Item
1. Business
Description
of Business
Climate
Real Impact Solutions II Acquisition Corporation is a recently formed blank check company incorporated on December 2, 2020 as a Delaware
corporation for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar
business combination with one or more businesses, which we refer to throughout this report as our initial business combination. We have
not selected any specific business combination target.
On January 29, 2021,
we consummated our IPO of 24,150,000 units, including 3,150,000 units sold pursuant to the full exercise of the underwriters’ option
to purchase additional units to cover over-allotments. Each unit consists of one share of Class A common stock and one-fifth of one redeemable
public warrant , each whole public warrant entitling the holder thereof to purchase one share of Class A common stock at an exercise
price of $11.50 per share, subject to adjustment. The units were sold at an offering price of $10.00 per unit, generating gross proceeds
of $241.5 million (before underwriting discounts and commissions and offering expenses). Prior to the consummation of the IPO, on December
11, 2020, the Sponsor purchased 6,037,500 shares of Class B common stock for an aggregate purchase price of $25,000. On January 6, 2021,
the Sponsor transferred 190,000 founder shares to directors, officers and certain consultants of
the Company. The founder shares included an aggregate of up to 787,500 shares subject to forfeiture to the extent that the underwriters’
over-allotment was not exercised in full or in part, so that the number of founder shares would collectively represent approximately
20% of CRIS II’s issued and outstanding shares of common stock after the IPO. As a result of the underwriters’ election to
fully exercise their over-allotment option, no founder shares are subject to forfeiture.
Simultaneously
with the consummation of the IPO and the issuance and sale of the units, we consummated the private placement of 4,553,333 private placement
warrants at a price of $1.50 per private placement warrant, generating gross proceeds of approximately $6.83 million. The private placement
warrants, which were purchased by the Sponsor, are identical to the public warrants, except that, if held by the Sponsor or its permitted
transferees, they (i) are not subject to being called for redemption under certain redemption scenarios (except as described in Exhibit
4.1 to this Annual Report on Form 10-K); (ii) are subject to transfer restrictions until 30 days following the consummation of the Company’s
initial business combination, subject to certain limited exceptions; (iii) may be exercised for cash or on a cashless basis; and (iv)
are entitled to registration rights. If the private placement warrants are held by holders other than the Sponsor or its permitted transferees,
the private placement warrants will be redeemable by the Company and exercisable by holders on the same basis as the public warrants.
The private placement warrants have been issued pursuant to, and are governed by, the warrant agreement.
Upon
the closing of the IPO and the sale of the private placement warrants (the “private placement”), a total of $241.5 million
of the net proceeds from the IPO and the private placement (which includes the underwriters’ deferred underwriting discount of
$8.45 million was placed in the Trust Account, with Continental Stock Transfer & Trust Company acting as trustee. Except with respect
to interest earned on the funds held in the Trust Account that may be released to CRIS II to pay its franchise and income tax obligations,
the funds held in the Trust Account will not be released from the Trust Account until the earliest of: (1) the completion of CRIS II’s
initial business combination; (2) the redemption of any public shares properly submitted in connection with a stockholder vote to amend
our amended and restated certificate of incorporation (A) to modify the substance or timing of CRIS II’s obligation to allow redemption
in connection with our initial business combination or to redeem 100% of the public shares if CRIS II does not complete its initial business
combination within 24 months from the closing of the IPO or (B) with respect to any other provision relating to stockholders’ rights
or pre-initial business combination activity; and (3) the redemption of all of the public shares if CRIS II has not completed its initial
business combination within 24 months from the closing of the IPO, subject to applicable law.
After
the payment of underwriting discounts and commissions (excluding the deferred portion of $8.45 million in underwriting discounts and
commissions, which amount will be payable upon consummation of our initial business combination) and approximately $761,445 in expenses
relating to the IPO, approximately $1.2 million of the net proceeds of the IPO and private placement was not deposited into the Trust
Account and was retained by CRIS II for working capital purposes. The net proceeds deposited into the Trust Account remain on deposit
in the Trust Account earning interest. As of December 31, 2021, there was approximately $241,511,431 in investments and cash held in
the Trust Account and $1,092,410 of cash held outside the Trust Account available for working capital.
As
of December 31, 2020, CRIS II has not commenced any operations. All activity for the period from December 2, 2020 (inception) through
December 31, 2021 relates to our IPO, which is described above, and identifying a target company for a business combination. CRIS II
will not generate any operating revenues unless and until completion of a business combination, at the earliest. CRIS II generates non-operating
income in the form of interest income from the proceeds derived from the IPO and may recognize non-operating income from changes in the
fair value of derivative liabilities recorded on its balance sheet.
CRIS
II’s units, common stock and warrants trade on the NYSE under the symbols “CLIM.U,” “CLIM,” and “CLIM
WS,” respectively.
Business
Strategy
Our
business strategy is to identify, acquire and maximize the value of a company operating in the one of the climate sectors mentioned in
the next section titled, “Market Opportunity.” Our management team will leverage its wide-reaching network of industry executives
and climate specialists to source proprietary business combination opportunities with differentiated companies that align with our mission.
We will seek opportunities that can benefit from our management team’s expansive experiences and unparalleled capabilities to create
value for our stockholders.
Market
Opportunity
Our
management team believes in metrics. The metrics of fighting climate change include: avoid making a bad situation worse by dramatically
reducing or eliminating new carbon emissions into the atmosphere (“Avoided Carbon”) or remove carbon already in the atmosphere
(“Removed Carbon”). The metrics of fighting climate change profitably are also straightforward: invest in companies that
have found competitive advantage in providing low to no carbon products and services on price and other terms superior to the more carbon
intensive alternative. While the areas set forth below are representative of our primary areas of focus, it is not an exhaustive list.
Avoided
Carbon: The Global Carbon Project estimates global carbon emissions at approximately 35 billion tonnes per year. Concurrently,
the IMF estimates the cost of avoiding carbon emissions at roughly $75 per tonne, creating a total addressable market for Avoided Carbon
of up to $2.6 trillion per year, or over $75 trillion in 2021 dollars from 2021 to 2050. A substantial portion of this carbon value is
in energy, both production and consumption. Today, renewables technology, and its adjacencies in the other climate sectors mentioned
in this section, have scaled and become more sophisticated, such that virtually the entire market for replacement energy is open to price
competitive zero carbon sources. The opportunity for the power sector alone represents a total addressable market of approximately $500
billion, mainly stemming from the replacement of fossil-fuel powered plants with cheaper zero-emission renewables, according to Lazard’s
2019 annual levelized-cost-of-energy report and the EIA’s annual global emissions estimates.
Distributed
generation competes favorably against the prevailing retail price of electricity. Increasingly, rooftop solar is being combined with
storage and other services that enhance its utility and the customer experience offering grid resilience and other ancillary benefits.
Yet, the market remains lightly penetrated, with only approximately 3.7% market penetration in the United States residential solar market
according to the EIA number of residential solar installations in SunRun’s November 2021 investor presentation.
U.S.
renewable electricity generation doubled between 2008 and 2018, and increased another 7% by 2020. New capacity additions of utility
scale and commercial and industrial scale renewables now exceed new capacity additions of natural gas and coal-fired generation combined
and that trend is likely only to accelerate, resulting in significant opportunity for new renewables and around enhancement of the first
generation of large scale renewables already deployed in the United States and around the world.
Large-scale
solutions for grid stability and resilience, including energy storage, decarbonized natural gas, trash to value and other sustainable
solutions, will become increasingly important as intermittent resources, primarily wind and solar generation, dominate grid and distributed
generation.
Energy
Efficiency services offer substantial energy savings and are now readily available at both the corporate and household level as a
result of new technology: integrated hardware and software packages that automate the process of avoiding waste in energy consumption.
These energy efficiency services are often offered as a critical part of a more comprehensive product/service offering (see below), but
there are demand side management and other similar emerging growth companies that specialize in this space.
Green
Energy Service Companies (“GESCOs”) increasingly satisfy corporate demand for clean energy. More and more, businesses,
committed as a matter of core values to consuming only clean energy, have found that traditional utilities are unable to meet their demands.
They are turning to GESCOs to deploy technology and utilize specially developed algorithms to reduce their consumption, while still meeting
their needs through clean energy procurement. This has created an emerging clean-energy-as-a-service industry.
Circular
Economy focused companies reject the premise that our economy must remain based on the take-make-waste linear consumption model and
we believe that there is substantial economic value and environmental benefit to be derived from a regenerative approach to production,
recycling and reuse of products and materials. Greenhouse gas emissions from industry represent approximately 23% of global CO2
emissions from anthropogrenic sources but have, to date, drawn considerably less attention than the power and transport sectors
and, as such, represent an area of economic opportunity and environmental necessity.
Greentailers
increasingly satisfy household demand for clean energy. For many years, green retail energy providers (“Greentailers”)
offered “renewables only” retail power. To a greater extent, Greentailers are now using technology to expand the depth and
breadth of their product offering to encompass both green power and reduced consumption. Additionally, they now more effectively incorporate
rooftop solar and the storage capacity of the family EV into the household system, leading to a smart-energy-home-as-a-service business
model.
Electric
Vehicle (“EV”) infrastructure and decarbonized liquid fuels, including green hydrogen and green ammonia, are becoming
increasingly important as the power and transportation sectors decarbonize. Electricity cost management, charging-as-a-service solutions,
grid services, and market mechanisms to support charging infrastructure are critical to support the transition of transportation from
carbon fuels to electric vehicles.
Removed
Carbon: While Avoided Carbon is our immediate focus, Removed Carbon has potential both in terms of climate and economic, making
it well worth tracking. According to the World Resources Institute, at least 10 gigatons of carbon in the atmosphere will likely need
to be removed annually over the next 30 years. Significant breakthroughs and developments continue to surface in this space. For instance,
when carbon capture technology first emerged, early studies estimated costs to be highly prohibitive, at over $600 per tonne. With advances
in technology and continuous effort of entrepreneurs and start-ups, the cost is now estimated at approximately one-third of initial estimates
and falling. Carbon Capture, Utilization and Storage technologies are already being tested by emerging companies at scale. At the same
time, considerable innovation and entrepreneurship is being poured into nature-based solutions, such as the capturing and storage of
atmospheric carbon within trees and soil. The addressable market of this technology would expand exponentially overnight if, as a result
of political change and government action, an effective price was placed on removing carbon from the atmosphere.
In
summary, clean energy opportunity is climate opportunity and CRIS II and its management team are deeply versed in the clean energy industry.
These sectors represent potential areas of opportunity in which CRIS II intends to deploy its capital.
Co-Sponsor
The PIMCO private funds, part
of our sponsor group, are managed by PIMCO, one of the world’s premier fixed income investment managers. For nearly 50 years,
PIMCO has worked relentlessly to help millions of investors achieve their objectives regardless of shifting market conditions. Today,
PIMCO has offices around the world and more than 3,000 professionals committed to its mission: delivering superior investment returns,
solutions and service to its clients. PIMCO’s alternatives platform combines the firm’s time-tested investment process with
opportunistic approaches to marketable and private credit, global real estate, macroeconomic, and quantitative strategies. As of December
31 2021, PIMCO had approximately $2.20 trillion in assets under management with $627.5 billion of sustainable investment assets, including
third party and Allianz assets under management, spanning, negative screened, ESG labeled and thematic accounts. PIMCO is owned by Allianz S.E.,
a leading global diversified financial services provider.
Acquisition
Criteria
We
have identified the following general criteria and guidelines that we believe are critical to evaluating prospective companies within
our targeted sub-sector:
| ● | “Best-in-class”
companies in the climate sector competitively positioned to capitalize on macro growth prospects; |
| ● | Differentiation
with regard to products / services, cost structure and business model; |
| ● | Sustainable
competitive advantages and / or high barriers to entry; |
| ● | Opportunities
for growth, organically or through add-on acquisitions; |
| ● | Ability
to benefit from our management’s unique and unparalleled expertise in the sector; |
| ● | Strength
of incumbent management and their fundamental motivations, long-term objectives and core
organizational values that represent best practices across the entire climate spectrum; |
| ● | Strategic
alignment with the existing management and owners of prospective targets who intend to roll
their interests into the Company after the consummation of an initial business combination;
and |
| ● | Ability
to benefit from access to the public market. |
Notwithstanding
the foregoing, these criteria and guidelines are not intended to be exhaustive. Any evaluation relating to the merits of a particular
initial business combination may or may not be based, to the extent relevant, on these general criteria and guidelines as well as other
considerations, factors, criteria and guidelines that our management may deem relevant.
Our
Acquisition Process
Our
acquisition process starts with and is predicated upon our extensive combined network of business executives and climate leaders and
is bolstered by our decades of expertise and intimate familiarity with the climate sector.
Our
acquisition process involves a thorough due diligence process, valuation and exhaustive analysis which consist of meetings with incumbent
management and employees, many of whom we are very familiar with through previous business dealings, to discuss business model, capital
allocation and growth potential. It also consists of technical, financial, valuation and operational due diligence, document reviews,
inspection of facilities, as well as a review of any legal or other relevant information which will be made available to us. While we
may retain third-party advisors as necessary to advise us during the due diligence process, we expect to rely primarily on our own core
team.
In
evaluating a prospective target business, we focus on, among other things, the differentiation of its product/services, cost structure,
strength of management, business model, unit economics, comparative advantages and other keys to sustained value creation. In assessing
management, we focus on their fundamental motivation - are they focused on building a strong business of enduring value over time, with
ever increasing impact on climate - and on their individual and corporate core values. It is our strongly held view, based on our life
experience, that the best companies in our target space are not only driven by solving for climate but they are animated, in terms of
their internal organization, by core values that represent best practices across the entire ESG spectrum.
The
final step of our acquisition process is the approval by our board of directors. Our board of directors, a majority of whom are independent
directors and each of whom has considerable experience and expertise in the climate sector, will thoroughly review all aspects of the
proposed combination and reach a decision on its merits consistent with their fiduciary responsibilities to the stockholders. We then
confirm approval by the PIMCO private funds, in accordance with their contractual right to consent to our initial business combination
transaction.
We
are not prohibited from pursuing an initial business combination with a company that is affiliated with the Sponsor, our officers or
directors. In the event we seek to complete our initial business combination with a company that is affiliated with the Sponsor or any
of our officers or directors, we, or a committee of our independent directors, if required by applicable law or based upon the decision
of our board of directors or a committee thereof, will obtain an opinion that our initial business combination is fair to us from a financial
point of view from either an independent investment banking firm or an independent accounting firm.
The
Sponsor, our directors and members of our management team may directly or indirectly own our founder shares, Class A common stock and/or
private placement warrants following the IPO, and, accordingly, may have a conflict of interest in determining whether a particular target
business is an appropriate business with which to effectuate our initial business combination. Further, each of our officers and directors
may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such
officers and directors is included by a target business as a condition to any agreement with respect to our initial business combination.
Each
of our officers and directors presently has, and any of them in the future may have, additional fiduciary or contractual obligations
to other entities pursuant to which such officer or director is or will be required to present a business combination opportunity. Accordingly,
if any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or
she then has fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such
opportunity to such entity. We do not believe, however, that the fiduciary duties or contractual obligations of our officers and directors
will materially affect our ability to complete our business combination. Our amended and restated certificate of incorporation provides
that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered
to such person solely in his or her capacity as a director or officer of our Company and such opportunity is one we are legally and contractually
permitted to undertake and would otherwise be reasonable for us to pursue.
In addition, the Sponsor, our
officers and directors may participate in the formation of, or become an officer or director of, any other blank check company prior to
completion of our initial business combination. As a result, the Sponsor, officers or directors could have conflicts of interest in determining
whether to present business combination opportunities to us or to any other blank check company with which they may become involved. In
particular, affiliates of the Sponsor are currently sponsoring other blank check companies, including Climate Change Real Impact Solutions
III Acquisition Corporation (“CRIS III”) and Climate Transition Acquisition I B.V., an Amsterdam-listed, sustainability focused
blank check company (“CTA”). CRIS III has submitted filings with the SEC for its initial public offering but not yet consummated
any such initial public offering. Further, Mr. Crane, a director and our Chief Executive Officer, serves as a director and Chief Executive
Officer of CRIS III and as a director of CTA, Mr. Cavalier, our Chief Financial Officer, serves as Chief Financial Officer of CRIS III,
Ms. Comstock, our Chief Commercial Officer, serves as Chief Commercial Officer of CRIS III, Ms. Frank-Shapiro, our Chief Operating Officer,
serves as Chief Operating Officer of CRIS III and Mr. Weinstein, one of our directors, is a director nominee of CRIS III and currently
serves as a director on the boards of two other blank check companies: Freedom Acquisition Corp. (“Freedom”) and Sandbridge
X2 Corp. (“Sandbridge”). Any of these other blank check companies, including CRIS III, CTA, Freedom or Sandbridge may present
additional conflicts of interest in pursuing an acquisition target. However, we do not believe that any potential conflicts with respect
to CRIS III, CTA, Freedom or Sandbridge would materially affect our ability to complete our initial business combination. Moreover, our
management team has significant experience in identifying and executing multiple acquisition opportunities simultaneously and we are not
limited by industry or geography in terms of the acquisition opportunities we can pursue.
Initial
Business Combination
As
required by the NYSE rules, our initial business combination must be approved by a majority of our independent directors. The NYSE rules
also require that we must complete our initial business combination with one or more businesses that together have an aggregate fair
market value of at least 80% of the net assets held in the Trust Account (excluding the deferred underwriting commissions and taxes payable)
at the time of our signing a definitive agreement in connection with our initial business combination. We refer to this as the 80% of
net assets test. Our board of directors will make the determination as to the fair market value of our initial business combination.
The fair market value of the target or targets will be determined by our board of directors based upon one or more standards generally
accepted by the financial community (such as actual and potential sales, earnings, cash flow and/or book value). Even though our board
of directors will rely on generally accepted standards, our board of directors will have discretion to select the standards employed.
In addition, the application of the standards generally involves a substantial degree of judgment. Accordingly, investors will be relying
on the business judgment of the board of directors in evaluating the fair market value of the target or targets. The proxy solicitation
materials or tender offer documents used by us in connection with any proposed transaction will provide public stockholders with our
analysis of our satisfaction of the 80% of net assets test, as well as the basis for our determinations. If our board of directors is
not able to independently determine the fair market value of our initial business combination, we will obtain an opinion from an independent
investment banking firm or another independent entity that commonly renders valuation opinions with respect to the satisfaction of the
80% of net assets test. While we consider it unlikely that our board of directors will not be able to make an independent determination
of the fair market value of our initial business combination, it may be unable to do so if it is less familiar or experienced with the
business of a particular target or if there is a significant amount of uncertainty as to the value of a target’s assets or prospects.
In addition, we have agreed not to enter into a definitive agreement regarding an initial business combination without the prior consent
of the PIMCO private funds.
We
may, at our option, pursue an acquisition opportunity jointly with one or more parties affiliated with PIMCO, including, without limitation,
officers and partners of PIMCO, investment funds, accounts, co-investment vehicles and other entities managed by affiliates of PIMCO,
including the PIMCO private funds, and/or investors in funds, accounts, co-investment vehicles and other entities managed by affiliates
of PIMCO. Any such party may co-invest with us in the target business at the time of our initial business combination, or we could raise
additional proceeds to complete the acquisition by issuing equity to such parties. The amount and other terms and conditions of any such
joint acquisition or equity issuance would be determined at the time thereof.
We
may structure our initial business combination either (i) in such a way so that the post-transaction company in which our public stockholders
own shares will own or acquire 100% of the equity interests or assets of the target business or businesses, or (ii) in such a way so
that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business in order to meet
certain objectives of the target management team or stockholders, or for other reasons. However, we will only complete an initial business
combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise
acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment
Company Act. Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our stockholders
prior to the initial business combination may collectively own a minority interest in the post-transaction company, depending on valuations
ascribed to the target and us in the initial business combination. For example, we could pursue a transaction in which we issue a substantial
number of new shares in exchange for all of the outstanding capital stock of a target. In this case, we would acquire a 100% controlling
interest in the target. However, as a result of the issuance of a substantial number of new shares, our stockholders immediately prior
to our initial business combination could own less than a majority of our outstanding shares subsequent to our initial business combination.
If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction
company, the portion of such business or businesses that is owned or acquired is what will be taken into account for purposes of the
80% of net assets test. If the initial business combination involves more than one target business, the 80% of net assets test will be
based on the aggregate value of all of the transactions and we will treat the target businesses together as the initial business combination
for purposes of a tender offer or for seeking stockholder approval, as applicable.
Other
Considerations
We
are not prohibited from pursuing an initial business combination or subsequent transaction with a company that is affiliated with the
Sponsor, our officers or directors. In the event we seek to complete our initial business combination or, subject to certain exceptions,
subsequent material transactions with a company that is affiliated with the Sponsor or any of our officers or directors, we, or a committee
of independent directors, if required by applicable law or based upon the decision of our board of directors or a committee thereof,
will obtain an opinion from an independent investment banking firm or an independent accounting firm that such initial business combination
or transaction is fair to our Company from a financial point of view.
Our
management and directors and PIMCO and its affiliates, including the PIMCO private funds, are continuously made aware of potential business
opportunities, one or more of which we may desire to pursue for a business combination. We will not consider a business combination with
any company that has already been identified to the PIMCO private funds or any of our directors or officers as a suitable acquisition
candidate for affiliates of PIMCO, including the PIMCO private funds, unless PIMCO or one of its affiliates, as applicable, in its sole
discretion, declines such potential business combination or makes available to our Company a co-investment opportunity in accordance
with applicable existing and future policies and procedures.
PIMCO
and its affiliates manage multiple funds and investment vehicles, including the PIMCO private funds, and may raise additional funds and/or
accounts in the future, which may be during the period in which we are seeking our initial business combination. These investment entities
may be seeking acquisition opportunities and related financing at any time. We may compete with any one or more of them on any given
acquisition opportunity. In addition, our officers and directors are not required to commit any specified amount of time to our affairs,
and, accordingly, will have conflicts of interest in allocating management time among various business activities, including identifying
potential business combinations and monitoring the related due diligence. Moreover, our officers and directors have and will have in
the future time and attention requirements for current and future investment funds, accounts, co-investment vehicles and other entities
managed by PIMCO or one of its affiliated entities. To the extent any conflict of interest arises between, on the one hand, us and, on
the other hand, investment funds, accounts, co-investment vehicles and other entities managed by PIMCO or one of its affiliated entities
(including, without limitation, arising as a result of certain of our officers and directors being required to offer acquisition opportunities
to such investment funds, accounts, co-investment vehicles or other entities), PIMCO and its applicable affiliate entities, including
the PIMCO private funds, will resolve such conflicts of interest in their sole discretion in accordance with their then existing fiduciary,
contractual and other duties, and there can be no assurance that such conflict of interest will be resolved in our favor.
Corporate
Information
Our
executive offices are located at 300 Carnegie Center, Suite 150 Princeton, NJ 08540 and our telephone number is (212) 847-0360.
We
are an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As such,
we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies
that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements
of Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), reduced disclosure obligations regarding executive
compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote
on executive compensation and stockholder approval of any golden parachute payments not previously approved. If some investors find our
securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities
may be more volatile.
In
addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period
provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging
growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.
We intend to take advantage of the benefits of this extended transition period.
We
will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of
the completion of the IPO, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to
be a large accelerated filer, which means the aggregate worldwide market value of our Class A common stock that is held by non-affiliates
equals or exceeds $700 million as of the prior June 30, and (2) the date on which we have issued more than $1.0 billion in non-convertible
debt securities during the prior three-year period. References herein to emerging growth company will have the meaning associated with
it in the JOBS Act.
Additionally,
we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take
advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements.
We will remain a smaller reporting company until the last day of the fiscal year in which (1) the aggregate worldwide market value of
our Class A common stock held by non-affiliates equaled or exceeded $250 million as of the prior June 30th, or (2) our annual revenues
equaled or exceeded $100 million during such completed fiscal year and the aggregate worldwide market value of our Class A common stock
held by non-affiliates equaled or exceeded $700 million as of the prior June 30th.
Effecting
Our Initial Business Combination
We
are not presently engaged in, and we will not engage in, any operations for an indefinite period of time. We intend to effectuate our
initial business combination using cash from the proceeds of the IPO and the private placement of the private placement warrants, the
proceeds of the sale of our shares in connection with our initial business combination (pursuant to forward purchase agreements or backstop
agreements we may enter into), shares issued to the owners of the target, debt issued to bank or other lenders or the owners of the target,
or a combination of the foregoing. We may seek to complete our initial business combination with a company or business that may be financially
unstable or in its early stages of development or growth, which would subject us to the numerous risks inherent in such companies and
businesses.
If
our initial business combination is paid for using equity or debt securities, or not all of the funds released from the Trust Account
are used for payment of the consideration in connection with our initial business combination or used for redemptions of our Class A
common stock, we may apply the balance of the cash released to us from the Trust Account for general corporate purposes, including for
maintenance or expansion of operations of the post-transaction company, the payment of principal or interest due on indebtedness incurred
in completing our initial business combination, to fund the purchase of other companies or for working capital.
We
may seek to raise additional funds through a private offering of debt or equity securities in connection with the completion of our initial
business combination, and we may effectuate our initial business combination using the proceeds of such offering rather than using the
amounts held in the Trust Account. In addition, we intend to target businesses larger than we could acquire with the net proceeds of
the IPO and the sale of the private placement warrants, and may as a result be required to seek additional financing to complete such
proposed initial business combination. Subject to compliance with applicable securities laws, we would expect to complete such financing
only simultaneously with the completion of our initial business combination. In the case of an initial business combination funded with
assets other than the Trust Account assets, our proxy materials or tender offer documents disclosing the initial business combination
would disclose the terms of the financing and, only if required by law, we would seek stockholder approval of such financing. There are
no prohibitions on our ability to raise funds privately or through loans in connection with our initial business combination. At this
time, we are not a party to any arrangement or understanding with any third party with respect to raising any additional funds through
the sale of securities, the incurrence of debt or otherwise.
Sources
of Target Businesses
We anticipate that
target business candidates will be brought to our attention from various sources, including our global networks, as well as other sources
such as investment bankers and investment professionals. Target businesses may be brought to our attention by such unaffiliated sources
as a result of being solicited by us through calls or mailings. These sources may also introduce us to target businesses in which they
think we may be interested on an unsolicited basis. The Sponsor, our officers and directors and their respective affiliates may also
bring to our attention target business candidates that they become aware of through their business contacts as a result of formal or
informal inquiries or discussions they may have. While we do not presently anticipate engaging the services of professional firms or
other individuals that specialize in business acquisitions on any formal basis, we may engage these firms or other individuals in the
future, in which event we may pay a finder’s fee, consulting fee, advisory fee or other compensation to be determined in an arm’s
length negotiation based on the terms of the transaction. We will engage a finder only to the extent our management determines that the
use of a finder may bring opportunities to us that may not otherwise be available to us or if finders approach us on an unsolicited basis
with a potential transaction that our management determines is in our best interest to pursue. Payment of finder’s fees is customarily
tied to completion of a transaction, in which case any such fee will be paid out of the funds held in the Trust Account. Other than the
(i) 30,000 founder shares transferred to Ms. Frank-Shapiro and 12,000 founder shares transferred to Daniel Gross, our former Chief Investment
Officer, as compensation for consulting services rendered to the Company, and any additional compensation for Ms. Frank-Shapiro and Mr.
Gross that the board of directors of CRIS II may approve in the future in connection with their consulting arrangements with CRIS II,
and (ii) payments of approximately $65,000 per month made by us to CRIS Services LLC, an entity owned by Messrs. Cavalier and Crane and
managed by Ms. Frank-Shapiro, for consulting services rendered to us (Messrs. Cavalier and Crane will receive health insurance benefits
from CRIS Services LLC), in no event will the Sponsor or any of our existing officers or directors, or any entity with which the Sponsor
or our officers are affiliated, be paid any finder’s fee, reimbursement, consulting fee, monies in respect of any payment of a
loan or other compensation by CRIS II prior to, or in connection with any services rendered for any services they render in order to
effectuate, the completion of our initial business combination (regardless of the type of transaction that it is). Although none of the
Sponsor, our officers, other than Ms. Frank-Shapiro, or directors, or any of their respective affiliates, will be allowed to receive
any compensation, finder’s fees or consulting fees from a prospective business combination target in connection with a contemplated
initial business combination, we do not have a policy that prohibits the Sponsor, our officers or directors, or any of their respective
affiliates, from negotiating for the reimbursement of out-of-pocket expenses by a target business. Some of our officers and directors
may enter into employment or consulting agreements with the post-transaction company following our initial business combination. The
presence or absence of any such fees or arrangements will not be used as a criterion in our selection process of an initial business
combination candidate.
We
are not prohibited from pursuing an initial business combination with a company that is affiliated with the Sponsor, our officers or
directors, or their respective affiliates. In the event we seek to complete our initial business combination with a company that is affiliated
with the Sponsor, our officers or directors, or their respective affiliates, we, or a committee of independent directors, if required
by applicable law or based upon the decision of our board of directors or a committee thereof, will obtain an opinion from an independent
investment banking firm or an independent accounting firm that our initial business combination is fair to our Company from a financial
point of view. We are not required to obtain such an opinion in any other context.
If
any of our officers or directors becomes aware of an initial business combination opportunity that falls within the line of business
of any entity to which he or she has pre-existing fiduciary or contractual obligations, he or she may be required to present such business
combination opportunity to such entity prior to presenting such business combination opportunity to us. Our officers and directors currently
have certain relevant fiduciary duties or contractual obligations that may take priority over their duties to us.
Selection
of a Target Business and Structuring of our Initial Business Combination
As
required by the NYSE rules, our initial business combination will be approved by a majority of our independent directors. The NYSE rules
also require that we must complete our initial business combination with one or more businesses that together have an aggregate fair
market value of at least 80% of the net assets held in the Trust Account (excluding the deferred underwriting commissions and taxes payable)
at the time of our signing a definitive agreement in connection with our initial business combination. The fair market value of the target
or targets will be determined by our board of directors based upon one or more standards generally accepted by the financial community
(such as actual and potential sales, earnings, cash flow and/or book value). Even though our board of directors will rely on generally
accepted standards, our board of directors will have discretion to select the standards employed. In addition, the application of the
standards generally involves a substantial degree of judgment. Accordingly, investors will be relying on the business judgment of the
board of directors in evaluating the fair market value of the target or targets. The proxy solicitation materials or tender offer documents
used by us in connection with any proposed transaction will provide public stockholders with our analysis of our satisfaction of the
80% of net assets test, as well as the basis for our determinations. If our board of directors is not able to independently determine
the fair market value of our initial business combination, we will obtain an opinion from an independent investment banking firm or another
independent entity that commonly renders valuation opinions with respect to the satisfaction of such criteria. While we consider it unlikely
that our board of directors will not be able to make an independent determination of the fair market value of our initial business combination,
it may be unable to do so if it is less familiar or experienced with the business of a particular target or if there is a significant
amount of uncertainty as to the value of a target’s assets or prospects. We do not currently intend to purchase multiple businesses
in unrelated industries in conjunction with our initial business combination. Subject to this requirement, our management will have virtually
unrestricted flexibility in identifying and selecting one or more prospective target businesses, although we will not be permitted to
effectuate our initial business combination with another blank check company or a similar company with nominal operations.
In
any case, we will only complete an initial business combination in which we own or acquire 50% or more of the outstanding voting securities
of the target or otherwise acquire a controlling interest in the target sufficient for it not to be required to register as an investment
company under the Investment Company Act. If we own or acquire less than 100% of the equity interests or assets of a target business
or businesses, the portion of such business or businesses that are owned or acquired by the post-transaction company is what will be
taken into account for purposes of the NYSE’s 80% of net assets test.
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, no assurance can be given that we will properly ascertain or assess all
significant risk factors.
In
evaluating a prospective business target, we expect to conduct a thorough due diligence review, which may encompass, among other things,
meetings with incumbent management and key employees, document reviews, interviews of customers and suppliers, inspection of facilities,
as well as a review of financial and other information that will be made available to us.
The
time required to select and evaluate a target business and to structure and complete our initial business combination, and the costs
associated with this process, are not currently ascertainable with any degree of certainty. Any costs incurred with respect to the identification
and evaluation of a prospective target business with which our initial business combination is not ultimately completed will result in
our incurring losses and will reduce the funds we can use to complete another business combination.
In
addition, we have agreed not to enter into a definitive agreement regarding an initial business combination without the prior consent
of the PIMCO private funds.
Lack
of Business Diversification
For
an indefinite period of time after the completion of our initial business combination, the prospects for our success may depend entirely
on the future performance of a single business. Unlike other entities that have the resources to complete business combinations with
multiple entities in one or several industries, it is probable that we will not have the resources to acquire multiple businesses. In
addition, we intend to focus our search for an initial business combination in a single industry. By completing our initial business
combination with only a single entity, our lack of diversification may subject us to negative economic, competitive and regulatory developments,
any or all of which may have a substantial adverse impact on the particular industry in which we operate after our initial business combination
and cause us to depend on the marketing and sale of a limited number of products or services.
Post-Combination
Management Team
Although
we intend to closely scrutinize the management of a prospective target business when evaluating the desirability of effecting our initial
business combination with that business, our assessment of the target business’ management may not prove to be correct. In addition,
the future management may not have the necessary skills, qualifications or abilities to manage a public company. Furthermore, the future
role of members of our management team, if any, in the target business cannot presently be stated with any certainty. The determination
as to whether any of the members of our management team will remain with the combined company will be made at the time of our initial
business combination. While it is possible that one or more of our directors will remain associated in some capacity with us following
our initial business combination, it is unlikely that any of them will devote their full efforts to our affairs subsequent to our initial
business combination. Moreover, no assurance can be given that members of our management team will have significant experience or knowledge
relating to the operations of the particular target business.
No
assurance can be given that any of our key personnel will remain in senior management or advisory positions with the combined company.
The determination as to whether any of our key personnel will remain with the combined company will be made at the time of our initial
business combination.
Following
an initial business combination, we may seek to recruit additional managers to supplement the incumbent management of the target business.
No assurance can be given that we will have the ability to recruit additional managers, or that additional managers will have the requisite
skills, knowledge or experience necessary to enhance the incumbent management.
Stockholders
May Not Have the Ability to Approve Our Initial Business Combination
We
may conduct redemptions without a stockholder vote pursuant to the tender offer rules of the SEC. However, we will seek stockholder approval
if it is required by law or applicable stock exchange rule, or we may decide to seek stockholder approval for business or other reasons.
Presented in the table below is a list of the types of initial business combinations we may consider and whether stockholder approval
is currently required under Delaware law for each transaction.
| Type of Transaction |
|
Whether
Stockholder
Approval is
Required |
| Purchase of assets |
|
No |
| |
|
|
| Purchase of stock of target not involving a merger with CRIS II |
|
No |
| |
|
|
| Merger of target into a subsidiary of CRIS II |
|
No |
| |
|
|
| Merger of CRIS II with a target |
|
Yes |
Under
the NYSE’s listing rules, stockholder approval would be required for our initial business combination if, for example:
| ● | we
issue shares of Class A common stock that will either (a) be equal to or in excess of 20%
of the number of shares of our Class A common stock then outstanding or (b) have voting power
equal to or in excess of 20% of the voting power then outstanding; |
| ● | any
of our directors, officers or substantial security holders (as defined by the NYSE rules)
has a 5% or greater interest, directly or indirectly, in the target business or assets to
be acquired and if the number of shares of common stock to be issued, or if the number of
shares of common stock into which the securities may be convertible or exercisable, exceeds
either (a) 1% of the number of shares of common stock or 1% of the voting power outstanding
before the issuance in the case of any of our directors and officers or (b) 5% of the number
of shares of common stock or 5% of the voting power outstanding before the issuance in the
case of any substantial security holders; or |
| ● | the
issuance or potential issuance of common stock will result in our undergoing a change of
control. |
The
decision as to whether we will seek stockholder approval of a proposed business combination in those instances in which stockholder approval
is not required by law will be made by us, solely in our discretion, and will be based on business and legal reasons, which include a
variety of factors, including, but not limited to:
| ● | the
timing of the transaction, including in the event we determine stockholder approval would
require additional time and there is either not enough time to seek stockholder approval
or doing so would place CRIS II at a disadvantage in the transaction or result in other additional
burdens on CRIS II; |
| ● | the
expected cost of holding a stockholder vote; |
| ● | the
risk that the stockholders would fail to approve a proposed business combination; |
| ● | other
time and budget constraints of CRIS II; and |
| ● | additional
legal complexities of a proposed business combination that would be time-consuming and burdensome
to present to stockholders. |
Permitted
Purchases of Our Securities
If
we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business
combination pursuant to the tender offer rules, the Sponsor, initial stockholders, our directors, officers, advisors or their respective
affiliates may purchase public shares or public warrants in privately negotiated transactions or in the open market either prior to or
following the completion of our initial business combination. There is no limit on the number of shares our initial stockholders, directors,
officers, advisors or their affiliates may purchase in such transactions, subject to compliance with applicable law and the NYSE rules.
However, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions
for any such transactions. If they engage in such transactions, they will not make any such purchases when they are in possession of
any material non-public information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange
Act. We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under
the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers
determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will comply with such rules.
Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject
to such reporting requirements. None of the funds held in the Trust Account will be used to purchase public shares or public warrants
in such transactions prior to completion of our initial business combination.
The
purpose of any such purchases of shares could be to vote such shares in favor of the initial business combination and thereby increase
the likelihood of obtaining stockholder approval of the initial business combination or to satisfy a closing condition in an agreement
with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination,
where it appears that such requirement would otherwise not be met. The purpose of any such purchases of public warrants could be to reduce
the number of public warrants outstanding or to vote such warrants on any matters submitted to the warrant holders for approval in connection
with our initial business combination. Any such purchases of our securities may result in the completion of our initial business combination
that may not otherwise have been possible. In addition, if such purchases are made, the public “float” of our shares of Class
A common stock or warrants may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult
to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.
The
Sponsor, our officers, directors and/or their affiliates anticipate that they may identify the stockholders with whom the Sponsor, our
officers, directors or their affiliates may pursue privately negotiated purchases by either the stockholders contacting us directly or
by our receipt of redemption requests submitted by stockholders following our mailing of proxy materials in connection with our initial
business combination. To the extent that the Sponsor, our officers, directors, advisors or their affiliates enter into a private purchase,
they would identify and contact only potential selling stockholders who have expressed their election to redeem their shares for a pro
rata share of the Trust Account or vote against our initial business combination, whether or not such stockholder has already submitted
a proxy with respect to our initial business combination. The Sponsor, our officers, directors, advisors or their affiliates will only
purchase public shares if such purchases comply with Regulation M under the Exchange Act and the other federal securities laws.
Any
purchases by the Sponsor, our officers, directors and/or their affiliates who are affiliated purchasers under Rule 10b-18 under the Exchange
Act will only be made to the extent such purchases are able to be made in compliance with Rule 10b-18, which is a safe harbor from liability
for manipulation under Section 9(a)(2) and Rule 10b-5 of the Exchange Act. Rule 10b-18 has certain technical requirements that must be
complied with in order for the safe harbor to be available to the purchaser. The Sponsor, our officers, directors and/or their affiliates
will not make purchases of common stock if the purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act. Any such purchases
will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchases are subject to such reporting
requirements.
Redemption
Rights for Public Stockholders upon Completion of our Initial Business Combination or Certain Stockholder Votes to Amend our Amended
and Restated Certificate of Incorporation
We
will provide our public stockholders with the opportunity to redeem all or a portion of their shares of Class A common stock upon (i)
the completion of our initial business combination or (ii) a stockholder vote to approve an amendment to our amended and restated certificate
of incorporation (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business
combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing
of the IPO or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity.
Such redemptions, if any, will be made at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust
Account as of two business days prior to the event triggering the right to redeem, including interest earned on the funds held in the
Trust Account and not previously released to us to pay our franchise and income taxes, divided by the number of then outstanding public
shares, subject to the limitations described herein. The amount in the Trust Account is initially anticipated to be approximately $10.00
per public share. The per-share amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred
underwriting commissions we will pay to the underwriters. The redemption rights will include the requirement that a beneficial holder
must identify itself in order to validly redeem its public shares. There will be no redemption rights upon the completion of our initial
business combination with respect to our warrants. Our initial stockholders have entered into a letter agreement with us, pursuant to
which they have agreed to waive their redemption rights with respect to any founder shares and any public shares held by them in connection
with the completion of our initial business combination or a stockholder vote to approve an amendment to our amended and restated certificate
of incorporation, as described above.
Manner
of Conducting Redemptions in Conjunction with a Stockholder Vote on our Initial Business Combination
We will provide our public
stockholders with the opportunity to redeem all or a portion of their shares of Class A common stock upon the completion of our initial
business combination either (i) in connection with a stockholder meeting called to approve the initial business combination or (ii) by
means of a tender offer. The decision as to whether we will seek stockholder approval of a proposed initial business combination or conduct
a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction
and whether the terms of the transaction would require us to seek stockholder approval under the law or stock exchange listing requirement.
Under the NYSE rules, asset acquisitions and stock purchases would not typically require stockholder approval while direct mergers with
our Company where we do not survive and any transactions where we issue more than 20% of our outstanding common stock or seek to amend
our amended and restated certificate of incorporation would require stockholder approval. If we structure an initial business combination
with a target company in a manner that requires stockholder approval, we will not have discretion as to whether to seek a stockholder
vote to approve a proposed initial business combination. We may conduct redemptions without a stockholder vote pursuant to the tender
offer rules of the SEC unless stockholder approval is required by law or stock exchange listing requirements or we choose to seek stockholder
approval for business or other reasons. So long as we obtain and maintain a listing for our securities on the NYSE, we will be required
to comply with such rules.
If
a stockholder vote is not required and we do not decide to hold a stockholder vote for business or other reasons, we will, pursuant to
our amended and restated certificate of incorporation:
| ● | conduct
the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate
issuer tender offers, and |
| ● | file
tender offer documents with the SEC prior to completing our initial business combination
which contain substantially the same financial and other information about the initial business
combination and the redemption rights as is required under Regulation 14A of the Exchange
Act, which regulates the solicitation of proxies. |
Upon
the public announcement of our initial business combination, we or the Sponsor will terminate any plan established in accordance with
Rule 10b5-1 to purchase shares of our Class A common stock in the open market if we elect to redeem our public shares through a tender
offer, to comply with Rule 14e-5 under the Exchange Act.
In
the event we conduct redemptions pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days,
in accordance with Rule 14e-1(a) under the Exchange Act, and we will not be permitted to complete our initial business combination until
the expiration of the tender offer period. In addition, the tender offer will be conditioned on public stockholders not tendering more
than a specified number of public shares which are not purchased by the Sponsor, which number will be based on the requirement that we
may not redeem public shares in an amount that would cause our net tangible assets to be less than $5,000,001 upon consummation of our
initial business combination and after payment of deferred underwriting commissions (so that we are not subject to the SEC’s “penny
stock” rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial
business combination. If public stockholders tender more shares than we have offered to purchase, we will withdraw the tender offer and
not complete the initial business combination.
If,
however, stockholder approval of the transaction is required by law or stock exchange listing requirements, or we decide to obtain stockholder
approval for business or other reasons, we will, pursuant to our amended and restated certificate of incorporation:
| ● | conduct
the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the
Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender
offer rules, and |
| ● | file
proxy materials with the SEC. |
In
the event that we seek stockholder approval of our initial business combination, we will distribute proxy materials and, in connection
therewith, provide our public stockholders with the redemption rights described above upon completion of the initial business combination.
If
we seek stockholder approval, we will complete our initial business combination only if a majority of the outstanding shares of common
stock voted are voted in favor of the initial business combination. A quorum for such meeting will consist of the holders present in
person or by proxy of shares of outstanding capital stock of CRIS II representing a majority of the voting power of all outstanding shares
of capital stock of CRIS II entitled to vote at such meeting. Our initial stockholders will count toward this quorum and pursuant to
the letter agreement, our initial stockholders have agreed to vote their founder shares and any public shares purchased during or after
the IPO (including in open market and privately negotiated transactions) in favor of our initial business combination. For purposes of
seeking approval of the majority of our outstanding shares of common stock voted, non-votes will have no effect on the approval of our
initial business combination once a quorum is obtained. As a result, in addition to our initial stockholders’ founder shares, we
would need only 9,056,250, or 37.5% (assuming all outstanding shares are voted), or 1,509,375, or 6.25% (assuming only the minimum number
of shares representing a quorum are voted), of the 24,150,000 public shares sold in the IPO to be voted in favor of an initial business
combination in order to have our initial business combination approved. Because the PIMCO private
funds or their respective affiliates purchased 2,079,000 units in the IPO and have agreed to vote the shares of Class A common stock
underlying such units in favor of our initial business combination, these percentages are further reduced to 28.9% and 0%, respectively. We
intend to give approximately 30 days (but not less than 10 days nor more than 60 days) prior written notice of any such meeting, if required,
at which a vote shall be taken to approve our initial business combination. These quorum and voting thresholds, and the voting agreements
of our initial stockholders, may make it more likely that we will consummate our initial business combination. Each public stockholder
may elect to redeem its public shares irrespective of whether they vote for or against the proposed transaction.
Our
amended and restated certificate of incorporation provides that in no event will we redeem our public shares in an amount that would
cause our net tangible assets to be less than $5,000,001 upon consummation of our initial business combination and after payment of deferred
underwriting commissions (so that we are not subject to the SEC’s “penny stock” rules) or any greater net tangible
asset or cash requirement which may be contained in the agreement relating to our initial business combination. For example, the proposed
initial business combination may require: (i) cash consideration to be paid to the target or its owners, (ii) cash to be transferred
to the target for working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions in accordance
with the terms of the proposed initial business combination. In the event the aggregate cash consideration we would be required to pay
for all shares of Class A common stock that are validly submitted for redemption plus any amount required to satisfy cash conditions
pursuant to the terms of the proposed initial business combination exceed the aggregate amount of cash available to us, we will not complete
the initial business combination or redeem any shares, and all shares of Class A common stock submitted for redemption will be returned
to the holders thereof.
Limitation
on Redemption upon Completion of our Initial Business Combination if We Seek Stockholder Approval
Notwithstanding
the foregoing, if we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with
our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation provides that
a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert
or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with
respect to more than an aggregate of 15% of the shares sold in the IPO, which we refer to as the “Excess Shares.” Such restriction
shall also be applicable to our affiliates. We believe this restriction will discourage stockholders from accumulating large blocks of
shares, and subsequent attempts by such holders to use their ability to exercise their redemption rights against a proposed initial business
combination as a means to force us or our management to purchase their shares at a significant premium to the then-current market price
or on other undesirable terms. Absent this provision, a public stockholder holding more than an aggregate of 15% of the shares sold in
the IPO could threaten to exercise its redemption rights if such holder’s shares are not purchased by us or our management at a
premium to the then-current market price or on other undesirable terms. By limiting our stockholders’ ability to redeem no more
than 15% of the shares sold in the IPO without our prior consent, we believe we will limit the ability of a small group of stockholders
to unreasonably attempt to block our ability to complete our initial business combination, particularly in connection with an initial
business combination with a target that requires as a closing condition that we have a minimum net worth or a certain amount of cash.
However, we would not be restricting our stockholders’ ability to vote all of their shares (including Excess Shares) for or against
our initial business combination.
Tendering
Stock Certificates in Connection with a Tender Offer or Redemption Rights
We
may require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares
in “street name,” to either tender their certificates to our transfer agent prior to the date set forth in the tender offer
documents or proxy materials mailed to such holders, or up to two business days prior to the initial vote on the proposal to approve
the initial business combination in the event we distribute proxy materials, or to deliver their shares to the transfer agent electronically
using The Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, at the holder’s option. The tender offer
or proxy materials, as applicable, that we will furnish to holders of our public shares in connection with our initial business combination
will indicate whether we are requiring public stockholders to satisfy such delivery requirements, which may include the requirement that
a beneficial holder must identify itself in order to validly redeem its public shares. Accordingly, a public stockholder would have from
the time we send out our tender offer materials until the close of the tender offer period, or up to two days prior to the vote on the
initial business combination if we distribute proxy materials, as applicable, to tender its shares if it wishes to seek to exercise its
redemption rights. Given the relatively short exercise period, it is advisable for stockholders to use electronic delivery of their public
shares.
There
is a nominal cost associated with the above-referenced tendering process and the act of certificating the shares or delivering them through
the DWAC System. The transfer agent will typically charge the tendering broker $80.00 and it would be up to the broker whether or not
to pass this cost on to the redeeming holder. However, this fee would be incurred regardless of whether or not we require holders seeking
to exercise redemption rights to tender their shares. The need to deliver shares is a requirement of exercising redemption rights regardless
of the timing of when such delivery must be effectuated.
The
foregoing is different from the procedures used by many blank check companies. In order to perfect redemption rights in connection with
their business combinations, many blank check companies would distribute proxy materials for the stockholders’ vote on an initial
business combination, and a holder could simply vote against a proposed initial business combination and check a box on the proxy card
indicating such holder was seeking to exercise his or her redemption rights. After the initial business combination was approved, CRIS
II would contact such stockholder to arrange for him or her to deliver his or her certificate to verify ownership. As a result, the stockholder
then had an “option window” after the completion of the initial business combination during which he or she could monitor
the price of CRIS II’s stock in the market. If the price rose above the redemption price, he or she could sell his or her shares
in the open market before actually delivering his or her shares to CRIS II for cancellation. As a result, the redemption rights, to which
stockholders were aware they needed to commit before the stockholder meeting, would become “option” rights surviving past
the completion of the initial business combination until the redeeming holder delivered its certificate. The requirement for physical
or electronic delivery prior to the meeting ensures that a redeeming holder’s election to redeem is irrevocable once the initial
business combination is approved.
Any
request to redeem such shares, once made, may be withdrawn at any time up to the date set forth in the tender offer materials or the
date of the stockholder meeting set forth in our proxy materials, as applicable. Furthermore, if a holder of a public share delivered
its certificate in connection with an election of redemption rights and subsequently decides prior to the applicable date not to elect
to exercise such rights, such holder may simply request that the transfer agent return the certificate (physically or electronically).
It is anticipated that the funds to be distributed to holders of our public shares electing to redeem their shares will be distributed
promptly after the completion of our initial business combination.
If
our initial business combination is not approved or completed for any reason, then our public stockholders who elected to exercise their
redemption rights would not be entitled to redeem their shares for the applicable pro rata share of the Trust Account. In such case,
we will promptly return any certificates delivered by public holders who elected to redeem their shares.
If an initial proposed
initial business combination is not completed, we may continue to try to complete an initial business combination with a different target
until 24 months from the closing of the IPO or during any extended time that we have to consummate a business combination beyond the
24 months (an “Extension Period”).
Redemption
of Public Shares and Liquidation if No Initial Business Combination
Our
amended and restated certificate of incorporation provides that we have only 24 months from the closing of the IPO to complete our
initial business combination. If we do not complete our initial business combination within such 24-month period or any Extension Period,
we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten
business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit
in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to us to pay our franchise
and income taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares,
which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further
liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption,
subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our
obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption
rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to complete our initial business
combination within the 24-month time period.
Our
initial stockholders have entered into a letter agreement with us, pursuant to which they have waived their rights to liquidating distributions
from the Trust Account with respect to any founder shares held by them if we fail to complete our initial business combination within
24 months from the closing of the IPO or during any Extension Period. However, if the Sponsor, our officers or directors acquire public
shares in or after the IPO, they will be entitled to liquidating distributions from the Trust Account with respect to such public shares
if we fail to complete our initial business combination within the allotted 24-month time period.
Our
initial stockholders have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and
restated certificate of incorporation (i) to modify the substance or timing of our obligation to allow redemption in connection with
our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within
24 months from the closing of the IPO or (ii) with respect to any other provision relating to stockholders’ rights or pre-initial
business combination activity, unless we provide our public stockholders with the opportunity to redeem their shares of Class A common
stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the
Trust Account including interest earned on the funds held in the Trust Account and not previously released to us to pay our franchise
and income taxes divided by the number of then outstanding public shares. However, we may not redeem our public shares in an amount that
would cause our net tangible assets to be less than $5,000,001 upon consummation of our initial business combination and after payment
of deferred underwriting commissions (so that we are not subject to the SEC’s “penny stock” rules). If this optional
redemption right is exercised with respect to an excessive number of public shares such that we cannot satisfy the net tangible asset
requirement (described above), we would not proceed with the amendment or the related redemption of our public shares at such time.
We
expect that all costs and expenses associated with implementing our plan of dissolution, as well as payments to any creditors, will be
funded from amounts remaining out of the approximately $1.1 million of proceeds held outside the Trust Account as of December 31, 2021,
although there can be no assurance that there will be sufficient funds for such purpose. We will depend on sufficient interest being
earned on the proceeds held in the Trust Account to pay any tax obligations we may owe. However, if those funds are not sufficient to
cover the costs and expenses associated with implementing our plan of dissolution, to the extent that there is any interest accrued in
the Trust Account not required to pay taxes on interest income earned on the Trust Account balance, we may request the trustee to release
to us an additional amount of up to $100,000 of such accrued interest to pay those costs and expenses.
If
we were to expend all of the net proceeds of the IPO and the sale of the private placement warrants, other than the proceeds deposited
in the Trust Account, and without taking into account interest, if any, earned on the Trust Account, the per-share redemption amount
received by stockholders upon our dissolution would be approximately $10.00. The proceeds deposited in the Trust Account could, however,
become subject to the claims of our creditors which would have higher priority than the claims of our public stockholders. there can
be no assurance that the actual per-share redemption amount received by stockholders will not be substantially less than $10.00. Under
Section 281(b) of the DGCL, our plan of dissolution must provide for all claims against us to be paid in full or make provision for payments
to be made in full, as applicable, if there are sufficient assets. These claims must be paid or provided for before we make any distribution
of our remaining assets to our stockholders. While we intend to pay such amounts, if any, there can be no assurance that we will have
funds sufficient to pay or provide for all creditors’ claims.
Although
we will seek to have all vendors, service providers, prospective target businesses or other entities with which we do business execute
agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the Trust Account for the benefit
of our public stockholders, there is no guarantee that they will execute such agreements or even if they execute such agreements that
they would be prevented from bringing claims against the Trust Account including but not limited to fraudulent inducement, breach of
fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order
to gain an advantage with respect to a claim against our assets, including the funds held in the Trust Account. If any third party refuses
to execute an agreement waiving such claims to the monies held in the Trust Account, our management will perform an analysis of the alternatives
available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes that such
third party’s engagement would be significantly more beneficial to us than any alternative. Examples of possible instances where
we may engage a third party that refuses to execute a waiver include the engagement of a third-party consultant whose particular expertise
or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver
or in cases where management is unable to find a service provider willing to execute a waiver. WithumSmith+Brown, PC (“Withum”),
our independent registered public accounting firm, and the underwriters of the IPO will not execute agreements with us waiving such claims
to the monies held in the Trust Account.
In
addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising
out of, any negotiations, contracts or agreements with us and will not seek recourse against the Trust Account for any reason. The Sponsor
has agreed that it will be liable to us if and to the extent any claims by a third party for services rendered or products sold to us,
or a prospective target business with which we have entered into a written letter of intent, confidentiality or similar agreement or
business combination agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.00 per public share and
(ii) the actual amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than
$10.00 per share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply
to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the Trust
Account (whether or not such waiver is enforceable) nor will it apply to any claims under our indemnity of the underwriters of the IPO
against certain liabilities, including liabilities under the Securities Act. However, we have not asked the Sponsor to reserve for such
indemnification obligations, nor have we independently verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations
and believe that the Sponsor’s only assets are securities of our Company. Therefore, there can be no assurance that the Sponsor
would be able to satisfy those obligations. None of our officers, directors or members of the Sponsor will indemnify us for claims by
third parties including, without limitation, claims by vendors and prospective target businesses.
In
the event that the proceeds in the Trust Account are reduced below (i) $10.00 per public share or (ii) such lesser amount per public
share held in the Trust Account as of the date of the liquidation of the Trust Account, due to reductions in value of the trust assets,
in each case net of the amount of interest which may be withdrawn to pay taxes, and the Sponsor asserts that it is unable to satisfy
its indemnification obligations or that it has no indemnification obligations related to a particular claim, our independent directors
would determine whether to take legal action against the Sponsor to enforce its indemnification obligations. While we currently expect
that our independent directors would take legal action on our behalf against the Sponsor to enforce its indemnification obligations to
us, it is possible that our independent directors in exercising their business judgment may choose not to do so if, for example, the
cost of such legal action is deemed by the independent directors to be too high relative to the amount recoverable or if the independent
directors determine that a favorable outcome is not likely. We have not asked the Sponsor to reserve for such indemnification obligations
and there can be no assurance that the Sponsor would be able to satisfy those obligations. Accordingly, there can be no assurance that
due to claims of creditors the actual value of the per-share redemption price will not be less than $10.00 per public share.
We
will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring
to have all vendors, service providers (other than our independent registered public accounting firm), prospective target businesses
or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or
to monies held in the Trust Account. The Sponsor will also not be liable as to any claims under our indemnity of the underwriters of
the IPO against certain liabilities, including liabilities under the Securities Act. In the event that we liquidate and it is subsequently
determined that the reserve for claims and liabilities is insufficient, stockholders who received funds from the Trust Account could
be liable for claims made by creditors; however, such liability will not be greater than the amount of funds from the Trust Account received
by any such stockholder.
Under
the DGCL, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received by
them in a dissolution. The pro rata portion of the Trust Account distributed to our public stockholders upon the redemption of our public
shares in the event we do not complete our initial business combination within 24 months from the closing of the IPO or during any Extension
Period may be considered a liquidating distribution under Delaware law. If the corporation complies with certain procedures set forth
in Section 280 of the DGCL intended to ensure that it makes reasonable provision for all claims against it, including a 60-day notice
period during which any third-party claims can be brought against the corporation, a 90-day period during which the corporation may reject
any claims brought, and an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability
of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the
claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary
of the dissolution.
Furthermore,
if the pro rata portion of the Trust Account distributed to our public stockholders upon the redemption of our public shares in the event
we do not complete our initial business combination within 24 months from the closing of the IPO or during any Extension Period, is not
considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful (potentially due to
the imposition of legal proceedings that a party may bring or due to other circumstances that are currently unknown), then pursuant to
Section 174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution,
instead of three years, as in the case of a liquidating distribution. If we do not complete our initial business combination within 24
months from the closing of the IPO or during any Extension Period, we will: (i) cease all operations except for the purpose of winding
up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share
price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held
in the Trust Account and not previously released to us to pay our franchise and income taxes (less up to $100,000 of interest to pay
dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’
rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii)
as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of
directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and
the requirements of other applicable law. Accordingly, it is our intention to redeem our public shares as soon as reasonably possible
following our 24th month and, therefore, we do not intend to comply with those procedures. As such, our stockholders could potentially
be liable for any claims to the extent of distributions received by them (but no more) and any liability of our stockholders may extend
well beyond the third anniversary of such date.
Because
we will not be complying with Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such
time that will provide for our payment of all existing and pending claims or claims that may be potentially brought against us within
the subsequent ten years. However, because we are a blank check company, rather than an operating company, and our operations will be
limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as
lawyers, investment bankers, etc.) or prospective target businesses. As described above, pursuant to the obligation contained in our
underwriting agreement, we will seek to have all vendors, service providers, prospective target businesses or other entities with which
we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the Trust
Account. As a result of this obligation, the claims that could be made against us are significantly limited and the likelihood that any
claim that would result in any liability extending to the Trust Account is remote. Further, the Sponsor may be liable only to the extent
necessary to ensure that the amounts in the Trust Account are not reduced below (i) $10.00 per public share or (ii) such lesser amount
per public share held in the Trust Account as of the date of the liquidation of the Trust Account, due to reductions in value of the
trust assets, in each case net of the amount of interest withdrawn to pay taxes and will not be liable as to any claims under our indemnity
of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act. In the event that an executed
waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such
third-party claims.
If
we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the proceeds held in the
Trust Account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of
third parties with priority over the claims of our stockholders. To the extent any bankruptcy claims deplete the Trust Account, there
can be no assurance that we will be able to return $10.00 per share to our public stockholders. Additionally, if we file a bankruptcy
petition or an involuntary bankruptcy petition is filed against us that is not dismissed, any distributions received by stockholders
could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent
conveyance.” As a result, a bankruptcy court could seek to recover some or all amounts received by our stockholders. Furthermore,
our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or may have acted in bad faith, thereby
exposing itself and our Company to claims of punitive damages, by paying public stockholders from the Trust Account prior to addressing
the claims of creditors. There can be no assurance that claims will not be brought against us for these reasons.
Our
public stockholders will be entitled to receive funds from the Trust Account only upon the earlier to occur of: (i) the completion of
our initial business combination, (ii) the redemption of any public shares properly tendered in connection with a stockholder vote to
amend any provisions of our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation
to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete
our initial business combination within 24 months from the closing of the IPO or (B) with respect to any other provision relating to
stockholders’ rights or pre-initial business combination activity, and (iii) the redemption of all of our public shares if we do
not complete our business combination within 24 months from the closing of the IPO or during any Extension Period, subject to applicable
law. In no other circumstances will a stockholder have any right or interest of any kind to or in the Trust Account. In the event we
seek stockholder approval in connection with our initial business combination, a stockholder’s voting in connection with the initial
business combination alone will not result in a stockholder’s redeeming its shares to us for an applicable pro rata share of the
Trust Account. Such stockholder must have also exercised its redemption rights as described above. These provisions of our amended and
restated certificate of incorporation, like all provisions of our amended and restated certificate of incorporation, may be amended with
a stockholder vote.
Comparison
of Redemption or Purchase Prices in Connection with Our Initial Business Combination, or Certain Stockholder Votes to Amend our Amended
and Restated Certificate of Incorporation, and if We Fail to Complete Our Initial Business Combination.
The
following table compares the redemptions and other permitted purchases of public shares that may take place in connection with the completion
of our initial business combination and if we do not complete our initial business combination within 24 months from the closing of the
IPO or during any Extension Period.
| |
Redemptions
in Connection with Our Initial Business Combination or Certain Stockholder Votes to Amend our Amended and Restated Certificate of Incorporation |
|
Other
Permitted Purchases of Public Shares by Us or Our Affiliates |
|
Redemptions
if We fail to Complete an Initial Business Combination |
| Calculation
of redemption price |
Redemptions
at the time of our initial business combination may be made pursuant to a tender offer or in connection with a stockholder vote.
The redemption price will be the same whether we conduct redemptions pursuant to a tender offer or in connection with a stockholder
vote. In either case, or in the case of redemptions in connection with a stockholder vote to approve an amendment to our amended
and restated certificate of incorporation (i) to modify the substance or timing of our obligation to allow redemption in connection
with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination
within 24 months from the closing of the IPO or (ii) with respect to any other provision relating to stockholders’ rights or
pre-initial business combination activity, our public stockholders may redeem their public shares for cash equal to the aggregate
amount then on deposit in the Trust Account as of two business days prior to the consummation of the initial business combination
(which is initially anticipated to be $10.00 per public share), including interest earned on the funds held in the Trust Account
and not previously released to us to pay our franchise and income taxes divided by the number of then outstanding public shares,
subject to the limitation that no redemptions will take place, if all of the redemptions would cause our net tangible assets to be
less than $5,000,001 upon consummation of our initial business combination and any limitations (including but not limited to cash
requirements) agreed to in connection with the negotiation of terms of a proposed initial business combination. |
|
If
we seek stockholder approval of our initial business combination, the Sponsor, directors, officers, advisors or their affiliates
may purchase public shares in privately negotiated transactions or in the open market prior to or following completion of our initial
business combination. There is no limit to the prices that the Sponsor, directors, officers, advisors or their affiliates may pay
in these transactions. |
|
If
we do not complete our initial business combination within 24 months from the closing of the IPO or during any Extension Period,
we will redeem all public shares at a per-share price, payable in cash, equal to the aggregate amount, then on deposit in the Trust
Account (which is initially anticipated to be $10.00 per public share including interest earned on the funds held in the Trust Account
and not previously released to us to pay our franchise and income taxes (less up to $100,000 of interest to pay dissolution expenses),
divided by the number of then outstanding public shares. |
| |
|
|
|
|
|
Impact
to remaining stockholders |
The
redemptions in connection with our initial business combination or certain stockholder votes to amend our amended and restated certificate
of incorporation will reduce the book value per share for our remaining stockholders, who will bear the burden of the deferred underwriting
commissions and taxes payable. |
|
If
the permitted purchases described above are made, there would be no impact to our remaining stockholders because the purchase price
would not be paid by us. |
|
The
redemption of our public shares if we fail to complete our initial business combination will reduce the book value per share for
the shares held by our initial stockholders, who will be our only remaining stockholders after such redemptions. |
Competition
In
identifying, evaluating and selecting a target business for our initial business combination, we may encounter competition from other
entities having a business objective similar to ours, including other blank check companies, private equity groups and leveraged buyout
funds, and operating businesses seeking strategic business combinations. Many of these entities are well established and have extensive
experience identifying and effecting business combinations directly or through affiliates. Moreover, many of these competitors possess
greater financial, technical, human and other resources than we do. Our ability to acquire larger target businesses will be limited by
our available financial resources. This inherent limitation may give others with greater resources an advantage in pursuing the initial
business combination of a target business. Furthermore, our obligation to pay cash in connection with our public stockholders who exercise
their redemption rights may reduce the resources available to us for our initial business combination and our outstanding warrants, and
the future dilution they potentially represent, may not be viewed favorably by certain target businesses. Either of these factors may
place us at a competitive disadvantage in successfully negotiating an initial business combination.
Facilities
Our
executive offices are located at 300 Carnegie Center, Suite 150 Princeton, NJ 08540 and our telephone number is (212) 847-0360. Our executive
offices are provided to us by the Sponsor. We consider our current office space adequate for our current operations.
Employees
We
currently have four officers. These individuals are not obligated to devote any specific number of hours to our matters but they intend
to devote as much of their time as they deem necessary to our affairs until we have completed our initial business combination. The amount
of time they will devote in any time period will vary based on whether a target business has been selected for our initial business combination
and the stage of the initial business combination process we are in. We do not intend to have any full-time employees prior to the completion
of our initial business combination.
Additional
Information
This
Annual Report on Form 10-K, our Quarterly Report on Form 10-Q, Current Reports on Form 8-K, and amendments to reports filed pursuant
to Sections 13(a) and 15(d) of the Exchange Act, are filed with the SEC. We are subject to the informational requirements of the Exchange
Act and files or furnishes reports, proxy statements and other information with the SEC. The SEC maintains an internet site that contains
reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov.
Our
website address is www.climaterealimpactsolutions.com. We make available free of charge on or through our website our Annual Report on
Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to those reports filed or furnished pursuant
to the Exchange Act as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC. However,
the information found on our website is not part of this or any other report.
Item
1A. Risk Factors
An
investment in our securities involves a high degree of risk. Investors should consider carefully all of the risks described below, together
with the other information contained in this Annual Report on Form 10-K, including our financial statements and related notes. 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 an investor could lose all or part of its investment. Additional risk factors
not presently known to us or that we currently deem immaterial may also impair our business or results of operations.
Risks
Relating to Our Identification of a Business Combination Target and Consummation of a Business Combination Transaction
Our
public stockholders may not be afforded an opportunity to vote on our proposed initial business combination, which means we may complete
our initial business combination even though a majority of our public stockholders do not support such a combination.
We
may choose not to hold a stockholder vote to approve our initial business combination unless the initial business combination would require
stockholder approval under applicable law or stock exchange listing requirements or if we decide to hold a stockholder vote for business
or other reasons. Except as required by law, the decision as to whether we will seek stockholder approval of a proposed initial business
combination or will allow stockholders to sell their shares to us in a tender offer will be made by us, solely in our discretion, and
will be based on a variety of factors, such as the timing of the transaction and whether the terms of the transaction would otherwise
require us to seek stockholder approval. Accordingly, we may complete our initial business combination even if holders of a majority
of our public shares do not approve of the initial business combination we complete.
If
we seek stockholder approval of our initial business combination, our initial stockholders have agreed to vote in favor of such initial
business combination, regardless of how our public stockholders vote.
Pursuant
to the letter agreement, our initial stockholders have agreed to vote their founder shares, as well as any public shares purchased during
or after the IPO (including in open market and privately negotiated transactions), in favor of our initial business combination. As a
result, in addition to our initial stockholders’ founder shares, we would need only 9,056,250, or 37.5% (assuming all outstanding
shares are voted), or 1,509,375, or 6.25% (assuming only the minimum number of shares
representing a quorum are voted), of the 24,150,000 public shares sold in the IPO to be
voted in favor of an initial business combination in order to have our initial business combination approved. Because the PIMCO private
funds or their respective affiliates purchased 2,079,000 units in the IPO and have agreed to vote the shares of Class A common stock
underlying such units in favor of our initial business combination, these percentages are further reduced to 28.9% and 0%, respectively.
Our initial stockholders owned shares representing 20% of our outstanding shares of common stock immediately following the completion
of the IPO. Accordingly, if we seek stockholder approval of our initial business combination, the agreement by our initial stockholders
to vote in favor of our initial business combination will increase the likelihood that we will receive the requisite stockholder approval
for such initial business combination.
A
public stockholder’s only opportunity to affect the investment decision regarding a potential business combination will be limited
to the exercise of its right to redeem its shares from us for cash, unless we seek stockholder approval of the initial business combination.
At
the time of an investment in us, public stockholders will not be provided with an opportunity to evaluate the specific merits or risks
of our initial business combination. Since our board of directors may complete an initial business combination without seeking stockholder
approval, public stockholders may not have the right or opportunity to vote on the initial business combination, unless we seek such
stockholder vote.
Accordingly,
if we do not seek stockholder approval, a public stockholder’s only opportunity to affect the investment decision regarding a potential
business combination may be limited to exercising its redemption rights within the period of time (which will be at least 20 business
days) set forth in our tender offer documents mailed to our public stockholders in which we describe our initial business combination.
The
ability of our public stockholders to redeem their shares for cash may make our financial condition unattractive to potential business
combination targets, which may make it difficult for us to enter into an initial business combination with a target.
We
may seek to enter into an initial business combination agreement with a prospective target that requires as a closing condition that
we have a minimum net worth or a certain amount of cash. If too many public stockholders exercise their redemption rights, we would not
be able to meet such closing condition and, as a result, would not be able to proceed with the initial business combination. Furthermore,
in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 upon consummation
of our initial business combination and after payment of deferred underwriting commissions (so that we are not subject to the SEC’s
“penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating
to our initial business combination. Consequently, if accepting all properly submitted redemption requests would cause our net tangible
assets to be less than $5,000,001 upon consummation of our initial business combination and after payment of deferred underwriting commissions
or such greater amount necessary to satisfy a closing condition as described above, we would not proceed with such redemption and the
related business combination and may instead search for an alternate business combination. Prospective targets will be aware of these
risks and, thus, may be reluctant to enter into an initial business combination with us.
The
ability of our public stockholders to exercise redemption rights with respect to a large number of our shares may not allow us to complete
the most desirable business combination or optimize our capital structure.
At
the time we enter into an agreement for our initial business combination, we will not know how many stockholders may exercise their redemption
rights, and therefore will need to structure the transaction based on our expectations as to the number of shares that will be submitted
for redemption. If our initial business combination agreement requires us to use a portion of the cash in the Trust Account to pay the
purchase price, or requires us to have a minimum amount of cash at closing, we will need to reserve a portion of the cash in the Trust
Account to meet such requirements, or arrange for third-party financing. In addition, if a larger number of shares are submitted for
redemption than we initially expected, we may need to restructure the transaction to reserve a greater portion of the cash in the Trust
Account or arrange for third-party financing. Raising additional third-party financing may involve dilutive equity issuances or the incurrence
of indebtedness at higher than desirable levels. Furthermore, this dilution would increase to the extent that the anti-dilution provisions
of the Class B common stock result in the issuance of Class A shares on a greater than one-to-one basis upon conversion of the Class
B common stock at the time of our business combination. The above considerations may limit our ability to complete the most desirable
business combination available to us or optimize our capital structure. The amount of the deferred underwriting commissions payable to
the underwriters will not be adjusted for any shares that are redeemed in connection with an initial business combination. The per-share
amount we will distribute to stockholders who properly exercise their redemption rights will not be reduced by the deferred underwriting
commission and after such redemptions, the per-share value of shares held by non-redeeming stockholders will reflect our obligation to
pay the deferred underwriting commissions.
The
ability of our public stockholders to exercise redemption rights with respect to a large number of our shares could increase the probability
that our initial business combination would be unsuccessful and that a public stockholder would have to wait for liquidation in order
to redeem its stock.
If
our initial business combination agreement requires us to use a portion of the cash in the Trust Account to pay the purchase price, or
requires us to have a minimum amount of cash at closing, the probability that our initial business combination would be unsuccessful
is increased. If our initial business combination is unsuccessful, a public stockholder would not receive its pro rata portion of the
Trust Account until we liquidate the Trust Account. If a public stockholder is in need of immediate liquidity, such public stockholder
could attempt to sell its stock in the open market; however, at such time our stock may trade at a discount to the pro rata amount per
share in the Trust Account. In either situation, a public stockholder may suffer a material loss on its investment or lose the benefit
of funds expected in connection with our redemption until we liquidate or such public stockholder is able to sell its stock in the open
market.
The
requirement that we complete our initial business combination within the prescribed timeframe may give potential target businesses leverage
over us in negotiating an initial business combination and may decrease our ability to conduct due diligence on potential business combination
targets as we approach our dissolution deadline, which could undermine our ability to complete our initial business combination on terms
that would produce value for our stockholders.
Any
potential target business with which we enter into negotiations concerning an initial business combination will be aware that we must
complete our initial business combination within 24 months from the closing of the IPO or seek a stockholder approved extension of such
period. Consequently, such target business may obtain leverage over us in negotiating an initial business combination, knowing that if
we do not complete our initial business combination with that particular target business, we may be unable to complete our initial business
combination with any target business. This risk will increase as we get closer to the timeframe described above. In addition, we may
have limited time to conduct due diligence and may enter into our initial business combination on terms that we would have rejected upon
a more comprehensive investigation.
Our
search for a business combination, and any target business with which we ultimately consummate a business combination, may be materially
adversely affected by the ongoing COVID-19 pandemic and the status of debt and equity markets.
Since
December 2019, a novel strain of coronavirus has spread throughout the world, including the United States. On January 30, 2020, the World
Health Organization declared the outbreak of COVID-19 a “Public Health Emergency of International Concern.” On January 31,
2020, U.S. Health and Human Services Secretary, Alex M. Azar II, declared a public health emergency for the United States to aid the
U.S. healthcare community in responding to COVID-19, and on March 11, 2020, the World Health Organization characterized the COVID-19
outbreak as a “pandemic.” The COVID-19 outbreak has and a significant outbreak of other infectious diseases could result
in a widespread health crisis that could adversely affect the economics and financial markets worldwide, and the business of any potential
target business with which we consummate a business combination could be materially and adversely affected.
Furthermore,
we may be unable to complete a business combination if continued concerns relating to COVID-19 continues to restrict travel, limit the
ability to have meetings with potential investors or the target company’s personnel, vendors and services providers are unable
to negotiate and consummate a transaction in a timely manner. The extent to which COVID-19 impacts our search for a business combination
will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning
the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others. If the disruptions posed by COVID-19
or other matters of global concern continue for an extensive period of time, our ability to consummate a business combination, or the
operations of a target business with which we ultimately consummate a business combination, may be materially adversely affected.
In
addition, our ability to consummate a business combination may be dependent on the ability to raise equity and debt financing which may
be impacted by COVID-19 and other events, including as a result of increased market volatility, decreased market liquidity in third-party
financing being unavailable on terms acceptable to us or at all.
We
may not be able to complete our initial business combination within the prescribed timeframe, in which case we would cease all operations
except for the purpose of winding up and we would redeem our public shares and liquidate, in which case our public stockholders may only
receive $10.00 per share, or less than such amount in certain circumstances, and our warrants will expire worthless.
Our
amended and restated certificate of incorporation provides that we must complete our initial business combination within 24 months from
the closing of the IPO. We may not be able to find a suitable target business and complete our initial business combination within such
time period. If we have not completed our initial business combination within such time period or during any Extension Period, we will:
(i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business
days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the
Trust Account including interest earned on the funds held in the Trust Account and not previously released to us to pay our franchise
and income taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares,
which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further
liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption,
subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our
obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. In such case, our public
stockholders may only receive $10.00 per share, and our warrants will expire worthless. In certain circumstances, our public stockholders
may receive less than $10.00 per share on the redemption of their shares. See “—If third parties bring claims against us,
the proceeds held in the Trust Account could be reduced and the per-share redemption amount received by stockholders may be less than
$10.00 per share” and other risk factors below.
Legal
proceedings in connection with a proposed business combination in the future, the outcomes of which are uncertain, could delay or prevent
the completion of the business combination.
In
connection with a proposed business combination, it is not uncommon for lawsuits to be filed against companies involved and/or their respective
directors and officers alleging, among other things, that the proxy statement/prospectus contains false and misleading statements and/or
omits material information concerning the business combination. It is possible that one or more legal actions may arise in connection
with a proposed business combination we may undertake in the future and, if such actions do arise, they generally seek, among other things,
injunctive relief and an award of attorneys’ fees and expenses. Defending such lawsuits could require us to incur significant costs
and draw the attention of our management team away from a proposed business combination. Further, the defense or settlement of any lawsuit
or claim that remains unresolved at the time a proposed business combination is consummated may adversely affect the combined company’s
business, financial condition, results of operations and cash flows. Such legal proceedings could delay or prevent a proposed business
combination from becoming effective within an agreed upon timeframe.
If
we seek stockholder approval of our initial business combination, the Sponsor, our directors, officers, advisors and their affiliates
may elect to purchase public shares or public warrants from public stockholders, which may influence a vote on a proposed initial business
combination and reduce the public “float” of our Class A common stock.
If
we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business
combination pursuant to the tender offer rules, the Sponsor, our directors, officers, advisors or their affiliates may purchase public
shares or public warrants or a combination thereof in privately negotiated transactions or in the open market either prior to or following
the completion of our initial business combination, although they are under no obligation to do so. However, they have no current commitments,
plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of
the funds in the Trust Account will be used to purchase public shares or public warrants in such transactions.
Such
a purchase may include a contractual acknowledgement that such stockholder, although still the record holder of our shares is no longer
the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that the Sponsor, our directors,
officers, advisors or their affiliates purchase public shares in privately negotiated transactions from public stockholders who have
already elected to exercise their redemption rights, such selling stockholders would be required to revoke their prior elections to redeem
their shares. The purpose of such purchases could be to vote such shares in favor of the initial business combination and thereby increase
the likelihood of obtaining stockholder approval of the initial business combination, or to satisfy a closing condition in an agreement
with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination,
where it appears that such requirement would otherwise not be met. The purpose of any such purchases of public warrants could be to reduce
the number of public warrants outstanding or to vote such warrants on any matters submitted to the warrant holders for approval in connection
with our initial business combination. Any such purchases of our securities may result in the completion of our initial business combination
that may not otherwise have been possible. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange
Act to the extent such purchasers are subject to such reporting requirements.
In
addition, if such purchases are made, the public “float” of our Class A common stock or public warrants and the number of
beneficial holders of our securities may be reduced, possibly making it difficult to obtain or maintain the quotation, listing or trading
of our securities on a national securities exchange.
If
a stockholder fails to receive notice of our offer to redeem our public shares in connection with our initial business combination, or
fails to comply with the procedures for tendering its shares, such shares may not be redeemed.
We
will comply with the tender offer rules or proxy rules, as applicable, when conducting redemptions in connection with our initial business
combination. Despite our compliance with these rules, if a stockholder fails to receive our tender offer or proxy materials, as applicable,
such stockholder may not become aware of the opportunity to redeem its shares. In addition, proxy materials or tender offer documents,
as applicable, that we will furnish to holders of our public shares in connection with our initial business combination will describe
the various procedures that must be complied with in order to validly tender or redeem public shares, which may include the requirement
that a beneficial holder must identify itself. For example, we may require our public stockholders seeking to exercise their redemption
rights, whether they are record holders or hold their shares in “street name,” to either tender their certificates to our
transfer agent prior to the date set forth in the tender offer documents mailed to such holders, or up to two business days prior to
the initial vote on the proposal to approve the initial business combination in the event we distribute proxy materials, or to deliver
their shares to the transfer agent electronically. In the event that a stockholder fails to comply with these or any other procedures,
its shares may not be redeemed.
Public
stockholders are not be entitled to protections normally afforded to investors of many other blank check companies.
Since
the net proceeds of the IPO 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 identified, we may be deemed to be a “blank check” company under the United States
securities laws. However, because we had net tangible assets in excess of $5,000,000 upon the successful completion of the IPO and the
sale of the private placement warrants and we have filed a Current Report on Form 8-K, including an audited balance sheet demonstrating
this fact, we are exempt from rules promulgated by the SEC to protect investors in blank check companies, such as Rule 419. Accordingly,
investors will are afforded the benefits or protections of those rules. Among other things, this means our units are tradable and we
have a longer period of time to complete our initial business combination than do companies subject to Rule 419. Moreover, if the IPO
were subject to Rule 419, that rule would prohibit the release of any interest earned on funds held in the Trust Account to us unless
and until the funds in the Trust Account were released to us in connection with our completion of an initial business combination.
If
we seek stockholder approval of our initial business combination and we do not conduct redemptions pursuant to the tender offer rules,
and if a public stockholder or a “group” of public stockholders are deemed to hold in excess of 15% of our Class A common
stock, a public stockholder will lose the ability to redeem all such shares in excess of 15% of our Class A common stock.
If
we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business
combination pursuant to the tender offer rules, our amended and restated certificate of incorporation provides that a public stockholder,
together with any affiliate of such public stockholder or any other person with whom such public stockholder is acting in concert or
as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect
to more than an aggregate of 15% of the shares sold in the IPO without our prior consent, which we refer to as the “Excess Shares.”
However, we would not be restricting our stockholders’ ability to vote all of their shares (including Excess Shares) for or against
our initial business combination. A public stockholder’s inability to redeem the Excess Shares will reduce its influence over our
ability to complete our initial business combination and such public stockholder could suffer a material loss on its investment in us
if such public stockholder sells Excess Shares in open market transactions. Additionally, a public stockholder will not receive redemption
distributions with respect to the Excess Shares if we complete our initial business combination. And as a result, such public stockholders
will continue to hold that number of shares exceeding 15% and, in order to dispose of such shares, would be required to sell its stock
in open market transactions, potentially at a loss.
Because
of our special purpose acquisition company structure and limited resources and the significant competition for business combination opportunities,
it may be more difficult for us to complete our initial business combination. If we do not complete our initial business combination,
our public stockholders may receive only approximately $10.00 per share on our redemption of our public shares, or less than such amount
in certain circumstances, and our warrants will expire worthless.
We
expect to encounter competition from other entities having a business objective similar to ours, including private investors (which may
be individuals or investment partnerships), other blank check companies and other entities competing for the types of businesses we intend
to acquire. Many of these individuals and entities are well-established and have extensive experience in identifying and effecting, directly
or indirectly, acquisitions of companies operating in or providing services to various industries. Many of these competitors possess
similar technical, human and other resources to ours, and our financial resources will be relatively limited when contrasted with those
of many of these competitors. While we believe there are numerous target businesses we could potentially acquire with the net proceeds
of the IPO 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, because we are obligated to pay cash for the shares of Class A
common stock which our public stockholders redeem in connection with our initial business combination, target companies will be aware
that this may present closing risk by reducing the resources available to us for our initial business combination. Additionally, potential
target companies may be less inclined to consummate a transaction with us because definitive documentation for such a transaction will
preclude any recourse against the Trust Account, meaning that potential counterparties may determine that they do not have adequate contractual
remedies in the event a transaction fails to close. These factors may place us at a competitive disadvantage in successfully negotiating
an initial business combination. If we do not complete our initial business combination, our public stockholders may receive only approximately
$10.00 per share on the liquidation of the Trust Account and our warrants will expire worthless. In certain circumstances, our public
stockholders may receive less than $10.00 per share upon our liquidation.
If the funds not being held in the Trust Account
are insufficient to allow us to operate until January 29, 2023, we may be unable to complete our initial business combination, in which
case our public stockholders may only receive $10.00 per share, or less than such amount in certain circumstances, and our warrants will
expire worthless.
The
funds available to us outside of the Trust Account may not be sufficient to allow us to operate until January 29, 2023, assuming
that our initial business combination is not completed during that time. Of the funds available to us, we could use a portion of the
funds available to us to pay fees to consultants to assist us with our search for a target business. We could also use a portion of the
funds as a down payment or to fund a “no-shop” provision (a provision in letters of intent or merger agreements designed
to keep target businesses from “shopping” around for transactions with other companies on terms more favorable to such target
businesses) with respect to a particular proposed initial business combination, although we do not have any current intention to do so.
If we entered into a letter of intent or other agreement where we paid for the right to receive exclusivity from a target business and
were subsequently required to forfeit such funds (whether as a result of our breach or otherwise), we might not have sufficient funds
to continue searching for, or conduct due diligence with respect to, a target business. If we do not complete our initial business combination,
our public stockholders may receive only approximately $10.00 per share on the liquidation of the Trust Account and our warrants will
expire worthless. In certain circumstances, our public stockholders may receive less than $10.00 per share upon our liquidation. If we
are required to seek additional capital, we would need to borrow funds from the Sponsor, our management team or other third parties to
operate or may be forced to liquidate. None of the Sponsor, members of our management team nor any of their affiliates is under any obligation
to advance funds to us in such circumstances. Any such advances would be repaid only from funds held outside the Trust Account or from
funds released to us upon completion of our initial business combination. Up to $2,000,000 of such loans may be converted into private
placement-equivalent warrants at a price of $1.50 per warrant at the option of the lender. Prior to the completion of our initial business
combination, we do not expect to seek loans from parties other than the Sponsor or an affiliate of the Sponsor as we do not believe third
parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in the Trust Account.
If we are unable to obtain these loans, we may be unable to complete our initial business combination. If we do not complete our initial
business combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the
Trust Account. Consequently, our public stockholders may only receive approximately $10.00 per share on our redemption of our public
shares, and our warrants will expire worthless. In certain circumstances, our public stockholders may receive less than $10.00 per share
on the redemption of their shares.
If
third parties bring claims against us, the proceeds held in the Trust Account could be reduced and the per-share redemption amount received
by stockholders may be less than $10.00 per share.
Our
placing of funds in the Trust Account may not protect those funds from third-party claims against us. Although we will seek to have all
vendors, service providers (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 stockholders, such parties may not execute such agreements, or even if they execute
such agreements they may not be prevented from bringing claims against the Trust Account, including, but not limited to, fraudulent inducement,
breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case
in order to gain advantage with respect to a claim against our assets, including the funds held in the Trust Account. If any third party
refuses to execute an agreement waiving such claims to the monies held in the Trust Account, our management will perform an analysis
of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if management
believes that such third party’s engagement would be significantly more beneficial to us than any alternative. Making such a request
of potential target businesses may make our acquisition proposal less attractive to them and, to the extent prospective target businesses
refuse to execute such a waiver, it may limit the field of potential target businesses that we might pursue. Withum, our independent
registered public accounting firm, and the underwriters of our IPO, have not executed agreements with us waiving such claims to the monies
held in the Trust Account.
Examples
of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third-party consultant
whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would
agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. In addition,
there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of,
any negotiations, contracts or agreements with us and will not seek recourse against the Trust Account for any reason. Upon redemption
of our public shares, if we do not complete our initial business combination within the prescribed timeframe, or upon the exercise of
a redemption right in connection with our initial business combination, we will be required to provide for payment of claims of creditors
that were not waived that may be brought against us within the ten years following redemption. Accordingly, the per-share redemption
amount received by public stockholders could be less than the $10.00 per share initially held in the Trust Account, due to claims of
such creditors. Pursuant to the letter agreement, which is filed as Exhibit 10.4 to this Annual Report on Form 10-K, the Sponsor has
agreed that it will be liable to us if and to the extent any claims by a third party for services rendered or products sold to us, or
a prospective target business with which we have entered into a written letter of intent, confidentiality or similar agreement or business
combination agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.00 per public share and (ii) the
actual amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.00
per share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any
claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the Trust Account
(whether or not such waiver is enforceable) nor will it apply to any claims under our indemnity of the underwriters of the IPO against
certain liabilities, including liabilities under the Securities Act. However, we have not asked the Sponsor to reserve for such indemnification
obligations, nor have we independently verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations and believe
that the Sponsor’s only assets are securities of our Company. Therefore, no assurance can be given that the 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 a public stockholder would receive such lesser amount per share in connection
with any redemption of its public shares. None of our officers, directors or members of the Sponsor will indemnify us for claims by third
parties including, without limitation, claims by vendors and prospective target businesses.
Our
directors may decide not to enforce the indemnification obligations of the Sponsor, resulting in a reduction in the amount of funds in
the Trust Account available for distribution to our public stockholders.
In
the event that the proceeds in the Trust Account are reduced below the lesser of (i) $10.00 per share and (ii) the actual amount per
share held in the Trust Account as of the date of the liquidation of the Trust Account if less than $10.00 per share due to reductions
in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes, and the 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 the Sponsor to enforce its indemnification obligations.
While
we currently expect that our independent directors would take legal action on our behalf against the Sponsor to enforce its indemnification
obligations to us, it is possible that our independent directors in exercising their business judgment and subject to their fiduciary
duties may choose not to do so in any particular instance if, for example, the cost of such legal action is deemed by the independent
directors to be too high relative to the amount recoverable or if the independent directors determine that a favorable outcome is not
likely. If our independent directors choose not to enforce these indemnification obligations, the amount of funds in the Trust Account
available for distribution to our public stockholders may be reduced below $10.00 per share.
We
may not have sufficient funds to satisfy indemnification claims of our directors and officers.
We
have agreed to indemnify our officers and directors to the fullest extent permitted by law. However, our officers and directors have
agreed to waive (and any other persons who may become an officer or director prior to the initial business combination will also be required
to waive) any right, title, interest or claim of any kind in or to any monies in the Trust Account and not to seek recourse against the
Trust Account for any reason whatsoever (except to the extent they are entitled to funds from the Trust Account due to their ownership
of public shares). Accordingly, any indemnification provided will be able to be satisfied by us only if (i) we have sufficient funds
outside of the Trust Account or (ii) we consummate an initial business combination. Our obligation to indemnify our officers and directors
may discourage stockholders from bringing a lawsuit against our officers or directors for breach of their fiduciary duty. These provisions
also may have the effect of reducing the likelihood of derivative litigation against our officers and directors, even though such an
action, if successful, might otherwise benefit us and our stockholders. Furthermore, a stockholder’s investment may be adversely
affected to the extent we pay the costs of settlement and damage awards against our officers and directors pursuant to these indemnification
provisions.
The
securities in which we invest the proceeds held in the Trust Account could bear a negative rate of interest, which could reduce the interest
income available for payment of taxes or reduce the value of the assets held in trust such that the per share redemption amount received
by public stockholders may be less than $10.00 per share.
The
net proceeds of the IPO and certain proceeds from the sale of the private placement warrants, in the amount of $241.5 million, are held
in an interest-bearing Trust Account. The proceeds held in the Trust Account may only be invested in direct U.S. government securities
with a maturity of 185 days or less, or in certain money market funds which invest only in direct U.S. Treasury obligations. While short-term
U.S. government treasury obligations currently yield a positive rate of interest, they have briefly yielded negative interest rates in
recent years. Central banks in Europe and Japan pursued interest rates below zero in recent years, and the Open Market Committee of the
Federal Reserve has not ruled out the possibility that it may in the future adopt similar policies in the United States. In the event
of very low or negative yields, the amount of interest income (which we may withdraw to pay income taxes, if any) would be reduced. In
the event that we are unable to complete our initial business combination, our public stockholders are entitled to receive their share
of the proceeds held in the Trust Account, plus any interest income. If the balance of the Trust Account is reduced below $241.5 million
as a result of negative interest rates, the amount of funds in the Trust Account available for distribution to our public stockholders
may be reduced below $10.00 per share.
If,
after we distribute the proceeds in the Trust Account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy
petition is filed against us that is not dismissed, a bankruptcy court may seek to recover such proceeds, and we and our board may be
exposed to claims of punitive damages.
If,
after we distribute the proceeds in the Trust Account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy
petition is filed against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor
and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy
court could seek to recover all amounts received by our stockholders. In addition, our board of directors may be viewed as having breached
its fiduciary duty to our creditors and/or having acted in bad faith, thereby exposing itself and us to claims of punitive damages, by
paying public stockholders from the Trust Account prior to addressing the claims of creditors.
If,
before distributing the proceeds in the Trust Account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy
petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our
stockholders and the per-share amount that would otherwise be received by our stockholders in connection with our liquidation may be
reduced.
If,
before distributing the proceeds in the Trust Account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy
petition is filed against us that is not dismissed, the proceeds held in the Trust Account could be subject to applicable bankruptcy
law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders.
To the extent any bankruptcy claims deplete the Trust Account, the per-share amount that would otherwise be received by our stockholders
in connection with our liquidation may be reduced.
If
we are deemed to be an investment company under the Investment Company Act, we may be required to institute burdensome compliance requirements
and our activities may be restricted, which may make it difficult for us to complete our initial business combination.
If
we are deemed to be an investment company under the Investment Company Act, our activities may be restricted, including:
| ● | 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; |
| ● | adoption
of a specific form of corporate structure; and |
| ● | reporting,
record keeping, voting, proxy and disclosure requirements and other rules and regulations. |
In
order not to be regulated as an investment company under the Investment Company Act, unless we can qualify for an exclusion, we must
ensure that we are engaged primarily in a business other than investing, reinvesting or trading in securities and that our activities
do not include investing, reinvesting, owning, holding or trading “investment securities” constituting more than 40% of our
total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. Our business is to identify and complete
an initial business combination and thereafter to operate the post-transaction business or assets for the long term. We do not plan to
buy businesses or assets with a view to resale or profit from their resale. We do not plan to buy unrelated businesses or assets or to
be a passive investor.
We
do not believe that our anticipated principal activities will subject us to the Investment Company Act. To this end, the proceeds held
in the Trust Account may only be invested in 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. An investment in our securities is not intended for persons who are seeking a return
on investments in government securities or investment securities. The Trust Account is intended as a holding place for funds pending
the earliest to occur of: (i) the completion of our initial business combination; (ii) the redemption of any public shares properly submitted
in connection with a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance or timing
of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we
do not complete our initial business combination within 24 months from the closing of the IPO or (B) with respect to any other provision
relating to stockholders’ rights or pre-initial business combination activity; or (iii) absent an initial business combination
within 24 months from the closing of the IPO or during any Extension Period, our return of the funds held in the Trust Account to our
public stockholders as part of our redemption of the public shares. If we do not invest the proceeds as discussed above, we may be deemed
to be subject to the Investment Company Act. If we were deemed to be subject to the Investment Company Act, compliance with these additional
regulatory burdens would require additional expenses for which we have not allotted funds and may hinder our ability to complete an initial
business combination or may result in our liquidation. If we do not complete our initial business combination, our public stockholders
may receive only approximately $10.00 per share on the liquidation of the Trust Account and our warrants will expire worthless.
Changes
in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, including our ability
to negotiate and complete our initial business combination and results of operations.
We are subject to laws and regulations enacted by national, regional
and local governments. In particular, we are required to comply with certain SEC and other legal requirements. 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, especially as applied to special purpose acquisition companies, 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.
If
we have not completed an initial business combination within 24 months from the closing of the IPO, our public stockholders may be forced
to wait beyond such 24 months before redemption from the Trust Account.
If
we have not completed an initial business combination within 24 months from the closing of the IPO or during any Extension Period, the
proceeds then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released
to us to pay taxes (less up to $100,000 of the interest to pay dissolution expenses), will be used to fund the redemption of our public
shares, as further described herein. Any redemption of public stockholders from the Trust Account will be effected automatically by function
of our amended and restated certificate of incorporation prior to any voluntary winding up. If we are required to wind-up, liquidate
the Trust Account and distribute such amount therein, pro rata, to our public stockholders, as part of any liquidation process, such
winding up, liquidation and distribution must comply with the applicable provisions of the DGCL. In that case, investors may be forced
to wait beyond 24 months from the closing of the IPO or the expiration of any Extension Period before the redemption proceeds of the
Trust Account become available to them, and they receive the return of their pro rata portion of the proceeds from the Trust Account.
We have no obligation to return funds to investors prior to the date of our redemption of public shares or liquidation unless we complete
our initial business combination prior thereto and only then in cases where investors have sought to redeem their Class A common stock.
Only upon our redemption or any liquidation will public stockholders be entitled to distributions if we do not complete our initial business
combination.
Our
stockholders may be held liable for claims by third parties against us to the extent of distributions received by them upon redemption
of their shares.
Under
the DGCL, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received by
them in a dissolution. The pro rata portion of the Trust Account distributed to our public stockholders upon the redemption of our public
shares in the event we do not complete our initial business combination within 24 months from the closing of the IPO or during any Extension
Period may be considered a liquidating distribution under Delaware law. If a corporation complies with certain procedures set forth in
Section 280 of the DGCL intended to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period
during which any third-party claims can be brought against the corporation, a 90-day period during which the corporation may reject any
claims brought, and an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability
of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the
claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary
of the dissolution. However, it is our intention to redeem our public shares as soon as reasonably possible following the end of the
24th month after the closing of the IPO or the expiration of any Extension Period in the event we do not complete our initial business
combination and, therefore, we do not intend to comply with the foregoing procedures.
Because
we will not be complying with Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such
time that will provide for our payment of all existing and pending claims or claims that may be potentially brought against us within
the ten years following our dissolution. However, because we are a blank check company, rather than an operating company, and our operations
will be limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors
(such as lawyers, investment bankers, etc.) or prospective target businesses. If our plan of distribution complies with Section 281(b)
of the DGCL, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s
pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would likely be barred
after the third anniversary of the dissolution. No assurance can be given that we will properly assess all claims that may be potentially
brought against us. As such, our stockholders could potentially be liable for any claims to the extent of distributions received by them
(but no more) and any liability of our stockholders may extend beyond the third anniversary of such date. Furthermore, if the pro rata
portion of the Trust Account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete
our initial business combination within 24 months from the closing of the IPO or during any Extension Period is not considered a liquidating
distribution under Delaware law and such redemption distribution is deemed to be unlawful (potentially due to the imposition of legal
proceedings that a party may bring or due to other circumstances that are currently unknown), then pursuant to Section 174 of the DGCL,
the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three
years, as in the case of a liquidating distribution.
We
have not registered the shares of Class A common stock issuable upon exercise of the warrants under the Securities Act or any state securities
laws, and such registration may not be in place when an investor desires to exercise warrants, thus precluding such investor from being
able to exercise its warrants except on a cashless basis. If the issuance of the shares upon exercise of warrants is not registered,
qualified or exempt from registration or qualification, the holder of such warrant will not be entitled to exercise such warrant and
such warrant may have no value and expire worthless.
We
have not registered the shares of Class A common stock issuable upon exercise of the warrants under the Securities Act or any state securities
laws at this time. However, under the terms of the warrant agreement, we have agreed that within twenty (20) business days after the
later of the first date on which the warrants are exercisable and the date on which we receive from any warrant holder a request for
such registration, we will use our commercially reasonable efforts to file with the SEC a registration statement for the registration
under the Securities Act of the shares of Class A common stock issuable upon exercise of the warrants and thereafter will use our commercially
reasonable efforts to cause the same to become effective within forty-five (45) business days following the filing of such registration
statement and to maintain a current prospectus relating to the Class A common stock issuable upon exercise of the warrants until the
expiration of the warrants in accordance with the provisions of the warrant agreement. No assurance can be given that we will be able
to do so if, for example, any facts or events arise which represent a fundamental change in the information set forth in the registration
statement or prospectus, the financial statements contained or incorporated by reference therein are not current or correct or the SEC
issues a stop order. If the shares of Class A common stock issuable upon exercise of the warrants are not registered under the Securities
Act, we will be required to permit holders to exercise their warrants on a cashless basis, in which case the number of shares of our
Class A common stock that a warrant holder will receive upon cashless exercise will be based on a formula subject to a maximum number
of shares equal to 0.361 shares of our Class A common stock per warrant (subject to adjustment). However, no warrant will be exercisable
for cash or on a cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise their warrants, unless
the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder,
or an exemption from state registration is available. If that exemption, or another exemption, is not available, holders will not be
able to exercise their warrants on a cashless basis. Notwithstanding the above, if shares of our Class A common stock are at the time
of any exercise of a public 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. In no event will
we be required to net cash settle any warrant, or issue securities or other compensation in exchange for the warrants in the event that
we are unable to register or qualify the shares underlying the warrants under applicable state securities laws and there is no exemption
available. If the issuance of the shares upon exercise of the warrants is not so registered or qualified or exempt from registration
or qualification, the holder of such warrant will not be entitled to exercise such warrant and such warrant may have no value and expire
worthless. In such event, holders who acquired their warrants as part of a purchase of units will have paid the full unit purchase price
solely for the shares of Class A common stock included in the units. If and when the warrants become redeemable by us, we may exercise
our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities
laws.
The
warrants may become exercisable and redeemable for a security other than the shares of Class A common stock, and holders will not have
any information regarding such other security at this time.
In
certain situations, including if we are not the surviving entity in our initial business combination, the warrants may become exercisable
for a security other than the shares of Class A common stock. As a result, if the surviving company redeems the warrants for securities
pursuant to the warrant agreement, a warrant holder may receive a security in a company of which it does 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 (20) business days after the later of the first date on which the warrants
are exercisable and the date on which we receive from any warrant holder a request for such registration.
If
a warrant holder exercises its public warrants on a “cashless basis,” such holder will receive fewer shares of Class A common
stock from such exercise than if such holder were to exercise such warrants for cash.
There
are circumstances in which the exercise of the public warrants may be required or permitted to be made on a cashless basis. First, if
a registration statement covering the shares of Class A common stock issuable upon exercise of the warrants is not effective by the 45th
business day after the filing of such registration statement, warrant holders may, until such time as there is an effective registration
statement, exercise warrants on a cashless basis in accordance with Section 3(a)(9) of the Securities Act or another exemption. Second,
if a registration statement covering the Class A common stock issuable upon exercise of the warrants is not effective within a specified
period following the filing of such registration statement, warrant holders may, until such time as there is an effective registration
statement and during any period when we shall have failed to maintain an effective registration statement, exercise warrants on a cashless
basis pursuant to the exemption provided by Section 3(a)(9) of the Securities Act, provided that such exemption is available; if that
exemption, or another exemption, is not available, holders will not be able to exercise their warrants on a cashless basis. Third, if
we call the public warrants for redemption, under certain circumstances, warrant holders will be able to exercise their warrants on a
cashless basis. In the event of an exercise on a cashless basis, a holder would pay the warrant exercise price by surrendering the warrants
for that number of shares of Class A common stock equal to the lesser of (A) the quotient obtained by dividing (x) the product of the
number of shares of Class A common stock underlying the warrants, multiplied by the excess of the “fair market value” of
our Class A common stock (defined above) over the exercise price of the warrants by (y) the fair market value and (B) 0.361 per whole
warrant, and the number of shares of our Class A common stock received by a holder upon exercise will be fewer than it would have been
had such holder exercised the warrant for cash.
For
example, if the holder is exercising 875 public warrants at $11.50 per share through a cashless exercise when the shares of our Class
A common stock have a fair market value of $17.50 per share when there is no effective registration statement, then upon the cashless
exercise, the holder will receive 300 shares of our Class A common stock. The holder would have received 875 shares of our Class A common
stock if the exercise price was paid in cash. This will have the effect of reducing the potential “upside” of the holder’s
investment in our Company because the warrant holder will hold a smaller number of shares of our Class A common stock upon a cashless
exercise of the warrants they hold.
The
grant of registration rights to our initial stockholders may make it more difficult to complete our initial business combination, and
the future exercise of such rights may adversely affect the market price of our Class A common stock.
Pursuant
to an agreement entered into concurrently with the issuance and sale of the securities in the IPO, our initial stockholders and their
permitted transferees can demand that we register the shares of Class A common stock into which are founder shares are convertible, the
private placement warrants, the shares of Class A common stock issuable upon exercise of the private placement warrants held, or to be
held, by them, and holders of warrants that may be issued upon conversion of working capital loans may demand that we register such warrants
or the Class A common stock issuable upon exercise of such warrants. We will bear the cost of registering these securities. The registration
and availability of such a significant number of securities for trading in the public market may have an adverse effect on the market
price of our Class A common stock. In addition, the existence of the registration rights may make our initial business combination more
costly or difficult to conclude. This is because the stockholders of the target business may increase the equity stake they seek in the
combined entity or ask for more cash consideration to offset the negative impact on the market price of our Class A common stock that
is expected when the securities owned by our initial stockholders or holders of working capital loans or their respective permitted transferees
are registered.
Any
stockholders who choose to remain stockholders following our initial business combination could suffer a reduction in the value of their
securities.
We will seek to complete
an initial business combination with companies in the climate sector, particularly in clean energy, renewables and carbon removal, but
may also pursue other business combination opportunities, except that we will not, under our amended and restated certificate of incorporation,
be permitted to effectuate our initial business combination with another blank check company or similar company with nominal operations.
Because we have not yet selected 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, no assurance can be given 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. Additionally, no assurance can be given that
an investment in our units will ultimately prove to be more favorable to investors than a direct investment, if such opportunity were
available, in a business combination target. Accordingly, any stockholders who choose to remain stockholders following our initial business
combination could suffer a reduction in the value of their securities.
Such
stockholders are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction
was due to the breach by our officers or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully
bring a private claim under securities laws that the proxy solicitation or tender offer materials, as applicable, relating to the business
combination contained an actionable material misstatement or material omission.
We
may seek business combination opportunities in industries or sectors which may or may not be outside of our management team’s area
of expertise.
Although
we intend to focus on identifying companies in the climate sector, we will consider an initial business combination outside of our management
team’s area of expertise if an initial business combination candidate is presented to us and we determine that such candidate offers
an attractive business combination opportunity for our Company or we are unable to identify a suitable candidate in this sector after
having expanded a reasonable amount of time and effort in an attempt to do so. Although our management will endeavor to evaluate the
risks inherent in any particular business combination candidate, no assurance can be given that we will adequately ascertain or assess
all of the significant risk factors. There can be no assurance that an investment in our units will not ultimately prove to be less favorable
than a direct investment, if an opportunity were available, in an initial business combination candidate. In the event we elect to pursue
a business combination outside of the areas of our management team’s expertise, our management team’s expertise may not be
directly applicable to its evaluation or operation, and the information contained in this Annual Report on Form 10-K regarding the areas
of our management team’s expertise would not be relevant to an understanding of the business that we elect to acquire. As a result,
our management may not be able to adequately ascertain or assess all of the significant risk factors. Accordingly, any stockholders who
choose to remain stockholders following our initial business combination could suffer a reduction in the value of their shares. Such
stockholders are unlikely to have a remedy for such reduction in value.
Although
we have identified general criteria and guidelines that we believe are important in evaluating prospective target businesses, we may
enter into our initial business combination with a target that does not meet such criteria and guidelines, and as a result, the target
business with which we enter into our initial business combination may not have attributes consistent with our general criteria and guidelines.
Although
we have identified general criteria and guidelines for evaluating prospective target businesses, it is possible that a target business
with which we enter into our initial business combination will not have these positive attributes. If we complete our initial business
combination with a target that does not meet some or all of these guidelines, such combination may not be as successful as a combination
with a business that does meet all of our general criteria and guidelines. In addition, if we announce a prospective business combination
with a target that does not meet our general criteria and guidelines, a greater number of stockholders may exercise their redemption
rights, which may make it difficult for us to meet any closing condition with a target business that requires us to have a minimum net
worth or a certain amount of cash. In addition, if stockholder approval of the transaction is required by law, or we decide to obtain
stockholder approval for business or other reasons, it may be more difficult for us to attain stockholder approval of our initial business
combination if the target business does not meet our general criteria and guidelines. If we do not complete our initial business combination,
our public stockholders may receive only approximately $10.00 per share on the liquidation of the Trust Account and our warrants will
expire worthless. In certain circumstances, our public stockholders may receive less than $10.00 per share on the redemption of their
shares.
We
may seek business combination opportunities with a financially unstable business or an entity lacking an established record of revenue,
cash flow or earnings, which could subject us to volatile revenues, cash flows or earnings or difficulty in retaining key personnel.
To
the extent we complete our initial business combination with a financially unstable business or an entity lacking an established record
of revenues or earnings, we may be affected by numerous risks inherent in the operations of the business with which we combine. These
risks include volatile revenues or earnings and difficulties in obtaining and retaining key personnel. Although our officers and directors
will endeavor to evaluate the risks inherent in a particular target business, we may not be able to properly ascertain or assess all
of the significant risk factors and we may not have adequate time to complete due diligence. Furthermore, some of these risks may be
outside of our control and leave us with no ability to control or reduce the chances that those risks will adversely impact a target
business.
We
are not required to obtain an opinion from an independent investment banking firm or from an independent accounting firm, and consequently,
public stockholders may have no assurance from an independent source that the price we are paying for the business is fair to our Company
from a financial point of view.
Unless
we complete our initial business combination with an affiliated entity or our board cannot independently determine the fair market value
of the target business or businesses, we are not required to obtain an opinion from an independent investment banking firm or an independent
accounting firm that the price we are paying is fair to our Company from a financial point of view. If no opinion is obtained, our stockholders
will be relying on the judgment of our board of directors, who will determine fair market value based on standards generally accepted
by the financial community. Such standards used will be disclosed in our proxy materials or tender offer documents, as applicable, related
to our initial business combination.
We
may issue additional common stock or preferred stock to complete our initial business combination or under an employee incentive plan
after completion of our initial business combination. We may also issue shares of Class A common stock upon the conversion of the Class
B common stock at a ratio greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions
contained in our amended and restated certificate of incorporation. Any such issuances would dilute the interest of our stockholders
and likely present other risks.
Our
amended and restated certificate of incorporation authorizes the issuance of up to 100,000,000 shares of Class A common stock, par value
$0.0001 per share, 10,000,000 shares of Class B common stock, par value $0.0001 per share, and 1,000,000 shares of preferred stock, par
value $0.0001 per share. As of December 31, 2021, there were 75,850,000 and 3,962,500 authorized but unissued shares of Class A common
stock and Class B common stock, respectively, available for issuance, which amount does not take into account the shares of Class A common
stock reserved for issuance upon exercise of outstanding warrants. As of December 31, 2021, there were no shares of preferred stock issued
and outstanding. Shares of Class B common stock are convertible into shares of our Class A common stock initially at a one-for-one ratio
but subject to adjustment as described in Exhibit 4.1 to this Annual Report on Form 10-K and set forth in our amended and restated certificate
of incorporation, including in certain circumstances in which we issue Class A common stock or equity-linked securities related to our
initial business combination. Shares of Class B common stock are also convertible at the option of the holder at any time.
We
may issue a substantial number of additional shares of common or preferred stock to complete our initial business combination or under
an employee incentive plan after completion of our initial business combination. We may also issue shares of Class A common stock to
redeem the warrants or upon conversion of the Class B common stock at a ratio greater than one-to-one at the time of our initial business
combination as a result of the anti-dilution provisions contained in our amended and restated certificate of incorporation. However,
our amended and restated certificate of incorporation provides, among other things, that prior to or in connection with our initial business
combination, we may not issue additional shares of capital stock that would entitle the holders thereof to (i) receive funds from the
Trust Account or (ii) vote on any initial business combination. These provisions of our amended and restated certificate of incorporation,
like all provisions of our amended and restated certificate of incorporation, may be amended with the approval of our stockholders. However,
our officers and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended
and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemption in connection with
our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within
24 months from the closing of the IPO or (B) with respect to any other provision relating to stockholders’ rights or pre-initial
business combination activity, unless we provide our public stockholders with the opportunity to redeem their shares of common stock
upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust
Account, including interest (which interest shall be net of taxes payable), divided by the number of then outstanding public shares.
The
issuance of additional shares of common or preferred stock:
| ● | may
significantly dilute the equity interest of investors in the IPO; |
| ● | may
subordinate the rights of holders of common stock if preferred stock is issued with rights
senior to those afforded our common stock; |
| ● | could
cause a change of control if a substantial number of shares of our common stock are issued,
which may affect, among other things, our ability to use our net operating loss carry forwards,
if any, and could result in the resignation or removal of our present officers and directors;
and |
| ● | may
adversely affect prevailing market prices for our units, Class A common stock and/or warrants. |
Unlike
many other similarly structured blank check companies, our initial stockholders will receive additional shares of Class A common stock
if we issue shares to consummate an initial business combination.
The
founder shares will automatically convert into Class A common stock at the time of our initial business combination, or earlier at the
option of the holders, on a one-for-one basis, subject to adjustment as described in Exhibit 4.1 to this Annual Report on Form 10-K and
provided in our amended and restated certificate of incorporation. In the case that additional shares of Class A common stock, or equity-linked
securities convertible into or exercisable or exchangeable for Class A common stock, are issued or deemed issued in excess of the amounts
offered in the IPO related to the closing of the initial business combination, the ratio at which founder shares shall convert into Class
A common stock (subject to adjustment as described in Exhibit 4.1 to this Annual Report on Form 10-K and provided in our amended and
restated certificate of incorporation) so that the number of Class A common stock issuable upon conversion of all founder shares will
equal, in the aggregate, on an as-converted basis, 20% of the sum of (i) the total number of all outstanding shares of common stock upon
completion of the IPO, plus (ii) all shares of Class A common stock and equity-linked securities issued, or deemed issued in connection
with the initial business combination (excluding any shares or equity-linked securities issued, or to be issued, to any seller in the
business combination, and any private placement-equivalent warrants issued to the Sponsor or its affiliates upon conversion of loans
made to us). This is different from most other similarly structured blank check companies in which the initial stockholder will only
be issued an aggregate of 20% of the total number of shares to be outstanding prior to the initial business combination.
Resources
could be wasted in researching business combinations that are not completed, which could materially adversely affect subsequent attempts
to locate and acquire or merge with another business. If we do not complete our initial business combination, our public stockholders
may receive only approximately $10.00 per share, or less than such amount in certain circumstances, on the liquidation of the Trust Account
and our warrants will expire worthless.
We
anticipate that the investigation of each specific target business and the negotiation, drafting and execution of relevant agreements,
disclosure documents and other instruments will require substantial management time and attention and substantial costs for accountants,
attorneys, consultants and others. If we decide not to complete a specific initial business combination, the costs incurred up to that
point for the proposed transaction likely would not be recoverable. Furthermore, if we reach an agreement relating to a specific target
business, we may fail to complete our initial business combination for any number of reasons including those beyond our control. Any
such event will result in a loss to us of the related costs incurred which could materially adversely affect subsequent attempts to locate
and acquire or merge with another business. If we do not complete our initial business combination, our public stockholders may receive
only approximately $10.00 per share on the liquidation of the Trust Account and our warrants will expire worthless. In certain circumstances,
our public stockholders may receive less than $10.00 per share on the redemption of their shares.
We
may engage in an initial business combination with one or more target businesses that have relationships with entities that may be affiliated
with the Sponsor, our officers, directors or existing holders which may raise potential conflicts of interest.
In
light of the involvement of the Sponsor, our officers and directors with other entities, we may decide to acquire one or more businesses
with which the Sponsor or one or more of our officers or directors is affiliated, including business affiliated with PIMCO. Our officers
and directors also serve as officers and board members for other entities. Such entities may compete with us for business combination
opportunities. The Sponsor, our officers and directors are not currently aware of any specific opportunities for us to complete our initial
business combination with any entities with which they are affiliated, and there have been no preliminary discussions concerning an initial
business combination with any such entity or entities. Although we will not be specifically focusing on, or targeting, any transaction
with any affiliated entities, we would pursue such a transaction if we determined that such affiliated entity met our criteria for an
initial business combination and such transaction was approved by a majority of our disinterested directors. Despite our agreement to
obtain an opinion, if required by applicable law or based upon the decision of our board of directors or a committee thereof, from an
independent investment banking firm or an independent accounting firm regarding the fairness to our Company from a financial point of
view of an initial business combination with one or more domestic or international businesses affiliated with our officers, directors
or existing holders, potential conflicts of interest still may exist and, as a result, the terms of the initial business combination
may not be as advantageous to our public stockholders as they would be absent any conflicts of interest.
Moreover,
we may, at our option, pursue an affiliated joint acquisition opportunity with one or more affiliates of the PIMCO private funds or with
other entities to which an officer or director has a fiduciary, contractual or other obligation or duty. Any such parties may co-invest
with us in the target business at the time of our initial business combination, or we could raise additional proceeds to complete the
acquisition by issuing equity to any such parties, which may give rise to certain conflicts of interest.
We
may engage one or more of our IPO’s underwriters or one of their respective affiliates to provide additional services to us after
the IPO, 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. Our underwriters are entitled to receive deferred commissions that will be released from the trust
only on a completion of an initial business combination. These financial incentives may cause them to have potential conflicts of interest
in rendering any such additional services to us, including, for example, in connection with the sourcing and consummation of an initial
business combination.
We
may engage one or more of our IPO’s underwriters or one of their respective affiliates to provide additional services to us, 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 such underwriter or its affiliate fair and reasonable fees or other compensation that would be
determined at that time in an arm's length negotiation. The underwriters are also entitled to receive deferred commissions that are conditioned
on the completion of an initial business combination. The underwriters' or their respective affiliates' financial interests 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.
Since
the Sponsor and its investors and our directors will lose their entire at-risk investment in us if our initial business combination is
not completed, a conflict of interest may arise in determining whether a particular business combination target is appropriate for our
initial business combination.
In
December 2020, the Sponsor purchased an aggregate of 6,037,500 shares of Class B common stock for an aggregate purchase price of $25,000,
or approximately $0.004 per share. The number of founder shares issued was determined based on the expectation that such founder shares
would represent 20% of the outstanding shares after the IPO. In January 2021, the Sponsor transferred 40,000 founder shares to Mr. Kauffman,
25,000 founder shares to Ms. Dehne, 25,000 founder shares to Ms. Lippert, 25,000 founder shares to Mr. Lumbra, 12,000 founder shares
to Mr. Gross, 30,000 founder shares to Ms. Frank-Shapiro and 33,000 founder shares to certain consultants of CRIS II. All of the founder
shares will be worthless if we do not complete an initial business combination. In addition, the Sponsor purchased an aggregate of 4,553,333
warrants at a price of $1.50 per warrant (approximately $6.83 million in the aggregate), which will also be worthless if we do not complete
an initial business combination. Our initial stockholders have entered into a letter agreement with us pursuant to which they have agreed
to vote any shares owned by them in favor of any proposed initial business combination and to waive their redemption rights with respect
to their founder shares and public shares in connection with (i) the completion of our initial business combination and (ii) any stockholder
vote to approve an amendment to our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation
to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete
our initial business combination within 24 months from the closing of the IPO or (B) with respect to any other provision relating to
stockholders’ rights or pre-initial business combination activity. In addition, we may obtain loans from the Sponsor, affiliates
of the Sponsor or an officer or director. The personal and financial interests of our 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.
We
may issue notes or other debt securities, or otherwise incur substantial debt, to complete an initial business combination, which may
adversely affect our leverage and financial condition and thus negatively impact the value of our stockholders’ investment in us.
Although
we currently have no commitments to issue any notes or other debt securities, or to otherwise incur outstanding debt, we may choose to
incur substantial debt to complete our initial business combination. We 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 common stock; |
| ● | using
a substantial portion of our cash flow to pay principal and interest on our debt, which will
reduce the funds available for dividends on our common stock if declared, our ability to
pay expenses, make capital expenditures and acquisitions, and fund other general corporate
purposes; |
| ● | 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; |
| ● | limitations
on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions,
debt service requirements, and execution of our strategy; 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 IPO and the sale of the private placement warrants which
will cause us to be solely dependent on a single business which may have a limited number of services and limited operating activities.
This lack of diversification may negatively impact our operating results and profitability.
Of
the net proceeds from the IPO and the sale of the private placement warrants, $241.5 million is available to complete our initial business
combination and pay related fees and expenses (which includes $8,452,500 for the payment of deferred underwriting commissions).
We
may effectuate our initial business combination with a single target business or multiple target businesses simultaneously or within
a short period of time. However, we may not be able to effectuate our initial business combination with more than one target business
because of various factors, including the existence of complex accounting issues and the requirement that we prepare and file pro forma
financial statements with the SEC that present operating results and the financial condition of several target businesses as if they
had been operated on a combined basis. By completing our initial business combination with only a single entity, our lack of diversification
may subject us to numerous economic, competitive and regulatory developments. Further, we would not be able to diversify our operations
or benefit from the possible spreading of risks or offsetting of losses, unlike other entities which may have the resources to complete
several business combinations in different industries or different areas of a single industry. In addition, we intend to focus our search
for an initial business combination in 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. We do not, however, intend to purchase
multiple businesses in unrelated industries in conjunction with our initial business combination. With multiple business combinations,
we could also face additional risks, including additional burdens and costs with respect to possible multiple negotiations and due diligence
investigations (if there are multiple sellers) and the additional risks associated with the subsequent assimilation of the operations
and services or products of the acquired companies in a single operating business. If we are unable to adequately address these risks,
it could negatively impact our profitability and results of operations.
We
may attempt to complete our initial business combination with a private company about which little information is available, which may
result in an initial business combination with a company that is not as profitable as we suspected, if at all.
In
pursuing our initial business combination strategy, we may seek to effectuate our initial business combination with a privately held
company. Very little public information generally exists about private companies, and we could be required to make our decision on whether
to pursue a potential initial business combination on the basis of limited information, which may result in an initial business combination
with a company that is not as profitable as we suspected, if at all.
We
do not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for us to complete
an initial business combination with which a substantial majority of our stockholders do not agree.
Our
amended and restated certificate of incorporation does not provide a specified maximum redemption threshold, except that in no event
will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 upon consummation of
our initial business combination and after payment of deferred underwriting commissions (such that we are not subject to the SEC’s
“penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating
to our initial business combination. As a result, we may be able to complete our initial business combination even though a substantial
majority of our public stockholders do not agree with the transaction and have redeemed their shares or, if we seek stockholder approval
of our initial business combination and do not conduct redemptions in connection with our initial business combination pursuant to the
tender offer rules, have entered into privately negotiated agreements to sell their shares to the Sponsor, our officers, directors, advisors
or their affiliates. In the event the aggregate cash consideration we would be required to pay for all shares of Class A common stock
that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of a proposed initial
business combination exceed the aggregate amount of cash available to us, we will not complete the initial business combination or redeem
any shares, all shares of Class A common stock submitted for redemption will be returned to the holders thereof, and we instead may search
for an alternate business combination.
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. No assurance can be given that we will not seek to amend our amended and restated certificate
of incorporation or governing instrument in a manner that will make it easier for us to complete our initial business combination that
some of our stockholders or warrant holders may not support.
In
order to effectuate an initial business combination, blank check companies have, in the recent past, amended various provisions of their
charters and governing instruments, including their warrant agreements. For example, blank check companies have amended the definition
of business combination, increased redemption thresholds and extended the time to consummate an initial business combination. No assurance
can be given that we will not seek to amend our charter or governing instruments, including to extend the time to consummate an initial
business combination in order to effectuate our initial business combination.
The
provisions of our amended and restated certificate of incorporation that relate to our pre-business combination activity (and corresponding
provisions of the agreement governing the release of funds from the Trust Account), including an amendment to permit us to withdraw funds
from the Trust Account such that the per share amount investors will receive upon any redemption or liquidation is substantially reduced
or eliminated, may be amended with the approval of holders of 65% of our common stock, which is a lower amendment threshold than that
of some other blank check companies. It may be easier for us, therefore, to amend our amended and restated certificate of incorporation
and the trust agreement to facilitate the completion of an initial business combination that some of our stockholders may not support.
Our
amended and restated certificate of incorporation provides that any of its provisions related to pre-initial business combination activity
(including the requirement to deposit proceeds of the IPO and the private placement of warrants into the Trust Account and not release
such amounts except in specified circumstances, and to provide redemption rights to public stockholders as described herein and including
to permit us to withdraw funds from the Trust Account such that the per share amount investors will receive upon any redemption or liquidation
is substantially reduced or eliminated) may be amended if approved by holders of 65% of our common stock entitled to vote thereon, and
corresponding provisions of the trust agreement governing the release of funds from the Trust Account may be amended if approved by holders
of 65% of our common stock entitled to vote thereon. In all other instances, our amended and restated certificate of incorporation may
be amended by holders of a majority of our outstanding common stock entitled to vote thereon, subject to applicable provisions of the
DGCL or applicable stock exchange rules. We may not issue additional securities that can vote on amendments to our amended and restated
certificate of incorporation. Our initial stockholders, who collectively beneficially own at least 20% of our common stock, will participate
in any vote to amend our amended and restated certificate of incorporation and/or trust agreement and will have the discretion to vote
in any manner they choose. As a result, we may be able to amend the provisions of our amended and restated certificate of incorporation
which govern our pre-initial business combination behavior more easily than some other blank check companies, and this may increase our
ability to complete an initial business combination with which a public stockholder does not agree. Our stockholders may pursue remedies
against us for any breach of our amended and restated certificate of incorporation.
Our
initial stockholders have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and
restated certificate of incorporation (i) to modify the substance or timing of our obligation to allow redemption in connection with
our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within
24 months from the closing of the IPO or (ii) with respect to any other provision relating to stockholders’ rights or pre-initial
business combination activity, unless we provide our public stockholders with the opportunity to redeem their shares of Class A common
stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the
Trust Account, divided by the number of then outstanding public shares. These agreements are contained in a letter agreement that we
have entered into with our initial stockholders. Our other stockholders are not parties to, or third-party beneficiaries of, these agreements
and will not have the ability to pursue remedies against the Sponsor, our officers or directors for any breach of these agreements. As
a result, in the event of a breach, our stockholders would need to pursue a stockholder derivative action, subject to applicable law.
We
may be unable to obtain additional financing to complete our initial business combination or to fund the operations and growth of a target
business, which could compel us to restructure or abandon a particular business combination.
We have not selected any
specific business combination target but intend to target businesses with enterprise values that are greater than we could acquire with
the net proceeds of our IPO and the sale of the private placement warrants. As a result, if the cash portion of the purchase price exceeds
the amount available from the Trust Account, net of amounts needed to satisfy any redemption by public stockholders, we may be required
to seek additional financing to complete such proposed initial business combination. There can be no assurance that such financing will
be available on acceptable terms, if at all. Since our IPO, our management believes that prevailing market conditions and other factors
have made obtaining additional financing for a proposed business combination significantly more difficult. To the extent that additional
financing proves to be unavailable when needed to complete our initial business combination, we would be compelled to either restructure
the transaction or abandon that particular business combination and seek an alternative target business candidate. Further, the amount
of additional financing we may be required to obtain could increase as a result of future growth capital needs for any particular transaction,
the depletion of the available net proceeds in search of a target business, the obligation to repurchase for cash a significant number
of public shares from stockholders who elect redemption in connection with our initial business combination and/or the terms of negotiated
transactions to purchase public shares in connection with our initial business combination. If we do not complete our initial business
combination, our public stockholders may receive only approximately $10.00 per share plus any pro rata interest earned on the funds held
in the Trust Account and not previously released to us to pay our franchise and income taxes on the liquidation of the Trust Account,
and our warrants will expire worthless. In addition, even if we do not need additional financing to complete our initial business combination,
we may require such financing to fund the operations or growth of the target business. The failure to secure additional financing could
have a material adverse effect on the continued development or growth of the target business. None of our officers, directors or stockholders
is required to provide any financing to us in connection with or after our initial business combination. If we do not complete our initial
business combination, our public stockholders may only receive approximately $10.00 per share on the liquidation of the Trust Account,
and our warrants will expire worthless. Furthermore, as described in the risk factor entitled “If
third parties bring claims against us, the proceeds held in the Trust Account could be reduced and the per-share redemption amount received
by stockholders may be less than $10.00 per share,” under certain circumstances our public stockholders may receive less than $10.00
per share upon the liquidation of the Trust Account.
Holders
of Class A common stock will not be entitled to vote on any election of directors we hold prior to our initial business combination and,
upon consummation of our initial business combination, our initial stockholders will have certain rights to designate individuals for
nomination for election as directors.
Prior
to our initial business combination, only holders of our founder shares will have the right to vote on the election of directors. Holders
of our public shares will not be entitled to vote on the election of directors during such time. In addition, prior to the completion
of an initial business combination, holders of a majority of our founder shares may remove a member of the board of directors for any
reason. Accordingly, a public stockholder may not have any say in the management of the Company prior to the consummation of an initial
business combination.
Further,
pursuant to a registration and stockholder rights agreement, upon consummation of an initial business combination, our initial stockholders
will be entitled to designate three individuals for nomination for election to our board of directors for so long as they continue to
hold, collectively, at least 50% of the founder shares (or the securities into which such founder shares convert) held by such persons
on January 26, 2021. Thereafter, such initial stockholders will be entitled to designate (i) two individuals for nomination for election
to our board of directors for so long they continue to hold, collectively, at least 30% of the founder shares (or the securities into
which such founder shares convert) held by such persons on the date of January 26, 2021 and (ii) one individual for nomination for election
to our board of directors for so long they continue to hold, collectively, at least 20% of the founder shares (or the securities into
which such founder shares convert) held by such persons on January 26, 2021. This may result in such holders having significant control
over our business.
Our
initial stockholders hold a substantial interest in us and will control the appointment of our board of directors until consummation
of our initial business combination. As a result, they will appoint all of our directors prior to our initial business combination and
may exert a substantial influence on actions requiring a stockholder vote, potentially in a manner that a public stockholder does not
support.
Our
initial stockholders own shares representing at least 20% of our issued and outstanding shares of common stock. Accordingly, they may
exert a substantial influence on actions requiring a stockholder vote, potentially in a manner that a public stockholder does not support,
including amendments to our amended and restated certificate of incorporation and approval of major corporate transactions. If our initial
stockholders purchase any additional shares of common stock in the aftermarket or in privately negotiated transactions, this would increase
their control. Factors that would be considered in making such additional purchases would include consideration of the current trading
price of our Class A common stock. In addition, prior to our initial business combination, our initial stockholders will have the right
to appoint all of our directors and may remove members of the board of directors for any reason. Holders of our public shares will have
no right to vote on the appointment of directors during such time. These provisions of our amended and restated certificate of incorporation
may only be amended by a resolution passed by holders of a majority of the founder shares. As a result, a public stockholder will not
have any influence over the appointment of directors prior to our initial business combination. All of our directors were appointed by
our initial stockholders for two-year terms. In addition, we have agreed not to enter into a definitive agreement regarding an initial
business combination without the prior consent of the PIMCO private funds. Accordingly, our initial stockholders will continue to exert
control at least until the completion of our initial business combination.
Because
we must furnish our stockholders with target business financial statements, we may lose the ability to complete an otherwise advantageous
initial business combination with some prospective target businesses.
The
federal proxy rules require that a proxy statement with respect to a vote on an initial business combination meeting certain financial
significance tests include historical and/or pro forma financial statement disclosure in periodic reports. We would include the same
financial statement disclosure in connection with any tender offer documents. These financial statements may be required to be prepared
in accordance with, or be reconciled to GAAP, or international financial reporting standards as issued by the International Accounting
Standards Board, or IFRS, depending on the circumstances and the historical financial statements may be required to be audited in accordance
with the standards of the Public Company Accounting Oversight Board (United States), or PCAOB. These financial statement requirements
may limit the pool of potential target businesses we may acquire because some targets may be unable to provide such financial statements
in time for us to disclose such statements in accordance with federal proxy or tender offer rules and complete our initial business combination
within the prescribed timeframe.
Compliance
obligations under the Sarbanes-Oxley Act may make it more difficult for us to effectuate our initial business combination, require substantial
financial and management resources, and increase the time and costs of completing an initial business combination.
Section
404 of the Sarbanes-Oxley Act requires that we evaluate and report on our system of internal controls beginning with our Annual Report
on Form 10-K for the year ending December 31, 2022. Only in the event we are deemed to be a large accelerated filer or an accelerated
filer, and no longer qualify as an emerging growth company, will we be required to comply with the independent registered public accounting
firm attestation requirement on our internal control over financial reporting. Further, for as long as we remain an emerging growth company,
we will not be required to comply with the independent registered public accounting firm attestation requirement on our internal control
over financial reporting. The fact that we are a blank check company makes compliance with the requirements of the Sarbanes-Oxley Act
particularly burdensome on us as compared to other public companies because a target company with which we seek to complete our initial
business combination may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of its internal controls.
The development of the internal control of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and
costs necessary to complete any such business combination.
Risks
Relating to the Post-Business Combination Company
Subsequent
to the completion of our initial business combination, we may be required to take write-downs or write-offs, restructuring and impairment
or other charges that could have a significant negative effect on our financial condition, results of operations and our stock price,
which could cause an investor to lose some or all of its investment.
Even
if we conduct extensive due diligence on a target business with which we combine, no assurance can be given that this diligence will
surface all material issues that may be present inside a particular target business, that it would be possible to uncover all material
issues through a customary amount of due diligence, or that factors outside of the target business and outside of our control will not
later arise. As a result of these factors, we may be forced to later write-down or write-off assets, restructure our operations, or incur
impairment or other charges that could result in our reporting losses. Even if our due diligence successfully identifies certain risks,
unexpected risks may arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis.
Even though these charges may be non-cash items and not have an immediate impact on our liquidity, the fact that we report charges of
this nature could contribute to negative market perceptions about us or our securities. In addition, charges of this nature may cause
us to violate net worth or other covenants to which we may be subject as a result of assuming pre-existing debt held by a target business
or by virtue of our obtaining debt financing to partially finance the initial business combination. Accordingly, any stockholders who
choose to remain stockholders following the initial business combination could suffer a reduction in the value of their shares. Such
stockholders are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction
was due to the breach by our officers or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully
bring a private claim under securities laws that the proxy solicitation or tender offer materials, as applicable, relating to the initial
business combination constituted an actionable material misstatement or omission.
Our
management may not be able to maintain control of a target business after our initial business combination.
We
may structure an initial business combination so that the post-transaction company in which our public stockholders own shares will own
less than 100% of the equity interests or assets of a target business, but we will only complete such business combination if the post-transaction
company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest
in the target sufficient for us not to be required to register as an investment company under the Investment Company Act. We will not
consider any transaction that does not meet such criteria. Even if the post-transaction company owns 50% or more of the voting securities
of the target, our stockholders prior to the initial business combination may collectively own a minority interest in the post business
combination company, depending on valuations ascribed to the target and us in the initial business combination. For example, we could
pursue a transaction in which we issue a substantial number of new shares of Class A common stock in exchange for all of the outstanding
capital stock of a target. In this case, we would acquire a 100% interest in the target. However, as a result of the issuance of a substantial
number of new shares of common stock, our stockholders immediately prior to such transaction could own less than a majority of our outstanding
shares of common stock subsequent to such transaction. In addition, other minority stockholders may subsequently combine their holdings
resulting in a single person or group obtaining a larger share of CRIS II’s stock than we initially acquired. Accordingly, this
may make it more likely that our management will not be able to maintain our control of the target business. We cannot provide assurance
that, upon loss of control of a target business, new management will possess the skills, qualifications or abilities necessary to profitably
operate such business.
We
may have a limited ability to assess the management of a prospective target business and, as a result, may affect our initial business
combination with a target business whose management may not have the skills, qualifications or abilities to manage a public company,
which could, in turn, negatively impact the value of our stockholders’ investment in us.
When
evaluating the desirability of effecting our initial business combination with a prospective target business, our ability to assess the
target business’s management may be limited due to a lack of time, resources or information. Our assessment of the capabilities
of the target’s management, therefore, may prove to be incorrect and such management may lack the skills, qualifications or abilities
we suspected. Should the target’s management not possess the skills, qualifications or abilities necessary to manage a public company,
the operations and profitability of the post-combination business may be negatively impacted. Accordingly, any stockholders who choose
to remain stockholders following the initial business combination could suffer a reduction in the value of their shares. Such stockholders
are unlikely to have a remedy for such reduction in value.
Risks
Relating to Our Management Team
We
are dependent upon our officers and directors and their departure could adversely affect our ability to operate.
Our
operations are dependent upon a relatively small group of individuals and, in particular, our officers and directors. We believe that
our success depends on the continued service of our officers and directors, at least until we have completed our initial business combination.
We do not have an employment agreement with, or key-man insurance on the life of, any of our directors or officers. The unexpected loss
of the services of one or more of our directors or officers could have a detrimental effect on us.
Our
ability to successfully effect our initial business combination and to be successful thereafter will be totally dependent upon the efforts
of our key personnel, some of whom may join us following our initial business combination. The loss of key personnel could negatively
impact the operations and profitability of our post-combination business.
Our
ability to successfully effect our initial business combination is dependent upon the efforts of our key personnel. The role of our key
personnel in the target business, however, cannot presently be ascertained. Although some of our key personnel may remain with the target
business in senior management or advisory positions following our initial business combination, it is likely that some or all of the
management of the target business will remain in place. While we intend to closely scrutinize any individuals we employ after our initial
business combination, no assurance can be given that our assessment of these individuals will prove to be correct.
These
individuals may be unfamiliar with the requirements of operating a company regulated by the SEC, which could cause us to have to expend
time and resources helping them become familiar with such requirements. In addition, our officers and directors of an initial business
combination candidate may resign upon completion of our initial business combination. The departure of an initial business combination
target’s key personnel could negatively impact the operations and profitability of our post-combination business. The role of an
initial business combination candidate’s key personnel upon the completion of our initial business combination cannot be ascertained
at this time. Although we contemplate that certain members of an initial business combination candidate’s management team will
remain associated with the initial business combination candidate following our initial business combination, it is possible that members
of the management of an initial business combination candidate will not wish to remain in place. The loss of key personnel could negatively
impact the operations and profitability of our post-combination business.
Our
key personnel may negotiate employment or consulting agreements as well as reimbursement of out-of-pocket expenses, if any, with a target
business in connection with a particular business combination. These agreements may provide for them to receive compensation or reimbursement
for out-of-pocket expenses, if any, following our initial business combination and as a result, may cause them to have conflicts of interest
in determining whether a particular business combination is the most advantageous.
Our
key personnel may be able to remain with CRIS II after the completion of our initial business combination only if they are able to negotiate
employment or consulting agreements in connection with the initial business combination. Additionally, they may negotiate reimbursement
of any out-of-pocket expenses incurred on our behalf prior to the consummation of our initial business combination, should they choose
to do so. Such negotiations would take place simultaneously with the negotiation of the initial business combination and could provide
for such individuals to receive compensation in the form of cash payments and/or our securities for services they would render to us
after the completion of the initial business combination, or as reimbursement for such out-of-pocket expenses. The personal and financial
interests of such individuals may influence their motivation in identifying and selecting a target business. However, we believe the
ability of such individuals to remain with us after the completion of our initial business combination will not be the determining factor
in our decision as to whether or not we will proceed with any potential business combination. There is no certainty, however, that any
of our key personnel will remain with us after the completion of our initial business combination. No assurance can be given that any
of our key personnel will remain in senior management or advisory positions with us. The determination as to whether any of our key personnel
will remain with us will be made at the time of our initial business combination.
Our
officers and directors will allocate their time to other businesses thereby causing conflicts of interest in their determination as to
how much time to devote to our affairs. This conflict of interest could have a negative impact on our ability to complete our initial
business combination.
Our officers and directors are
not required to, and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating their time
between our operations and our search for an initial business combination and their other businesses. For example, affiliates of the Sponsor
are currently sponsoring other blank check companies, including CRIS III and CTA. Further, Mr. Crane, a director and our Chief Executive
Officer, serves as a director and Chief Executive Officer of CRIS III and as a director of CTA, Mr. Cavalier, our Chief Financial Officer,
serves as Chief Financial Officer of CRIS III, Ms. Comstock, our Chief Commercial Officer, serves as Chief Commercial Officer of CRIS
III, Ms. Frank-Shapiro, our Chief Operating Officer, serves as Chief Operating Officer of CRIS III and Mr. Weinstein, one of our directors,
is a director nominee of CRIS III and currently serves as a director on the boards of two other blank check companies: Freedom and Sandbridge.
Any of these other blank check companies, including CRIS III, CTA, Freedom and Sandbridge, may present additional conflicts of interest
in pursuing an acquisition target.
Although
we have retained and may in the future retain consultants to perform certain services for CRIS II, we do not intend to have any full-time
employees prior to the completion of our initial business combination. Each of our officers and directors is engaged in other business
endeavors for which he may be entitled to substantial compensation and our officers and directors are not obligated to contribute any
specific number of hours per week to our affairs nor are they prohibited from sponsoring, or otherwise becoming involved with, or continuing
their involvement with, any other blank check companies prior to us completing our initial business combination. Our independent directors
may also serve as officers or board members for other entities. If our officers’ and directors’ other business affairs require
them to devote substantial amounts of time to such affairs in excess of their current commitment levels, it could limit their ability
to devote time to our affairs which may have a negative impact on our ability to complete our initial business combination.
Members
of our management team and our board of directors and their respective affiliated companies have been, and may from time to time be,
involved in legal proceedings or governmental investigations unrelated to our business.
Members
of our management team and our board of directors have been involved in a wide variety of businesses. Such involvement has, and may lead
to, media coverage and public awareness. As a result of such involvement, members of our management team and our board of directors and
their respective affiliated companies have been, and may from time to time be, involved in legal proceedings or governmental investigations
unrelated to our business. Any such proceedings or investigations may be detrimental to our reputation and could negatively affect our
ability to identify and complete an initial business combination and may have an adverse effect on the price of our securities.
Certain
of our officers and directors are now, and all of them may in the future become, affiliated with entities engaged in business activities
similar to those intended to be conducted by us and, accordingly, may have conflicts of interest in allocating their time and determining
to which entity a particular business opportunity should be presented.
Until
we consummate our initial business combination, we intend to engage in the business of identifying and combining with one or more businesses.
Our officers and directors are, and may in the future become, affiliated with entities (such as operating companies or investment vehicles)
that are engaged in a similar business.
PIMCO
and its affiliates, including the PIMCO private funds, have invested in diverse industries, including in the climate sector. There could
be overlap between companies that would be suitable for a business combination with us and companies that present an attractive investment
opportunity for the Sponsor, our directors or officers, and entities with which they currently are or may in the future be affiliated,
certain of PIMCO’s funds and/or other investment vehicles, including the PIMCO private funds. In addition, PIMCO and its affiliates
engage in the business of originating, underwriting, syndicating, acquiring and trading loans and debt securities of corporate and other
borrowers, and may provide or participate in any debt financing arrangement in connection with any acquisition of any target business
that we may make. If PIMCO or any of its affiliates provides or participates in any such debt financing arrangement it may present a
conflict of interest and will have to be approved under our related person transaction policy or by our independent directors.
Our
officers and directors also may become aware of business opportunities which may be appropriate for presentation to us and other entities
to which they owe certain fiduciary or contractual duties. Any such opportunities may present additional conflicts of interest in pursuing
an acquisition target, and our directors and officers may have conflicts of interest in determining to which entity a particular business
opportunity should be presented. These conflicts may not be resolved in our favor and a potential target business may be presented to
another entity prior to its presentation to us. Our amended and restated certificate of incorporation provides that we renounce our interest
in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in
his or her capacity as a director or officer of our Company and such opportunity is one we are legally and contractually permitted to
undertake and would otherwise be reasonable for us to pursue, and to the extent the director or officer is permitted to refer that opportunity
to us without violating another legal obligation.
In addition, the Sponsor, officers
and directors may participate in the formation of, or become an officer or director of, any other blank check company prior to completion
of our initial business combination. As a result, the Sponsor, officers or directors could have conflicts of interest in determining whether
to present business combination opportunities to us or to any other blank check company with which they may become involved. In particular,
affiliates of our Sponsor are currently sponsoring other blank check companies, including CRIS III and CTA. Further, Mr. Crane, a director
and our Chief Executive Officer, serves as a director and Chief Executive Officer of CRIS III and as a director of CTA, Mr. Cavalier,
our Chief Financial Officer, serves as Chief Financial Officer of CRIS III, Ms. Comstock, our Chief Commercial Officer, serves as Chief
Commercial Officer of CRIS III, Ms. Frank-Shapiro, our Chief Operating Officer, serves as Chief Operating Officer of CRIS III and Mr.
Weinstein, one of our directors, is a director nominee of CRIS III and currently serves as a director on the boards of two other blank
check companies: Freedom and Sandbridge. Any of these other blank check companies, including CRIS III, CTA, Freedom and Sandbridge, may
present additional conflicts of interest in pursuing an acquisition target. However, we do not believe that any potential conflicts with
respect to CRIS III, CTA, Freedom or Sandbridge would materially affect our ability to complete our initial business combination. Moreover,
our management team has significant experience in identifying and executing multiple acquisition opportunities simultaneously and we are
not limited by industry or geography in terms of the acquisition opportunities we can pursue.
Our
officers, directors, security holders and their respective affiliates may have competitive pecuniary interests that conflict with our
interests.
We
have not adopted a policy that expressly prohibits our directors, officers, security holders or affiliates from having a direct or indirect
pecuniary or financial interest in any investment to be acquired or disposed of by us or in any transaction to which we are a party or
have an interest. In fact, we may enter into an initial business combination with a target business that is affiliated with the Sponsor,
our directors or officers, although we do not intend to do so. We do not have a policy that expressly prohibits any such persons from
engaging for their own account in business activities of the types conducted by us. Accordingly, such persons or entities may have a
conflict between their interests and ours.
Risks
Relating to Our Securities
Public
stockholders will not have any rights or interests in funds from the Trust Account, except under certain limited circumstances. To liquidate
an investment, therefore, a public stockholder may be forced to sell its public shares or warrants, potentially at a loss.
Our
public stockholders will be entitled to receive funds from the Trust Account only upon the earliest to occur of: (i) our completion of
an initial business combination, and then only in connection with those shares of Class A common stock that such stockholder properly
elected to redeem, subject to the limitations described herein, (ii) the redemption of any public shares properly submitted in connection
with a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation
to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete
our initial business combination within 24 months from the closing of the IPO or (B) with respect to any other provision relating to
stockholders’ rights or pre-initial business combination activity and (iii) the redemption of our public shares if we do not complete
an initial business combination within 24 months from the closing of the IPO or during any Extension Period, subject to applicable law
and as further described herein. In no other circumstances will a public stockholder have any right or interest of any kind in the Trust
Account. Holders of warrants will not have any right to the proceeds held in the Trust Account with respect to the warrants. Accordingly,
to liquidate its investment, an investor may be forced to sell its public shares or warrants, potentially at a loss.
The
NYSE may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities
and subject us to additional trading restrictions.
Our
units, common stock and warrants are listed on the NYSE. There can be no assurance that our securities will continue to be listed on
the NYSE or other national securities exchange in the future or prior to our initial business combination. In order to continue listing
our securities on the NYSE prior to our initial business combination, we must maintain certain financial, distribution and stock price
levels. Generally, we must maintain a minimum amount in stockholders’ equity and a minimum number of holders of our securities.
Additionally, in connection with our initial business combination, we will be required to demonstrate compliance with the NYSE’s
or another national securities exchange’s initial listing requirements, which are more rigorous than the NYSE’s continued
listing requirements, in order to continue to maintain the listing of our securities on the NYSE or other national securities exchange.
For instance, our stock price would generally be required to be at least $4.00 per share. There can be no assurance that we will be able
to meet those initial listing requirements at that time. If the NYSE delists our securities from trading on its exchange and we are not
able to list our securities on another national securities exchange, we expect our securities could be quoted on an over-the-counter
market. If this were to occur, we could face significant material adverse consequences, including:
| ● | a
limited availability of market quotations for our securities; |
| ● | reduced
liquidity for our securities; |
| ● | a
determination that our Class A common stock is a “penny stock” which will require
brokers trading in our Class A common stock to adhere to more stringent rules and possibly
result in a reduced level of trading activity in the secondary trading market for our securities; |
| ● | 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.” Because our units, common stock and warrants are
listed on the NYSE, our units, Class A common stock and warrants are covered securities. Although the states are preempted from regulating
the sale of our securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and,
if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case.
While we are not aware of a state having used these powers to prohibit or restrict the sale of securities issued by blank check companies,
other than the State of Idaho, certain state securities regulators view blank check companies unfavorably and might use these powers,
or threaten to use these powers, to hinder the sale of securities of blank check companies in their states. Further, if we were no longer
listed on the NYSE or other national securities exchange, our securities would not be covered securities and we would be subject to regulation
in each state in which we offer our securities, including in connection with our initial business combination.
We
may amend the terms of the warrants in a manner that may be adverse to holders of public warrants with the approval by the holders of
at least 50% of the then outstanding public warrants. As a result, the exercise price of the warrants could be increased, the exercise
period could be shortened and the number of shares of our Class A common stock purchasable upon exercise of a warrant could be decreased,
all without a holder’s 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 50% of the then outstanding public warrants
to make any change that adversely affects the interests of the registered holders of public warrants. Accordingly, we may amend the terms
of the public warrants in a manner adverse to a holder if holders of at least 50% of the then outstanding public warrants approve of
such amendment. Although our ability to amend the terms of the public warrants with the consent of at least 50% of the then outstanding
public warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of
the warrants, convert the warrants into cash or stock, shorten the exercise period or decrease the number of shares of our Class A common
stock purchasable upon exercise of a warrant.
The
warrants are being accounted for as a warrant liability and are being recorded at fair value upon issuance with changes in fair value
each period reported in earnings, which may have an adverse effect on the market price of the Class A common stock.
As described in our financial statements included in this Annual Report
on Form 10-K, we are accounting for our issued and outstanding warrants as a warrant liability and is recording that liability at fair
value upon issuance and is recording any subsequent changes in fair value as of the end of each period for which earnings are reported.
The impact of increases in fair value may have an adverse effect on earnings, our balance sheet and statement of operations or the market
price of the Class A common stock.
A
provision of our warrant agreement may make it more difficult for us to consummate an initial business combination.
Unlike
most blank check companies, if
| (i) | we
issue additional shares of Class A common stock or equity-linked securities for capital raising
purposes in connection with the closing of our initial business combination at an issue price
or effective issue price of less than $9.20 per share of Class A common stock (with such
issue price or effective issue price to be determined in good faith by our board of directors,
and in the case of any such issuance to the Sponsor or its affiliates, without taking into
account any founder shares held by the Sponsor or such affiliates, as applicable, prior to
such issuance) (the “Newly Issued Price”); |
| (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
volume weighted average trading price of the Class A common stock during the 20 trading day
period starting on the trading day after the day on which we consummate a business combination
(such price, the “Market Value”) 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, and the $18.00 per share redemption trigger price described in Exhibit 4.1 to this Annual Report on Form 10-K will
be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price, and the $10.00 per
share redemption trigger price described in Exhibit 4.1 to this Annual Report on Form 10-K will be adjusted (to the nearest cent) to
be equal to the higher of the Market Value and the Newly Issued Price. This may make it more difficult for us to consummate an initial
business combination with a target business.
We
may redeem unexpired warrants prior to their exercise at a time that is disadvantageous to holders, thereby making the warrants worthless.
We
have the ability to redeem outstanding warrants at any time after they become exercisable and prior to their expiration, at a price of
$0.01 per warrant, provided that the last reported sales price of our Class A common stock equals or exceeds $18.00 per share (as adjusted
for stock splits, stock dividends, reorganizations, recapitalizations and the like and certain issuances of Class A common stock and
equity-linked securities) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to the date on
which we give proper notice of such redemption and provided certain other conditions are met. If and when the warrants become redeemable
by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all
applicable state securities laws. Redemption of the outstanding warrants could force a warrant holder (i) to exercise its warrants and
pay the exercise price therefor at a time when it may be disadvantageous to do so, (ii) to sell its warrants at the then-current market
price when such warrant holder might otherwise wish to hold its warrants or (iii) to accept the nominal redemption price which, at the
time the outstanding warrants are called for redemption, is likely to be substantially less than the market value of the warrants. None
of the private placement warrants will be redeemable by us (except as described in Exhibit 4.1 to this Annual Report on Form 10-K) so
long as they are held by the Sponsor or its permitted transferees.
In
addition, we have the ability to redeem the outstanding public warrants at any time after they become exercisable and prior to their
expiration, at a price of $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that the closing
price of our Class A common stock equals or exceeds $10.00 per share (as adjusted for adjustments to the number of shares issuable upon
exercise or the exercise price of a warrant as described in Exhibit 4.1 to this Annual Report on Form 10-K) for any 20 trading days within
a 30 trading-day period ending on the third trading day prior to proper notice of such redemption and provided that certain other conditions
are met, including that holders will be able to exercise their warrants prior to redemption for a number of shares of Class A common
stock determined based on the redemption date and the fair market value of shares of our Class A common stock. Please see Exhibit 4.1
to this Annual Report on Form 10-K for more information about the public warrants. The value received upon exercise of the warrants (1)
may be less than the value the holders would have received if they had exercised their warrants at a later time where the underlying
share price is higher and (2) may not compensate the holders for the value of the warrants, including because the number of shares received
is capped at 0.361 shares of Class A common stock per whole warrant (subject to adjustment) irrespective of the remaining life of the
warrants.
None
of the private placement warrants will be redeemable by us (except as described in Exhibit 4.1 to this Annual Report on Form 10-K) so
long as they are held by the Sponsor or its permitted transferees.
Our
warrants and founder shares may have an adverse effect on the market price of our Class A common stock and make it more difficult to
effectuate our initial business combination.
We
issued warrants to purchase 4,830,000 shares of our Class A common stock as part of the units offered in the IPO and, simultaneously
with the closing of the IPO, we issued private placement warrants to purchase an aggregate of 4,553,333 shares of Class A common stock
at $11.50 per share. Our initial stockholders currently own an aggregate of 6,037,500 founder shares. The founder shares are convertible
into shares of Class A common stock on a one-for-one basis, subject to adjustment as described in Exhibit 4.1 to this Annual Report on
Form 10-K. In addition, if the Sponsor makes any working capital loans, up to $2.0 million of such loans may be converted into warrants,
at the price of $1.50 per warrant at the option of the lender. Such warrants would be identical to the private placement warrants, including
as to exercise price, exercisability and exercise period.
To
the extent we issue shares of Class A common stock to effectuate an initial business combination, the potential for the issuance of a
substantial number of additional shares of Class A common stock upon exercise of these warrants and conversion rights could make us a
less attractive business combination vehicle to a target business. Any such issuance will increase the number of issued and outstanding
shares of our Class A common stock and reduce the value of the shares of Class A common stock issued to complete the initial business
combination. Therefore, our warrants and founder shares may make it more difficult to effectuate an initial business combination or increase
the cost of acquiring the target business.
The
private placement warrants are identical to the warrants sold as part of the units in the IPO except that, so long as they are held by
the Sponsor or its permitted transferees, (i) they will not be redeemable by us (except as described in Exhibit 4.1 to this Annual Report
on Form 10-K); (ii) they (including the Class A common stock issuable upon exercise of these warrants) may not, subject to certain limited
exceptions, be transferred, assigned or sold by the Sponsor until 30 days after the completion of our initial business combination; (iii)
they may be exercised by the holders on a cashless basis; and (iv) they are entitled to registration rights.
Because
each unit contains one-fifth 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-fifth of one redeemable warrant. No fractional warrants will be issued upon separation of the units and only whole
warrants will trade. Accordingly, unless an investor purchases at least five units, such investor will not be able to receive or trade
a whole warrant. This is different from other offerings similar to ours whose units include one share of common stock and one warrant
to purchase one whole share. We have established the components of the units in this way in order to reduce the dilutive effect of the
warrants upon completion of an initial business combination since the warrants will be exercisable in the aggregate for one-fifth of
the number of shares compared to units that each contain a whole warrant to purchase one share, thus making us, we believe, a more attractive
merger partner for target businesses. Nevertheless, this unit structure may cause our units to be worth less than if they included a
warrant to purchase one whole share.
General
Risk Factors
We
are a recently formed company with limited operating history and limited revenues, and a public stockholder has no basis on which to
evaluate our ability to achieve our business objective.
We
are a recently formed company with a limited history of operating results. Because we have a limited operating history, public stockholders
have a limited basis upon which to evaluate our ability to achieve our business objective of completing our initial business combination
with one or more target businesses. We have no plans, arrangements or understandings with any prospective target business concerning
an initial business combination and may be unable to complete our initial business combination. If we fail to complete our initial business
combination, we will never generate any operating revenues.
Past
performance by our management team, directors, advisors, the PIMCO private funds and their respective affiliates may not be indicative
of future performance of an investment in the company or in the future performance of any business we may acquire.
Information
regarding performance by, or businesses associated with, our management team, directors and advisors, the PIMCO private funds and their
respective affiliates, including PIMCO, is presented for informational purposes only. Past performance by our management team, directors
and advisors, the PIMCO private funds and their respective affiliates is not a guarantee (i) either of success with respect to any business
combination we may consummate or (ii) that we will be able to locate a suitable candidate for our initial business combination. Investors
should not rely on the historical performance of our management team, directors and advisors, the PIMCO private funds and their respective
affiliates as indicative of the future performance of an investment in the Company or the returns the Company will, or is likely to,
generate going forward. Our management team, directors and advisors, the PIMCO private funds and their respective affiliates have had
limited past experience with blank check and special purpose acquisition companies and no experience working together. The absence of
experience working together may be exacerbated by the challenges associated with the COVID-19 pandemic.
As
the number of special purpose acquisition companies evaluating targets increases, attractive targets may become scarcer and there may
be more competition for attractive targets. This could increase the valuations of business combination targets and the cost of our initial
business combination, and could even result in our inability to find a target or to consummate an initial business combination.
In
recent years, the number of special purpose acquisition companies that have been formed has increased substantially. Many potential targets
for special purpose acquisition companies have already entered into an initial business combination, and there are still many special
purpose acquisition companies seeking targets for their initial business combination, as well as many such companies currently in registration.
As a result, at times, fewer attractive targets may be available, and it may require more time, more effort and more resources to identify
a suitable target and to consummate an initial business combination.
In
addition, because there are more special purpose acquisition companies seeking to enter into an initial business combination with available
targets, the competition for available targets with attractive fundamentals or business models may increase, which could cause target
companies to demand improved financial terms. Attractive deals could also become scarcer for other reasons, such as economic or industry
sector downturns, geopolitical tensions, or increases in the cost of additional capital needed to close business combinations or operate
targets post-business combination. This could increase the cost of, delay or otherwise complicate or frustrate our ability to find and
consummate an initial business combination, and may result in our inability to consummate an initial business combination on terms favorable
to our investors altogether.
Cyber
incidents or attacks directed at us could result in information theft, data corruption, operational disruption and/or financial loss.
We
depend on digital technologies, including information systems, infrastructure and cloud applications and services, including those of
third parties with which we may deal. Sophisticated and deliberate attacks on, or security breaches in, our systems or infrastructure,
or the systems or infrastructure of third parties or the cloud, could lead to corruption or misappropriation of our assets, proprietary
information and sensitive or confidential data. As an early stage company without significant investments in data security protection,
we may not be sufficiently protected against such occurrences. We may not have sufficient resources to adequately protect against, or
to investigate and remediate any vulnerability to, cyber incidents. It is possible that any of these occurrences, or a combination of
them, could have adverse consequences on our business and lead to financial loss.
We identified a material weakness in our
internal control over financial reporting.
Our
management is responsible for establishing and maintaining adequate internal control over financial reporting designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance
with accounting principles generally accepted in the United States of America (“GAAP”). Our management is likewise required,
on a quarterly basis, to evaluate the effectiveness of our internal controls and to disclose any changes and material weaknesses identified
through such evaluation in those internal controls. 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 on a timely basis. Therefore, under customary accounting and corporate governance practices
when an issuer concludes that its annual or interim financial statements should be restated, that issuer will reevaluate its internal
controls over financial reporting to identify and remediate the material weakness(es) that led to such restatement.
As a result of changes to
industry practice and new consensus in the accounting profession, we identified a material weakness in our internal control over financial
reporting related to the accounting for a significant and unusual transaction related to the improper valuation of our Class A common
stock subject to possible redemption at the closing of our IPO and the restatement of our earnings per share calculation. As a result
of this material weakness, our management concluded that our internal control over financial reporting was not effective as of September
30, 2021. This material weakness, discussed in our Quarterly Report on Form 10-Q for the period ended September 30, 2021, resulted in
a material misstatement of the initial carrying value of the Class A common stock subject to possible redemption and the restatement of
our earnings per share calculation for the affected periods. The restatements did not have an impact on the Company’s cash position
and cash held in the Trust Account established in connection with the IPO. To respond to this material weakness, we have devoted, and
plan to continue to devote, significant effort and resources to the remediation and improvement of our internal control over financial
reporting. While we have processes to identify and appropriately apply applicable accounting requirements, we plan to enhance these processes
to better evaluate our research and understanding of the nuances of the complex accounting standards that apply to our financial statements.
Our plans at this time include providing enhanced access to accounting literature, research materials and documents and increased communication
among our personnel and third-party professionals with whom we consult regarding complex accounting applications. The elements of our
remediation plan can only be accomplished over time, and we can offer no assurance that these initiatives will ultimately have the intended
effects.
Any failure to maintain such
internal control could adversely impact our ability to report our financial position and results from operations on a timely and accurate
basis. If our financial statements are not accurate, investors may not have a complete understanding of our operations. Likewise, if our
financial statements are not filed on a timely basis, we could be subject to sanctions or investigations by the stock exchange on which
our common stock is listed, the SEC or other regulatory authorities. In either case, there could result a material adverse effect on our
business. Ineffective internal controls could also cause investors to lose confidence in our reported financial information, which could
have a negative effect on the trading price of our stock.
We can give no assurance that
the measures we have taken and plan to take in the future will remediate the material weakness identified or that any additional material
weaknesses or restatements of financial results will not arise in the future due to a failure to implement and maintain adequate internal
control over financial reporting or circumvention of these controls. In addition, even if we are successful in strengthening our controls
and procedures, in the future those controls and procedures may not be adequate to prevent or identify irregularities or errors or to
facilitate the fair presentation of our financial statements.
We
are an emerging growth company and a smaller reporting company within the meaning of the Securities Act, and if we take advantage of
certain exemptions from disclosure requirements available to emerging growth companies or smaller reporting companies, this could make
our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.
We
are an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage
of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth
companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the
Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and
exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden
parachute payments not previously approved. As a result, our stockholders may not have access to certain information they may deem important.
We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier, including
if the aggregate worldwide market value of our Class A common stock held by non-affiliates equals or exceeds $700.0 million as of any
June 30 before that time, in which case we would no longer be an emerging growth company as of the following December 31. We cannot predict
whether investors will find our securities less attractive because we will rely on these exemptions. If some investors find our securities
less attractive as a result of our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise
would be, there may be a less active trading market for our securities and the trading prices of our securities may be more volatile.
Further,
Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting
standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do
not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting
standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements
that apply to non-emerging growth companies but any such an election to opt out is irrevocable. We have elected not to opt out of such
extended transition period, which means that when a standard is issued or revised and it has different application dates for public or
private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new
or revised standard. This may make comparison of our financial statements with another public company which is neither an emerging growth
company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of
the potential differences in accounting standards used.
Additionally,
we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take
advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements.
We will remain a smaller reporting company until the last day of the fiscal year in which (1) the aggregate worldwide market value of
our Class A common stock held by non-affiliates equaled or exceeded $250.0 million as of the prior June 30th, or (2) our annual revenues
equaled or exceeded $100.0 million during such completed fiscal year and the aggregate worldwide market value of our Class A common stock
held by non-affiliates equaled or exceeded $700.0 million as of the prior June 30th. To the extent we take advantage of such reduced
disclosure obligations, it may also make comparison of our financial statements and other disclosures with other public companies difficult
or impossible.
Provisions
in our amended and restated certificate of incorporation and Delaware law may inhibit a takeover of us, which could limit the price investors
might be willing to pay in the future for our Class A common stock and could entrench management.
Our
amended and restated certificate of incorporation contains provisions that may discourage unsolicited takeover proposals that stockholders
may consider to be in their best interests. These provisions include the ability of the board of directors to designate the terms of
and issue new series of preferred stock, and the fact that prior to the completion of our initial business combination only holders of
shares of our Class B common stock, which may make the removal of management more difficult and may discourage transactions that otherwise
could involve payment of a premium over prevailing market prices for our securities.
We
are also subject to anti-takeover provisions under Delaware law, which could delay or prevent a change of control. Together these provisions
may make the removal of management more difficult and may discourage transactions that otherwise could involve payment of a premium over
prevailing market prices for our securities.
Our
amended and restated certificate of incorporation requires, to the fullest extent permitted by law, that derivative actions brought in
our name, actions against our directors, officers, other employees or stockholders for breach of fiduciary duty and other similar actions
may be brought only in the Court of Chancery in the State of Delaware and, if brought outside of Delaware, the stockholder bringing the
suit will be deemed to have consented to service of process on such stockholder’s counsel, which may have the effect of discouraging
lawsuits against our directors, officers, other employees or stockholders.
Our
amended and restated certificate of incorporation requires, to the fullest extent permitted by law, that derivative actions brought in
our name, actions against our directors, officers, other employees or stockholders for breach of fiduciary duty and other similar actions
may be brought only in the Court of Chancery in the State of Delaware and, if brought outside of Delaware, the stockholder bringing the
suit will be deemed to have consented to service of process on such stockholder’s counsel except any action (A) as to which the
Court of Chancery in the State of Delaware determines that there is an indispensable party not subject to the jurisdiction of the Court
of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following
such determination), (B) which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, (C) for
which the Court of Chancery does not have subject matter jurisdiction, or (D) any action created by the Exchange Act or any other claim
for which the federal courts have exclusive jurisdiction. Any person or entity purchasing or otherwise acquiring any interest in shares
of our capital stock shall be deemed to have notice of and consented to the forum provisions in our amended and restated certificate
of incorporation. Unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States
shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. This choice
of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes
with us or any of our directors, officers, other employees or stockholders, which may discourage lawsuits with respect to such claims,
although our stockholders will not be deemed to have waived our compliance with federal securities laws and the rules and regulations
thereunder. Alternatively, if a court were to find the choice of forum provision contained in our amended and restated certificate of
incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in
other jurisdictions, which could harm our business, operating results and financial condition.
Our
amended and restated certificate of incorporation provides that the exclusive forum provision will be applicable to the fullest extent
permitted by applicable law, subject to certain exceptions. Section 27 of the Exchange Act creates exclusive federal jurisdiction over
all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. As a result,
the exclusive forum provision will not apply to suits brought to enforce any duty or liability created by the Exchange Act or any other
claim for which the federal courts have exclusive jurisdiction. In addition, our amended and restated certificate of incorporation provides
that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States of America
shall, to the fullest extent permitted by law, be the exclusive forum for the resolution of any complaint asserting a cause of action
arising under the Securities Act or the rules and regulations promulgated thereunder. We note, however, that there is uncertainty as
to whether a court would enforce this provision and that investors cannot waive compliance with the federal securities laws and the rules
and regulations thereunder. Section 22 of the Securities Act creates concurrent jurisdiction for state and federal courts over all suits
brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder.
Since
only holders of our founder shares have the right to vote on the election of directors, the NYSE may consider us to be a ‘controlled
company’ within the meaning of the NYSE rules and, as a result, we may qualify for exemptions from certain corporate governance
requirements.
Only
holders of our founder shares have the right to vote on the election of directors. As a result, the NYSE may consider us to be a ‘controlled
company’ within the meaning of the NYSE corporate governance standards. Under the NYSE 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 the NYSE; |
| ● | 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 the NYSE, subject to applicable
phase-in rules. However, if we determine in the future to utilize some or all of these exemptions, public stockholders will not have
the same protections afforded to stockholders of companies that are subject to all of the NYSE corporate governance requirements.
If
we effect our initial business combination with a company with operations or opportunities outside of the United States, we would be
subject to a variety of additional risks that may negatively impact our operations.
If
we effect our initial business combination with a company with operations or opportunities outside of the United States, we would be
subject to any special considerations or risks associated with companies operating in an international setting, including any of the
following:
| ● | higher
costs and difficulties inherent in managing cross-border business operations and complying
with different commercial and legal requirements of overseas markets; |
| ● | rules
and regulations regarding currency redemption; |
| ● | complex
corporate withholding taxes on individuals; |
| ● | laws
governing the manner in which future business combinations may be effected; |
| ● | tariffs
and trade barriers; |
| ● | regulations
related to customs and import/export matters; |
| ● | longer
payment cycles and challenges in collecting accounts receivable; |
| ● | tax
issues, including but not limited to tax law changes and variations in tax laws as compared
to the United States; |
| ● | currency
fluctuations and exchange controls; |
| ● | cultural
and language differences; |
| ● | changes
in industry, regulatory or environmental standards within the jurisdictions where we operate; |
| ● | public
health or safety concerns and governmental restrictions, including those caused by outbreaks
of pandemic disease such as the COVID-19 pandemic; |
| ● | crime,
strikes, riots, civil disturbances, terrorist attacks, natural disasters and wars; |
| ● | deterioration
of political relations with the United States; and |
| ● | government
appropriations of assets. |
We
may not be able to adequately address these additional risks. If we were unable to do so, our operations might suffer, which may adversely
impact our results of operations and financial condition.
We
may face risks related to climate sector companies.
Business
combinations with companies in the climate sector, which we broadly define as consisting of all companies the business of which results,
directly or indirectly, in the reduction of CO2 and other greenhouse gases into the atmosphere that would otherwise have occurred, entail
certain risks. If we are successful in completing a business combination with such a target business, we may be subject to, and possibly
adversely affected by, the following risks:
| ● | recognizing
that the market for CO2 avoidance and removal is grounded in science, any material change
in consensus scientific opinion in respect of the urgency or potential remedies to the climate
challenge could affect the economics of or total addressable market for clean energy and
other CO2 reducing products and specialists; |
| ● | governmental
or regulatory actions in any or all of our chosen markets, even if well intentioned from
a climate perspective, could have an immediate and dramatic effect on our business operations
and opportunities; |
| ● | the
increasingly partisan nature of the public debate about climate issues could result in a
consumer backlash in certain markets against products and services which exist, in whole
or in part, to reduce CO2 emissions into the atmosphere; |
| ● | shifting
approaches over time to how CO2 emissions are calculated, or to the perceived long term effectiveness
of various approaches to CO2 storage and sequestration, could affect the perceived environmental
benefit of our products and services; |
| ● | dependence
of our operations upon third-party suppliers or service providers whose failure either to
perform adequately or to adhere to our environmental standards could disrupt our business; |
| ● | difficulty
in establishing and implementing a commercial and operational approach adequate to address
the specific needs of the markets we are pursuing; |
| ● | difficulty
in identifying effective local partners and developing any necessary partnerships with local
businesses on commercially and environmentally acceptable terms; |
| ● | our
inability to comply with governmental regulations or obtain governmental approval for our
products and/or business operations; |
| ● | difficulty
in competing against established companies who may have greater financial resources and/or
a more effective or established localized business presence and/or an ability to introduce
and sell low or no carbon products at minimal or negative operating margins for sustained
periods of time; |
| ● | difficulty
in competing successfully with improved technologies introduced subsequent to our own; |
| ● | the
possibility of applying an ineffective commercial approach to targeted markets, including
product offerings that may not meet market needs with respect to their environmental or non-environmental
attributes; |
| ● | an
inability to build strong brand identity, environmental credibility or reputation for exceptional
customer satisfaction and service; |
| ● | difficulty
in generating sufficient sales volumes at economically sustainable profitability levels; |
| ● | difficulty
in timely identifying, attracting, training, and retaining qualified sales, technical, and
other personnel; and |
| ● | any
significant disruption in our computer systems or those of third parties that we would utilize
in our operations, including disruptions or failure of our networks, systems or technology
as a result of computer viruses, “cyber-attacks,” misappropriation of data or
other malfeasance, as well as outages, natural disasters, terrorist attacks, accidental releases
of information or similar events; |
Any
of the foregoing could have an adverse impact on our operations following a business combination. However, our efforts in identifying
prospective target businesses will be focused on, but not be limited to the climate sector. Accordingly, if we acquire a target business
in another industry, these risks will likely not affect us and we will be subject to other risks attendant with the specific industry
in which we operate or target business which we acquire, none of which can be presently ascertained.
