. As a result, we may redeem the warrants as set forth above even if the holders
are otherwise unable to exercise their warrants.
We may amend the terms of the warrants in a manner that may be adverse
to holders of public warrants with the approval by the holders of at least 65% of the then-outstanding public warrants. As a result, the
exercise price of your warrants could be increased, the exercise period could be shortened and the number of our Class A ordinary
shares purchasable upon exercise of a warrant could be decreased, all without your approval.
Our warrants are issued in registered form under
a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. The warrant agreement provides
that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision,
but requires the approval by the holders of at least 65% of the then-outstanding public warrants to make any change that adversely
affects the interests of the registered holders of public warrants. Accordingly, we may amend the terms of the public warrants in a manner
adverse to a holder if holders of at least 65% of the then-outstanding public warrants approve of such amendment and, solely with
respect to any amendment to the terms of the private placement warrants or any provision of the warrant agreement with respect to the
private placement warrants, 65% of the number of the then outstanding private placement warrants. Although our ability to amend the terms
of the public warrants with the consent of at least 65% of the then-outstanding public warrants is unlimited, examples of such amendments
could be amendments to, among other things, increase the exercise price of the warrants, convert the warrants into cash, shorten the exercise
period or decrease the number of Class A ordinary shares purchasable upon exercise of a warrant.
Our warrant agreement designates the courts of the State of New York
or the United States District Court for the Southern District of New York as the sole and exclusive forum for certain types
of actions and proceedings that may be initiated by holders of our warrants, which could limit the ability of warrant holders to obtain
a favorable judicial forum for disputes with our company.
Our warrant agreement provides that, subject to
applicable law, (i) any action, proceeding or claim against us arising out of or relating in any way to the warrant agreement, including
under the Securities Act, will be brought and enforced in the courts of the State of New York or the United States District
Court for the Southern District of New York, and (ii) that we irrevocably submit to such jurisdiction, which jurisdiction shall
be the exclusive forum for any such action, proceeding or claim. We will waive any objection to such exclusive jurisdiction and that such
courts represent an inconvenient forum.
Notwithstanding the foregoing, these provisions
of the warrant agreement do not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other
claim for which the federal district courts of the United States of America are the sole and exclusive forum. Any person or entity
purchasing or otherwise acquiring any interest in any of our warrants shall be deemed to have notice of and to have consented to the forum
provisions in our warrant agreement. If any action, the subject matter of which is within the scope the forum provisions of the warrant
agreement, is filed in a court other than a court of the State of New York or the United States District Court for the Southern
District of New York (a “foreign action”) in the name of any holder of our warrants, such holder shall be deemed to have
consented to: (x) the personal jurisdiction of the state and federal courts located in the State of New York in connection with
any action brought in any such court to enforce the forum provisions (an “enforcement action”), and (y) having service
of process made upon such warrant holder in any such enforcement action by service upon such warrant holder’s counsel in the foreign
action as agent for such warrant holder.
This choice-of-forum provision may limit a
warrant holder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with our company, which may discourage
such lawsuits. Alternatively, if a court were to find this provision of our warrant agreement inapplicable or unenforceable with respect
to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters
in other jurisdictions, which could materially and adversely affect our business, financial condition and results of operations and result
in a diversion of the time and resources of our management and board of directors.
We may redeem your unexpired warrants prior to their exercise at
a time that is disadvantageous to you, thereby making your warrants worthless.
We have the ability to redeem the outstanding public
warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the closing
price of our Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable
upon exercise or the exercise price of a warrant as described under the heading “Description of Securities — Warrants —
Public Shareholders’ Warrants — Anti-Dilution Adjustments”) for any 20 trading days within a 30 trading-day period
ending on the third trading day prior to proper notice of such redemption and provided that certain other conditions are met. If and when
the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying
securities for sale under all applicable state securities laws. As a result, we may redeem the warrants as set forth above even if the
holders are otherwise unable to exercise the warrants. Redemption of the outstanding warrants could force you to (i) exercise your
warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) sell your warrants at
the then-current market price when you might otherwise wish to hold your warrants or (iii) accept the nominal redemption price
which, at the time the outstanding warrants are called for redemption, would be substantially less than the market value of your warrants.
In addition, we have the ability to redeem the outstanding
public warrants at any time after they become exercisable and prior to their expiration, at a price of $0.10 per warrant upon a minimum
of 30 days’ prior written notice of redemption provided that the closing price of our Class A ordinary shares equals or
exceeds $10.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant
as described under the heading “Description of Securities — Warrants — Public Shareholders’ Warrants — Anti-Dilution Adjustments”)
for any 20 trading days within a 30 trading-day period ending on the third trading day prior to proper notice of such redemption
and provided that certain other conditions are met, including that holders will be able to exercise their warrants prior to redemption
for a number of Class A ordinary shares determined based on the redemption date and the fair market value of our Class A ordinary
shares. Redemption of warrants when the price per Class A ordinary share equals or exceeds $10.00.” The value received upon
exercise of the warrants (1) may be less than the value the holders would have received if they had exercised their warrants at a
later time where the underlying share price is higher and (2) may not compensate the holders for the value of the warrants, including
because the number of ordinary shares received is capped at 0.361 Class A ordinary shares per warrant (subject to adjustment) irrespective
of the remaining life of the warrants.
None of the private placement warrants are redeemable
by us as (except as set forth under “Description of Securities — Warrants — Public Shareholders’ Warrants —
Redemption of warrants when the price per Class A ordinary share equals or exceeds $10.00”) so long as they are held by our
sponsor or its permitted transferees.
Our warrants may have an adverse effect on the market price of our
Class A ordinary shares and make it more difficult to effectuate our initial business combination.
At the Initial Public Offering, we issued warrants
to purchase 7,500,000 of our Class A ordinary shares, on April 13th, 2021, the underwriters’ over-allotment option was exercised
and an additional 1,125,000 Class A ordinary shares were issued, total Class A shares issued were 8,625,000. At the Initial Public
Offering, we issued in a private placement an aggregate of 5,666,667 private placement warrants, and on April 13th, 2021, the underwriters’
over-allotment option was exercised and we issued an additional 600,000 warrants, each exercisable to purchase one Class A ordinary
share at $11.50 per share, subject to adjustment, total private placement warrants issued are 6,266,667. In addition, if the sponsor,
its affiliates or a member of our management team makes any working capital loans, it may convert up to $1,500,000 of such loans into
up to an additional 1,000,000 private placement warrants, at the price of $1.50 per warrant. We may also issue up to 1,250,000 forward
purchase warrants pursuant to the forward purchase agreement. We may also issue Class A ordinary shares in connection with our redemption
of our warrants.
To the extent we issue ordinary shares for any reason,
including to effectuate a business combination, the potential for the issuance of a substantial number of additional Class A ordinary
shares upon exercise of these warrants could make us a less attractive acquisition vehicle to a target business. Such warrants, when exercised,
will increase the number of issued and outstanding Class A ordinary shares and reduce the value of the Class A ordinary shares
issued to complete the business transaction. Therefore, our warrants may make it more difficult to effectuate a business transaction or
increase the cost of acquiring the target business.
Because each unit contains one-fourth of one redeemable warrant
and only a whole warrant may be exercised, the units may be worth less than units of other blank check companies.
Each unit contains one-fourth of one redeemable
warrant. Pursuant to the warrant agreement, no fractional warrants are issued upon separation of the units, and only whole units will
trade. If, upon exercise of the warrants, a holder would be entitled to receive a fractional interest in a share, we will, upon exercise,
round down to the nearest whole number the number of Class A ordinary shares to be issued to the warrant holder. This is different
from other offerings similar to ours whose units include one ordinary share and one whole warrant to purchase one whole share. We have
established the components of the units in this way in order to reduce the dilutive effect of the warrants upon completion of a business
combination since the warrants are be exercisable in the aggregate for one-fourth of the number of shares compared to units that
each contain a whole warrant to purchase one whole share, thus making us, we believe, a more attractive merger partner for target businesses.
Nevertheless, this unit structure may cause our units to be worth less than if a unit included a warrant to purchase one whole share.
A provision of our warrant agreement may make it more difficult
for us to consummate an initial business combination.
If (i) we issue additional Class A ordinary
shares or equity-linked securities for capital raising purposes in connection with the closing of our initial business combination
at a Newly Issued Price of less than $9.20 per Class A ordinary share, (ii) the aggregate gross proceeds from such issuances
represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of our initial business combination
on the date of the consummation of our initial business combination (net of redemptions), and (iii) the Market Value of our Class A
ordinary shares is below $9.20 per share, then the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to
115% of the higher of the Market Value and the Newly Issued Price, the $18.00 per share redemption trigger price will be adjusted (to
the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price (See “— Redemption of warrants
when the price per Class A ordinary share equals or exceeds $18.00” and “— Redemption of warrants when the price
per Class A ordinary share equals or exceeds $10.00”), and the $10.00 per share redemption trigger price will be adjusted (to
the nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price (See “— Redemption of warrants
when the price per Class A ordinary share equals or exceeds $10.00”). This may make it more difficult for us to consummate
an initial business combination with a target business.
There is currently no market for our securities and a market for
our securities may not develop, which would adversely affect the liquidity and price of our securities.
There is currently no market for our securities.
Shareholders therefore have no access to information about prior market history on which to base their investment decision. Following
the Initial Public Offering, the price of our securities may vary significantly due to one or more potential business combinations and
general market or economic conditions, including as a result of the COVID-19 outbreak. Furthermore, an active trading market for
our securities may never develop or, if developed, it may not be sustained. You may be unable to sell your securities unless a market
can be established and sustained.
Provisions in our amended and restated memorandum and articles of
association may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for our Class A
ordinary shares and could entrench management.
Our amended and restated memorandum and articles
of association contain provisions that may discourage unsolicited takeover proposals that shareholders may consider to be in their best
interests. These provisions include a staggered board of directors, the ability of the board of directors to designate the terms of and
issue new series of preference shares, and the fact that prior to the completion of our initial business combination holders of our Class B
ordinary shares which have been issued to our sponsor are the only shareholders of the company entitled to vote on the appointment of
directors, which may make more difficult the removal of management and may discourage transactions that otherwise could involve payment
of a premium over prevailing market prices for our securities.
Because we are incorporated under the laws of the Cayman Islands,
you may face difficulties in protecting your interests, and your ability to protect your rights through the U.S. federal courts may be
limited.
We are an exempted company incorporated under the
laws of the Cayman Islands. As a result, it may be difficult for investors to effect service of process within the United States
upon our directors or executive officers, or enforce judgments obtained in the United States courts against our directors or officers.
Our corporate affairs are governed by our amended
and restated memorandum and articles of association, the Companies Act (as the same may be supplemented or amended from time to time)
and the common law of the Cayman Islands. We will also be subject to the federal securities laws of the United States. The rights
of shareholders to take action against the directors, actions by minority shareholders and the fiduciary responsibilities of our directors
to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands
is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from English common law, the decisions
of whose courts are of persuasive authority, but are not binding on a court in the Cayman Islands. The rights of our shareholders and
the fiduciary responsibilities of our directors under Cayman Islands law are different from what they would be under statutes or judicial
precedent in some jurisdictions in the United States. In particular, the Cayman Islands has a different body of securities laws as
compared to the United States, and certain states, such as Delaware, may have more fully developed and judicially interpreted bodies
of corporate law. In addition, Cayman Islands companies may not have standing to initiate a shareholders derivative action in a Federal
court of the United States.
We have been advised by Maples and Calder (Cayman)
LLP, our Cayman Islands legal counsel, that the courts of the Cayman Islands are unlikely (i) to recognize or enforce against us
judgments of courts of the United States predicated upon the civil liability provisions of the federal securities laws of the United States
or any state; and (ii) in original actions brought in the Cayman Islands, to impose liabilities against us predicated upon the civil
liability provisions of the federal securities laws of the United States or any state, so far as the liabilities imposed by those
provisions are penal in nature. In those circumstances, although there is no statutory enforcement in the Cayman Islands of judgments
obtained in the United States, the courts of the Cayman Islands will recognize and enforce a foreign money judgment of a foreign
court of competent jurisdiction without retrial on the merits based on the principle that a judgment of a competent foreign court imposes
upon the judgment debtor an obligation to pay the sum for which judgment has been given provided certain conditions are met. For a foreign
judgment to be enforced in the Cayman Islands, such judgment must be final and conclusive and for a liquidated sum, and must not be in
respect of taxes or a fine or penalty, inconsistent with a Cayman Islands judgment in respect of the same matter, impeachable on the grounds
of fraud or obtained in a manner, or be of a kind the enforcement of which is, contrary to natural justice or the public policy of the
Cayman Islands (awards of punitive or multiple damages may well be held to be contrary to public policy). A Cayman Islands Court may stay
enforcement proceedings if concurrent proceedings are being brought elsewhere.
As a result of all of the above, public shareholders
may have more difficulty in protecting their interests in the face of actions taken by management, members of the board of directors or
controlling shareholders than they would as public shareholders of a United States company.
Since holders of our founder shares are the only shareholders of
the company that will have the right to vote on the appointment of directors prior to our initial business combination, upon the listing
of our shares on Nasdaq, Nasdaq may consider us to be a “controlled company” within the meaning of Nasdaq rules and, as a
result, we may qualify for exemptions from certain corporate governance requirements.
After completion of the Initial Public Offering,
holders of our founder shares are the only shareholders of the company that will have the right to vote on the appointment of directors
prior to our initial business combination. As a result, Nasdaq may consider us to be a “controlled company” within the meaning
of Nasdaq corporate governance standards. Under Nasdaq corporate governance standards, a company of which more than 50% of the voting
power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain
corporate governance requirements, including the requirements that:
| ● | we have a board that includes a majority of “independent
directors,” as defined under the rules of Nasdaq; |
| ● | we have a compensation committee of our board that is comprised
entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and |
| ● | we have a nominating and corporate governance committee of
our board that is comprised entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities. |
We do not intend to utilize these exemptions and
intend to comply with the corporate governance requirements of Nasdaq, subject to applicable phase-in rules. However, if we determine
in the future to utilize some or all of these exemptions, you will not have the same protections afforded to shareholders of companies
that are subject to all of Nasdaq corporate governance requirements.
If we have not consummated an initial business combination within
24 months from the closing of the Initial Public Offering, our public shareholders may be forced to wait beyond such 24 months before
redemption from our trust account.
If we have not consummated an initial business combination
within 24 months from the closing of the Initial Public Offering, the proceeds then on deposit in the trust account, including interest
earned on the funds held in the trust account and not previously released to us to pay our taxes, if any (less up to $100,000 of interest
to pay dissolution expenses), will be used to fund the redemption of our public shares, as further described herein. Any redemption of
public shareholders from the trust account will be effected automatically by function of our amended and restated memorandum and articles
of association prior to any voluntary winding up. If we are required to wind up, liquidate the trust account and distribute such amount
therein, pro rata, to our public shareholders, as part of any liquidation process, such winding up, liquidation and distribution must
comply with the applicable provisions of the Companies Act. In that case, investors may be forced to wait beyond 24 months from the
closing of the Initial Public Offering before the redemption proceeds of our trust account become available to them, and they receive
the return of their pro rata portion of the proceeds from our trust account. We have no obligation to return funds to investors prior
to the date of our redemption or liquidation unless, prior thereto, we consummate our initial business combination or amend certain provisions
of our amended and restated memorandum and articles of association, and only then in cases where investors have sought to redeem their
Class A ordinary shares. Only upon our redemption or any liquidation will public shareholders be entitled to distributions if we
do not complete our initial business combination and do not amend certain provisions of our amended and restated memorandum and articles
of association. Our amended and restated memorandum and articles of association provide that, if we wind up for any other reason prior
to the consummation of our initial business combination, we will follow the foregoing procedures with respect to the liquidation of the
trust account as promptly as reasonably possible but not more than ten business days thereafter, subject to applicable Cayman Islands
law.
Holders of Class A ordinary shares will not be entitled to
vote on any appointment of directors we hold prior to our initial business combination.
Prior to our initial business combination, holders
of our founder shares are the only shareholders of the company that will have the right to vote on the appointment of directors. Holders
of our public shares will not be entitled to vote on the appointment of directors during such time. In addition, prior to our initial
business combination, holders of a majority of our founder shares may remove a member of the board of directors for any reason. Accordingly,
you may not have any say in the management of our company prior to the consummation of an initial business combination.
The warrants may become exercisable and redeemable for a security
other than the Class A ordinary shares, and you will not have any information regarding such other security at this time.
In certain situations, including if we are not the
surviving entity in our initial business combination, the warrants may become exercisable for a security other than the Class A ordinary
shares. As a result, if the surviving company redeems your warrants for securities pursuant to the warrant agreement, you may receive
a security in a company of which you do not have information at this time. Pursuant to the warrant agreement, the surviving company will
be required to use commercially reasonable efforts to register the issuance of the security underlying the warrants within twenty business
days of the closing of an initial business combination.
The grant of registration rights to our sponsor may make it more
difficult to complete our initial business combination, and the future exercise of such rights may adversely affect the market price of
our Class A ordinary shares.
Pursuant to an agreement entered into prior to the
closing of the Initial Public Offering, our sponsor and its permitted transferees can demand that we register the resale of the Class A
ordinary shares into which founder shares are convertible, the private placement warrants and the Class A ordinary shares issuable
upon exercise of the private placement warrants, and warrants that may be issued upon conversion of working capital loans and the Class A
ordinary shares issuable upon conversion of such warrants. Pursuant to the forward purchase agreement, we have agreed to use reasonable
best efforts (i) to file within 30 days after the closing of the initial business combination a registration statement with
the SEC for a secondary offering of the forward purchase shares and the forward purchase warrants (and underlying Class A ordinary
shares), (ii) to cause such registration statement to be declared effective promptly thereafter but in no event later than sixty
(60) days after the initial filing, (iii) to maintain the effectiveness of such registration statement until the earliest of (A) the
date on which LEC V or its assignees cease to hold the securities covered thereby, and (B) the date all of the securities covered
thereby can be sold publicly without restriction or limitation under Rule 144 under the Securities Act and (iv) after
such registration statement is declared effective, cause us to conduct firm commitment underwritten offerings, subject to certain limitations.
In addition, the forward purchase agreement provides for certain “piggy-back” registration rights to the holders of forward
purchase securities to include their securities in other registration statements filed by us. We will bear the cost of registering these
securities. The registration and availability of such a significant number of securities for trading in the public market may have an
adverse effect on the market price of our Class A ordinary shares. In addition, the existence of the registration rights may make
our initial business combination more costly or difficult to conclude. This is because the shareholders of the target business may increase
the equity stake they seek in the combined entity or ask for more cash consideration to offset the negative impact on the market price
of our securities that is expected when the securities owned by our sponsor or its permitted transferees are registered for resale.
We may reincorporate, migrate to or merge with and into another
entity as surviving company in another jurisdiction in connection with our initial business combination and such reincorporation, migration
or merger may result in taxes imposed on shareholders.
We may, in connection with our initial business
combination and subject to requisite shareholder approval under the Companies Act, reincorporate in, migrate to or merge with and into
another entity as surviving company in, the jurisdiction in which the target company or business is located or in another jurisdiction.
The transaction may require a shareholder or warrant holder to recognize taxable income in the jurisdiction in which the shareholder or
warrant holder is a tax resident or in which its members are resident if it is a tax transparent entity. We do not intend to make any
cash distributions to shareholders or warrant holders to pay such taxes. Shareholders or warrant holders may be subject to withholding
taxes or other taxes with respect to their ownership of us after the reincorporation.
Risks Relating to our Sponsor and Management Team
Our ability to successfully effect our initial business combination
and to be successful thereafter will be totally dependent upon the efforts of our key personnel, some of whom may join us following our
initial business combination. The loss of key personnel could negatively impact the operations and profitability of our post-combination
business.
Our ability to successfully effect our initial business
combination is dependent upon the efforts of our key personnel. The role of our key personnel in the target business, however, cannot
presently be ascertained. Although some of our key personnel may remain with the target business in senior management, director or advisory
positions following our initial business combination, it is likely that some or all of the management of the target business will remain
in place. While we intend to closely scrutinize any individuals we engage after our initial business combination, we cannot assure you
that our assessment of these individuals will prove to be correct. These individuals may be unfamiliar with the requirements of operating
a company regulated by the SEC, which could cause us to have to expend time and resources helping them become familiar with such requirements.
Our key personnel may negotiate employment or consulting agreements
with a target business in connection with a particular business combination, and a particular business combination may be conditioned
on the retention or resignation of such key personnel. These agreements may provide for them to receive compensation following our initial
business combination and as a result, may cause them to have conflicts of interest in determining whether a particular business combination
is the most advantageous.
Our key personnel may be able to remain with our
company after the completion of our initial business combination only if they are able to negotiate employment or consulting agreements
in connection with the business combination. Such negotiations would take place simultaneously with the negotiation of the business combination
and could provide for such individuals to receive compensation in the form of cash payments and/or our securities for services they would
render to us after the completion of the business combination. Such negotiations also could make such key personnel’s retention
or resignation a condition to any such agreement. The personal and financial interests of such individuals may influence their motivation
in identifying and selecting a target business. In addition, pursuant to an agreement entered into prior to the closing of the Initial
Public Offering, our sponsor, upon and following consummation of an initial business combination, will be entitled to nominate three individuals
for appointment to our board of directors, as long as the sponsor holds any securities covered by the registration and shareholder rights
agreement, which is described under the section of this Annual Report on Form 10-K entitled “Description of Securities — Registration
and Shareholder Rights.”
The officers and directors of an acquisition candidate may resign
upon completion of our initial business combination. The loss of a business combination target’s key personnel could negatively
impact the operations and profitability of our post-combination business.
The role of an acquisition candidate’s key
personnel upon the completion of our initial business combination cannot be ascertained at this time. Although we contemplate that certain
members of an acquisition candidate’s management team will remain associated with the acquisition candidate following our initial
business combination, it is possible that members of the management of an acquisition candidate will not wish to remain in place.
Our executive officers and directors will allocate their time to
other businesses thereby causing conflicts of interest in their determination as to how much time to devote to our affairs. This conflict
of interest could have a negative impact on our ability to complete our initial business combination.
Our executive officers and directors are not required
to, and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our
operations and our search for a business combination and their other businesses. We do not intend to have any full-time employees
prior to the completion of our initial business combination. Each of our executive officers is engaged in several other business endeavors
for which he may be entitled to substantial compensation, and our executive officers are not obligated to contribute any specific number
of hours per week to our affairs. Our independent directors also serve as officers and board members for other entities. If our executive
officers’ and directors’ other business affairs require them to devote substantial amounts of time to such affairs in excess
of their current commitment levels, it could limit their ability to devote time to our affairs which may have a negative impact on our
ability to complete our initial business combination. For a complete discussion of our executive officers’ and directors’
other business affairs, please see “Management — Officers and Directors.”
Lead Edge and certain of our officers and directors presently have,
and any of them in the future may have, additional, fiduciary or contractual obligations to other entities, including another blank check
company, and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should be presented.
Following the completion of the Initial Public Offering
and until we consummate our initial business combination, we intend to engage in the business of identifying and combining with one or
more businesses or entities. Lead Edge and certain of our officers and directors presently have, and any of them in the future may have,
additional fiduciary or contractual obligations to other entities pursuant to which Lead Edge or such officer or director is or will be
required to present a business combination opportunity to such entity, subject to his, her or its fiduciary duties under Cayman Islands
law. Accordingly, they may have conflicts of interest in determining to which entity a particular business opportunity should be presented.
These conflicts may not be resolved in our favor and a potential target business may be presented to another entity prior to its presentation
to us, subject to their fiduciary duties under Cayman Islands law.
In addition, our sponsor, officers and directors
may in the future become affiliated with other blank check companies that may have acquisition objectives that are similar to ours. Accordingly,
they may have conflicts of interest in determining to which entity a particular business opportunity should be presented. These conflicts
may not be resolved in our favor and a potential target business may be presented to such other blank check companies prior to its presentation
to us, subject to our officers’ and directors’ fiduciary duties under Cayman Islands law. Our amended and restated memorandum
and articles of association provide that, to the fullest extent permitted by applicable law: (i) no individual serving as a director or
an officer shall have any duty, except and to the extent expressly assumed by contract, to refrain from engaging directly or indirectly
in the same or similar business activities or lines of business as us; and (ii) we renounce any interest or expectancy in, or in being
offered an opportunity to participate in, any potential transaction or matter which may be a corporate opportunity for any director or
officer, on the one hand, and us, on the other.
For a complete discussion of our executive officers’
and directors’ business affiliations and the potential conflicts of interest that you should be aware of, please see “Item
13 — Certain Relationships and Related Transactions, and Director Independence.”
Our executive officers, directors, security holders and their respective
affiliates may have competitive pecuniary interests that conflict with our interests.
We have not adopted a policy that expressly prohibits
our directors, executive officers, security holders or affiliates from having a direct or indirect pecuniary or financial interest in
any investment to be acquired or disposed of by us or in any transaction to which we are a party or have an interest. In fact, we may
enter into a business combination with a target business that is affiliated with Lead Edge, our sponsor, our directors or executive officers,
although we do not intend to do so. Nor do we have a policy that expressly prohibits any such persons from engaging for their own account
in business activities of the types conducted by us. Accordingly, such persons or entities may have a conflict between their interests
and ours.
The personal and financial interests of our directors
and officers may influence their motivation in timely identifying and selecting a target business and completing a business combination.
Consequently, our directors’ and officers’ discretion in identifying and selecting a suitable target business may result in
a conflict of interest when determining whether the terms, conditions and timing of a particular business combination are appropriate
and in our shareholders’ best interest. If this were the case, it would be a breach of their fiduciary duties to us as a matter
of Cayman Islands law and we or our shareholders might have a claim against such individuals for infringing on our shareholders’
rights. However, we might not ultimately be successful in any claim we may make against them for such reason.
We may engage in a business combination with one or more target
businesses that have relationships with entities that may be affiliated with Lead Edge, our sponsor, executive officers, directors or
initial shareholders which may raise potential conflicts of interest.
In light of the involvement of our sponsor, executive
officers and directors with other entities, we may decide to acquire one or more businesses affiliated with Lead Edge, our sponsor, executive
officers, directors or initial shareholders. Our directors also serve as officers and board members for other entities, including, without
limitation, those described under “Management — Conflicts of Interest.” Lead Edge, our sponsor, or our officers and
directors may sponsor, form or participate in other blank check companies similar to ours during the period in which we are seeking an
initial business combination. Such entities may compete with us for business combination opportunities. Our sponsor, officers and directors
are not currently aware of any specific opportunities for us to complete our initial business combination with any entities with which
they are affiliated, and there have been no substantive discussions concerning a business combination with any such entity or entities.
Although we will not be specifically focusing on, or targeting, any transaction with any affiliated entities, we would pursue such a transaction
if we determined that such affiliated entity met our criteria and guidelines for a business combination as set forth in “Proposed
Business — Effecting Our Initial Business Combination — Evaluation of a Target Business and Structuring of Our Initial Business
Combination” and such transaction was approved by a majority of our independent and disinterested directors. Despite our agreement
to obtain an opinion from an independent investment banking firm that is a member of FINRA or an independent accounting firm regarding
the fairness to our company from a financial point of view of a business combination with one or more domestic or international businesses
affiliated with Lead Edge, our sponsor, executive officers, directors or initial shareholders, potential conflicts of interest still may
exist and, as a result, the terms of the business combination may not be as advantageous to our public shareholders as they would be absent
any conflicts of interest.
Since our sponsor, executive officers and directors will lose their
entire investment in us if our initial business combination is not completed (other than with respect to public shares they may acquire
during or after the Initial Public Offering), a conflict of interest may arise in determining whether a particular business combination
target is appropriate for our initial business combination.
On December 28, 2020, the sponsor paid $25,000,
or approximately $0.003 per share, to cover certain of our offering costs in consideration of 8,625,000 Class B ordinary shares,
par value $0.0001. On March 8, 2021, our sponsor transferred 70,000 Class B ordinary shares to each of our independent directors.
Prior to the initial investment in the company of $25,000 by the sponsor, the company had no assets, tangible or intangible. The per share
price of the founder shares was determined by dividing the amount contributed to the company by the number of founder shares issued. The
founder shares will be worthless if we do not complete an initial business combination. In addition, our sponsor has committed, pursuant
to a written agreement, to purchase an aggregate of 5,666,667 private placement warrants (or 6,266,667 private placement warrants when
the underwriters’ over-allotment option was exercised in full), each exercisable to purchase one Class A ordinary share
at $11.50 per share, subject to adjustment, at a price of $1.50 per warrant ($8,500,000 in the aggregate or $9,400,000 when the underwriters’
over-allotment option was exercised in full), in a private placement that will close simultaneously with the closing of the Initial
Public Offering. If we do not consummate an initial business within 24 months from the closing of the Initial Public Offering, the
private placement warrants will expire worthless. The personal and financial interests of our executive officers and directors may influence
their motivation in identifying and selecting a target business combination, completing an initial business combination and influencing
the operation of the business following the initial business combination. This risk may become more acute as the 24-month anniversary
of the closing of the Initial Public Offering nears, which is the deadline for our consummation of an initial business combination.
Our management may not be able to maintain control of a target business
after our initial business combination. Upon the loss of control of a target business, new management may not possess the skills, qualifications
or abilities necessary to profitably operate such business.
We may structure our initial business combination
so that the post-business combination company in which our public shareholders own shares will own less than 100% of the equity interests
or assets of a target business, but we will only complete such business combination if the post-business combination company owns
or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target
business sufficient for us not to be required to register as an investment company under the Investment Company Act. We will not
consider any transaction that does not meet such criteria. Even if the post-business combination company owns 50% or more of the
voting securities of the target, our shareholders prior to our initial business combination may collectively own a minority interest in
the post-business combination company, depending on valuations ascribed to the target and us in the business combination. For example,
we could pursue a transaction in which we issue a substantial number of new Class A ordinary shares in exchange for all of the outstanding
capital stock, shares or other equity interests of a target. In this case, we would acquire a 100% interest in the target. However, as
a result of the issuance of a substantial number of new Class A ordinary shares, our shareholders immediately prior to such transaction
could own less than a majority of our outstanding Class A ordinary shares subsequent to such transaction. In addition, other minority
shareholders may subsequently combine their holdings resulting in a single person or group obtaining a larger share of the company’s
shares than we initially acquired. Accordingly, this may make it more likely that our management will not be able to maintain control
of the target business.
Our sponsor controls a substantial interest in us and thus may exert
a substantial influence on actions requiring a shareholder vote, potentially in a manner that you do not support.
Upon the closing of the Initial Public Offering,
our sponsor will own, on an as-converted basis, 20% of our issued and outstanding ordinary shares (assuming it does not purchase
any units in the Initial Public Offering). Accordingly, it may exert a substantial influence on actions requiring a shareholder vote,
potentially in a manner that you do not support, including amendments to our amended and restated memorandum and articles of association
and approval of significant corporate transactions including our initial business combination. If our sponsor purchases any units in the
Initial Public Offering or if our sponsor purchases any additional Class A ordinary shares in the aftermarket or in privately negotiated
transactions, this would increase its control. Neither our sponsor nor, to our knowledge, any of our officers or directors, have any current
intention to purchase additional securities, other than as disclosed in this Annual Report on Form 10-K. Factors that would be considered
in making such additional purchases would include consideration of the current trading price of our Class A ordinary shares. In addition,
our board of directors, whose members were elected by our sponsor, is and will be divided into three classes, each of which will generally
serve for a term of three years with only one class of directors being elected in each year. We may not hold general meeting to elect
new directors prior to the completion of our initial business combination, in which case all of the current directors will continue in
office until at least the completion of the business combination. If there is an annual general meeting, as a consequence of our “staggered”
board of directors, only a minority of the board of directors will be considered for appointment and our sponsor, because of its ownership
position, will control the outcome, as holders of our Class B ordinary shares are the only shareholders of the company that will
have the right to vote on the appointment of directors and to remove directors prior to our initial business combination. Accordingly,
our sponsor will continue to exert control at least until the completion of our initial business combination.
After our initial business combination, it is possible that a majority
of our directors and officers will live outside the United States and all of our assets will be located outside the United States;
therefore investors may not be able to enforce federal securities laws or their other legal rights.
It is possible that after our initial business combination,
a majority of our directors and officers will reside outside of the United States and all of our assets will be located outside of
the United States. As a result, it may be difficult, or in some cases not possible, for investors in the United States to enforce
their legal rights, to effect service of process upon all of our directors or officers or to enforce judgments of United States courts
predicated upon civil liabilities and criminal penalties on our directors and officers under United States laws.
We are dependent upon our executive officers and directors and their
loss could adversely affect our ability to operate.
Our operations are dependent upon a relatively small
group of individuals and, in particular, our executive officers and directors. We believe that our success depends on the continued service
of our officers and directors, at least until we have completed our initial business combination. In addition, our executive officers
and directors are not required to commit any specified amount of time to our affairs and, accordingly, will have conflicts of interest
in allocating their time among various business activities, including identifying potential business combinations and monitoring the related
due diligence. We do not have an employment agreement with, or key-man insurance on the life of, any of our directors or executive
officers.
The unexpected loss of the services of one or more
of our directors or executive officers could have a detrimental effect on us.
Risks Associated with Acquiring and Operating a Business in Foreign
Countries
If we pursue a target company with operations or opportunities outside
of the United States for our initial business combination, we may face additional burdens in connection with investigating, agreeing
to and completing such initial business combination, and if we effect such initial business combination, we would be subject to a variety
of additional risks that may negatively impact our operations.
If we pursue a target a company with operations
or opportunities outside of the United States for our initial business combination, we would be subject to risks associated with
cross-border business combinations, including in connection with investigating, agreeing to and completing our initial business combination,
conducting due diligence in a foreign jurisdiction, having such transaction approved by any local governments, regulators or agencies
and changes in the purchase price based on fluctuations in foreign exchange rates.
If we effect our initial business combination with
such a company, we would be subject to any special considerations or risks associated with companies operating in an international setting,
including any of the following:
| ● | costs and difficulties inherent in managing cross-border business
operations; |
| ● | rules and regulations regarding currency redemption; |
| ● | complex corporate withholding taxes on individuals; |
| ● | laws governing the manner in which future business combinations
may be effected; |
| ● | exchange listing and/or delisting requirements; |
| ● | tariffs and trade barriers; |
| ● | regulations related to customs and import/export matters; |
| ● | local or regional economic policies and market conditions; |
| ● | unexpected changes in regulatory requirements; |
| ● | tax issues, such as tax law changes and variations in tax
laws as compared to the United States; |
| ● | currency fluctuations and exchange controls; |
| ● | challenges in collecting accounts receivable; |
| ● | cultural and language differences; |
| ● | underdeveloped or unpredictable legal or regulatory systems; |
| ● | protection of intellectual property; |
| ● | social unrest, crime, strikes, riots and civil disturbances; |
| ● | regime changes and political upheaval; |
| ● | terrorist attacks, natural disasters and wars; and |
| ● | deterioration of political relations with the United States. |
We may not be able to adequately address these additional
risks. If we were unable to do so, we may be unable to complete such initial business combination, or, if we complete such combination,
our operations might suffer, either of which may adversely impact our business, financial condition and results of operations.
If our management following our initial business combination is
unfamiliar with United States securities laws, they may have to expend time and resources becoming familiar with such laws, which
could lead to various regulatory issues.
Following our initial business combination, our
management may resign from their positions as officers or directors of the company and the management of the target business at the time
of the business combination will remain in place. Management of the target business may not be familiar with United States securities
laws. If new management is unfamiliar with United States securities laws, they may have to expend time and resources becoming familiar
with such laws. This could be expensive and time-consuming and could lead to various regulatory issues which may adversely affect
our operations.
After our initial business combination, substantially all of our
assets may be located in a foreign country and substantially all of our revenue may be derived from our operations in any such country.
Accordingly, our results of operations and prospects will be subject, to a significant extent, to the economic, political and social conditions
and government policies, developments and conditions in the country in which we operate.
The economic, political and social conditions, as
well as government policies, of the country in which our operations are located could affect our business. Economic growth could be uneven,
both geographically and among various sectors of the economy and such growth may not be sustained in the future. If in the future such
country’s economy experiences a downturn or grows at a slower rate than expected, there may be less demand for spending in certain
industries. A decrease in demand for spending in certain industries could materially and adversely affect our ability to find an attractive
target business with which to consummate our initial business combination and if we effect our initial business combination, the ability
of that target business to become profitable.
Exchange rate fluctuations and currency policies may cause a target
business’ ability to succeed in the international markets to be diminished.
In the event we acquire a non-U.S. target, all revenues
and income would likely be received in a foreign currency, and the dollar equivalent of our net assets and distributions, if any, could
be adversely affected by reductions in the value of the local currency. The value of the currencies in our target regions fluctuate and
are affected by, among other things, changes in political and economic conditions. Any change in the relative value of such currency against
our reporting currency may affect the attractiveness of any target business or, following consummation of our initial business combination,
our financial condition and results of operations. Additionally, if a currency appreciates in value against the dollar prior to the consummation
of our initial business combination, the cost of a target business as measured in dollars will increase, which may make it less likely
that we are able to consummate such transaction.
We may reincorporate in another jurisdiction in connection with
our initial business combination, and the laws of such jurisdiction may govern some or all of our future material agreements and we may
not be able to enforce our legal rights.
In connection with our initial business combination,
we may relocate the home jurisdiction of our business from the Cayman Islands to another jurisdiction. If we determine to do this, the
laws of such jurisdiction may govern some or all of our future material agreements. The system of laws and the enforcement of existing
laws in such jurisdiction may not be as certain in implementation and interpretation as in the United States. The inability to enforce
or obtain a remedy under any of our future agreements could result in a significant loss of business, business opportunities or capital.
We are subject to changing law and regulations regarding regulatory
matters, corporate governance and public disclosure that have increased both our costs and the risk of non-compliance.
We are subject to rules and regulations by various
governing bodies, including, for example, the SEC, which are charged with the protection of investors and the oversight of companies whose
securities are publicly traded, and to new and evolving regulatory measures under applicable law. Our efforts to comply with new and changing
laws and regulations have resulted in and are likely to continue to result in, increased general and administrative expenses and a diversion
of management time and attention from seeking a business combination target.
Moreover, because these laws, regulations and standards
are subject to varying interpretations, their application in practice may evolve over time as new guidance becomes available. This evolution
may result in continuing uncertainty regarding compliance matters and additional costs necessitated by ongoing revisions to our disclosure
and governance practices. If we fail to address and comply with these regulations and any subsequent changes, we may be subject to penalty
and our business may be harmed.
General Risk Factors
We are a recently incorporated company with no operating history
and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.
We are a company recently incorporated under the
laws of the Cayman Islands with no operating results, and we will not commence operations until obtaining funding through the Initial
Public Offering. Because we lack an operating history, you have no basis upon which to evaluate our ability to achieve our business objective
of completing our initial business combination with one or more target businesses. We have no plans, arrangements or understandings with
any prospective target business concerning a business combination and may be unable to complete our initial business combination. If we
fail to complete our initial business combination, we will never generate any operating revenues.
Past performance by our management team or their respective affiliates
may not be indicative of future performance of an investment in us or in the future performance of the business we may acquire.
Information regarding performance is presented for
informational purposes only. Any past experience or performance of our management team and their respective affiliates is not a guarantee
of either (i) our ability to successfully identify and execute a transaction or (ii) success with respect to any business combination
that we may consummate. You should not rely on the historical record of our management team or their respective affiliates as indicative
of the future performance of an investment in us or the returns we will, or are likely to, generate going forward. Our management has
no experience in operating special purpose acquisition companies.
Cyber incidents or attacks directed at us could result in information
theft, data corruption, operational disruption and/or financial loss.
We depend on digital technologies, including information
systems, infrastructure and cloud applications and services, including those of third parties with which we may deal. Sophisticated and
deliberate attacks on, or security breaches in, our systems or infrastructure, or the systems or infrastructure of third parties or the
cloud, could lead to corruption or misappropriation of our assets, proprietary information and sensitive or confidential data. As an early
stage company without significant investments in data security protection, we may not be sufficiently protected against such occurrences.
We may not have sufficient resources to adequately protect against, or to investigate and remediate any vulnerability to, cyber incidents.
It is possible that any of these occurrences, or a combination of them, could have adverse consequences on our business and lead to financial
loss.
Changes in laws or regulations, or a failure to comply with any
laws and regulations, may adversely affect our business, including our ability to negotiate and complete our initial business combination,
and results of operations.
We are subject to laws and regulations enacted by
national, regional and local governments. In particular, we will be required to comply with certain SEC and other legal requirements.
Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations
and their interpretation and application may also change from time to time and those changes could have a material adverse effect on our
business, investments and results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted
and applied, could have a material adverse effect on our business, including our ability to negotiate and complete our initial business
combination, and results of operations.
We may be a passive foreign investment company, or “PFIC,”
which could result in adverse U.S. federal income tax consequences to U.S. investors.
If we are a PFIC for any taxable year (or portion
thereof) that is included in the holding period of a U.S. Holder (as defined in the section of this Annual Report on Form 10-K captioned
“Taxation — United States Federal Income Tax Considerations — General”) of our Class A ordinary shares
or warrants, the U.S. Holder may be subject to adverse U.S. federal income tax consequences and may be subject to additional reporting
requirements. Our PFIC status for our current and subsequent taxable years may depend on whether we qualify for the PFIC start-up exception
(see the section of this Annual Report on Form 10-K captioned “Taxation — United States Federal Income Tax Considerations
— U.S. Holders — Passive Foreign Investment Company Rules”). Depending on the particular circumstances the application
of the start-up exception may be subject to uncertainty, and there cannot be any assurance that we will qualify for the start-up exception.
Accordingly, there can be no assurances with respect to our status as a PFIC for our current taxable year or any subsequent taxable year.
Our actual PFIC status for any taxable year, however, will not be determinable until after the end of such taxable year. Moreover, if
we determine we are a PFIC for any taxable year, upon written request, we will endeavor to provide to a U.S. Holder such information as
the Internal Revenue Service (“IRS”) may require, including a PFIC Annual Information Statement, in order to enable the U.S.
Holder to make and maintain a “qualified electing fund” election, but there can be no assurance that we will timely provide
such required information, and such election would be unavailable with respect to our warrants in all cases. We urge U.S. investors to
consult their tax advisors regarding the possible application of the PFIC rules. For a more detailed discussion of the tax consequences
of PFIC classification to U.S. Holders, see the section of this Annual Report on Form 10-K captioned “Taxation — United States
Federal Income Tax Considerations — U.S. Holders — Passive Foreign Investment Company Rules.”
We are an emerging growth company and a smaller reporting company
within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to
“emerging growth companies” or “smaller reporting companies,” this could make our securities less attractive to
investors and may make it more difficult to compare our performance with other public companies.
We are an “emerging growth company”
within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from
various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including,
but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act,
reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the
requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments
not previously approved. As a result, our shareholders may not have access to certain information they may deem important. We could be
an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier, including if the market
value of our Class A ordinary shares held by non-affiliates equals or exceeds $700 million as of any June 30 before that
time, in which case we would no longer be an emerging growth company as of the following December 31. We cannot predict whether investors
will find our securities less attractive because we will rely on these exemptions. If some investors find our securities less attractive
as a result of our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would be, there
may be a less active trading market for our securities and the trading prices of our securities may be more volatile.
Further, Section 102(b)(1) of the JOBS
Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private
companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class
of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS
Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to
non-emerging growth companies but any such an election to opt out is irrevocable. We have elected not to opt out of such extended
transition period which means that when a standard is issued or revised and it has different application dates for public or private companies,
we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.
This may make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging
growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences
in accounting standards used.
Additionally, we are a “smaller reporting
company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced
disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller
reporting company until the last day of the fiscal year in which (1) the market value of our ordinary shares held by non-affiliates equals
or exceeds $250 million as of the prior June 30, and (2) our annual revenues equaled or exceeded $100 million during
such completed fiscal year or the market value of our ordinary shares held by non-affiliates equals or exceeds $700 million
as of the prior June 30. To the extent we take advantage of such reduced disclosure obligations, it may also make comparison of our financial
statements with other public companies difficult or impossible.
We have identified a material weakness in our
internal control over financial reporting. If we are unable to develop and maintain an effective system of internal control over financial
reporting, we may not be able to accurately report our financial results in a timely manner, which may adversely affect investor confidence
in us and materially and adversely affect our business and operating results.
As described in our most recent 10-Q/A, filed on December 20, 2021,
we have identified a material weakness in our internal control over financial reporting related to the application of ASC 480-10-S99-3A to
our accounting classification of our public shares. As a result of this material weakness, our management has concluded that our internal
control over financial reporting was not effective as of September 30, 2021. Historically, a portion of our public shares was classified
as permanent equity to maintain shareholders’ equity greater than $5 million on the basis that we will not redeem our public shares
in an amount that would cause our net tangible assets to be less than $5,000,001, as described in our amended and restated certificate
of incorporation. Pursuant to our re-evaluation of the application of ASC 480-10-S99-3A to our accounting classification of
the Public Shares, our management has determined that all of the Public Shares should be classified as temporary equity. For a discussion
of management’s consideration of the material weakness identified related to the application of ASC 480-10-S99-3A to our
accounting classification of the Public Share, see Note 2 to the accompanying unaudited condensed financial statements, as well as Part
I, Item 4: Controls and Procedures included in the most recent Quarterly Report on Form 10-Q/A, filed on December 20, 2021.
A material weakness is a deficiency, or a combination of deficiencies,
in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or
interim financial statements will not be prevented or detected and corrected on a timely basis.
Effective internal controls are necessary for us to provide reliable
financial reports and prevent fraud. We continue to evaluate steps to remediate the material weakness. These remediation measures may
be time consuming and costly and there is no assurance that these initiatives will ultimately have the intended effects.
If we identify any new material weaknesses in
the future, any such newly identified material weakness could limit our ability to prevent or detect a misstatement of our accounts or
disclosures that could result in a material misstatement of our annual or interim financial statements. In such case, we may be unable
to maintain compliance with securities law requirements regarding timely filing of periodic reports in addition to applicable stock exchange
listing requirements, investors may lose confidence in our financial reporting and our stock price may decline as a result. We cannot
assure you that the measures we have taken to date, or any measures we may take in the future, will be sufficient to avoid potential future
material weaknesses.
We may face litigation and other risks
as a result of the material weakness in our internal control over financial reporting.
As a result of the material weakness, we identified related
to the change in accounting for our public shares, and other matters raised or that may in the future be raised by the SEC, we face potential
for litigation or other disputes which may include, among others, claims invoking the federal and state securities laws, contractual
claims or other claims arising from the material weaknesses in our internal control over financial reporting and the preparation of our
financial statements. As of the date of this Form 10-K, we believe we have remediated the material weakness. In addition, we have no
knowledge of any such litigation or dispute. However, we can provide no assurance that such litigation or dispute will not arise in the
future. Any such litigation or dispute, whether successful or not, could have a material adverse effect on our business, results of operations
and financial condition or our ability to complete a Business Combination.