BACKGROUND
We are a blank check company incorporated in the State of Delaware on October 7, 2020, for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination involving the Company and one or more businesses.
There are currently 34,500,000 shares of Class A common stock and 8,625,000 shares of Class B common stock outstanding. In addition, we issued warrants to purchase 8,625,000 shares of Class A common stock as part of our IPO and warrants to purchase 5,933,333 shares of Class A common stock as part of the private placement with the Sponsor and certain anchor investors that we consummated simultaneously with the consummation of our IPO. Each whole warrant entitles its holder to purchase one share of Class A common stock at an exercise price of $11.50 per share. The warrants will become exercisable 30 days after the completion of our initial business combination and expire five years after the completion of our initial business combination or earlier upon redemption or liquidation. Once the warrants become exercisable, the Company may redeem the outstanding warrants at a price of $0.01 per warrant, if the last sale price of the Company’s Class A common stock equals or exceeds $18.00 per share for any 20 trading days within a 30 trading day period ending on the third business day before the Company sends the notice of redemption to the warrant holders. The Private Placement Warrants, however, are non-redeemable so long as they are held by the Sponsor or its permitted transferees.
Pursuant to that certain Sponsor Support Agreement (the “Sponsor Agreement”), dated as of September 10, 2022, among the Company, the Sponsor and GSH, the Sponsor has agreed to forfeit approximately (i) 1,766,612 Founder Shares and (ii) 50% of the Private Placement Warrants held by it upon the consummation of the Closing. The Sponsor has also agreed, subject to certain exceptions, not to transfer 2,120,627 Founder Shares held by it (the “Sponsor Earnout Shares”) until they become released under the Sponsor Agreement. Further, upon the Closing, Judith A. Hannaway, Jonathan Langer and Charles Schoenherr, our directors, and Keith Feldman, our Chief Financial Officer, will be entitled to receive, 27,121, 27,121, 27,121 and 235,118 Founder Shares, respectively, from our Sponsor, and Keith Feldman will also be entitled to receive 149,520 Private Placement Warrants from our Sponsor. Additionally, upon the Closing, approximately up to 321,000 Sponsor Earnout Shares and 820,000 Founder Shares may be allocated to third parties (including the anchor investors). For a discussion of the interests that our Sponsor and officers and directors may have in the Business Combination, see “The Extension Amendment Proposal — Interests of the Sponsor, Directors and Officers” in the accompanying Proxy Statement.
As of November 28, 2022, the record date for the Special Meeting, approximately $346.6 million from the proceeds from our IPO and the simultaneous private placement were held in our Trust Account in the United States maintained by American Stock Transfer & Trust Company, acting as trustee, invested in U.S. “government securities”, within the meaning set forth in 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 under the Investment Company Act which invest only in direct U.S. government treasury obligations. On November 17, 2022, the Company determined that it will convert all of its investments in the Trust Account into cash, which will remain in the Trust Account, during January 2023. After January 2023, the Company no longer intends to invest the net proceeds in securities or interest-bearing accounts prior to an initial business combination. Accordingly, the amount of interest income (which we are permitted to use to pay certain of our taxes and up to $100,000 of dissolution expenses) will no longer increase, which will limit the interest income available for payment of taxes and dissolution expenses for distribution to public shareholders in connection with our liquidation or in connection with the consummation of our business combination. See “Risk Factors — We do not intend to continue to invest the proceeds held in the Trust Account in interest-bearing securities, which will limit the interest income available for payment of taxes and dissolution expenses or for distribution to public shareholders.”
As of September 30, 2022, we had cash of approximately $11,000 held outside of the Trust Account. If our cash is insufficient to cover the working capital requirements of the Company, the Company’s officers, directors and Sponsor may, but are not obligated to, loan the Company funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion, to meet the Company’s working capital needs. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential transaction, and reducing overhead expenses. The Company cannot