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CE ENERGY ACQUISITION CORP.

Date Filed : May 09, 2022

S-11d282039ds1.htmFORM S-1Form S-1
Table of Contents

As filed with the U.S. Securities and Exchange Commission on May 9, 2022

RegistrationNo. 333-                

 

 

 

UNITED STATES

SECURITIESAND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM S-1

REGISTRATION STATEMENT

UNDER

THESECURITIES ACT OF 1933

 

 

CE Energy Acquisition Corp.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware 6770 87-3886672
(State or other jurisdiction of
incorporation or organization)
 (Primary Standard Industrial
Classification Code Number)
 (I.R.S. Employer
Identification Number)

 

 

United Center

500 VirginiaStreet East, 10th floor

Charleston, West Virginia 25301

Telephone: (304) 859-7440

(Address, Including Zip Code, and Telephone Number, Including Area Code,of Registrant’s Principal Executive Offices)

 

 

Ryan Cunningham

Chairman and Chief Executive Officer

United Center

500 VirginiaStreet East, 10th floor

Charleston, West Virginia 25301

Telephone: (304) 859-7440

(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent For Service)

 

 

Copies to:

Barry I. Grossman, Esq.
Joshua Englard, Esq.
Ellenoff Grossman & Schole LLP
1345 Avenue of the Americas
New York, New York 10105
Telephone: (212)370-1300
 

Mitchell S. Nussbaum, Esq.
David J. Levine, Esq.
Loeb & Loeb LLP
345 ParkAvenue
New York, New York 10154

Telephone: (212) 407-4000

 

 

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the SecuritiesAct of 1933 check the following box.  ☐

If this Form is filed to register additional securities for an offering pursuant toRule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Actregistration statement number of the earlier effective registration statement for the same offering.  ☐

If this Form is apost-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the sameoffering.  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and“emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer   Accelerated filer 
Non-accelerated filer   Smaller reporting company 
   Emerging growth company 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition periodfor complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.  ☐

 

 

The Registrant hereby amendsthis Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective inaccordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

 

 

 


Table of Contents

The information in this prospectus is not complete and may be changed. We may not sellthese securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdictionwhere the offer or sale is not permitted.

 

SUBJECT TO COMPLETION, DATED MAY 9, 2022

PRELIMINARY PROSPECTUS

$100,000,000

CE EnergyAcquisition Corp.

10,000,000 Units

 

 

CE Energy Acquisition Corp. is anewly organized blank check company formed 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 throughoutthis prospectus as our initial business combination.. We have not selected any business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combinationtarget. Although we are not limited to a particular industry or geographic region for purposes of consummating an initial business combination, we intend to focus our search for a target business in the energy industry.

This is an initial public offering of our securities. Each unit has an offering price of $10.00 and consists of one share of our Class A common stock andthree-quarters of one redeemable warrant. Only whole warrants are exercisable. Each whole warrant entitles the holder thereof to purchase one share of our Class A common stock at a price of $11.50 per share, subject to adjustment as describedin this prospectus. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. The warrants will become exercisable on the later of 30 days after the completion of our initial business combination or12 months from the closing of this offering and will expire five years after the completion of our initial business combination or earlier upon redemption or liquidation, as described in this prospectus.

The underwriters have a 45-day option from the date of this prospectus to purchase up to an additional 1,500,000 unitsto cover over-allotments, if any. We will provide our public stockholders with the opportunity to redeem all or a portion of their shares of our Class A common stock upon the completion of our initial business combination, subject to thelimitations described herein. If we are unable to complete our initial business combination within 15 months from the closing of this offering (or up to 21 months from the closing of this offering if we extend the period of time to consummate abusiness combination for up to three months on two occasions, as described in more detail in this prospectus), we will redeem 100% of the public shares for cash, subject to applicable law and certain conditions as further described herein. Ourpublic stockholders will not be afforded an opportunity to vote on our extension of time to consummate an initial business combination from 15 months to 21 months described above or redeem their shares in connection with such extensions.

Our sponsor, CE Energy Sponsors LLC has agreed to purchase an aggregate of 5,500,000 warrants (or 6,025,000 warrants if the over-allotment option is exercisedin full) at a price of $1.00 per warrant, for an aggregate purchase price of $5,500,000 (or $6,025,000 if the over-allotment option is exercised in full), in a private placement that will close simultaneously with the closing of this offering. Theprivate placement warrants are identical to the warrants sold in this offering, subject to certain limited exceptions as described in this prospectus.

Oursponsor owns an aggregate of 2,875,000 shares of our Class B common stock (up to 375,000 shares of which are subject to forfeiture depending on the extent to which the underwriters’ over-allotment option is exercised), which willautomatically convert into shares of Class A common stock at the time of our initial business combination, as described herein.

Currently, there is nopublic market for our units, Class A common stock or warrants. We have applied to list our units on The Nasdaq Global Market, or Nasdaq, under the symbol “CEACU.” We cannot guarantee that our securities will be approved for listing onNasdaq. We expect the Class A common stock and warrants comprising the units will begin separate trading on the 52nd day following the date of this prospectus unless Maxim Group, LLC, therepresentative of the underwriters, informs us of its decision to allow earlier separate trading, subject to our satisfaction of certain conditions. Once the securities comprising the units begin separate trading, we expect that the Class Acommon stock and warrants will be listed on Nasdaq under the symbols “CEAC” and “CEACW,” respectively.

 

 

 

We are an “emerging growth company” under applicable federal securities laws and will be subject to reduced public company reporting requirements.Investing in our securities involves a high degree of risk. See “Risk Factors” beginning on page 36 for a discussion of information that should be considered in connection with an investment in our securities.Investors will not be entitled to protections normally afforded to investors in Rule 419 blank check offerings.

Neither the U.S. Securities andExchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

 

   PER UNIT   TOTAL 

Public offering price

  $10.00   $100,000,000 

Underwriting commissions(1)

  $0.55   $5,500,000 

Proceeds, before expenses, to CE Energy Acquisition Corp.

  $9.45   $94,500,000 

 

(1)

Includes $0.35 per unit, or$3,500,000 (or up to $4,025,000 if the underwriters’ over-allotment option is exercised in full) in the aggregate payable to the underwriters for deferred underwriting commissions to be placed in a trust account located in theUnited States as described herein. The deferred commissions will be released to the underwriters only on completion of an initial business combination, as described in this prospectus. See the section of this prospectus entitled“Underwriting” beginning on page 167 for a description of compensation and other items of value payable to the underwriters.

Ofthe proceeds we receive from this offering and the sale of the private placement warrants described in this prospectus, $101,500,000 or $116,725,000 if the underwriters’ over-allotment option is exercised in full ($10.15 per unit in eithercase) will be deposited into a trust account in the United States with Continental Stock Transfer & Trust Company acting as trustee, and $2,000,000 will be available to pay fees and expenses in connection with the closing of thisoffering and for working capital following the closing of this offering.

The underwriters are offering the units for sale on a firm commitment basis. Theunderwriters expect to deliver the units to the purchasers on or about                      , 2022.

 

 

Sole Bookrunner

MaximGroup LLC

                 , 2022


Table of Contents

TABLE OF CONTENTS

 

   Page 

Summary

   1 

Cautionary Note Regarding Forward-Looking Statements

   35 

Risk Factors

   36 

Use of Proceeds

   78 

Dividend Policy

   83 

Dilution

   84 

Capitalization

   87 

Management’s Discussion and Analysis of Financial Condition and Results ofOperations

   89 

Proposed Business

   96 

Management

   126 

Principal Stockholders

   134 

Certain Relationships and Related Party Transactions

   137 

Description of Securities

   140 

Material U.S. Federal Income Tax Considerations

   156 

Underwriting

   166 

Legal Matters

   172 

Experts

   172 

Where You Can Find Additional Information

   172 

Index to Financial Statements

   F-1 

We are responsible for the information contained in this prospectus. We have not authorized anyone to provide you withdifferent information, and we take no responsibility for any other information others may give to you. We are not, and the underwriters are not, making an offer to sell securities in any jurisdiction where the offer or sale is not permitted. Youshould not assume that the information contained in this prospectus is accurate as of any date other than the date on the front of this prospectus.

 

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SUMMARY

This summary only highlights the more detailed information appearing elsewhere in this prospectus. You should read this entire prospectus carefully,including the information under the section of this prospectus entitled “Risk Factors” and our financial statements and the related notes included elsewhere in this prospectus, before investing.

Unless otherwise stated in this prospectus, or the context otherwise requires, references to:

 

  

“Class A common stock” are to our Class A common stock, par value $0.0001 per share;

 

  

“Class B common stock” are to our Class B common stock, par value $0.0001 per share;

 

  

“common stock” are to our Class A common stock and our Class B common stock, collectively;

 

  

“company” or “our company” “we,” “us,” “are to CE EnergyAcquisition Corp.;

 

  

“equity-linked securities” are to any securities of our company which are convertible into orexchangeable or exercisable for, common stock of our company, including but not limited to a private placement of equity or debt.

 

  

“founder shares” are to shares of our Class B common stock initially purchased by our sponsorin a private placement prior to this offering, and the shares of our Class A common stock issued upon the conversion thereof as provided herein;

 

  

“initial stockholders” are to our sponsor and any other holders of our founder shares prior to thisoffering (or their permitted transferees);

 

  

“management” or our “management team” are to our officers and directors;

 

  

“private placement warrants” are to the warrants issued to our sponsor in a private placementsimultaneously with the closing of this offering, which private placement warrants are identical to the warrants sold in this offering, subject to certain limited exceptions as described in this prospectus;

 

  

“public shares” are to shares of our Class A common stock sold as part of the units in thisoffering (whether they are purchased in this offering or thereafter in the open market);

 

  

“public stockholders” are to the holders of our public shares, including our initial stockholdersand management team to the extent our initial stockholders and/or members of our management team purchase public shares, provided that each initial stockholder’s and member of our management team’s status as a “publicstockholder” shall only exist with respect to such public shares;

 

  

“public warrants” are to our redeemable warrants sold as part of the units in this offering (whetherthey are purchased in this offering or thereafter in the open market), to the private placement warrants if held by third parties other than our sponsor or the underwriters (or permitted transferees), and to any private placement warrants issuedupon conversion of working capital loans that are sold to third parties that are not initial purchasers or executive officers or directors (or permitted transferees), in each case, following the consummation of our initial business combination;

 

  

“representative” or “Maxim” are to Maxim Group, LLC, the representative of theunderwriters in this offering;

 

  

“representative shares” are to 100,000 shares of Class A common stock (115,000 shares ofClass A common stock if the underwriters’ over-allotment option is exercised in full) to be issued to the representative of the underwriters at the closing of the offering;

 

  

“sponsor” are to CE Energy Sponsors LLC, a Delaware limited liability company, whose members includeentities controlled by certain of our directors and officers; and

 

  

“warrants” are to our redeemable warrants, which includes the public warrants as well as the privateplacement warrants.                

Each unitconsists of one share of Class A common stock and three-quarters of one redeemable warrant, each entitling the holder thereof to purchase one share of our Class A common stock at a price of $11.50 per share, subject to adjustment asdescribed in this prospectus. Unless we tell you otherwise, the information in this prospectus assumes that the underwriters will not exercise their over-allotment option.

 

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PROPOSED BUSINESS

Our Company

We are a newly organized blank check companyincorporated as a Delaware corporation formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses, which we refer to throughout thisprospectus as our initial business combination or our business combination.

To date, our efforts have been limited to organizational activities as wellas activities related to this offering. We have not selected any specific business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target.We have generated no operating revenues to date and we may not generate operating revenues even after we consummate our initial business combination.

While we may pursue an acquisition opportunity in any industry, sector or geographical location, we intend to focus our search for a target business in theenergy industry, in particular, a business with assets used in exploring, developing, producing, transporting, storing, gathering, processing, fractionating, refining, distributing or marketing of natural gas, natural gas liquids, crude oil orrefined products in North America, Central and South America. We may pursue an acquisition opportunity in renewable energy (“renewables”) which refers to energy from a source that is sustainable, such as wind, hydropower, geothermal orsolar power.

Past performance of our management team is not a guarantee either (i) of success with respect to any business combination we mayconsummate, or (ii) that we will be able to identify a suitable candidate for our initial business combination. You should not rely on the historical performance record of our management as indicative of our future performance. In addition, fora list of our executive officers and entities for which a conflict of interest may or does exist between such officers and the company, as well as the priority and preference that such entity has with respect to performance of obligations andpresentation of business opportunities to us, please refer to the table and subsequent explanatory paragraph under “Management — Conflicts of Interest”.

Our officers and directors may become officers or directors of any other blank check company prior to completion of our initial business combination. As aresult, our 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.

Our Board of Directors and Management

Ryan E.M. Cunningham                Chairman and Chief Executive Officer

Ryan Cunningham is the President and Operational Partner of Cunningham Energy, LLC, an independent producer of oil and gaswhich he founded in 2008. He currently directs operations for Cunningham Energy, Marzcorp Oil & Gas Inc., Viper Capital Partners LLC and Raven Ridge Energy LLC. Mr. Cunningham served as operating partner of Black Crow Oil LLCfrom 2009 to 2010. From 1999 to 2001, Mr. Cunningham was a sales trader with Oppenheimer & Co. (formerly CIBC World Markets), initially with the private client division and then in its institutional trading group with middle marketsand institutional sales trading teams before becoming head sales trader in 2001. Mr. Cunningham has been a Board member of the West Virginia Oil & gas Association since 2013. Mr. Cunningham received a Bachelor of Arts degree onEnvironmental Policy from Rollins College.

Morgan (Mo)Fahimi                Chief Financial Officer and Director Nominee

Since March 2021 Mr. Fahimi has led the sales efforts of Acuris, a media company specializing in high-value content for financialprofessionals and dealogic platforms, which is owned Acuris by ION Investment

 

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Group, a financial software and data business. Acuris provides all-encompassing data and intelligence sets for the equity and fixed income institutionalcommunity as well the private equity markets, and is known for its products fixed income research provider Debtwire and Mergermarket, a specialist in M&A intelligence. Mr. Fahimi joined Mergermarket in 2005 as head of sales, where he ledthe sales effort of the Debtwire division, a worldwide leading fixed income data and intelligence platform. From 2007 to 2020, Mr. Fahimi was Managing Director Head of Sales for the Dealreporter business within Mergermarket, a worldwideleading Risk Arbitrage Data and Intelligence platform, where he was responsible for initiating all commercial relationships and distribution of global Dealreporter., From 2002 to 2004, Mr. Fahimi was an account executive with CIBC World Marketsin institutional Middle Market Sales and Trading. Mr. Fahimi is a director of Signal Research, a US and UK based Quantitative, Macro and Technical Analysis Research firm catering to the Institutional investment community. He received a BAin Economics from Kingston University, London, England.

Abdiel A.Santiago                 Director Nominee

AbdielSantiago has been the Secretariat (CEO/CIO) of the Fondo de Ahorro de Panamá (Panama’s Sovereign Wealth Fund) since 2013. From 2012 to 2013, he was a senior adviser at G-2 Capitalfocusing on financial restructuring opportunities. From 2005 to 2011, he was an equity investment research executive at Morgan Stanley in New York covering the energy and industrial sectors. From 1998 to 2002, Mr. Santiago served as a financialanalyst/examiner at the US Securities and Exchange Commission overseeing financial/regulatory matters at broker-dealers and asset managers. Mr. Santiago received an MBA from the Kellogg School of Management at Northwestern University and aBachelor’s degree from the University of Denver.

TylerHardt                Director Nominee

Tyler Hardt isthe Chief Investment Officer of Pelican Bay Capital Bay Management, LLC, which he founded in July 2018. From June 2009 to June 2018, Mr. Hardt was as an equity analyst on the Domestic Value Team at Artisan Partners AssetManagement. From 2004 to 2005, he was a corporate development analyst on the Corporate Mergers & Acquisitions and Corporate Strategy group at AT&T and from 2005 to 2007 he was strategic planning analyst on the CorporateMergers & Acquisitions and Corporate Strategy group at American Tire Distributors. Mr. Hardt received an MBA with Honors from the Wharton School at the University of Pennsylvania, and a Bachelor of Science in Finance from theUniversity of Maryland, where he graduated cum laude.

Gerald M. TitusIII                 Director Nominee

Gerald M.TitusIII has been a member of Spilman Thomas & Battle, PLLC, a regional law firm based in Charleston, West Virginia since 2008. He represents clients in the oil and gas industry. Prior to joining Spilman Thomas & Battle, PLLC,Mr. Titus was an Assistant United States Attorney for the United States Department of Justice. He received JD and Bachelor degrees from Washington and Lee University.

Industry Opportunity

While we mayacquire a business in any industry, our strategy is to source, acquire and, after our initial business combination, grow, an oil and gas exploration and production (“E&P”) or midstream business. E&P companies focus on finding,producing and marketing various forms of crude oil and natural gas and midstream businesses and on gathering, separating, storing and transporting various hydrocarbons. We believe that there is a unique and timely opportunity to achieve attractivereturns by acquiring and developing E&P assets in proven basins with known operational and limited geologic risks. We believe this opportunity exists due to several key factors:

 

 (i)

the recent fluctuations in commodity prices had an immediate and meaningful impact on the cash flows of E&Pcompanies, creating a need for many E&P firms to issue external capital or sell assets;

 

 (ii)

the heightened activity in U.S. shale operations and global deep-water developments has resulted insmaller mature, ‘brownfield’ production operations being relatively starved of capital resources;

 

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 (iii)

digital technologies are having a revolutionary impact on the efficiency of many industry sectors, includingenergy, but relatively little of that technology is currently being applied to ‘brownfield’ mature production, which, harboring abundant data and information, will benefit from integrated digital technologies unlocking critical aspects ofreservoir performance impacting cash flow;

 

 (iv)

the recent fluctuations in commodity prices and declining U.S. shale oil cost structure has substantiallyreduced E&P asset valuations and is moderating drilling and completion costs, and operating costs, resulting in a lower cost to acquire and develop. Volatility of U.S. natural gas futures prices has risen during the past seven months, reachingrecord-high levels in February. Historical volatility measures the magnitude of daily changes in the closing price for a commodity during a specific time in the past. Based on rolling front-month contracts, the30-day historical volatility of the U.S. natural gas futures price was 179.1% for February, almost doubling from January. The previous record natural gas price volatility for any month was October 2009, whenthe historical volatility averaged 123.8% (U.S. Energy Information Administration);

 

 (v)

the short-term commodity price volatility has depressed asset values that don’t reflect our positivelong-term outlook for crude oil and natural gas demand and the need for higher commodity prices to meet expected demand growth; the invasion of Ukraine by Russia and subsequent sanctions on Russia and other actions created significant marketuncertainties about the potential for oil supply disruptions. These events are occurring against a backdrop of low oil inventories and persistent upward oil price pressures (U.S. Energy Information Administration); and

 

 (vi)

the largest oil and gas companies, including ExxonMobil, Royal Dutch Shell, Chevron and BP, are projected tosell a combined $100 billion in oil and gas assets around the world as they focus on top-performing regions according to a new analysis from consulting firm Rystad Energy (October 2020).

We also believe there is significant potential to acquire and, after our initial business combination, grow a midstream business,particularly in international regions with expected and growing hydrocarbon production profiles.

We believe our management team is wellpositioned to take advantage of opportunities within the energy sector and create value for our stockholders. Our management team has a history in oil and gas, with a deep knowledge of the industry and a well-established network ofrelationships with public and private oil and gas companies, National Oil Companies (NOCs), Government Licensing Authorities, equity sponsors, lending institutions, family offices, attorneys and brokers, from which we expect to generate attractiveacquisition opportunities.

While we will consider assets globally that meet our business strategy criteria, we do consider energy assets in Central andSouth America of particular interest given current relative valuation, reservoir potential and/or legacy of development. Notwithstanding above ground political and operating challenges, infrastructure and reservoir quality are of particularimportance for brownfield re-development and midstream investments. According to the BP Statistical Review of World Energy 2019, Latin America (Mexico, Central and South America) has the highest Reserveto Production ratio, or R/P ratio, of 106 years compared to a global average of 50 years, Africa of 42 years, Europe of 11 years, Commonwealth of Independent States (CIS) of 27 years, Middle East of 72 years and North America of 29 years. The sizeof the reserves and resources relative to current production illustrates a historical relative under-investment in the region.

While we may acquirean E&P business, we also may focus on companies in the renewable energy industry worldwide. We intend to focus on companies that have strong management teams, high growth potential, and that would benefit from access to capital to fundacquisitions or working capital for organic growth. We believe the renewable energy industry represents an attractive target market with many potential acquisition opportunities. Renewable energy growth may accelerate in 2022 with recentannouncements to spend between $1 trillion and $2 trillion per year over the next ten years in the U.S., to increase the use of clean energies in the transportation, electricity and building sectors.

 

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Business Combination Criteria

Consistent with our acquisition strategy, we have identified the following general criteria and guidelines that we believe are important in evaluatingprospective target businesses. We will use these criteria and guidelines in evaluating acquisition opportunities. While we intend to acquire companies that we believe exhibit one or more of the following characteristics, we may decide to enter intoour initial business combination with a target business that does not meet these criteria and guidelines. We intend to acquire companies that we believe have the following characteristics:

 

  

Management Control: It will be an important factor to have operational control rather than being apassive equity partner. Existing staff needs to have credentials, expertise and performance that are aligned with future operational activity. Potential should exist for local and expatriate recruitment to compliment the special requirements offuture operational activity. Furthermore, the ability to contract specialized consultants and service companies should exist.

 

  

Ease of Operating: Health, Safety, Security, Environmental andSocial (HSSES) standards, procedures and performance will be a critical element of future operational activity; historical records and performance will be an essential element in assessing suitability for future efficient and effective performance.

 

  

Financial Restructuring: Capital Allocation, Cash Flow Analysis,Authority for Expenditure (AFE), Economic Modeling processes and Corporate Finance integration will be essential processes to ensure effective and efficient future operation. An assessment of existing processes should highlight deficiencies andwhere essential restructuring modifications should not be too onerous.

For potential E&P acquisitions, we intend to targetopportunities with:

 

  

Subsurface materiality: Existing production is 10,000bopd, where historical production suggestssignificant increases can be achieved through, but not restricted to a variety of well interventions, infill wells, pressure support, pattern reconfigurations and other operational activity. Independent Reserve Audits demonstrate material ProvenUndeveloped Reserves (PUD’s), together with Probable (P2), Possible (P3) and Contingent Resources exist. Realistic Field Development Plans (FDP’s) are in place or can be constructed. Sufficient surveillance data and information isavailable to envisage significant impact can be achieved with the implementation of various Digital Science and Analysis techniques.

These criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be based, to theextent relevant, on these general guidelines as well as other considerations, factors and criteria that our management may deem relevant. In the event that we decide to enter into our initial business combination with a target business that does notmeet the above criteria and guidelines, we will disclose that the target business does not meet the above criteria in our stockholder communications related to our initial business combination, which, as discussed in this prospectus, would be in theform of proxy solicitation materials or tender offer documents that we would file with the SEC. The evaluation relating to the merits of a particular initial business combination may be based, to the extent relevant, on these general guidelines aswell as other considerations, factors and criteria that our management may deem relevant. In the event that we decide to enter into our initial business combination with a target business that does not meet the above criteria and guidelines, we willdisclose that the target business does not meet the above criteria in our stockholder communications related to our initial business combination, which, as discussed in this prospectus, would be in the form of tender offer documents or proxysolicitation materials that we would file with the SEC.

Sourcing of potential business combination targets

We believe that the operational and transactional experience of our management team and the relationships they have developed as a result of such experience,will provide us with a substantial number of potential business combination targets. These individuals and entities have developed a broad network of contacts and corporate

 

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relationships around the world. This network has grown through sourcing, acquiring and financing businesses and maintaining relationships with sellers, financing sources and target managementteams. Our management team members have significant experience in executing transactions under varying economic and financial market conditions. We believe that these networks of contacts and relationships and this experience will provide us withimportant sources of investment opportunities. In addition, we anticipate that target business candidates may be brought to our attention from various unaffiliated sources, including investment market participants, private equity funds and largebusiness enterprises seeking to divest noncore assets or divisions.

We are not prohibited from pursuing an initial business combination with a businesscombination target that is affiliated with our sponsor, officers or directors or making the acquisition through a joint venture or other form of shared ownership with our sponsor, officers or directors. In the event we seek to complete our initialbusiness combination with a company that is affiliated with our sponsor, officers or directors, we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm or another independent firm that commonlyrenders valuation opinions for the type of company we are seeking to acquire 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 opinionin any other context. If any of our officers or directors becomes aware of a business combination opportunity that falls within the line of business of any entity to which he or she has then-current fiduciary or contractual obligations, he orshe may be required to present such business combination opportunity to such entity prior to presenting such business combination opportunity to us, subject to his or her fiduciary duties. Our officers and directors currently have certain relevantfiduciary duties or contractual obligations that may take priority over their duties to us. Any such entity may co-invest with us in the target business at the time of our initial business combination, orwe could raise additional proceeds to complete the acquisition by making a specified future issuance to any such entity.

Other acquisitionconsiderations

Unless we complete our initial business combination with an affiliated entity, or our Board of Directors cannot independently determinethe fair market value of the target business or businesses, we are not required to obtain an opinion from an independent investment banking firm, another independent firm that commonly renders valuation opinions for the type of company we areseeking to acquire or from an independent accounting firm that the price we are paying for a target is fair to our company from a financial point of view. If no opinion is obtained, our stockholders will be relying on the business judgment of ourBoard of Directors, which will have significant discretion in choosing the standard used to establish the fair market value of the target or targets, and different methods of valuation may vary greatly in outcome from one another. Such standardsused will be disclosed in our tender offer documents or proxy solicitation materials, as applicable, related to our initial business combination.

Membersof our management team may directly or indirectly own shares of our common stock and/or private placement warrants following this offering, and, accordingly, may have a conflict of interest in determining whether a particular target business is anappropriate 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 resignationof any such officers and directors was included by a target business as a condition to any agreement with respect to our initial business combination.

Each of our directors and officers presently has, and in the future any of our directors and our officers may have additional, fiduciary or contractualobligations to other entities pursuant to which such officer or director is or will be required to present acquisition opportunities to such entity. Accordingly, subject to his or her fiduciary duties, if any of our officers or directors becomesaware of an acquisition opportunity which is suitable for an entity to which he or she has then current fiduciary or contractual obligations, he or she will need to honor his or her fiduciary or contractual obligations to present such acquisitionopportunity to such entity, and only present it to us if such entity rejects the opportunity. In addition, we may, at our option, pursue an Affiliated Joint Acquisition opportunity with an entity to which an officer or director has a fiduciary orcontractual obligation.

 

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Any such entity may co-invest with us in the target business at the time of our initial business combination, or we could raise additional proceeds tocomplete the acquisition by making a specified future issuance to any such entity. A director shall be at liberty to vote in respect of any contract or transaction in which he is interested provided that the nature of such interest shall bedisclosed at or prior to its consideration or any vote thereon by the board of directors. We do not believe, however, that any fiduciary duties or contractual obligations of our directors or officers would materially undermine our ability tocomplete our business combination.

Initial Business Combination

We will have 15 months from the closing of this offering to consummate an initial business combination. However, if we anticipate that we may not be able toconsummate our initial business combination within 15 months, we may, by resolution of our board if requested by our sponsor, extend the period of time to consummate a business combination by an additional three months on two occasions (for atotal of up to 21 months to complete a business combination), subject to our sponsor depositing additional funds into the trust account, upon five days advance notice prior to the applicable deadline, $1,000,000, or $1,150,000 if theunderwriters’ over-allotment option is exercised in full ($0.10 per unit in either case), for each of the available three month extensions, providing a total possible business combination period of 21 months at a total payment value of$2,000,000, or $2,300,000 if the underwriters’ over-allotment option is exercised in full (each such extension period being hereinafter referred to as an “Extension Period”). Any such payments would be made in the form of non-interest bearing loans. If we complete our initial business combination, we will, at the option of our sponsor, repay such loaned amounts out of the proceeds of the trust account released to us or convert aportion or all of the total loan amount into warrants at a price of $1.00 per warrant, which warrants will be identical to the private placement warrants. If we do not complete a business combination, we will repay such loans only from funds heldoutside of the trust account. Our stockholders will not be entitled to vote or redeem their shares in connection with any such extension. However, our stockholders will be entitled to vote and redeem their shares in connection with a stockholdermeeting held to approve an initial business combination or in a tender offer undertaken in connection with such an initial business combination if we propose such a business combination during any three-month extension period. If we are unable toconsummate our initial business combination within such time period, we will, as promptly as possible but not more than ten business days thereafter, redeem 100% of our outstanding public shares for a pro rata portion of the funds held in the trustaccount, including a pro rata portion of any interest earned on the funds held in the trust account, net of taxes payable and liquidation expenses of up to $100,000, and then seek to dissolve and liquidate. However, we may not be able to distributesuch amounts as a result of claims of creditors which may take priority over the claims of our public stockholders. In the event of our dissolution and liquidation, the private placement warrants will expire and will be worthless.

Nasdaq rules require that we must complete one or more business combinations having an aggregate fair market value of at least 80% of the value of the assetsheld in the trust account (excluding the deferred underwriting commissions and taxes payable on the interest earned on the trust account) at the time of our signing a definitive agreement in connection with our initial business combination. Ourboard of directors will make the determination as to the fair market value of our initial business combination. If our board of directors is not able to independently determine the fair market value of our initial business combination, we willobtain an opinion from an independent investment banking firm that is a member of FINRA or an independent accounting firm with respect to the satisfaction of such criteria. While we consider it unlikely that our board of directors will not be ableto 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 ofuncertainty as to the value of a target’s assets or prospects. Additionally, pursuant to Nasdaq rules, any initial business combination must be approved by a majority of our independent directors.

We anticipate structuring our initial business combination either (i) in such a way so that the post-transaction company in which our public stockholdersown shares will own or acquire 100% of the equity interests or assets

 

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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 orderto 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 votingsecurities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended, or the “Investment CompanyAct”. 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 atarget. 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 thana 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 suchbusiness or businesses that is owned or acquired is what will be taken into account for purposes of Nasdaq’s 80% of net assets test. If the initial business combination involves more than one target business, the 80% of net assets test will bebased on the aggregate value of all of the transactions and we will treat the target businesses together as the initial business combination for purposes of a tender offer or for seeking stockholder approval, as applicable.

Our Business Combination Process

Inevaluating prospective business combinations, we expect to conduct a thorough due diligence review process that will encompass, among other things, a review of historical and projected financial and operating data, meetings with management and theiradvisors (if applicable), on-site inspection of facilities and assets, discussion with customers and suppliers, legal reviews and other reviews as we deem appropriate.

We are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor, officers or directors. In the event weseek to complete our initial business combination with a company that is affiliated with our sponsor, officers or directors, we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm that is amember of FINRA or an independent accounting firm that our initial business combination is fair to our company from a financial point of view.

Each ofour 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 combinationopportunity. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he has then-current fiduciary or contractual obligations to present the opportunity to suchentity, he will honor his fiduciary or contractual obligations to present such opportunity to such entity. We believe, however, that the fiduciary duties or contractual obligations of our officers or directors will not materially affect our abilityto complete our initial business combination. Our second amended and restated certificate of incorporation will provide that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity isexpressly offered to such person solely in his 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 extentthe director or officer is permitted to refer that opportunity to us without violating another legal obligation.

Corporate Information

Our executive offices are located at United Center, 500 Virginia Street East, 10th floor, Charleston, West Virginia 25301, and ourtelephone number is (304) 859-7440.

 

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We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act of1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. As such, we are eligible to take advantage of certain exemptions from various reporting requirements that areapplicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or theSarbanes-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 onexecutive 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 pricesof our securities may be more volatile.

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage ofthe 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 untilthose standards would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period.

We willremain 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 this offering, (b) in which we have total annual gross revenue of at least$1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Class A common stock that is held by non-affiliates exceeds $700 million as ofthe 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 growthcompany will have the meaning associated with it in the JOBS Act.

Additionally, we are a “smaller reporting company” as defined inRule 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 financialstatements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our common stock held by non-affiliates exceeds $250 million as of theend of the prior June 30th, or (2) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our common stock held by non-affiliates exceeds $700 million as of the prior June 30th.

 

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THE OFFERING

In deciding whether to invest in our securities, you should take into account not only the backgrounds of the members of our management team, but also thespecial risks we face as a blank check company and the fact that this offering is not being conducted in compliance with Rule 419 promulgated under the Securities Act. You will not be entitled to protections normally afforded to investors inRule 419 blank check offerings. You should carefully consider these and the other risks set forth in the section of this prospectus entitled “Risk Factors.”

 

Securities offered

10,000,000 units, at $10.00 per unit, each unit consisting of:

 

  

one share of Class A common stock; and

 

  

three-quarters of one redeemable warrant, with each whole warrant exercisable for one share of Class Acommon stock at a price of $11.50 per share.

 

Proposed Nasdaq symbols

Units: “CEACU”

 

 Class A common stock: “CEAC”

 

 Warrants: “CEACW”

 

Trading commencement and separation of Class A common stock and warrants

The units will begin trading on or promptly after the date of this prospectus. We expect the Class A common stock and warrants comprising the units will begin separate trading on the 52ndday following the date of this prospectus unless Maxim Group LLC informs us of its decision to allow earlier separate trading, subject to our having filed the Current Report on Form 8-K described belowand having issued a press release announcing when such separate trading will begin. Once the shares of Class A common stock and warrants commence separate trading, holders will have the option to continue to hold units or separate their unitsinto the component securities. Holders will need to have their brokers contact our transfer agent in order to separate the units into shares of Class A common stock and warrants. No fractional warrants will be issued upon separation of theunits and only whole warrants will trade. Accordingly, unless you purchase a multiple of four units, you will not be able to receive or trade a whole warrant.

 

Separate trading of the Class A common stock and warrants is prohibited until we have filed aCurrent Report on Form 8-K

In no event will the Class A common stock and warrants be traded separately until we have filed a Current Report on Form 8-K with the SEC containing an audited balance sheet reflecting ourreceipt of the gross proceeds at the closing of this offering. We will file the Current Report on Form 8-K promptly after the closing of this offering, which is anticipated to take place three businessdays from the date of this prospectus. If the underwriters’ over-allotment option is exercised following the initial filing of such Current Report on Form 8-K, a second or amended Current Report on Form 8-K will be filed to provide updated financial information to reflect the exercise of the underwriters’ over-allotment option.

Units:

 

Number outstanding before this offering

0

 

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Number outstanding after this offering

10,000,000(1)

Common stock:

 

Number outstanding before this offering

2,875,000 shares of Class B common stock(2)

 

Number outstanding after this offering

12,500,000 shares of Class A common stock and Class B common stock(1)(3)

Warrants:

 

Number outstanding before this offering

0

 

Number of private placement warrants to be sold in a private placement simultaneously withthis offering

5,500,000(1)

 

Number of warrants to be outstanding after this offering and the private placement

13,000,000(1)(4)

 

Exercisability

Each whole warrant entitles the holder thereof to purchase one share of Class A common stock.

 

 We structured each unit to contain three-quarters of one redeemable warrant, with each whole warrant exercisable for one share of Class A common stock, as compared to units issued by some other similar blank checkcompanies which contain whole warrants exercisable for one whole share, in order to reduce the dilutive effect of the warrants upon completion of an initial business combination as compared to units that each contain a warrant to purchase one wholeshare, thus making us, we believe, a more attractive initial business combination partner for target businesses.

 

Exercise price

$11.50 per share, subject to adjustment as described herein. In addition, if (x) we issue additional shares of Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of our initialbusiness 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 ofany such issuance to our sponsor or its affiliates, without taking into

 

(1) 

Assumes no exercise of the underwriters’ over-allotment option and the forfeiture by our initialstockholders of 375,000 founder shares.

(2) 

Includes up to 375,000 shares that are subject to forfeiture by our initial stockholders depending on theextent to which the underwriters’ over-allotment option is exercised.

(3) 

Comprised of 10,000,000 shares of Class A common stock included in the units to be sold in this offeringand 2,500,000 shares of Class B common stock (or founder shares) and 100,000 shares of Class A common stock to be issued to Maxim Group LLC and/or its designees at the closing of the offering. The Class B common stock is convertibleinto shares of our Class A common stock on a one-for-one basis, subject to adjustment as described below adjacent to the caption “Founder shares conversion andanti-dilution rights.”

(4) 

Comprised of 7,500,000 public warrants included in the units to be sold in this offering and 5,500,000 privateplacement warrants to be sold in the private placement.

 

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account any founder shares held by our sponsor or its affiliates, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances representmore 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 (z) the volumeweighted average reported sale price of our common stock during the 10 trading days ending on the third trading day prior to the day on which we consummate our initial business combination (such price, the “Market Value”) is below $9.20per share, 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 below under“Redemption of warrants” will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price.

 

Exercise period

The warrants will become exercisable on the later of:

 

  

30 days after the completion of our initial business combination, or

 

  

12 months from the closing of this offering;

 

 provided in each case that we have an effective registration statement under the Securities Act covering the shares of Class A common stock issuable upon exercise of the warrants and a current prospectus relatingto them is available (or we permit holders to exercise their warrants on a cashless basis under the circumstances specified in the warrant agreement).

 

 We are not registering the shares of Class A common stock issuable upon exercise of the warrants at this time. However, we have agreed that as soon as practicable, but in no event later than 15 business days afterthe closing of our initial business combination, we will use our best efforts to file with the SEC a registration statement covering the shares of Class A common stock issuable upon exercise of the warrants, to cause such registration statementto become effective and to maintain the effectiveness of such registration statement, and a current prospectus relating to those shares of Class A common stock until the warrants expire, as specified in the warrant agreement. If a registrationstatement covering the shares of Class A common stock issuable upon exercise of the warrants is not effective within 60 business days after the closing of our initial business combination, warrant holders may, until such time as there isan effective registration statement and during any period when we will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act oranother exemption.

 

 

Notwithstanding the above, if our Class A common stock is at the time of any exercise of a warrant not listed on anational securities exchange such that it satisfies 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

 

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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 aregistration statement, and in the event we do not so elect, we will use our best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.

 

 The warrants will expire at 5:00 p.m., New York City time, five years after the completion of our initial business combination or earlier upon redemption or liquidation. On the exercise of any warrant, the warrantexercise price will be paid directly to us and not placed in the trust account.

 

Redemption of warrants

Once the warrants become exercisable, we may redeem the outstanding warrants (excluding the private placement warrants but including any outstanding warrants issued upon exercise of the unit purchase option issued to the representative and/orits designees):

 

  

in whole and not in part;

 

  

at a price of $0.01 per warrant;

 

  

upon a minimum of 30 days’ prior written notice of redemption, which we refer to as the 30-day redemption period; and

 

  

if, and only if, the last sale price of our Class A common stock equals or exceeds $18.00 per share (asadjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) on each of 20 trading days within a 30-trading day period ending on the third trading day prior to the date on whichwe send the notice of redemption to the warrant holders.

 

 We will not redeem the warrants unless a registration statement under the Securities Act covering the shares of Class A common stock issuable upon exercise of the warrants is effective and a current prospectusrelating to those shares of Class A common stock is available throughout the 30-day redemption period, except if the warrants may be exercised on a cashless basis and such cashless exercise is exempt fromregistration under the Securities Act. If and when the warrants become redeemable by us, we may not exercise our redemption right if the issuance of shares of common stock upon exercise of the warrants is not exempt from registration orqualification under applicable state blue sky laws or we are unable to effect such registration or qualification. We will use our best efforts to register or qualify such shares of common stock under the blue sky laws of the state of residence inthose states in which the warrants were offered by us in this offering.

 

 

If we call the warrants for redemption as described above, our management will have the option to require all holders thatwish to exercise warrants to do so on a “cashless basis.” In determining whether to require all holders to exercise their warrants on a “cashless basis,” our management will consider, among other factors, our cash position, thenumber of warrants that are outstanding and the dilutive effect on our stockholders of issuing the maximum number of shares of Class A common stock issuable upon the exercise of our warrants.

 

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In such event, each holder would pay the exercise price by surrendering the warrants for that number of shares of Class A common stock equal to the quotient obtained by dividing (x) theproduct of the number of shares of Class A common stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value” (defined below) by (y) the fair market value.The “fair market value” shall mean the average reported last sale price of the Class A common stock for the 10 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders ofwarrants.

 

 Please see the section of this prospectus entitled “Description of Securities — Redeemable Warrants — Public Stockholders’ Warrants” for additional information.

 

 None of the private placement warrants will be redeemable by us so long as they are held by the sponsor or its permitted transferees.

 

Founder shares

On December 28, 2021, our sponsor purchased 2,875,000 founder shares for an aggregate purchase price of $25,000, or approximately $0.009 per share. The per share purchase price of the founder shares was determined by dividing the amount ofcash contributed to the company by the aggregate number of founder shares issued. The number of founder shares issued was determined based on the expectation that the founder shares would represent 20% of the outstanding shares after this offering(excluding the representative’s shares). As such, our initial stockholders will collectively own 20% of our issued and outstanding shares after this offering, assuming our sponsor or our directors or officers do not purchase units in thisoffering and excluding the representative shares. Neither our sponsor nor any of our officers or directors have expressed an intention to purchase any units in this offering. Up to 375,000 founder shares will be subject to forfeiture by our initialstockholders depending on the extent to which the underwriters’ over-allotment option is exercised so that our initial stockholders will maintain ownership of 20% of our common stock after this offering, excluding the representative shares. Wewill effect a stock dividend or share contribution prior to this offering should the size of the offering change, in order to maintain such ownership percentage.

 

 The founder shares are identical to the shares of Class A common stock included in the units being sold in this offering, except that:

 

  

the founder shares are shares of Class B common stock that automatically convert into shares of ourClass A common stock at the time of our initial business combination, on a one-for-one basis, subject to adjustment pursuant to certain anti-dilution rights, asdescribed herein;

 

  

the founder shares are subject to certain transfer restrictions, as described in more detail below;

 

  

our sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they haveagreed to (i) waive their redemption rights with respect to their founder

 

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shares and public shares in connection with the completion of our initial business combination, (ii) waive their redemption rights with respect to their founder shares and public shares inconnection with a stockholder vote to approve an amendment to our second amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete ourinitial business combination within 15 months from the closing of this offering (or up to 21 months from the closing of this offering if we extend the period of time to consummate a business combination by three months on up to two occasions asdescribed in more detail in this prospectus) or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity and (iii) waive their rightsto liquidating distributions from the trust account with respect to their founder shares if we fail to complete our initial business combination within 15 months from the closing of this offering (or up to 21 months from the closing of this offeringif we extend the period of time to consummate a business combination by up to three months on two occasions as described in more detail in this prospectus), although they will be entitled to liquidating distributions from the trust account withrespect to any public shares they hold if we fail to complete our initial business combination within the prescribed time frame;

 

  

pursuant to the letter agreement, our sponsor, officers and directors have agreed to vote any founder shares heldby them and any public shares purchased during or after this offering (including in open market and privately negotiated transactions) in favor of our initial business combination. If we submit our initial business combination to our publicstockholders for a vote, 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. As a result, in addition to our initialstockholders’ founder shares, we would need only 3,800,001, or 38.0%, of the 10,000,000 public shares sold in this offering to be voted in favor of an initial business combination (assuming all outstanding shares are voted) in order to have ourinitial business combination approved (assuming the over-allotment option is not exercised); and

 

  

the founder shares are entitled to registration rights.

 

Transfer restrictions on founder shares

Our initial stockholders have agreed not to transfer, assign or sell any of their founder shares until the earlier to occur of (i) one year afterthe date of the consummation of our initial business combination or (ii) the date on which we consummate a liquidation, merger, stock exchange or other similar transaction which results in all of our stockholders having the right to exchangetheir shares of Class A common stock for cash, securities or other property (except as described herein under the section of this prospectus entitled “Principal Stockholders — Restrictions on Transfers of Founder

 

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Shares and Private Placement Warrants”). Any permitted transferees will be subject to the same restrictions and other agreements of our initial stockholders with respect to any foundershares. Notwithstanding the foregoing, if the closing price of our shares of Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20trading days within any 30-trading day period commencing 150 days after our initial business combination, the founder shares will no longer be subject to such transfer restrictions. We refer to suchtransfer restrictions throughout this prospectus as the lock-up.

 

Founder shares conversion and anti-dilution rights

The shares of Class B common stock will automatically convert into shares of our Class A common stock at the time of our initial business combination on aone-for-one basis, subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like, and subject to further adjustment asprovided herein. In the case that additional shares of Class A common stock, or equity-linked securities, are issued or deemed issued in excess of the amounts offered in this prospectus and related to the closing of the initial businesscombination, the ratio at which shares of Class B common stock shall convert into shares of Class A common stock will be adjusted (unless the holders of a majority of the outstanding shares of Class B common stock agree to waive suchadjustment with respect to any such issuance or deemed issuance) so that the number of shares of Class A common stock issuable upon conversion of all shares of Class B common stock will equal, in the aggregate, on an as-converted basis, 20% of the sum of the total number of all shares of common stock outstanding upon the completion of this offering plus all shares of Class A common stock and equity-linked securities issuedor 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 initial business combination or any private placement-equivalent units issued to oursponsor, its affiliates or certain of our officers and directors upon conversion of working capital loans made to us). Holders of founder shares may also elect to convert their shares of Class B common stock into an equal number of shares ofClass A common stock, subject to adjustment as provided above, at any time. The term “equity-linked securities” refers to any debt or equity securities that are convertible, exercisable or exchangeable for shares of Class Acommon stock issued in a financing transaction in connection with our initial business combination, including but not limited to a private placement of equity or debt. Securities could be “deemed issued” for purposes of the conversion rateadjustment if such shares are issuable upon the conversion or exercise of convertible securities, warrants or similar securities.

 

Voting Rights

Holders of the Class A common stock and holders of the Class B common stock will vote together as a single class on all matters submitted to a vote of our stockholders, with each share of common stock entitling the holder to one vote.

 

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Private placement warrants and underlying securities

Our sponsor has agreed to purchase an aggregate of 5,500,000 warrants (or 6,025,000 warrants if the over-allotment option is exercised in full) at a price of $1.00 per warrant, for an aggregate purchase price of $5,500,000, or $6,025,000 if theover-allotment option is exercised in full. The private placement warrants are identical to the warrants sold in this offering except that the private placement warrants, so long as they are held by our sponsor or the underwriters or their permittedtransferees, (i) will not be redeemable by us, (ii) may not (including the Class A common stock issuable upon exercise of these warrants), subject to certain limited exceptions, be transferred, assigned or sold by the holders until30 days after the completion of our initial business combination, (iii) may be exercised by the holders on a cashless basis and (iv) will be entitled to registration rights. A portion of the purchase price of the private placementwarrants will be added to the proceeds from this offering to be held in the trust account such that at the time of closing $101,500,000 (or $116,725,000 if the underwriters exercise their over-allotment option in full) will be held in the trustaccount. If we do not complete our initial business combination within 15 months from the closing of this offering (or up to 21 months from the closing of this offering if we extend the period of time to consummate a business combinationby three months on up to two occasions as described in more detail in this prospectus), the proceeds from the sale of the private placement warrants held in the trust account will be used to fund the redemption of our public shares (subject to therequirements of applicable law) and the private placement warrants (and the underlying securities) will expire worthless.

 

 The private placement warrants will be non-redeemable and exercisable on a cashless basis so long as they are held by the sponsor, the underwriters or their permitted transferees.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 us and exercisable by the holders on the same basis as the warrants included in the unitsbeing sold in this offering.

 

Transfer restrictions on private placement warrants and underlying securities

The private placement warrants (including the shares of Class A common stock issuable upon exercise of the private placement warrants) will not be transferable, assignable or saleable until 30 days after the completion of our initialbusiness combination (except as described under the section of this prospectus entitled “Principal Stockholders — Restrictions on Transfers of Founder Shares and Private Placement Warrants”). Following such period, the privateplacement warrants (including the shares of Class A common stock issuable upon exercise of the private placement warrants) will be transferable, assignable or saleable, except that the private placement warrants will not trade.

 

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Cashless exercise of private placement warrants

If holders of private placement warrants elect to exercise them on a cashless basis, they would pay the exercise price by surrendering their warrants for that number of shares of Class A common stock equal to the quotient obtained bydividing (x) the product of the number of shares of Class A common stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value” (defined below) by (y) thefair market value. The “fair market value” shall mean the average reported last sale price of the Class A common stock for the 10 trading days ending on the third trading day prior to the date on which the notice of warrant exerciseis sent to the warrant agent. The reason that we have agreed that these warrants will be exercisable on a cashless basis so long as they are held by the sponsor or its permitted transferees is because it is not known at this time whether they willbe affiliated with us following an initial business combination. If they remain affiliated with us, their ability to sell our securities in the open market will be significantly limited. We expect to have policies in place that prohibit insidersfrom selling our securities except during specific periods of time. Even during such periods of time when insiders will be permitted to sell our securities, an insider cannot trade in our securities if he or she is in possession of material non-public information. Accordingly, unlike public stockholders who could sell the shares of Class A common stock issuable upon exercise of the warrants freely in the open market, the insiders could besignificantly restricted from doing so. As a result, we believe that allowing the holders to exercise such warrants on a cashless basis is appropriate.

 

Proceeds to be held in trust account

Nasdaq rules provide that at least 90% of the gross proceeds from this offering and the sale of the private placement warrants be deposited in a trust account. Of the net proceeds of this offering and the sale of the private placement warrants,$101,500,000, or $10.15 per unit ($116,725,000, or $10.15 per unit, if the underwriters’ over-allotment option is exercised in full) will be placed into a trust account in the United States, with Continental Stock Transfer & TrustCompany acting as trustee. These proceeds include $3,500,000 (or $4,025,000 if the underwriters’ over-allotment option is exercised in full) in deferred underwriting commissions.

 

 

Except with respect to interest earned on the funds held in the trust account that may be released to us to pay our franchiseand income tax obligations (less up to $100,000 of interest to pay dissolution expenses), the proceeds from this offering and the sale of the private placement warrants will not be released from the trust account until the earliest of (a) thecompletion of our initial business combination, (b) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our second amended and restated certificate of incorporation (i) to modify thesubstance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 15 months from the closing of this offering (or up to 21 months from the closing of this offering if we extendthe period of time to consummate a business combination by up to three months on two occasions as

 

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described in more detail in this prospectus) or (ii) with respect to any other provision relating to stockholders’ rights or pre-businesscombination activity, and (c) the redemption of our public shares if we are unable to complete our initial business combination within 15 months from the closing of this offering (or up to 21 months from the closing of this offering if weextend the period of time to consummate a business combination by up to three months on two occasions as described in more detail in this prospectus), subject to applicable law. The proceeds deposited in the trust account could become subject to theclaims of our creditors, if any, which could have priority over the claims of our public stockholders.

 

Anticipated expenses and funding sources

Except as described above with respect to the payment of taxes, unless and until we complete our initial business combination, no proceeds held in the trust account will be available for our use. The proceeds held in the trust account will beinvested only in U.S. government securities with a maturity of 180 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest onlyin direct U.S. government treasury obligations. We will disclose in each quarterly and annual report filed with the SEC prior to our initial business combination whether the proceeds deposited in the trust account are invested in U.S. governmenttreasury obligations or money market funds or a combination thereof. Based upon current interest rates, we expect the trust account to generate approximately $101,500 of interest annually assuming an interest rate of 0.1% per year; however, we canprovide no assurances regarding this amount. Unless and until we complete our initial business combination, we may pay our expenses only from:

 

  

the net proceeds of this offering and the sale of the private placement warrants not held in the trust account,which will be approximately $1,350,000 in working capital after the payment of approximately $650,000 in expenses relating to this offering; and

 

  

any loans or additional investments from our sponsor, members of our management team or their affiliates or otherthird parties, although they are under no obligation to advance funds or invest in us, and provided that any such loans will not have any claim on the proceeds held in the trust account unless such proceeds are released to us upon completion of aninitial business combination.

 

Conditions to completing our initial business combination

Nasdaq rules require that we must complete one or more business combinations having an aggregate fair market value of at least 80% of the value of theassets held in the trust account (excluding the deferred underwriting commissions and taxes payable on the interest earned on the trust account) at the time of our signing a definitive agreement in connection with our initial business combination.Our board of directors will make the determination as to the fair market value of our initial business combination. If our board of directors is

 

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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 that is a member of FINRA oran independent accounting firm 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 businesscombination, 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. There is no limitationon our ability to raise funds privately, or through loans in connection with our initial business combination.

 

 We anticipate structuring our initial business combination either (i) in such a way so that the post-transaction company in which our public stockholders own shares will own or acquire 100% of the equity interestsor 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 targetmanagement 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 otherwiseacquires 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 ofthe 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 ofthe 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% ofthe 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 ofNasdaq’s 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 businessestogether as the initial business combination for purposes of a tender offer or for seeking stockholder approval, as applicable.

 

Permitted purchases of public shares and public warrants by our affiliates

If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial businesscombination pursuant to the tender offer rules, our sponsor,

 

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initial stockholders, directors, officers, advisors or their affiliates may purchase shares or public warrants in privately negotiated transactions or in the open market either prior to orfollowing 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 withapplicable law and Nasdaq rules. However, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. If they engage in such transactions, they willnot 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 Securities Exchange Actof 1934, as amended (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 thegoing-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 pursuantto Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements. None of the funds held in the trust account will be used to purchase shares or public warrants in such transactionsprior to completion of our initial business combination. See “Proposed Business — Permitted purchases of our securities” for a description of how our sponsor, initial stockholders, directors, officers, advisors or any of theiraffiliates will select which stockholders to purchase securities from in any private transaction.

 

 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 businesscombination 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 wouldotherwise 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 ourinitial 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” ofour 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 anational securities exchange.

 

Redemption rights for public stockholders upon completion of our initial business combination

We will provide our public stockholders with the opportunity to redeem all or a portion of their public shares upon the completion of

 

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our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account as of twobusiness days prior to the consummation of our initial business combination, 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 thenoutstanding public shares, subject to the limitations described herein. The amount in the trust account is initially anticipated to be $10.15 per public share, without taking into account any interest earned on such funds or additional funds, ifany, deposited into the trust account in connection with extensions of the period of time to consummate a business combination (as described in more detail in this prospectus). The per-share amount we willdistribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions we will pay to the underwriters. There will be no redemption rights upon the completion of our initial business combination withrespect to our warrants. Our sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares held by them and any public shares theymay acquire during or after this offering in connection with the completion of our initial business combination or otherwise.

 

 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 transferagent 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 vote on the proposal to approve the initial business combination in the event we distribute proxymaterials, 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, thatwe 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.

 

Manner of conducting redemptions

We will provide our public stockholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initialbusiness 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 proposedinitial 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 seekstockholder approval under the law or stock exchange listing requirements. Under Nasdaq rules, asset acquisitions and stock purchases would not typically require stockholder approval while direct mergers with our company where we do not survive andany transactions where we issue more than 20% of our outstanding common stock or seek to amend our second

 

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amended and restated certificate of incorporation would require stockholder approval. We may conduct redemptions without a stockholder vote pursuant to the tender offer rules of the SEC unlessstockholder approval is required by law or stock exchange listing requirements or we choose to seek stockholder approval for business or other legal reasons. So long as we obtain and maintain a listing for our securities on Nasdaq, we will berequired 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 legal reasons, we will, pursuant to our second amended and restated certificate of incorporation:

 

  

conduct the redemptions pursuant to Rule 13e-4 andRegulation 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 containsubstantially 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.

 

 Such provisions may be amended if approved by holders of a majority of our common stock entitled to vote thereon.

 

 Whether or not we maintain our registration under the Exchange Act or our listing on Nasdaq, we will provide our public stockholders with the opportunity to redeem their public shares by one of the two methods listedabove. Upon the public announcement of our initial business combination, if we elect to conduct redemptions pursuant to the tender offer rules, we or our sponsor will terminate any plan established in accordance withRule 10b5-1 to purchase shares of our Class A common stock in the open market, in order 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 aspecified number of public shares, 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 either immediately prior to or upon consummationof our initial business combination and after payment of underwriters’ fees and commissions (so that we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which may becontained 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.

 

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 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 legal reasons, we will:

 

  

conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the ExchangeAct, which regulates the solicitation of proxies, and not pursuant to the tender offer rules, and

 

  

file proxy materials with the SEC.

 

 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 forsuch meeting will consist of the holders present in person or by proxy of shares of outstanding capital stock of the company representing a majority of the voting power of all outstanding shares of capital stock of the company entitled to vote atsuch meeting.

 

 Our initial stockholders will count towards this quorum and, pursuant to the letter agreement, our sponsor, officers and directors have agreed to vote their founder shares and any public shares purchased during or afterthis offering (including in open market and privately negotiated transactions) in favor of our initial business combination. For purposes of seeking approval of the majority of our 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 3,800,001,or 38.0%, of the 10,000,000 public shares sold in this offering to be voted in favor of an initial business combination (assuming all outstanding shares are voted) in order to have our initial business combination approved (assuming theover-allotment option is not exercised). 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 ourinitial business combination. These quorums 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 redeemits public shares irrespective of whether they vote for or against the proposed transaction.

 

 

We may require our public stockholders seeking to exercise their redemption rights, whether they are record holders or holdtheir 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 vote on the proposal toapprove the initial business combination in the event we distribute proxy materials, or to deliver their shares to the transfer agent electronically. We believe that this will allow our transfer agent to efficiently process any redemptions withoutthe need for further communication or action from the redeeming public stockholders, which could delay redemptions and result in additional administrative cost. If the proposed initial business combination is not approved and we continue to searchfor a target company, we will promptly return

 

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any certificates delivered, or shares tendered electronically, by public stockholders who elected to redeem their shares.

 

 Our second amended and restated certificate of incorporation will provide 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 eitherimmediately prior to or upon consummation of our initial business combination and after payment of underwriters’ fees and commissions (so that we are not subject to the SEC’s “penny stock” rules) or any greater net tangible assetor 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. Inthe 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 proposedinitial 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 tothe holders thereof.

 

Limitation on redemption rights ofstockholders holding 15% or more of the shares sold in this offering if we hold stockholder vote

Notwithstanding the foregoing redemption rights, if we seek stockholder approval of our initial business combination and we do not conduct redemptionsin connection with our initial business combination pursuant to the tender offer rules, our second amended and restated certificate of incorporation will provide that a public stockholder, together with any affiliate of such stockholder or any otherperson 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 redeeming its shares with respect to more than an aggregate of 15% of the shares sold inthis offering, without our prior consent. We believe the restriction described above will discourage stockholders from accumulating large blocks of shares, and subsequent attempts by such holders to use their ability to redeem their shares as ameans 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 sharessold in this offering could threaten to exercise its redemption rights against an initial business combination if such holder’s shares are not purchased by us or our management at a premium to the then-current market price or on otherundesirable terms. By limiting our stockholders’ ability to redeem to no more than 15% of the shares sold in this offering, we believe we will limit the ability of a small group of stockholders to unreasonably attempt to block our ability to

 

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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 acertain amount of cash. However, we would not be restricting our stockholders’ ability to vote all of their shares (including all shares held by those stockholders that hold more than 15% of the shares sold in this offering) for or against ourinitial business combination.

 

Redemption rights in connection with proposed amendments to our certificate of incorporation

Our second amended and restated certificate of incorporation will provide that any of its provisions related topre-business combination activity (including the requirement to deposit proceeds of this offering and the private placement of units into the trust account and not release such amounts except in specifiedcircumstances, and to provide redemption rights to public stockholders as described herein) may be amended if approved by holders of a majority of our common stock entitled to vote thereon, and corresponding provisions of the trust agreementgoverning the release of funds from our trust account may be amended if approved by holders of a majority of our common stock entitled to vote thereon. In all other instances, our amended and restated certificate of incorporation may be amended byholders of a majority of our outstanding common stock entitled to vote thereon, subject to applicable provisions of the Delaware General Corporation Law, or DGCL, or applicable stock exchange rules. Under our amended and restated certificate ofincorporation, we may not issue additional securities that can vote on amendments to our amended and restated certificate of incorporation or on our initial business combination or that would entitle holders thereof to receive funds from the trustaccount. Our initial stockholders, who will collectively beneficially own 20% of our common stock upon the closing of this offering (assuming they do not purchase any units in this offering and excluding the representative shares), will participatein any vote to amend our second amended and restated certificate of incorporation and/or trust agreement and will have the discretion to vote in any manner they choose. Our sponsor, executive officers, and directors have agreed, pursuant to awritten agreement with us, that they will not propose any amendment to our second amended and restated certificate of incorporation (i) to modify the substance or timing of our obligation to redeem 100% of our public shares if we do notcomplete our initial business combination within 15 months from the closing of this offering (or up to 21 months from the closing of this offering if we extend the period of time to consummate a business combination by up to three months on up totwo occasions as described in more detail in this prospectus) or (ii) with respect to any other provision relating to stockholders’ rights or pre-business combination activity, unless we provide ourpublic 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 ondeposit in the trust account, including interest (which interest shall be net of taxes payable) divided by the number of then outstanding public shares. Our

 

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sponsor, officers and directors have entered into a letter agreement with us pursuant to which they have agreed to waive their redemption rights with respect to any founder shares and any publicshares held by them in connection with the completion of our initial business combination.

 

Release of funds in trust account on closing of our initial business combination

On the completion of our initial business combination, the funds held in the trust account will be used to pay amounts due to any public stockholders who exercise their redemption rights as described above under “Redemption rights forpublic stockholders upon completion of our initial business combination.” We will use the remaining funds to pay the underwriters their deferred underwriting commissions, to pay all or a portion of the consideration payable to the target orowners of the target of our initial business combination and to pay other expenses associated with our initial business combination. If our initial business combination is paid for using equity or debt securities, or not all of the funds releasedfrom the trust account are used for payment of the consideration in connection with our initial business combination, we may apply the balance of the cash released to us from the trust account for general corporate purposes, including formaintenance or expansion of operations of post-transaction businesses, 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.

 

Redemption of public shares and distribution and liquidation if no initial business combination

Our second amended and restated certificate of incorporation will provide that we will have only 15 months from the closing of this offering (or up to21 months from the closing of this offering if we extend the period of time to consummate a business combination by up to three months on up to two occasions as described in more detail in this prospectus) to complete our initial businesscombination. If we are unable to complete our initial business combination within such 15-month period (or up to 21 months from the closing of this offering if we extend the period of time to consummate abusiness combination by up to three months on up to two occasions as described in more detail in this prospectus), we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not morethan 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 fundsheld 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 willcompletely 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 suchredemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate,

 

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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 liquidatingdistributions with respect to our warrants, which will expire worthless if we fail to complete our initial business combination within the 15-month time period (or up to 21 months from the closing of thisoffering if we extend the period of time to consummate a business combination by up to three months on up to two occasions as described in more detail in this prospectus).

 

 Our sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have waived their rights to liquidating distributions from the trust account with respect to any founder sharesheld by them if we fail to complete our initial business combination within 15 months from the closing of this offering (or up to 21 months from the closing of this offering if we extend the period of time to consummate a business combination by upto three months on up to two occasions as described in more detail in this prospectus). However, if our initial stockholders acquire public shares in or after this offering, they will be entitled to liquidating distributions from the trust accountwith respect to such public shares if we fail to complete our initial business combination within the allotted 15-month time period (or up to 21 months from the closing of this offering if we extend the periodof time to consummate a business combination by up to three months on up to two occasions as described in more detail in this prospectus).

 

 The underwriters have agreed to waive their rights to their deferred underwriting commission held in the trust account in the event we do not complete our initial business combination and subsequently liquidate and, insuch event, such amounts will be included with the funds held in the trust account that will be available to fund the redemption of our public shares.

 

Ability to extend time to complete business combination

If we anticipate that we may not be able to consummate our initial business combination within 15 months, we may, by resolution of our board ifrequested by our sponsor, extend the period of time to consummate a business combination by an additional three months on up to two occasions (for a total of up to 21 months to complete a business combination as described in more detail in thisprospectus), subject to the sponsor depositing additional funds into the trust account as set out below. Pursuant to the terms of our second amended and restated certificate of incorporation and the trust agreement to be entered into between us andContinental Stock Transfer & Trust Company on the date of this prospectus, in order for the time available for us to consummate our initial business combination to be extended, our sponsor or its affiliates or designees, upon five daysadvance notice prior to the applicable deadline, $1,000,000, or $1,150,000 if the underwriters’ over-allotment option is exercised in full ($0.10 per unit in either case), on or prior to the date of the applicable deadline, for the availablethree month extension. Any such payments would be made in the form of

 

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non-interest bearing loans. If we complete our initial business combination, we will, at the option of our sponsor, repay such loaned amounts out of theproceeds of the trust account released to us or convert a portion or all of the total loan amount into warrants at a price of $1.00 per warrant, which warrants will be identical to the private placement warrants. If we do not complete a businesscombination, we will repay such loans only from funds held outside of the trust account. Our stockholders will not be entitled to vote or redeem their shares in connection with any such extension. Furthermore, the letter agreement with our initialstockholders contains a provision pursuant to which our sponsor has agreed to waive its right to be repaid for such loans to the extent there is insufficient funds held outside of the trust account in the event that we do not complete a businesscombination. Our sponsor and its affiliates or designees are not obligated to fund the trust account to extend the time for us to complete our initial business combination.

 

 Our stockholders will be entitled to vote and redeem their shares in connection with a stockholder meeting held to approve an initial business combination or in a tender offer undertaken in connection with such aninitial business combination if we propose such a business combination during any three-month extension period.

 

Limited payments to insiders

There will be no finder’s fees, reimbursement, consulting fee, non-cash payments, monies in respect of any payment of a loan or other compensation paid by us to our sponsor, officers or directors, orany affiliate of our sponsor or officers prior to, or in connection with any services rendered in order to effectuate, the consummation of our initial business combination (regardless of the type of transaction that it is). However, the followingpayments will be made to our sponsor, officers or directors, or our or their affiliates, none of which will be made from the proceeds of this offering held in the trust account prior to the completion of our initial business combination:

 

  

Repayment of up to an aggregate of $300,000 in loans made to us by our sponsor to cover offering-related andorganizational expenses;

 

  

Payment to Mo Fahimi, our Chief Financial Officer, of $10,000 per month for 15 months (or up to 21 months fromthe closing of this offering if we extend the period of time to consummate a business combination by up to three months on up to two occasions as described in more detail in this prospectus), for his services commencing upon the closing of thisoffering. Upon completion of our initial business combination or our liquidation, we will cease paying these monthly fees;

 

  

Reimbursement for anyout-of-pocket expenses related to identifying, investigating and completing an initial business combination; and

 

  

Repayment of loans which may be made by our sponsor or an affiliate of our sponsor or certain of our officers anddirectors to finance transaction costs in connection with an intended initial business combination, the terms of which have not been

 

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determined nor have any written agreements been executed with respect thereto. Up to $1,500,000 of such working capital loans may be convertible into private placement-equivalent warrants at aprice of $1.00 per warrant (which, for example, would result in the holders being issued 1,500,000 warrants if $1,500,000 of notes were so converted), 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 of the underlying warrants. The terms of such working capital loans by our sponsor or its affiliates, or our officers and directors, if any, have not been determined and no writtenagreements exist with respect to such loans.

 

 Our audit committee will review on a quarterly basis all payments that were made to our sponsor, officers or directors, or our or their affiliates.

 

Audit Committee

We will establish and maintain an audit committee, which will be composed entirely of independent directors to, among other things, monitor compliance with the terms described above and the other terms relating to this offering. If anynoncompliance is identified, then the audit committee will be charged with the responsibility to immediately take all action necessary to rectify such noncompliance or otherwise to cause compliance with the terms of this offering. For moreinformation, see the section of this prospectus entitled “Management — Committees of the Board of Directors — Audit Committee.”

 

Indemnity

Our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party for services rendered or products sold to us, or a prospective target business with which we have entered into a written letter of intent,confidentiality or similar agreement or business combination agreement, reduce the amount of funds in the trust account to below the lesser of (i) $10.15 per public share and (ii) the actual amount per public share held in the trust account asof the date of the liquidation of the trust account, if less than $10.15 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 prospectivetarget 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 this offering against certainliabilities, including liabilities under the Securities Act. However, we have not asked our sponsor to reserve for such indemnification obligations, nor have we independently verified whether our sponsor has sufficient funds to satisfy its indemnityobligations and believe that our sponsor’s only assets are securities of our company. Therefore, we cannot assure you that our sponsor would be able to satisfy those obligations. None of our officers or directors will indemnify us for claims bythird parties including, without limitation, claims by vendors and prospective target businesses.

 

Conflicts of interest

Our officers and directors may become officers or directors of any other blank check company prior to completion of our initial business

 

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combination. Our second amended and restated certificate of incorporation will provide that we renounce our interest in any corporate opportunity offered to any director or officer unless suchopportunity is expressly offered to such person solely in his or her capacity as a director or officer of the company and such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us topursue, and to the extent the director or officer is permitted to refer that opportunity to us without violating another legal obligation. We do not believe, however, that the fiduciary duties or contractual obligations of our officers or directorswill materially affect our ability to complete our initial business combination.

 

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SUMMARY OF RISK FACTORS

We are a newly formed company that has conducted no operations and has generated no revenues. Until we complete our initial business combination, we will haveno operations and will generate no operating revenues. In making your decision whether to invest in our securities, you should take into account not only the background of our management team, but also the special risks we face as a blank checkcompany. This offering is not being conducted in compliance with Rule 419 promulgated under the Securities Act. Accordingly, you will not be entitled to protections normally afforded to investors in Rule 419 blank check offerings. For additionalinformation concerning how Rule 419 blank check offerings differ from this offering, please see the section of this prospectus entitled “Proposed Business — Comparison of This Offering to Those of Blank Check Companies Subject to Rule419.” You should carefully consider these and the other risks set forth in the section of this prospectus entitled “Risk Factors.”

 

  

We are a newly incorporated company with no operating history and no revenues, and you have no basis on which toevaluate our ability to achieve our business objective.

 

  

Past performance by our management team may not be indicative of future performance of an investment in theCompany.

 

  

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.

 

  

Your only opportunity to affect the investment decision regarding a potential business combination will belimited to the exercise of your right to redeem your shares from us for cash, unless we seek stockholder approval of such business combination.

 

  

If we seek stockholder approval of our initial business combination, our sponsor has agreed to vote in favor ofsuch initial business combination, regardless of how our public stockholders vote.

 

  

The ability of our public stockholders to redeem their shares for cash may make our financial conditionunattractive to potential business combination targets, which may make it difficult for us to enter into a business combination with a target.

 

  

The ability of our public stockholders to exercise redemption rights with respect to a large number of our sharesmay not allow us to complete the most desirable business combination or optimize our capital structure.

 

  

The requirement that we complete our initial business combination within the prescribed time frame may givepotential target businesses leverage over us in negotiating a business combination and may limit the time we have in which to conduct due diligence on potential business combination targets, in particular as we approach our dissolution deadline,which could undermine our ability to complete our initial business combination on terms that would produce value for our stockholders.

 

  

Our search for a business combination, and any target business with which we ultimately consummate a businesscombination, may be materially adversely affected by the novel coronavirus (“COVID-19”) outbreak.

 

  

As the number of special purpose acquisition companies evaluating targets increases, attractive targets maybecome scarcer and there may be more competition for attractive targets. This could increase the cost of our initial business combination and could even result in our inability to find a target or to consummate an initial business combination.

 

  

If we seek stockholder approval of our initial business combination, our sponsor, directors, officers, advisorsand their affiliates may elect to purchase shares or warrants from public stockholders, which may influence a vote on a proposed business combination and reduce the public “float” of our Class A common stock.

 

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If a stockholder fails to receive notice of our offer to redeem our public shares in connection with our initialbusiness combination or fails to comply with the procedures for tendering its shares, such shares may not be redeemed.

 

  

You will not have any rights or interests in funds from the trust account, except under certain limitedcircumstances. To liquidate your investment, therefore, you may be forced to sell your public shares or warrants, potentially at a loss.

 

  

Nasdaq may delist our securities from trading on its exchange, which could limit investors’ ability to maketransactions in our securities and subject us to additional trading restrictions.

 

  

You will not be entitled to protections normally afforded to investors of many other blank check companies.

 

  

If third parties bring claims against us, the proceeds held in the trust account could be reduced and the pershare redemption amount received by stockholders may be less than $10.15 per share.

 

  

Our directors may decide not to enforce the indemnification obligations of our sponsor, resulting in a reductionin the amount of funds in the trust account available for distribution to our public stockholders.

 

  

Our officers and directors will allocate their time to other businesses thereby causing conflicts of interest intheir 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.

 

  

Because of our limited resources and the significant competition for business combination opportunities, it maybe more difficult for us to complete our initial business combination. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.15 per share on our redemption of our public shares, orless than such amount in certain circumstances, and our warrants will expire worthless.

 

  

If the net proceeds of this offering and the sale of the private placement warrants not being held in the trustaccount are insufficient to allow us to operate for at least the next 15 months (or up to 21 months from the closing of this offering if we extend the period of time to consummate a business combination by up to three months on up to two occasionsas described in more detail in this prospectus), we may be unable to complete our initial business combination, in which case our public stockholders may only receive $10.15 per share, or less than such amount in certain circumstances, and ourwarrants will expire worthless.

 

  

We may engage in a business combination with one or more target businesses that have relationships with entitiesthat may be affiliated with our sponsor, officers, directors or existing holders which may raise potential conflicts of interest.

 

  

The other risks and uncertainties discussed in “Risk Factors” and elsewhere in this prospectus.

 

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SUMMARY FINANCIAL DATA

The following table summarizes the relevant financial data for our business and should be read with our financial statements, which are included in thisprospectus. We have not had any significant operations to date, so only balance sheet data is presented.

 

   December 31, 2021 
   Actual   As Adjusted 

Balance Sheet Data:

    

Working capital(1)

  $24,171   $ 1,374,171 

Total assets(2)

   25,000    102,875,000 

Total liabilities(3)

   829    7,276,829 

Value of common stock subject to possibleredemption(4)

   —      88,083,081 

Stockholder’s equity(5)

  $24,171   $ 7,515,090 

 

 

(1)

The “as adjusted” calculation includes $1,350,000 of cash held outside the trust account, plus$24,171 of actual working capital at December 31, 2021.

(2)

The “as adjusted” calculation equals $101,500,000 of cash held in trust from the proceeds of thisoffering and the sale of the private placement warrants, plus $1,350,000 in cash held outside the trust account, plus $25,000 of current assets at December 31, 2021.

(3)

The “as adjusted” calculation equals $3,500,000 of deferred underwriting commissions, assuming theover-allotment option is not exercised, $3,776,000 of private placement warrant liability, and actual total liabilities of $829 at December 31, 2021.

(4)

The “as adjusted” calculation equals the proceeds from the offering and net of offering costs of$7,150,000, attributable to 10,000,000 Class A common stock subject to possible redemption.

(5)

Excludes 10,000,000 shares of common stock purchased in the public market which are subject to redemption inconnection with our initial business combination. The “as adjusted” calculation equals the “as adjusted” total assets, less the “as adjusted” total liabilities, less the value of shares of common stock that may beredeemed in connection with our initial business combination ($10.15 per share).

The “as adjusted” information gives effectto the sale of the units we are offering, and the sale of the private placement warrants, including the application of the related gross proceeds and the payment of the estimated remaining costs from such sale and the repayment of the accrued andother liabilities required to be repaid.

The “as adjusted” total assets amount $101,500,000 to be held in the trust account (or $116,725,000 ifthe over-allotment option is exercised in full) which, except for limited situations described in this prospectus, will be available to us only upon the consummation of a business combination within the time period described in this prospectus. If abusiness combination is not so consummated, the trust account, less amounts we are permitted to withdraw from interest earned on the funds in the trust account as described in this prospectus, will be distributed solely to our public stockholders(subject to our obligations under Delaware law to provide for claims of creditors).

 

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Some of the statements contained in this prospectus may constitute “forward-looking statements” for purposes of the federal securities laws. Ourforward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections,forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,”“estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” andsimilar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.

 

  

our ability to select an appropriate target business or businesses;

 

  

our ability to complete our initial business combination;

 

  

our expectations around the performance of the prospective target business or businesses;

 

  

our success in retaining or recruiting, or changes required in, our officers, key employees or directorsfollowing our initial business combination;

 

  

our officers and directors allocating their time to other businesses and potentially having conflicts of interestwith our business or in approving our initial business combination, as a result of which they would then receive expense reimbursements;

 

  

our potential ability to obtain additional financing to complete our initial business combination;

 

  

our pool of prospective target businesses in the technology industry;

 

  

our ability to consummate an initial business combination due to uncertainty resulting from the COVID-19 pandemic;

 

  

the ability of our officers and directors to generate a number of potential acquisition opportunities;

 

  

our public securities’ potential liquidity and trading;

 

  

the lack of a market for our securities;

 

  

the use of proceeds not held in the trust account or available to us from interest income on the trust accountbalance;

 

  

the trust account not being subject to the claims of third parties; or

 

  

our financial performance following this offering.

The forward-looking statements contained in this prospectus are based on our current expectations and beliefs concerning future developments and theirpotential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) orother assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors describedunder the section of this prospectus entitled “Risk Factors.” Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from thoseprojected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securitieslaws.

 

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RISK FACTORS

An investment in our securities involves a high degree of risk. You should consider carefully all of the risks described below, together with the otherinformation contained in this prospectus, before making a decision to invest in our units. If any of the following events occur, our business, financial condition and operating results may be materially adversely affected. In that event, the tradingprice of our securities could decline, and you could lose all or part of your investment.

Risks Relating to our Search for, Consummation of, orInability to Consummate, a Business Combination and Post-Business Combination Risks

Our public stockholders may not be afforded an opportunity tovote 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 stockholderapproval under applicable law or stock exchange listing requirements or if we decide to hold a stockholder vote for business or other legal reasons. Except as required by law, the decision as to whether we will seek stockholder approval of aproposed 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 whetherthe 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 combinationwe complete. Please see the section of this prospectus entitled “Proposed Business — Stockholders May Not Have the Ability to Approve Our Initial Business Combination” for additional information.

If we seek stockholder approval of our initial business combination, our initial stockholders have agreed to vote in favor of such initial businesscombination, regardless of how our public stockholders vote.

Pursuant to the letter agreement, our sponsor, officers and directors have agreed to votetheir founder shares, as well as any public shares purchased during or after this offering (including in open market and privately negotiated transactions), in favor of our initial business combination. As a result, in addition to our initialstockholders’ founder shares would need only 3,800,001, or 38.0%, of the 10,000,000 public shares sold in this offering to be voted in favor of an initial business combination (assuming all outstanding shares are voted) in order to have ourinitial business combination approved (assuming the over-allotment option is not exercised). Our initial stockholders will own shares representing 20% of our outstanding shares of common stock immediately following the completion of this offering,assuming they do not purchase units in this offering and excluding the representative shares. Accordingly, if we seek stockholder approval of our initial business combination, the agreement by our initial stockholders to vote in favor of our initialbusiness combination will increase the likelihood that we will receive the requisite stockholder approval for such initial business combination.

Youronly opportunity to affect the investment decision regarding a potential business combination will be limited to the exercise of your right to redeem your shares from us for cash, unless we seek stockholder approval of the initial businesscombination.

At the time of your investment in us, you will not be provided with an opportunity to evaluate the specific merits or risks of ourinitial 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, your only opportunity to affect the investment decision regarding a potential business combination may be limited to exercising your redemption rights withinthe 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.

 

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The ability of our public stockholders to redeem their shares for cash may make our financial conditionunattractive 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 networth 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 either immediately prior to or upon consummation of our initial business combination and after payment ofunderwriters’ fees and commissions (so that we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial businesscombination. Consequently, if accepting all properly submitted redemption requests would cause our net tangible assets to be less than $5,000,001 either immediately prior to or upon consummation of our initial business combination and after paymentof underwriters’ fees and 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 alternatebusiness 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 mostdesirable business combination or optimize our capital structure.

At the time we enter into an agreement for our initial business combination, we willnot 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 combinationagreement 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 suchrequirements, 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 trustaccount 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 extentthat the anti-dilution provision 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 theClass 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 deferredunderwriting 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 tostockholders 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 ofour 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 you would have to wait for liquidation in order toredeem your stock.

If our initial business combination agreement requires us to use a portion of the cash in the trust account to pay the purchaseprice, or requires us to have a minimum amount of cash at closing, the probability that our initial business combination would be unsuccessful is increased. If our initial business combination is unsuccessful, you would not receive your pro rataportion of the trust account until we liquidate the trust account. If you are in need of immediate liquidity, you could attempt to sell your stock in the open market; however, at such time our stock may trade at a discount to the pro rata amount pershare in the trust account. In either situation, you may suffer a material loss on your investment or lose the benefit of funds expected in connection with our redemption until we liquidate or you are able to sell your stock in the open market.

 

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The requirement that we complete our initial business combination within the prescribed time frame maygive 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 couldundermine our ability to complete our initial business combination on terms that would produce value for our stockholders.

Any potential targetbusiness with which we enter into negotiations concerning an initial business combination will be aware that we must complete our initial business combination within 15 months from the closing of this offering (or up to 21 months from the closing ofthis offering if we extend the period of time to consummate a business combination as described in more detail in this prospectus). 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 thetimeframe 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.

We may not be able to complete our initial business combination within the prescribed time frame, in which case we would cease all operations except forthe purpose of winding up and we would redeem our public shares and liquidate, in which case our public stockholders may only receive $10.15 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 15 months from theclosing of this offering (or up to 21 months from the closing of this offering if we extend the period of time to consummate a business combination as discussed in more detail in this prospectus). We may not be able to find a suitable targetbusiness and complete our initial business combination within such time period. If we have not completed our initial business combination within such time period, we will: (i) cease all operations except for the purpose of winding up,(ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit inthe 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 thenoutstanding 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 promptlyas 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 creditorsand the requirements of other applicable law. In such case, our public stockholders may only receive $10.15 per share, and our warrants will expire worthless. In certain circumstances, our public stockholders may receive less than $10.15 per shareon 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 bystockholders may be less than $10.15 per share” and other risk factors below.

Because our trust account will initially contain $10.15 per shareof Class A common stock, public stockholders may be more incentivized to redeem their public shares at the time of our initial business combination.

Our trust account will initially contain $10.15 per share of Class A common stock. This is different than some other similarly structured blank checkcompanies for which the trust account will only contain $10.00 per share of Class A common stock. As a result of the additional funds that could be available to public stockholders upon redemption of public shares, our public stockholders maybe more incentivized to redeem their public shares and not to hold those shares of Class A common stock through our initial business combination. A higher percentage of redemptions by our public stockholders could make it more difficult for usto complete our initial business combination.

 

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Members of our management team and board of directors have significant experience as founders, boardmembers, officers, executives or employees of other companies. While they are not currently, certain of those persons may become involved in litigation, investigations or other proceedings, including related to those companies or otherwise. Thedefense or prosecution of these matters could be time-consuming and could divert our management’s attention, and may have an adverse effect on us, which may impede our ability to consummate an initial business combination.

During the course of their careers, members of our management team and board of directors have had significant experience as founders, board members, officers,executives or employees of other companies. As a result of their involvement and positions in these companies, while they are not currently, certain of those persons may in the future become involved in litigation, investigations or otherproceedings, including relating to the business affairs of such companies, transactions entered into by such companies, or otherwise. While they are not currently, individual members of our management team and board of directors also may becomeinvolved in litigation, investigations or other proceedings involving claims or allegations related to or as a result of their previous personal conduct, either in their capacity as a corporate officer or director or otherwise, and may be personallynamed in such actions and potentially subject to personal liability as a result of their previous individual conduct or otherwise. Any such liability may or may not be covered by insurance and/or indemnification, depending on the facts andcircumstances. The defense or prosecution of these matters could be time-consuming. Any litigation, investigations or other proceedings and the potential outcomes of such actions may divert the attention and resources of our management team andboard of directors away from identifying and selecting a target business or businesses for our initial business combination and may negatively affect our reputation, which may impede our ability to complete an initial business combination.

Changes in the market for directors’ and officers’ liability insurance could make it more difficult and more expensive for us to negotiate andcomplete an initial business combination.

In recent months, the market for directors’ and officers’ liability insurance for special purposeacquisition companies has changed. Fewer insurance companies are offering quotes for directors’ and officers’ liability coverage, the premiums charged for such policies have generally increased and the terms of such policies have generallybecome less favorable. There can be no assurance that these trends will not continue.

The increased cost and decreased availability of directors’and officers’ liability insurance could make it more difficult and more expensive for us to negotiate an initial business combination. In order to obtain directors’ and officers’ liability insurance or modify its coverage as a resultof becoming a public company, the post-business combination entity might need to incur greater expense, accept less favorable terms or both. However, any failure to obtain adequate directors’ and officers’ liability insurance could have anadverse impact on the post-business combination’s ability to attract and retain qualified officers and directors.

In addition, even after we were tocomplete an initial business combination, our directors and officers could still be subject to potential liability from claims arising from conduct alleged to have occurred prior to the initial business combination. As a result, in order to protectour directors and officers, the post-business combination entity may need to purchase additional insurance with respect to any such claims (“run-off insurance”). The need for run-off insurance would be an added expense for the post-business combination entity and could interfere with or frustrate our ability to consummate an initial business combination on terms favorable to ourinvestors.

Our search for a business combination, and any target business with which we ultimately consummate a business combination, may bematerially adversely affected by the recent coronavirus (COVID-19) outbreak.

On March 11, 2020, the WorldHealth Organization officially declared the outbreak of the COVID-19 a “pandemic.” The COVID-19 pandemic continuing, or a significant outbreak of otherinfectious diseases adversely affect the economies and financial markets worldwide, and the business of any potential target business with which we consummate a business combination could be materially and adversely affected. Furthermore, we

 

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may be unable to complete a business combination if continued concerns relating to COVID-19 restrict travel, limit the ability to have meetings withpotential investors or the target company’s personnel, vendors and services providers are unavailable to negotiate and consummate a transaction in a timely manner. The extent to which COVID-19 impacts oursearch for a business combination will depend on future developments, including the advancement and proliferation of COVID-19 vaccinations, which are highly uncertain and cannot be predicted, including newinformation 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 abusiness combination, may be materially adversely affected.

As the number of special purpose acquisition companies evaluating targets increases,attractive targets may become scarcer and there may be more competition for attractive targets. This could increase the cost of our initial business combination and could even result in our inability to find a target or to consummate an initialbusiness combination.

In recent years, the number of special purpose acquisition companies that have been formed has increased substantially. Manypotential 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 asmany 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 businesscombination.

In addition, because there are more special purpose acquisition companies seeking to enter into an initial business combination withavailable targets, the competition for available targets with attractive fundamentals or business models may increase, which could cause targets companies to demand improved financial terms. Attractive deals could also become scarcer for otherreasons, 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.

If we seek stockholder approval of our initial business combination, our sponsor, directors, officers, advisors and their affiliates may elect to purchaseshares or 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 combinationpursuant to the tender offer rules, our sponsor, directors, officers, advisors or their affiliates may purchase shares or public warrants or a combination thereof in privately negotiated transactions or in the open market either prior to orfollowing 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 orconditions for any such transactions. None of the funds in the trust account will be used to purchase 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 beneficialowner thereof and therefore agrees not to exercise its redemption rights. In the event that our sponsor, directors, officers, advisors or their affiliates purchase shares in privately negotiated transactions from public stockholders who have alreadyelected 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 combinationand thereby increase the

 

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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 acertain 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 warrantsoutstanding 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 businesscombination 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 holdersof 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 complywith the procedures for tendering its shares, such shares may not be redeemed.

We will comply with the tender offer rules or proxy rules, asapplicable, 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 notbecome 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 thevarious procedures that must be complied with in order to validly tender or redeem public shares. For example, we may require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their sharesin “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 vote on the proposal to approve theinitial 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 beredeemed. See the section of this prospectus entitled “Proposed Business — Redemption Rights for Public Stockholders upon Completion of our Initial Business Combination — Tendering Stock Certificates in Connection with aTender Offer or Redemption Rights.”

You will not have any rights or interests in funds from the trust account, except under certain limitedcircumstances. To liquidate your investment, therefore, you may be forced to sell your public shares or warrants, potentially at a loss.

Our publicstockholders 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 thatsuch 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 ofincorporation (A) to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 15 months from the closing of this offering (or up to 21 months from theclosing of this offering if we extend the period of time to consummate a business combination as described in greater more in this prospectus) 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 are unable to complete an initial business combination within 15 months from the closing of this offering (or up to21 months from the closing of this offering if we extend the period of time to consummate a business combination as described in more detail in this prospectus), subject to applicable law and as further described herein. In no other circumstanceswill 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 your investment, youmay be forced to sell your public shares or warrants, potentially at a loss.

 

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You will not be entitled to protections normally afforded to investors of many other blank checkcompanies.

Since the net proceeds of this offering and the sale of the private placement warrants are intended to be used to complete an initialbusiness 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 will have net tangible assets in excess of $5,000,000 upon the successful completion of this offering and the sale of the private placement warrants and will file a Current Report on Form 8-K, including an audited balance sheet demonstrating thisfact, we are exempt from rules promulgated by the SEC to protect investors in blank check companies, such as Rule 419. Accordingly, investors will not be afforded the benefits or protections of those rules. Among other things, this means ourunits will be immediately tradable and we will have a longer period of time to complete our initial business combination than do companies subject to Rule 419. In accordance with the SEC’s penny stock rules, we will calculate net tangibleassets as total assets less intangible assets and liabilities. We expect our net tangible assets following this offering to exceed $5,000,001, as our total assets will primarily consist of the $101,500,000 of proceeds in the trust account and ourtotal liabilities will consist of the private warrant liability, deferred underwriting commissions and accrued offering costs and other payables. Moreover, if this offering were subject to Rule 419, that rule would prohibit the release of anyinterest earned on funds held in the trust account to us unless and until the funds in the trust account were released to us in connection with our completion of an initial business combination. For a more detailed comparison of our offering toofferings that comply with Rule 419, please see the section of this prospectus entitled “Proposed Business — Comparison of This Offering to Those of Blank Check Companies Subject to Rule 419.”

Because of our limited resources and the significant competition for business combination opportunities, it may be more difficult for us to complete ourinitial business combination. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.15 per share on our redemption of our public shares, or less than such amount in certaincircumstances, and our warrants will expire worthless.

We expect to encounter intense competition from other entities having a business objectivesimilar 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 arewell-established and have extensive experience in identifying and effecting, directly or indirectly, acquisitions of companies operating in or providing services to various industries. Many of these competitors possess greater technical, human andother resources or more industry knowledge than we do, and our financial resources will be relatively limited when contrasted with those of many of these competitors. While we believe there are numerous target businesses we could potentially acquirewith the net proceeds of this offering and the sale of the private placement warrants, our ability to compete with respect to the acquisition of certain target businesses that are sizable will be limited by our available financial resources. Thisinherent 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 inconnection with our initial business combination, target companies will be aware that this may reduce the resources available to us for our initial business combination. This may place us at a competitive disadvantage in successfully negotiating aninitial business combination. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.15 per share on the liquidation of our trust account and our warrants will expire worthless. Incertain circumstances, our public stockholders may receive less than $10.15 per share upon our liquidation. 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 $10.15 per share” and other risk factors below.

 

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If the net proceeds of this offering and the sale of the private placement warrants not being held in thetrust account are insufficient to allow us to operate for at least the next 15 months (or up to 21 months from the closing of this offering if we extend the period of time to consummate a business combination), we may be unable to complete ourinitial business combination, in which case our public stockholders may only receive $10.15 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 for at least the next 15 months (or up to 21 months fromthe closing of this offering if we extend the period of time to consummate a business combination as described in more detail in this prospectus), assuming that our initial business combination is not completed during that time. We believe that,upon the closing of this offering, the funds available to us outside of the trust account will be sufficient to allow us to operate for at least the next 15 months (or up to 21 months from the closing of this offering if we extend the period of timeto consummate a business combination as described in more detail in this prospectus); however, we cannot assure you that our estimate is accurate. Of the funds available to us, we could use a portion of the funds available to us to pay fees toconsultants 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 mergeragreements 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 wedo not have any current intention to do so. If we entered into a letter of intent or merger 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 resultof 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 are unable to complete our initial business combination, our public stockholders mayreceive only approximately $10.15 per share on the liquidation of our trust account and our warrants will expire worthless. In certain circumstances, our public stockholders may receive less than $10.15 per share upon our liquidation. 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 $10.15 pershare” and other risk factors below.

If the net proceeds of this offering and the sale of the private placement warrants not being held in thetrust account are insufficient, it could limit the amount available to fund our search for a target business or businesses and complete our initial business combination and we will depend on loans from our sponsor or management team to fund oursearch for an initial business combination, to pay our franchise and income taxes and to complete our initial business combination. If we are unable to obtain these loans, we may be unable to complete our initial business combination.

Of the net proceeds of this offering and the sale of the private placement warrants, only approximately $1,350,000 will be available to us initially outsidethe trust account to fund our working capital requirements. In the event that our offering expenses exceed our estimate of $650,000, we may fund such excess with funds not to be held in the trust account. In such case, the amount of funds we intendto be held outside the trust account would decrease by a corresponding amount. The amount held in the trust account will not be impacted as a result of such increase or decrease. Conversely, in the event that the offering expenses are less than ourestimate of $650,000, the amount of funds we intend to be held outside the trust account would increase by a corresponding amount. If we are required to seek additional capital, we would need to borrow funds from our sponsor, management team orother third parties to operate or may be forced to liquidate. None of our 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 repaidonly from funds held outside the trust account or from funds released to us upon completion of our initial business combination. Up to $1,500,000 of such working capital loans may be convertible into private placement-equivalent warrants at a priceof $1.00 per warrant (which, for example, would result in the holders being issued 1,500,000 warrants if $1,500,000 of notes were so converted), at the option of the lender. Prior to the completion of our initial business combination, we do notexpect to seek loans from parties other than our sponsor or an affiliate of our 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 our trust

 

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account. If we are unable to obtain these loans, we may be unable to complete our initial business combination. If we are unable to complete our initial business combination because we do nothave 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 $10.15 per share on our redemption of our public shares, and ourwarrants will expire worthless. In certain circumstances, our public stockholders may receive less than $10.15 per share on the redemption of their shares. See “— If third parties bring claims against us, the proceeds held in the trustaccount could be reduced and the per-share redemption amount received by stockholders may be less than $10.15 per share” and other risk factors below.

Subsequent to the completion of our initial business combination, we may be required to take write-downs or write-offs, restructuring and impairment orother charges that could have a significant negative effect on our financial condition, results of operations and our stock price, which could cause you to lose some or all of your investment.

Even if we conduct extensive due diligence on a target business with which we combine, we cannot assure you that this diligence will surface all materialissues 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 notlater 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 ofthis 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 topartially 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 tohave 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 successfullybring 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.

If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-shareredemption amount received by stockholders may be less than $10.15 per share.

Our placing of funds in the trust account may not protect those fundsfrom third-party claims against us. Although we will seek to have all vendors, service providers, prospective target businesses and other entities with which we do business execute agreements with us waiving any right, title, interest or claim ofany 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 trustaccount, 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 aclaim 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 alternativesavailable 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. BDO USA, LLP,our independent registered public accounting firm, and the underwriters of the offering, will not execute 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 whoseparticular expertise or skills are believed by management to be

 

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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. Inaddition, 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 accountfor any reason. Upon redemption of our public shares, if we are unable to complete our initial business combination within the prescribed timeframe, or upon the exercise of a redemption right in connection with our initial business combination, wewill be required to provide for payment of claims of creditors that were not waived that may be brought against us within the 10 years following redemption. Accordingly, the per-share redemption amountreceived by public stockholders could be less than the $10.15 per share initially held in the trust account, due to claims of such creditors. Pursuant to the letter agreement, the form of which is filed as Exhibit 10.1 to the registration statementof which this prospectus forms a part, our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party for services rendered or products sold to us, or a prospective target business with which we have enteredinto 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) $10.15 per public share and (ii) the actual amount per publicshare held in the trust account as of the date of the liquidation of the trust account, if less than $10.15 per share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claimsby 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 underwritersof this offering against certain liabilities, including liabilities under the Securities Act. However, we have not asked our sponsor to reserve for such indemnification obligations, nor have we independently verified whether our sponsor hassufficient funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are securities of our company. Therefore, we cannot assure you that our sponsor would be able to satisfy those obligations. None of our officers ordirectors will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.

Ourdirectors may decide not to enforce the indemnification obligations of our sponsor, resulting in a reduction in the amount of funds in the trust account available for distribution to our public stockholders.

In the event that the proceeds in the trust account are reduced below the lesser of (i) $10.15 per share and (ii) the actual amount per share held in thetrust account as of the date of the liquidation of the trust account if less than $10.15 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 our sponsor asserts thatit is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our sponsor to enforce its indemnificationobligations.

While we currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce itsindemnification 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 legalaction 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 theseindemnification obligations, the amount of funds in the trust account available for distribution to our public stockholders may be reduced below $10.15 per share.

We may not have sufficient funds to satisfy indemnification claims of our directors and executive officers.

We have agreed to indemnify our officers and directors to the fullest extent permitted by law. However, our officers and directors have agreed to waive anyright, title, interest or claim of any kind in or to any monies in the trust account and to not seek recourse against the trust account for any reason whatsoever. 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 ourofficers or directors for breach of their

 

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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, mightotherwise 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 indemnificationprovisions.

If, after we distribute the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntarybankruptcy 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 isfiled 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 aresult, 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 exposingitself 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 havepriority 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 isfiled 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 ofour 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.

Our stockholders may be held liable for claims by third parties against us to the extent of distributions received by them upon redemption of theirshares.

Under the DGCL, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received bythem in a dissolution. The pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination within 15 months from the closing ofthis offering (or up to 21 months from the closing of this offering if we extend the period of time to consummate a business combination as described in greater detail in this prospectus) may be considered a liquidating distribution under Delawarelaw. 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 noticeperiod 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 additional150-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 suchstockholder’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 publicshares as soon as reasonably possible following the 15th month from the closing of this offering (or up to the 18th month from the closing ofthis offering if we extend the period of time to consummate a business combination) 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 timethat will provide for our payment of all existing and pending claims or claims that may be potentially brought against us within the 10 years following our dissolution. However,

 

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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 toarise 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 liquidatingdistribution 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. Wecannot assure you 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 anyliability of our stockholders may extend beyond the third anniversary of such date. Furthermore, if the pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do notcomplete our initial business combination within 15 months from the closing of this offering (or up to 21 months from the closing of this offering if we extend the period of time to consummate a business combination as discussed in more detail inthis prospectus) 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 circumstancesthat 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 aliquidating distribution.

We may not hold an annual meeting of stockholders until after the consummation of our initial business combination, whichcould delay the opportunity for our stockholders to elect directors.

In accordance with Nasdaq corporate governance requirements, we are not requiredto hold an annual meeting until no later than one year after our first fiscal year end following our listing on Nasdaq. Under Section 211(b) of the DGCL, we are, however, required to hold an annual meeting of stockholders for the purposes ofelecting directors in accordance with our bylaws unless such election is made by written consent in lieu of such a meeting. We may not hold an annual meeting of stockholders to elect new directors prior to the consummation of our initial businesscombination, and thus we may not be in compliance with Section 211(b) of the DGCL, which requires an annual meeting. Therefore, if our stockholders want us to hold an annual meeting prior to the consummation of our initial business combination,they may attempt to force us to hold one by submitting an application to the Delaware Court of Chancery in accordance with Section 211(c) of the DGCL.

Because we are neither limited to evaluating a target business in a particular industry sector nor have we selected any specific target businesses withwhich to pursue our initial business combination, you will be unable to ascertain the merits or risks of any particular target business’s operations.

We intend to focus our search on targets operating in the renewable energy industry, except that we will not, under our second amended and restated certificateof 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 or approached any specific target business with respect to abusiness 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 ourinitial 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 orearnings, 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 targetbusiness, we cannot assure you that we will properly ascertain or assess all of the significant risk factors or that we will have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our control and leave uswith no ability to control or reduce the chances that those risks will adversely impact a target business. We also cannot assure you that an investment in our units will ultimately prove to be more favorable to investors than a direct investment, ifsuch 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. Suchstockholders are unlikely to

 

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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 fiduciaryduty 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 materialmisstatement or material omission.

We may seek business combination opportunities in industries or sectors which may or may not be outside of ourmanagement’s area of expertise.

Although we intend to focus our search on targets operating in the technology-focused areas, we will consider aninitial business combination outside of our management’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 ourcompany 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 particularbusiness combination candidate, we cannot assure you that we will adequately ascertain or assess all of the significant risk factors. We also cannot assure you that an investment in our units will not ultimately prove to be less favorable toinvestors in this offering 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’s expertise, ourmanagement’s expertise may not be directly applicable to its evaluation or operation, and the information contained in this prospectus regarding the areas of our management’s expertise would not be relevant to an understanding of thebusiness 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 businesscombination 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 intoour initial business combination with a target that does not meet such criteria and guidelines, and as a result, the target business with which we enter into our initial business combination may not have attributes entirely consistent with ourgeneral criteria and guidelines.

Although we have identified general criteria and guidelines for evaluating prospective target businesses, it ispossible that a target business with which we enter into our initial business combination will not have all of these positive attributes. If we complete our initial business combination with a target that does not meet some or all of theseguidelines, 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 ourgeneral 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 certainamount 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 legal reasons, it may be more difficult for us to attain stockholder approval of ourinitial business combination if the target business does not meet our general criteria and guidelines. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.15 per share on theliquidation of our trust account and our warrants will expire worthless. In certain circumstances, our public stockholders may receive less than $10.15 per share on the redemption of their shares. See “— If third parties bring claimsagainst us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.15 per share” and other risk factors below.

 

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We may seek business combination opportunities with a financially unstable business or an entity lackingan 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 orearnings, 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 anddirectors 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 a fairness opinion and consequently, you may have no assurance from an independent source that the price we are paying forthe business is fair to our company from a financial point of view.

Unless we complete our initial business combination with an affiliated entity orour 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 another independent entity that commonly renders valuationopinions 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 onstandards 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.

Because we must furnish our stockholders with target business financial statements, we may lose the ability to complete an otherwise advantageous initialbusiness combination with some prospective target businesses.

The federal proxy rules require that a proxy statement with respect to a vote on aninitial business combination meeting certain financial significance tests include historical and/or pro forma financial statement disclosure in periodic reports. We will include the same financial statement disclosure in connection with our tenderoffer documents, whether or not they are required under the tender offer rules. These financial statements may be required to be prepared in accordance with, or be reconciled to, accounting principles generally accepted in the United States ofAmerica, or GAAP, or international financial reporting standards as issued by the International Accounting Standards Board, or IFRS, depending on the circumstances and the historical financial statements may be required to be audited in accordancewith 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 providesuch financial statements in time for us to disclose such statements in accordance with federal proxy rules and complete our initial business combination within the prescribed time frame.

Compliance obligations under the Sarbanes-Oxley Act may make it more difficult for us to effectuate our initial business combination, require substantialfinancial and management resources, and increase the time and costs of completing an initial business combination.

Section 404 of theSarbanes-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, 2023. Only in the event weare 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 internalcontrol 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

 

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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 particularlyburdensome 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 internalcontrols. 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.

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 initialbusiness combination with which a substantial majority of our stockholders do not agree.

Our second amended and restated certificate of incorporationwill 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 either immediately prior to or upon consummation ofour initial business combination and after payment of underwriters’ fees and 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 containedin 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 redeemedtheir 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 negotiatedagreements to sell their shares to our sponsor, officers, directors, advisors or their affiliates. In the event the aggregate cash consideration we would be required to pay for all shares of Class A common stock that are validly submitted forredemption 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 redeemany 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 andother governing instruments, including their warrant agreements. We cannot assure you that we will not seek to amend our amended and restated certificate of incorporation or governing instruments in a manner that will make it easier for us tocomplete our initial business combination that our stockholders may not support.

In order to effectuate an initial business combination, blank checkcompanies have, in the recent past, amended various provisions of their charters and modified 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 and, with respect to their warrants, amended their warrant agreements to require the warrants to be exchanged for cash and/or other securities.Amending our second amended and restated certificate of incorporation will require the approval of holders of a majority of our common stock, and amending our warrant agreement will require a vote of holders of a majority of the public warrants. Inaddition, our second amended and restated certificate of incorporation will require us to provide our public stockholders with the opportunity to redeem their public shares for cash if we propose an amendment to our second amended and restatedcertificate of incorporation (A) to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 15 months from the closing of this offering (or up to 21months from the closing of this offering if we extend the period of time to consummate a business combination as described in more detail in this prospectus) or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity. To the extent any such amendments would be deemed to fundamentally change the nature of any securities offered through this registration statement, we would register, orseek an exemption from registration for, the affected securities. We cannot assure you that we will not seek to amend our charter or governing instruments or extend the time to consummate an initial business combination in order to effectuate ourinitial business combination.

 

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The provisions of our second 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 our trust account), including an amendment to permit us to withdraw funds from the trust accountsuch 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 a majority of our common stock, which is a lower amendment threshold thanthat of some other blank check companies. It may be easier for us, therefore, to amend our second amended and restated certificate of incorporation and the trust agreement to facilitate the completion of an initial business combination that some ofour stockholders may not support.

Our second amended and restated certificate of incorporation will provide that any of its provisions related to pre-initial business combination activity (including the requirement to deposit proceeds of this offering and the private placement of warrants into the trust account and not release such amounts except in specifiedcircumstances, 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 liquidationis substantially reduced or eliminated) may be amended if approved by holders of a majority of our common stock entitled to vote thereon, and corresponding provisions of the trust agreement governing the release of funds from our trust account maybe amended if approved by holders of a majority of our common stock entitled to vote thereon. In all other instances, our second amended and restated certificate of incorporation may be amended by holders of a majority of our outstanding commonstock 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 second amended and restated certificate of incorporation. Ourinitial stockholders, who will collectively beneficially own up to 20% of our common stock upon the closing of this offering (assuming they do not purchase any units in this offering and excluding the representative shares), will participate in anyvote to amend our second 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 second amended and restatedcertificate 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 businesscombination with which you do not agree. Our stockholders may pursue remedies against us for any breach of our second amended and restated certificate of incorporation.

Our sponsor, officers and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our second amended andrestated certificate of incorporation (i) to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 15 months from the closing of this offering (or upto 21 months from the closing of this offering if we extend the period of time to consummate a business combination as described in more detail in this prospectus) 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 agreementthat we have entered into with our sponsor, officers and directors. Our stockholders are not parties to, or third-party beneficiaries of, these agreements and, as a result, will not have the ability to pursue remedies against our sponsor, officersor 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, butintend to target businesses larger than we could acquire with the net proceeds of this offering and the sale of the private placement warrants. As a result, we may be required to seek additional financing to complete such proposed initial businesscombination. We cannot

 

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assure you that such financing will be available on acceptable terms, if at all. To the extent that additional financing proves to be unavailable when needed to complete our initial businesscombination, 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 obtaincould 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 shares fromstockholders who elect redemption in connection with our initial business combination and/or the terms of negotiated transactions to purchase shares in connection with our initial business combination. If we are unable to complete our initialbusiness combination, our public stockholders may receive only approximately $10.15 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 (less upto $100,000 of interest to pay dissolution expenses) on the liquidation of our trust account and our warrants will expire worthless. In addition, even if we do not need additional financing to complete our initial business combination, we mayrequire 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 are unable to complete our initial business combination, our public stockholders may only receive approximately$10.15 per share on the liquidation of our 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 bereduced and the per-share redemption amount received by stockholders may be less than $10.15 per share,” under certain circumstances our public stockholders may receive less than $10.15 per share upon theliquidation of the trust account.

Our initial stockholders may exert a substantial influence on actions requiring a stockholder vote, potentially in amanner that you do not support.

Upon the closing of this offering, our initial stockholders will own shares representing approximately 20% of ourissued and outstanding shares of common stock (excluding the shares of Class A common stock underlying the private placement warrants and the representative shares and assuming they do not purchase any units in this offering). Accordingly, theymay exert a substantial influence on actions requiring a stockholder vote, potentially in a manner that you do not support, including amendments to our amended and restated certificate of incorporation and approval of major corporate transactions.If our initial stockholders purchase any units in this offering or 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 thatwould be considered in making such additional purchases would include consideration of the current trading price of our Class A common stock. In addition, our board of directors, whose members were elected by our initial stockholders, is andwill be divided into two classes, each of which will generally serve for a term of two years with only one class of directors being elected in each year. We may not hold an annual meeting of stockholders to elect new directors prior to thecompletion of our initial business combination, in which case all of the current directors will continue in office until at least the completion of the initial business combination. If there is an annual meeting, as a consequence of our“staggered” board of directors, only a minority of the board of directors will be considered for election and our initial stockholders, because of their ownership position, will have considerable influence regarding the outcome.Accordingly, our initial stockholders will continue to exert control at least until the completion of our initial business combination.

Our publicstockholders will not be entitled to vote or redeem their shares in connection with each of our potential three-month extensions.

If we are not ableto consummate our initial business combination within 15 months, we may, by resolution of our board if requested by our sponsor, extend the period of time to consummate a business combination by an additional three months on two occasions, as longas our sponsor or its affiliates or designees, upon five days advance notice prior to the applicable deadline, deposits into the trust account $1,000,000, or $1,150,000 if the

 

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underwriters’ over-allotment option is exercised in full ($0.10 per unit in either case), for each of the available three month extensions, providing a total possible business combinationperiod of 21 months at a total payment value of $2,000,000, or $2,300,000 if the underwriters’ over-allotment option is exercised in full (each such extension period being hereinafter referred to as an “Extension Period”). Our publicstockholders will not be entitled to vote or redeem their shares in connection with any such extension. As a result, we may conduct such an extension even though a majority of our public stockholders do not support such an extension and will not beable to redeem their shares in connection therewith. This feature is different than the traditional special purpose acquisition company structure, in which any extension of the company’s period to complete a business combination requires a voteof the company’s stockholders and stockholders have the right to redeem their public shares in connection with such vote.

Our sponsor may decidenot to extend the term we have to consummate our initial business combination, in which case we would cease all operations except for the purpose of winding up and we would redeem our public shares and liquidate, and the rights will be worthless.

We will have until 15 months from the closing of this offering to consummate our initial business combination. However, if we anticipate that we maynot be able to consummate our initial business combination within 15 months, we may, by resolution of our board if requested by our sponsor, extend the period of time to consummate a business combination by an additional three months on twooccasions (for a total of up to 21 months to complete a business combination as described in more detail in this prospectus), subject to the sponsor depositing additional funds into the trust account as set out below. Our stockholders will not beentitled to vote or redeem their shares in connection with any such extension. However, our stockholders will be entitled to vote and redeem their shares in connection with a stockholder meeting held to approve an initial business combination or ina tender offer undertaken in connection with an initial business combination if we propose such a business combination during such three-month extension period. In order for the time available for us to consummate our initial business combination tobe extended, our sponsor or its affiliates or designees must deposit into the trust account $1,000,000, or $1,150,000 if the underwriters’ over-allotment option is exercised in full ($0.10 per unit in either case), for each of the availablethree month extensions, providing a total possible business combination period of 21 months at a total payment value of $2,000,000, or $2,300,000 if the underwriters’ over-allotment option is exercised in full (each such extension period beinghereinafter referred to as an “Extension Period”). Any such payments would be made in the form of a non-interest bearing loan. If we complete our initial business combination, we will, at the optionof our sponsor, repay such loaned amounts out of the proceeds of the trust account released to us or convert a portion or all of the total loan amount into warrants at a price of $1.00 per warrant, which warrants will be identical to the privateplacement warrants. If we do not complete a business combination, we will repay such loans only from funds held outside of the trust account. Our sponsor and its affiliates or designees are not obligated to fund the trust account to extend the timefor us to complete our initial business combination. If we are unable to consummate our initial business combination within the applicable time period, we will, as promptly as reasonably possible but not more than five business days thereafter,redeem the public shares for a pro rata portion of the funds held in the trust account and as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve andliquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.

Resources could be wasted in researching business combinations that are not completed, which could materially adversely affect subsequent attempts tolocate and acquire or merge with another business. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.15 per share, or less than such amount in certain circumstances, on theliquidation of our trust account and our warrants will expire worthless.

We anticipate that the investigation of each specific target business and thenegotiation, 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 notto complete a

 

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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 aspecific 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 materiallyadversely affect subsequent attempts to locate and acquire or merge with another business. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.15 per share on the liquidation ofour trust account and our warrants will expire worthless. In certain circumstances, our public stockholders may receive less than $10.15 per share on the redemption of their shares. See “— If third parties bring claims against us, theproceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.15 per share” and other risk factors below.

Our key personnel may negotiate employment or consulting agreements with a target business in connection with a particular business combination. Theseagreements may provide for them to receive compensation following our initial business combination and as a result, may cause them to have conflicts of interest in determining whether a particular business combination is the most advantageous.

Our key personnel may be able to remain with the company after the completion of our initial business combination only if they are able to negotiateemployment or consulting agreements in connection with the initial business combination. Such negotiations would take place simultaneously with the negotiation of the initial business combination and could provide for such individuals to receivecompensation 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. The personal and financial interests of such individuals may influence their motivation inidentifying 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 wewill 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. We cannot assure you that any of our key personnel willremain 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.

We may have a limited ability to assess the management of a prospective target business and, as a result, may effect our initial business combination witha 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 targetbusiness’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 benegatively 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 reductionin value.

The Russian invasion of Ukraine has had an immediate and material adverse effect on financial and business conditions worldwide, andparticularly in Europe, in a manner that could materially and adversely affect the business and prospects of potential targets for our initial business combination. These circumstances could reduce the number of attractive targets for our initialbusiness combination, increase the cost of our initial business combination and delay or prevent us from completing our initial business combination.

On February 24, 2022, the Russian Federation launched an invasion of Ukraine that has continued to escalate without any resolution of the invasionforeseeable in the near future with the short and long-term impact on financial and business conditions worldwide, and particularly in Europe, remaining highly uncertain, and in

 

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energy markets generally throughout the world. The United States has been joined by the European Union, Canada and other countries across the globe in imposing new and stricter sanctions againstthe Russian Federation in a manner that has resulted in higher energy prices and higher prices for raw materials and goods and services and disruptions to supply and distribution chains in a manner that has contributed to higher inflation. TheUnited States, the European Union, Canada and other countries across the globe may impose additional sanctions against the Russian Federation as the conflict continues to escalate. The impact of the sanctions also includes disruptions to financialmarkets, an inability to complete financial or banking transactions, restrictions on travel and an inability to service existing or new customers in a timely manner in the affected areas of Europe. Many multinational corporations have exceeded whatis required by the newer and stricter sanctions in reducing or terminating their business ties to the Russian Federation. The Russian Federation could resort to cyberattacks and other action that impact businesses across Europe including thosewithout any direct business ties to the Russian Federation. We expect that the withdrawal of some firms from Russia, combined with limitations on finance, are likely to contribute to ongoing constraints on new field development and crude oilproduction with ongoing effects into the medium term. Market participant trading activity combined with the active conflict involving Russia remains a substantial source of uncertainty and risk for global crude oil production and prices. Thisuncertainty may impact our ability to identify a target and if a target is identified to close a business combination. It also may create uncertainty in pricing the cost of acquiring, and in the valuation of, a target company, depending on thefluctuation of oil and gas prices. Oil market uncertainties, linked to Russia’s further invasion of Ukraine, have occurred while global petroleum inventory levels are low. This situation has contributed to historically high levels ofbackwardation (when near-term prices are higher than longer-dated ones). These circumstances could have a material and adverse effect on the business and prospects of energy companies which are the focus of our search for our initial businesscombination. The number of attractive targets for our initial business combination could be reduced, the cost of our initial business combination may be increased and we could experience a delay or inability to complete our initial businesscombination.

If we acquire an operating company or business in the renewable energy industry, our future operations may be subject to risks associatedwith this sector.

While we may pursue an initial business combination target in any business or industry, we expect to focus oursearch on acquiring an operating company or business in the renewable energy industry. Because we have not yet identified or approached any specific target business, we cannot provide specific risks of any business combination. However, risksinherent in investments in this sector may include, but are not limited to, the following:

 

  

Competition could reduce profit margins.

 

  

Our inability to comply with governmental regulations affecting the renewable energy industry could negativelyaffect our operations.

 

  

An inability to license or enforce intellectual property rights on which our business may depend.

 

  

The success of our planned business following consummation of our initial business combination may depend onmaintaining a well-secured business and technology infrastructure.

 

  

If we are required to obtain governmental approval of our products, the production of our products could bedelayed and we could be required to engage in a lengthy and expensive approval process that may not ultimately be successful.

 

  

Continuing government and private efforts to contain renewable energy costs, including through the implementationof legal and regulatory changes, may reduce our future revenue and our profitability following such business combination.

 

  

Changes in the renewable energy related industry and markets for such products affecting our customers orretailing practices could negatively impact customer relationships and our results of operations.

 

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The renewable energy industry is susceptible to significant liability exposure. If liability claims are broughtagainst us following a business combination, it could materially adversely affect our operations.

 

  

Dependence of our operations upon third-party suppliers, manufacturers or contractors whose failure to performadequately could disrupt our business.

 

  

A disruption in supply could adversely impact our business.

Any of the foregoing could have an adverse impact on our operations following a business combination. However, our efforts in identifyingprospective target businesses will not be limited to the renewable energy industry. 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 thespecific industry in which we operate or target business which we acquire, none of which can be presently ascertained.

If we effect our initialbusiness 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 anyspecial 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 withdifferent 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 theUnited States;

 

  

currency fluctuations and exchange controls;

 

  

rates of inflation;

 

  

cultural and language differences;

 

  

employment regulations;

 

  

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 ourresults of operations and financial condition.

 

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We may issue notes or other debt securities, or otherwise incur substantial debt, to complete an initialbusiness combination, which may adversely affect our leverage and financial condition and thus negatively impact the value of our stockholders’ investment in us.

Although we have no commitments as of the date of this prospectus to issue any notes or other debt securities, or to otherwise incur outstanding debt followingthis offering, 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 ofany 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 couldhave a variety of negative effects, including:

 

  

default and foreclosure on our assets if our operating revenues after an initial business combination areinsufficient to repay our debt obligations;

 

  

acceleration of our obligations to repay the indebtedness even if we make all principal and interest paymentswhen 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 security is payable on demand;

 

  

our inability to obtain necessary additional financing if the debt security contains covenants restricting ourability to obtain such financing while the debt security 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 thefunds 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 inwhich we operate;

 

  

increased vulnerability to adverse changes in general economic, industry and competitive conditions and adversechanges in government regulation;

 

  

limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debtservice requirements, and execution of our strategy; and

 

  

other disadvantages compared to our competitors who have less debt.

We may issue our common stock to investors in connection with our initial business combination at a price that is less than the prevailing market price ofour common stock at that time.

In connection with our initial business combination, we may issue shares of common stock to investors in privateplacement transactions (so-called PIPE transactions) at a price of $10.15 per share or which approximates the per-share amounts in our trust account at such time, whichis generally approximately $10.15. The purpose of such issuances will be to enable us to provide sufficient liquidity to the post-business combination entity. The price of the common stock we issue may therefore be less, and potentiallysignificantly less, than the market price for our common stock at such time.

We may only be able to complete one business combination with theproceeds of this offering 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 maynegatively impact our operating results and profitability.

Of the net proceeds from this offering and the sale of the private placement warrants,$101,500,000 (or $116,725,000 if the underwriters’ over-allotment option is exercised in full) will be available to complete our

 

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initial business combination and pay related fees and expenses (which includes up to $3,500,000, or up to $4,025,000 if the over-allotment option is exercised in full, for the payment of deferredunderwriting commissions).

We may effectuate our initial business combination with a single target business or multiple target businesses simultaneouslyor 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 thatwe 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 combinationwith 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 oroffsetting 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 businesscombination 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 orservices.

This lack of diversification may subject us to numerous economic, competitive and regulatory risks, any or all of which mayhave a substantial adverse impact upon the particular industry in which we may operate subsequent to our initial business combination.

We may attemptto 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 andprofitability.

If we determine to simultaneously acquire several businesses that are owned by different sellers, we will need for each of such sellersto 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 withrespect 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 asingle operating business. If we are unable to adequately address these risks, it could negatively impact our profitability and results of operations.

Since our officers and directors will be eligible to share in a portion of any appreciation in founder shares purchased at approximately $0.009 per share,a conflict of interest may arise in determining whether a particular business combination target is appropriate for our initial business combination.

The members of our management team and our directors who will assist us in sourcing potential acquisition targets, have invested in our sponsor by subscribingunits issued by the sponsor. These officers and directors will not receive any cash compensation from us prior to a business combination but through their investment in the sponsor will be eligible to share in a portion of any appreciation infounder shares and private placement units, provided that we successfully complete a business combination. We believe that this structure aligns the incentives of these officers and directors with the interests of our stockholders. However,investors should be aware that, as these officers and directors have paid approximately $0.009 per share for the interest in the founder shares, this structure also creates an incentive whereby our officers and directors could potentially make asubstantial profit even if we complete a business combination with a target that ultimately declines in value and is not profitable for public investors.

 

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We may engage one or more of our underwriters or one of their respective affiliates to provide additionalservices to us after this offering, which may include acting as financial advisor in connection with an initial business combination or as placement agent in connection with a related financing transaction. Our underwriters are entitled to receivedeferred underwriting commissions that will be released from the trust account only upon a completion of an initial business combination. These financial incentives may cause them to have potential conflicts of interest in rendering any suchadditional services to us after this offering, including, for example, in connection with the sourcing and consummation of an initial business combination.

We may engage one or more of our underwriters or one of their respective affiliates to provide additional services to us after this offering, including, forexample, identifying potential targets, providing financial advisory services, acting as a placement agent in a private offering or arranging debt financing transactions. We may pay such underwriter or its affiliate fair and reasonable fees or othercompensation that would be determined at that time in an arm’s length negotiation; provided that no agreement will be entered into with any of the underwriters or their respective affiliates and no fees or other compensation for such serviceswill be paid to any of the underwriters or their respective affiliates prior to the date that is 60 days from the date of this prospectus, unless such payment would not be deemed underwriters’ compensation in connection with this offering. Theunderwriters are also entitled to receive deferred underwriting commissions that are conditioned on the completion of an initial business combination. The underwriters’ or their respective affiliates’ financial interests tied to theconsummation 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 aninitial business combination.

Risks Relating to our Sponsor, Advisors and Management Team

Our sponsor paid an aggregate of $25,000 for the founder shares, or approximately $0.009 per founder share. As a result of this low initial price, oursponsor, its affiliates and our management team and advisors stand to make a substantial profit even if an initial business combination subsequently declines in value or is unprofitable for our public stockholders.

As a result of the low acquisition cost of our founder shares, our sponsor, its affiliates and our management team could make a substantial profit even if weselect and consummate an initial business combination with an acquisition target that subsequently declines in value or is unprofitable for our public stockholders. Thus, such parties may have more of an economic incentive for us to enter into aninitial business combination with a riskier, weaker-performing or financially unstable business, or an entity lacking an established record of revenues or earnings, than would be the case if such parties had paid the full offering price fortheir founder shares.

Our ability to successfully effect our initial business combination and to be successful thereafter will be totally dependentupon 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 thetarget 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 ofthe management of the target business will remain in place. While we intend to closely scrutinize any individuals we employ after our initial business combination, we cannot assure you that our assessment of these individuals will prove to becorrect. 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, the officersand 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 andprofitability of our post-combination business. The role of an initial

 

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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 aninitial 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 businesscombination 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.

We are dependent upon our executive 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 executive officers and directors. We believe that our successdepends on the continued service of our executive 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 onthe life of, any of our directors or executive officers. The unexpected loss of the services of one or more of our directors or executive officers could have a detrimental effect on us.

Since our sponsor, officers and directors will lose their entire investment in us if our initial business combination is not completed, a conflict ofinterest may arise in determining whether a particular business combination target is appropriate for our initial business combination.

OnDecember 28, 2021, our sponsor purchased an aggregate of 2,875,000 founder shares for an aggregate purchase price of $25,000, or approximately $0.009 per share. The number of founder shares issued was determined based on the expectation thatsuch founder shares would represent 20% of the outstanding shares after this offering, assuming our sponsor and directors and officers do not purchase units in this offering and excluding the representative shares. The founder shares will beworthless if we do not complete an initial business combination. In addition, our sponsor has agreed to purchase an aggregate of 5,500,000 warrants (or 6,025,000 warrants if the over-allotment option is exercised in full) at a price of $1.00 perwarrant, for an aggregate purchase price of $5,500,000, or $6,025,000 if the over-allotment option is exercised in full, that will also be worthless if we do not complete an initial business combination. Holders of founder shares have agreed(A) to vote any shares owned by them in favor of any proposed initial business combination and (B) not to redeem any founder shares in connection with a stockholder vote to approve a proposed initial business combination or in connectionwith a tender offer. In addition, we may obtain loans from our sponsor, affiliates of our sponsor or an officer or director. The personal and financial interests of our officers and directors may influence their motivation in identifying andselecting a target business combination, completing an initial business combination and influencing the operation of the business following the 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 todevote to our affairs. This conflict of interest could have a negative impact on our ability to complete our initial business combination.

Ourofficers 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 theirother businesses. We do not intend to have any full-time employees prior to the completion of our initial business combination. Each of our officers is engaged in other business endeavors for which he may be entitled to substantial compensation andour officers are not obligated to contribute any specific number of hours per week to our affairs. Our independent directors may also serve as officers or board members for other entities. If our officers’ and directors’ other businessaffairs 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 ourinitial business combination. For a complete discussion of our officers’ and directors’ other business affairs, please see the section of this prospectus entitled “Management — Directors and Officers.”

 

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Certain of our officers and directors are now, and all of them may in the future become, affiliated withentities 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.

Following the completion of this offering and until we consummate our initial business combination, we intend to engage in the business of identifyingand combining with one or more businesses. Our sponsor and 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.

Our officers and directors also may become aware of business opportunities which may be appropriate for presentation to us and the other entities to whichthey owe certain fiduciary or contractual duties.

Accordingly, they may have conflicts of interest in determining to which entity a particular businessopportunity 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 will providethat 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 isone 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. Thepurpose for the surrender of corporate opportunities is to allow officers, directors or other representatives with multiple business affiliations to continue to serve as an officer of our company or on our board of directors. Our officers anddirectors may from time to time be presented with opportunities that could benefit both another business affiliation and us. In the absence of the “corporate opportunity” waiver in our charter, certain candidates would not be able to serveas an officer or director. We believe we substantially benefit from having representatives, who bring significant, relevant and valuable experience to our management, and, as a result, the inclusion of the “corporate opportunity” waiver inour amended and restated certificate of incorporation provides us with greater flexibility to attract and retain the officers and directors that we feel are the best candidates. However, the personal and financial interests of our directors andofficers may influence their motivation in timely identifying and selecting a target business and completing a business combination. The different timelines of competing business combinations could cause our directors and officers to prioritize adifferent business combination over finding a suitable acquisition target for our business combination. Consequently, our directors’ and officers’ discretion in identifying and selecting a suitable target business may result in a conflictof interest when determining whether the terms, conditions and timing of a particular business combination are appropriate and in our stockholders’ best interest, which could negatively impact the timing for a business combination.

For a complete discussion of our officers’ and directors’ business affiliations and the potential conflicts of interest that you should be aware of,please see the sections of this prospectus entitled “Management — Directors and Officers,” “Management — Conflicts of Interest” and “Certain Relationships and Related Party Transactions.”

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 indirectpecuniary 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 isaffiliated with our 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.

 

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We may engage in an initial business combination with one or more target businesses that haverelationships with entities that may be affiliated with our sponsor, officers, directors or existing holders which may raise potential conflicts of interest.

In light of the involvement of our sponsor, officers and directors with other entities, we may decide to acquire one or more businesses affiliated with oursponsor, officers or directors. Our directors also serve as officers and board members for other entities, including, without limitation, those described under the section of this prospectus entitled “Management — Conflicts ofInterest.” Such entities may compete with us for business combination opportunities. Our sponsor, officers and directors are not currently aware of any specific opportunities for us to complete our initial business combination with any entitieswith 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 anyaffiliated entities, we would pursue such a transaction if we determined that such affiliated entity met our criteria for an initial business combination as set forth in the section of this prospectus entitled “Proposed Business —Selection of a Target Business and Structuring of our Initial Business Combination” and such transaction was approved by a majority of our disinterested directors. Despite our agreement to obtain an opinion from an independent investmentbanking firm that is a member of FINRA, or from an independent accounting firm, regarding the fairness to our stockholders from a financial point of view of an initial business combination with one or more domestic or international businessesaffiliated 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 beabsent any conflicts of interest.

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 than100% 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 acontrolling 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-transactioncompany 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 thetarget 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, ourstockholders 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 ina single person or group obtaining a larger share of the company’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 cannotprovide 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.

Risks Relating to Our Securities

The securities inwhich we invest the funds held in the trust account could bear a negative rate of interest, which could reduce the value of the assets held in trust such that the per-share redemption amount received by publicstockholders may be less than $10.15 per share.

The proceeds held in the trust account will be invested only in U.S. government treasury obligationswith a maturity of 180 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 treasuryobligations. While short-

 

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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 andJapan pursued interest rates below zero in recent years, and the Open Market Committee of the Federal Reserve has not ruled out the possibility that it may in the future adopt similar policies in the United States. In the event that we areunable to complete our initial business combination or make certain amendments to our amended and restated certificate of incorporation, our public stockholders are entitled to receive theirpro-rata share of the proceeds held in the trust account, plus any interest income, net of taxes paid or payable (less, in the case we are unable to complete our initial business combination, $100,000 ofinterest). Negative interest rates could reduce the value of the assets held in trust such that the per-share redemption amount received by public stockholders may be less than $10.15 per share.

If we are deemed to be an investment company under the Investment Company Act, we may be required to institute burdensome compliance requirements and ouractivities may be restricted, which may make it difficult for us to complete our initial business combination.

If we are deemed to be an investmentcompany 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 initialbusiness 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 mustensure 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” constitutingmore than 40% of our total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. Our business will be to identify and complete an initial business combination and thereafter to operate the post-transactionbusiness 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 accountmay 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 180 days or less or in money market funds meeting certain conditionsunder 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 inother 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 mannerof a merchant bank or private equity fund), we intend to avoid being deemed an “investment company” within the meaning of the Investment Company Act. This offering is not intended for persons who are seeking a return on investments ingovernment 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 sharesproperly 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 redeem 100% of our public shares if we do not complete ourinitial business combination within 15 months from the closing of this offering (or up to 21 months from the closing of

 

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this offering if we extend the period of time to consummate a business combination as described in greater detail in this prospectus) or (B) with respect to any other provision relating tostockholders’ rights or pre-initial business combination activity; or (iii) absent an initial business combination within 15 months from the closing of this offering (or up to 21 months from theclosing of this offering if we extend the period of time to consummate a business combination as described in greater detail in this prospectus), our return of the funds held in the trust account to our public stockholders as part of our redemptionof the public shares. We are aware of litigation against special purpose acquisition companies asserting that notwithstanding the foregoing, the entity should be considered an investment company.

Although we believe that these claims are without merit, we cannot guarantee that we will not be subject to the Investment Company Act or related litigation.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 requireadditional 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 are unable to complete our initial business combination, our public stockholdersmay receive only approximately $10.15 per share on the liquidation of our trust account and our warrants will expire worthless.

If we seek stockholderapproval of our initial business combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a “group” of stockholders are deemed to hold in excess of 15% of our Class A common stock, you will losethe ability to redeem all such shares in excess of 15% of our Class A common stock.

If we seek stockholder approval of our initial businesscombination 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 will provide that a public stockholder, together with anyaffiliate 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 tomore than an aggregate of 15% of the shares sold in this offering 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. Your inability to redeem the Excess Shares will reduce your influence over our ability to complete our initial business combination and you could suffer a material loss onyour investment in us if you sell Excess Shares in open market transactions. Additionally, you will not receive redemption distributions with respect to the Excess Shares if we complete our initial business combination. And as a result, you willcontinue to hold that number of shares exceeding 15% and, in order to dispose of such shares, would be required to sell your stock in open market transactions, potentially at a loss.

Nasdaq may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subjectus to additional trading restrictions.

We have applied to have our units listed on Nasdaq. We expect that our units will be listed on Nasdaq on orpromptly after the date of this prospectus. Following the date the shares of our Class A common stock and warrants are eligible to trade separately, we anticipate that the shares of our Class A common stock and warrants will be separatelylisted on Nasdaq. We cannot guarantee that our securities will be approved for listing on Nasdaq. Although after giving effect to this offering we expect to meet, on a pro forma basis, the minimum initial listing standards set forth in the Nasdaqlisting standards, we cannot assure you that our securities will be, or will continue to be, listed on Nasdaq in the future or prior to our initial business combination. In order to continue listing our securities on Nasdaq prior to our initialbusiness combination, we must maintain certain financial, distribution and stock price levels. Generally, we must maintain an average global market capitalization and a minimum number of holders of our securities (generally 400 public holders).Additionally, in connection with

 

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our initial business combination, we will be required to demonstrate compliance with Nasdaq’s initial listing requirements, which are more rigorous than Nasdaq’s continued listingrequirements, in order to continue to maintain the listing of our securities on Nasdaq. For instance, our stock price would generally be required to be at least $4.00 per share, and we would be required to have a minimum of 400 round lot holders ofour securities. We cannot assure you that we will be able to meet those initial listing requirements at that time.

If Nasdaq delists our securities fromtrading 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 anover-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 brokerstrading 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 regulatingthe sale of certain securities, which are referred to as “covered securities.” Because we expect that our units and eventually our Class A common stock and warrants will be listed on Nasdaq, our units, Class A common stock andwarrants will be 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 offraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. While we are not aware of a state having used these powers to prohibit or restrict the sale of securities issued by blank check companies,other than the State of Idaho, certain state securities regulators view blank check companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities of blank check companies in their states.Further, if we were no longer listed on Nasdaq, our securities would not 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 are not registering the shares of Class A common stock issuable upon exercise of the warrants under the Securities Act or any state securities lawsat this time, and such registration may not be in place when an investor desires to exercise warrants, thus precluding such investor from being able to exercise its warrants except on a cashless basis. If the issuance of the shares upon exercise ofwarrants 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 are not registering the shares of Class A common stock issuable upon exercise of the warrants under the Securities Act or any state securities laws atthis time. However, under the terms of the warrant agreement, we will agree that as soon as practicable, but in no event later than 15 business days after the closing of our initial business combination, we will use our best efforts to file with theSEC 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 best efforts to cause the same to become effective within60 business days following our initial business combination 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 theprovisions of the warrant agreement. We cannot assure you that we will be able to do so if, for example, any facts or events arise which represent a fundamental change in the information set forth in the registration statement or prospectus, thefinancial statements contained or incorporated by reference therein are not current or correct or the SEC issues a stop order. If the shares issuable upon exercise of the warrants are not registered under the Securities Act, we will be required topermit holders to exercise their warrants on a cashless basis. However, no warrant will be

 

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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 exerciseis registered or qualified under the securities laws of the state of the exercising holder, or an exemption from registration is available. Notwithstanding the above, if our Class A common stock is at the time of any exercise of a warrant notlisted on a national securities exchange such that it satisfies 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 warrantsto 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, and in the event we do not soelect, we will use our best 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 othercompensation 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 uponexercise 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 notexercise our redemption right if the issuance of shares of common stock upon exercise of the warrants is not exempt from registration or qualification under applicable state blue sky laws or we are unable to effect such registration orqualification. We will use our best efforts to register or qualify such shares of common stock under the blue sky laws of the state of residence in those states in which the warrants were offered by us in this offering. However, there may beinstances in which holders of our public warrants may be unable to exercise such public warrants but holders of our private placement warrants may be able to exercise such private placement warrants.

If you exercise your public warrants on a “cashless basis,” you will receive fewer shares of Class A common stock from such exercise than ifyou were to exercise such warrants for cash.

There are circumstances in which the exercise of the public warrants may be required or permitted to bemade 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 60th business day afterthe closing of our initial business combination, warrant holders may, during the period beginning on the 61st business day after the closing of our initial business combination and ending uponsuch registration statement being declared effective by the SEC and during any other period when we will have failed to maintain an effective registration statement, exercise warrants on a cashless basis in accordance with Section 3(a)(9) ofthe Securities Act or another exemption. Second, if our Class A common stock is at any time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” underSection 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 soelect, we will not be required to file or maintain in effect a registration statement, and in the event we do not so elect, we will use our best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption isnot available. Third, if we call the public warrants for redemption, our management will have the option to require all holders that wish to exercise warrants to do so on a cashless basis. In the event of an exercise on a cashless basis, a holderwould pay the warrant exercise price by surrendering the warrants for that number of shares of Class A common stock equal to the quotient obtained by dividing (x) the product of the number of shares of Class A common stock underlyingthe warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value” (as defined in the next sentence) by (y) the fair market value. The “fair market value” is the averagereported last sale price of the Class A common stock for the 10 trading days ending on the third trading day prior to the date on which the notice of exercise is received by the warrant agent or on which the notice of redemption is sent to theholders of warrants, as applicable. As a result, you would receive fewer shares of Class A common stock from such exercise than if you were to exercise such warrants for cash.

 

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The grant of registration rights to our initial stockholders may make it more difficult to complete ourinitial business combination, and the future exercise of such rights may adversely affect the market price of our Class A common stock.

Pursuantto an agreement to be entered into concurrently with the issuance and sale of the securities in this offering, our initial stockholders and their permitted transferees can demand that we register the private placement warrants, the shares ofClass A common stock issuable upon exercise of the private placement warrants and upon conversion of the founder shares held, or to be held, by them and holders of securities that may be issued upon conversion of working capital loans maydemand that we register such warrants or the Class A common stock issuable upon conversion or exercise of such warrants. We will bear the cost of registering these securities. The registration and availability of such a significant number ofsecurities 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 toconclude. 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 stockthat is expected when the securities owned by our initial stockholders or holders of working capital loans or their respective permitted transferees are registered.

We may issue additional common stock or preferred stock to complete our initial business combination or under an employee incentive plan after completionof 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 thanone-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 ofincorporation. Any such issuances would dilute the interest of our stockholders and likely present other risks.

Our amended and restated certificateof 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, parvalue $0.0001 per share. Immediately after this offering, there will be 89,900,000 and 7,500,000 (assuming, in each case, that the underwriters have not exercised their over-allotment option) authorized but unissued shares of Class A commonstock 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 or the shares of Class Acommon stock issuable upon conversion of Class B common stock. Immediately after the consummation of this offering, there will be no shares of preferred stock issued and outstanding. Shares of Class B common stock are convertible intoshares of our Class A common stock initially at a one-for-one ratio but subject to adjustment as set forth herein, including in certain circumstances in which weissue Class A common stock or equity-linked securities related to our initial business combination.

We may issue a substantial number of additionalshares of common or preferred stock to complete our initial business combination or under an employee incentive plan after completion of our initial business combination (although our amended and restated certificate of incorporation will providethat we may not issue securities that can vote with common stockholders on matters related to our pre-initial business combination activity). The price at which we issue any shares may be lower than the priceyou paid for the Units in this offering or at a price lower than the trading price of our Class A Common Stock at the time we commit to such issuance or at the actual issuance of such shares. We may also issue shares of Class A commonstock 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 theanti-dilution provisions contained in our amended and restated certificate of incorporation. However, our amended and restated certificate of incorporation will provide, among other things, that prior to our initial business combination, we may notissue 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 ofincorporation, like all provisions of our amended and restated certificate of incorporation, may be amended with the approval of our stockholders. However, our executive officers, directors and director nominees have agreed, pursuant to a writtenagreement with us, that they will not propose any

 

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amendment to our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete ourinitial business combination within 15 months from the closing of this offering (or up to 21 months from the closing of this offering if we extend the period of time to consummate a business combination as discussed in more detail in thisprospectus) 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 toredeem 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 (whichinterest shall be net of taxes payable), divided by the number of then outstanding public shares.

The issuance of additional shares of common orpreferred stock:

 

  

may significantly dilute the equity interest of investors in this offering;

 

  

may subordinate the rights of holders of common stock if preferred stock is issued with rights senior to thoseafforded our common stock;

 

  

could cause a change of control if a substantial number of shares of our common stock are issued, which mayaffect, 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.

The nominal purchase price paid by our sponsor for the founder shares may result in significant dilution to the implied value ofyour public shares upon the consummation of our initial business combination.

We are offering our units at an offering price of $10.00 per unit andthe amount in our trust account is initially anticipated to be $10.15 per public share without taking into account any interest earned on such funds or additional funds, if any, deposited into the trust account in connection with extensions of theperiod of time to consummate a business combination (as described in more detail in this prospectus), implying an initial value of $10.15 per public share. However, prior to this offering, our sponsor paid a nominal aggregate purchase price of$25,000 for the founder shares, or approximately $0.009 per share. As a result, the value of your public shares may be significantly diluted upon the consummation of our initial business combination, when the founder shares are converted into publicshares. For example, the following table shows the dilutive effect of the founder shares on the implied value of the public shares upon the consummation of our initial business combination, assuming that our equity value at that time is $98,000,000,which is the amount we would have for our initial business combination in the trust account after payment of $3,500,000 of deferred underwriting commissions, assuming the underwriters’ over-allotment option is not exercised, no interest isearned on the funds held in the trust account, and no public shares are redeemed in connection with our initial business combination, and without taking into account any other potential impacts on our valuation at such time, such as the tradingprice of our public shares, the business combination transaction costs, any equity issued or cash paid to the target’s sellers or other third parties, or the target’s business itself, including its assets, liabilities, management andprospects, as well as the value of our public and private placement warrants. At such valuation, each of our shares of common stock would have an implied value of $7.78 per share upon consummation of our initial business combination, which would bea 23.35% decrease as compared to the initial implied value per public share of $10.15 (the initial per share redemption price).

 

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Public shares

   10,000,000 

Founder shares

   2,500,000 

Representative shares

   100,000 
  

 

 

 

Total shares

   12,600,000 

Total funds in trust available for initial business combination (less deferred underwritingcommissions)

  $98,000,000 

Initial implied value per public share

  $10.15 

Implied value per share upon consummation of initial business combination

  $7.78 

The value of the founder shares following completion of our initial business combination is likely to be substantiallyhigher than the nominal price paid for them, even if the trading price of our common stock at such time is substantially less than $10.15 per share.

Upon the closing of this offering, assuming no exercise of the underwriters’ over-allotment option, our sponsor will have invested in us an aggregate of$5,525,000, comprised of the $25,000 purchase price for the founder shares and the $5,500,000 purchase price for the private placement warrants. Assuming a trading price of $10.15 per share upon consummation of our initial business combination, the2,500,000 founder shares would have an aggregate implied value of $25,375,000. Even if the trading price of our common stock was as low as $2.21 per share, and the private placement warrants were worthless, the value of the founder shares would beequal to the sponsor’s initial investment in us. As a result, our sponsor is likely to be able to recoup its investment in us and make a substantial profit on that investment, even if our public shares have lost significant value. Accordingly,our management team, which owns interests in our sponsor, may have an economic incentive that differs from that of the public stockholders to pursue and consummate an initial business combination rather than to liquidate and to return all of thecash in the trust to the stockholders, even if that business combination were with a riskier or less-established target business. For the foregoing reasons, you should consider our management team’s financial incentive to complete an initialbusiness combination when evaluating whether to redeem your shares prior to or in connection with the initial business combination.

Our sponsor paidan aggregate of $25,000, or approximately $0.009 per founder share, and, accordingly, you will experience immediate and substantial dilution from the purchase of our Class B common stock.

The difference between the public offering price per share (allocating all of the unit purchase price to the Class A common stock and none to the warrantincluded in the unit) and the pro forma net tangible book value per share of our Class A common stock after this offering constitutes the dilution to you and the other investors in this offering. Our sponsor acquired the founder shares at anominal price, significantly contributing to this dilution. Upon the closing of this offering, and assuming no value is ascribed to the warrants included in the units, you and the other public stockholders will incur an immediate and substantialdilution of approximately 86.4% (or $8.64 per share, assuming no exercise of the underwriters’ over-allotment option), the difference between the pro forma net tangible book deficit per share of $1.36 and the initial offering price of $10.00per unit. In addition, because of the anti-4 rights of the founder shares, any equity or equity-linked securities issued or deemed issued in connection with our initial business combination would bedisproportionately dilutive to our Class A common stock.

Unlike many other similarly structured blank check companies, our initial stockholderswill receive additional shares of Class A common stock if we issue shares to consummate an initial business combination.

The founder shares willautomatically convert into Class A common stock at the time of our initial business combination, on a one-for-one basis, subject to adjustment as providedherein. In the case that additional shares of Class A common stock, or equity-linked securities convertible or exercisable for Class A common stock, are

 

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issued or deemed issued in excess of the amounts offered in this prospectus and related to the closing of the initial business combination, the ratio at which founder shares shall convert intoClass A common stock will be adjusted 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 thetotal number of all outstanding shares of common stock upon completion of the initial business combination, excluding the representative shares and any shares or equity-linked securities issued, or to be issued, to any seller in the businesscombination and any private placement-equivalent units and their underlying securities issued to our sponsor or its affiliates upon conversion of loans made to us. This is different from most other similarly structured blank check companies inwhich 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. Additionally, the aforementioned adjustment will not take into account any shares ofClass A common stock redeemed in connection with the business combination. Accordingly, the holders of the founder shares could receive additional shares of Class A common stock even if the additional shares of Class A common stock,or equity-linked securities convertible or exercisable for Class A common stock, are issued or deemed issued solely to replace those shares that were redeemed in connection with the business combination. The foregoing may make it moredifficult and expensive for us to consummate an initial business combination.

We may amend the terms of the warrants in a manner that may be adverseto holders of public warrants with the approval by the holders of a majority of the then outstanding public warrants. As a result, the exercise price of your warrants could be increased, the exercise period could be shortened and the number ofshares of our Class A common stock purchasable upon exercise of a warrant could be decreased, all without your approval.

Our warrants will beissued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. The warrant agreement will provide that the terms of the warrants may be amended without the consent of anyholder to cure any ambiguity or correct any defective provision, but requires the approval by the holders of a majority of the then outstanding public warrants to make any change that adversely affects the interests of the registered holders ofpublic warrants. Accordingly, we may amend the terms of the public warrants in a manner adverse to a holder if holders of a majority of the then outstanding public warrants approve of such amendment. Although our ability to amend the terms of thepublic warrants with the consent of a majority 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 intocash or stock, shorten the exercise period or decrease the number of shares of our Class A common stock purchasable upon exercise of a warrant.

Our warrant agreement will designate the courts of the State of New York or the United States District Court for the Southern District ofNew York as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by holders of our warrants, which could limit the ability of warrant holders to obtain a favorable judicial forum for disputes with ourcompany.

Our warrant agreement will provide that, subject to applicable law, (i) any action, proceeding or claim against us arising out of orrelating in any way to the warrant agreement, including under the Securities Act, will be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and(ii) that we irrevocably submit to such jurisdiction, which jurisdiction shall be the exclusive forum for any such action, proceeding or claim. We will waive any objection to such exclusive jurisdiction and that such courts represent aninconvenient forum.

Notwithstanding the foregoing, these provisions of the warrant agreement will not apply to suits brought to enforce any liability orduty created by the Exchange Act or any other claim for which the federal district courts of the United States of America are the sole and exclusive forum. Any person or entity purchasing or otherwise acquiring any interest in any of ourwarrants shall be deemed to have notice of and to have consented to the forum provisions in our warrant agreement. If any action, the subject matter of which is within the scope the

 

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forum provisions of the warrant agreement, is filed in a court other than a court of the State of New York or the United States District Court for the Southern District of New York(a “foreign action”) in the name of any holder of our warrants, such holder shall be deemed to have consented to: (x) the personal jurisdiction of the state and federal courts located in the State of New York in connection withany action brought in any such court to enforce the forum provisions (an “enforcement action”), and (y) having service of process made upon such warrant holder in any such enforcement action by service upon such warrant holder’scounsel in the foreign action as agent for such warrant holder.

Thischoice-of-forum provision may limit a warrant holder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with our company,which may discourage such lawsuits. Alternatively, if a court were to find this provision of our warrant agreement inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additionalcosts associated with resolving such matters in other jurisdictions, which could materially and adversely affect our business, financial condition and results of operations and result in a diversion of the time and resources of our management andboard of directors.

We may redeem your unexpired warrants prior to their exercise at a time that is disadvantageous to you, thereby making yourwarrants worthless.

We have the ability to redeem outstanding warrants at any time after they become exercisable and prior to their expiration, at aprice 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) for any 20trading 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 thewarrants become redeemable by us, we may not exercise our redemption right if the issuance of shares of common stock upon exercise of the warrants is not exempt from registration or qualification under applicable state blue sky laws or we are unableto effect such registration or qualification. We will use our best efforts to register or qualify such shares of common stock under the blue sky laws of the state of residence in those states in which the warrants were offered by us in thisoffering. Redemption of the outstanding warrants could force you (i) to exercise your warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) to sell your warrants at the then-currentmarket price when you might otherwise wish to hold your 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 ofyour warrants. None of the private placement warrants will be redeemable by us 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 effectuateour initial business combination.

We will be issuing warrants to purchase 7,500,000 shares of our Class A common stock (or up to 8,625,000 sharesof Class A common stock if the underwriters’ over-allotment option is exercised in full) as part of the units offered by this prospectus and, simultaneously with the closing of this offering, we will be issuing in a private placement,private placement warrants to purchase an aggregate of 5,500,000 shares of Class A common stock (or up to 6,025,000 shares if the underwriters’ over-allotment option is exercised in full). Our initial stockholders currently own anaggregate of 2,875,000 founder shares. The founder shares are convertible into shares of Class A common stock on a one-for-one basis, subject to adjustment as setforth herein. In addition, if our sponsor or its affiliates, or any of our officers or directors, makes any working capital loans, up to $1,500,000 of such loans may be converted into private placement-equivalent warrants at a price of $1.00 perwarrant (which, for example, would result in the holders being issued 1,500,000 warrants if $1,500,000 of notes were so converted), at the option of the lender. Such warrants would be identical to the private placement warrants, including as toexercise price, exercisability and exercise period.

 

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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 conversion of these rights or exercise of these warrants 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 warrantsand founder shares may make it more difficult to effectuate an initial business combination or increase the cost of acquiring the target business.

Theprivate placement warrants are identical to the warrants sold as part of the units in this offering except that, so long as they are held by our sponsor or its permitted transferees, (i) they will not be redeemable by us, (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 our sponsor until 30 days after the completion of our initial businesscombination and (iii) they may be exercised by the holders on a cashless basis.

Because each unit contains three-quarters of one redeemablewarrant and only a whole warrant may be exercised, the units may be worth less than units of other blank check companies.

Each unit containsthree-quarters of one redeemable warrant. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. Accordingly, unless you purchase at least four units, you will not be able to receive or trade a wholewarrant. 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 dilutiveeffect of the warrants upon completion of an initial business combination since the warrants will be exercisable in the aggregate for three-quarters of the number of shares compared to units that each contain a warrant to purchase one wholeshare, 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.

A provision of our warrant agreement may make it more difficult for use to consummate an initial business combination.

Unlike some other blank check companies, if

 

 (i)

we issue additional shares of Class A common stock or equity-linked securities for capital raisingpurposes in connection with the closing of our initial business combination at a Newly Issued Price of less than $9.20 per share;

 

 (ii)

the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, andinterest thereon, available for the funding of our initial business combination on the date of the consummation of our initial business combination (net of redemptions), and

 

 (iii)

the Market Value is below $9.20 per share,

then the exercise price of the warrants will be adjusted to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 pershare redemption trigger price will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price. This may make it more difficult for us to consummate an initial business combination with atarget business.

Our private placement warrants are expected to be accounted for as derivative liabilities and will be recorded at fair value uponissuance with changes in fair value each period reported in earnings, which may have an adverse effect on the market price of our common stock or may make it more difficult for us to consummate an initial business combination.

Simultaneously with the closing of this offering, we will be issuing in a private placement, 5,500,000 private placement warrants (or 6,025,000 privateplacement warrants if the over-allotment option is exercised in full).

 

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We expect to account for the warrants issued in the private placement as a warrant liability. At each reporting period (1) the accounting treatment of the private placement warrants will be re-evaluated for proper accounting treatment as a liability or equity and (2) the fair value of the liability of the private placement warrants will be re-measured andthe change in the fair value of the liability will be recorded as other income (expense) in our income statement. The impact of changes in fair value on earnings may have an adverse effect on the market price of our common stock. In addition,potential targets may seek a SPAC that does not have warrants that are accounted for as a liability, which may make it more difficult for us to consummate an initial business combination with a target business.

The determination of the offering price of our units and the size of this offering is more arbitrary than the pricing of securities and size of an offeringof an operating company in a particular industry. You may have less assurance, therefore, that the offering price of our units properly reflects the value of such units than you would have in a typical offering of an operating company.

Prior to this offering there has been no public market for any of our securities. The public offering price of the units and the terms of the warrants werenegotiated between us and the underwriters. In determining the size of this offering, management held customary organizational meetings with representatives of the underwriters, both prior to our inception and thereafter, with respect to the stateof capital markets, generally, and the amount the underwriters believed they reasonably could raise on our behalf. Factors considered in determining the size of this offering, prices and terms of the units, including the Class A common stockand warrants underlying the units, include:

 

  

the history and prospects of companies whose principal business is the acquisition of other companies;

 

  

prior offerings of those companies;

 

  

our prospects for acquiring an operating business;

 

  

a review of debt to equity ratios in leveraged transactions;

 

  

our capital structure;

 

  

an assessment of our management and their experience in identifying operating companies;

 

  

general conditions of the securities markets at the time of this offering; and

 

  

other factors as were deemed relevant.

Although these factors were considered, the determination of our offering price is more arbitrary than the pricing of securities of an operating company in aparticular industry since we have no historical operations or financial results.

There is currently no market for our securities and a market for oursecurities may not develop, which would adversely affect the liquidity and price of our securities.

There is currently no market for our securities.Stockholders therefore have no access to information about prior market history on which to base their investment decision. Following this offering, the price of our securities may vary significantly due to one or more potential businesscombinations and general market or economic conditions. Furthermore, an active trading market for our securities may never develop or, if developed, it may not be sustained. You may be unable to sell your securities unless a market can beestablished and sustained.

Provisions in our amended and restated certificate of incorporation and Delaware law may inhibit a takeover of us, whichcould limit the price investors might be willing to pay in the future for our Class A common stock and could entrench management.

Our secondamended and restated certificate of incorporation will contain provisions that may discourage unsolicited takeover proposals that stockholders may consider to be in their best interests. These provisions include a staggered board of directors andthe ability of the board of directors to designate the terms of and issue

 

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new series of preferred shares, which may make the removal of management more difficult and may discourage transactions that otherwise could involve payment of a premium over prevailing marketprices for our securities.

We are also subject to anti-takeover provisions under Delaware law, which could delay or prevent a change of control. Togetherthese 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 second amended and restated certificate of incorporation will require, to the fullest extent permitted by law, that derivative actions brought in ourname, actions against our directors, officers, other employees or stockholders for breach of fiduciary duty and certain other actions may be brought only in the Court of Chancery in the State of Delaware and, if brought outside of Delaware, thestockholder bringing the suit will, subject to certain exceptions, 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, otheremployees or stockholders.

Our second amended and restated certificate of incorporation will require, to the fullest extent permitted by law, thatderivative actions brought in our name, actions against our directors, officers, other employees or stockholders for breach of fiduciary duty and certain other actions may be brought only in the Court of Chancery in the State of Delaware and, ifbrought 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 determinesthat 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 or (C) for which the Court of Chancery does not have subject matter jurisdiction. Any person or entity purchasing or otherwise acquiring anyinterest in shares of our capital stock shall be deemed to have notice of and consented to the forum provisions in our second amended and restated certificate of incorporation. This choice of forum provision may limit or make more costly astockholder’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.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 suchaction in other jurisdictions, which could harm our business, operating results and financial condition.

Our second amended and restated certificate ofincorporation will provide 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 allsuits 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 ExchangeAct or any other claim for which the federal courts have exclusive jurisdiction. In addition, our second amended and restated certificate of incorporation will provide that, unless we consent in writing to the selection of an alternative forum, thefederal 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 andregulations 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.

 

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General Risk Factors

We are a newly formed company with no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our businessobjective.

We are a newly formed company with no operating results, and we will not commence operations until obtaining funding through this offering.Because we lack an operating history, you have no basis upon which to evaluate our ability to achieve our business objective of completing our initial business combination with one or more target businesses. We have no plans, arrangements orunderstandings 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 anyoperating revenues.

Due to our limited financial resources and liquidity concerns there is substantial doubt about our ability to continue as a“going concern.”

As of December 31, 2021, we had $25,000 in cash and working capital of $24,171. Further, we have incurred and expectto continue to incur significant costs in pursuit of our financing and acquisition plans. Management’s plans to address this need for capital through this offering are discussed in the section of this prospectus titled “Management’sDiscussion and Analysis of Financial Condition and Results of Operations.” We cannot assure you that our plans to raise capital or to consummate an initial business combination will be successful. These factors, among others, raise substantialdoubt about our ability to continue as a going concern. The financial statements contained elsewhere in this prospectus do not include any adjustments that might result from our inability to consummate this offering or our inability to continue as agoing concern.

Past performance by our management team may not be indicative of future performance of an investment in the Company.

Past performance by our management team is not a guarantee either (i) 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. You should not rely on the historical record of our management team’s performance as indicative of our future performance of an investment inthe company or the returns the company will, or is likely to, generate going forward.

Cyber incidents or attacks directed at us could result ininformation 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 thirdparties 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 besufficiently 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 acombination of them, could have adverse consequences on our business and lead to financial loss.

Changes in laws or regulations, or a failure tocomply with any laws and regulations, may adversely affect our business, including our ability to negotiate and complete our initial business combination and results of operations.

We are subject to laws and regulations enacted by national, regional and local governments. In particular, we will be required to comply with certain SEC andother legal requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly.

 

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Those laws and regulations and their interpretation and application may also change from time to time andthose 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 ourbusiness, including our ability to negotiate and complete our initial business combination and results of operations.

We are an emerging growthcompany within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to emerging growth companies, this could make our securities less attractive to investors and may make it moredifficult to compare our performance with other public companies.

We are an “emerging growth company” within the meaning of the SecuritiesAct, 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 beingrequired 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 therequirements 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 deemimportant. We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our Class A common stock held bynon-affiliates exceeds $700 million as of any June 30 before that time, in which case we would no longer be an emerging growth company as of the following December 31. We cannot predict whetherinvestors 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 lowerthan 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 accountingstandards 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 revisedfinancial 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 anysuch 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 anemerging 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 growthcompany nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accountant standards used. Additionally, we are a “smaller reportingcompany” as defined in Rule 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only twoyears of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our common stock held by non-affiliates exceeds$250 million as of the end of the prior June 30th, or (2) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our common stock heldby non-affiliates exceeds $700 million as of the prior June 30th. To the extent we take advantage of such reduced disclosure obligations, it may alsomake comparison of our financial statements with other public companies difficult or impossible.

 

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An investment in this offering may result in uncertain or adverse U.S. federal income tax consequences.

An investment in this offering may result in uncertain U.S. federal income tax consequences. For instance, because there are no authorities thatdirectly address instruments similar to the units we are issuing in this offering, the allocation an investor makes with respect to the purchase price of a unit among the share of Class A common stock andone-half of one warrant to purchase one share of Class A common stock included in each unit could be challenged by the IRS or the courts. Furthermore, the U.S. federal income tax consequences of acashless exercise of warrants included in the units we are issuing in this offering is unclear under current law. It is also unclear whether the redemption rights with respect to our shares of Class A common stock suspend the running of a U.S.holder’s holding period for purposes of determining whether any gain or loss realized by such holder on the sale or exchange of Class A common stock is long-term capital gain or loss and for determining whether any dividend we pay would beconsidered “qualified dividends” for federal income tax purposes. See the section titled “Material U.S. Federal Income Tax Considerations” for a summary of certain material U.S. federal income tax consequences of an investment inour securities. Prospective investors are urged to consult their tax advisors with respect to these and other tax consequences when purchasing, holding or disposing of our securities.

 

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USE OF PROCEEDS

We are offering 10,000,000 units at an offering price of $10.00 per unit. We estimate that the net proceeds of this offering together with the funds we willreceive from the sale of the private placement warrants will be used as set forth in the following table.

 

   WITHOUT
OVER -
ALLOTMENT
OPTION
  OVER-ALLOTMENT
OPTION FULLY
EXERCISED
 

Gross proceeds

   

Gross proceeds from units offered topublic(1)

  $100,000,000  $115,000,000 

Gross proceeds from private placement warrants offered in the private placement to thesponsor

   5,500,000   6,025,000 
  

 

 

  

 

 

 

Total gross proceeds

  $105,500,000  $121,025,000 

Offering expenses(2)

   

Underwriting commissions (2.0% of gross proceeds from units offered to public, excludingdeferred portion)(3)

  $2,000,000  $2,300,000 

Legal fees and expenses

   250,000   250,000 

Accounting fees and expenses

   40,000   40,000 

SEC/FINRA Expenses

   28,411   28,411 

Travel and road show

   20,000   20,000 

Nasdaq listing and filing fees

   75,000   75,000 

Printing and engraving expenses

   30,000   30,000 

Reimbursement of underwriters expenses

   125,000   125,000 

Miscellaneous

   81,589   81,589 
  

 

 

  

 

 

 

Total offering expenses (excluding underwriting commissions)

  $650,000  $650,000 
  

 

 

  

 

 

 

Proceeds after offering expenses

  $102,850,000  $118,075,000 
  

 

 

  

 

 

 

Held in trust account(3)

  $101,500,000  $116,725,000 

% of public offering size

   101.5  101.5

Not held in trust account

  $1,350,000  $1,350,000 
  

 

 

  

 

 

 

 

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The following table shows the use of the approximately $1,350,000.(4)

 

   AMOUNT   PERCENT 

Legal, accounting, due diligence, travel, and other expenses in connection with any businesscombination(5)

  $300,000    22.2

Legal and accounting fees related to regulatory
reporting obligations

   100,000    7.4

Nasdaq continued listing fees

   75,000    5.6

Payments to our CFO as compensation for his services ($10,000 per month for up to 15 months)(6)

   150,000    11.1

Director and Officer liability insurance premiums

   350,000    25.9

Working capital to cover miscellaneous expenses (including taxes net of anticipated interestincome)

   375,000    27.8
  

 

 

   

 

 

 

Total

  $1,350,000    100.0
  

 

 

   

 

 

 

 

(1)

Includes gross proceeds from this offering of $100,000,000 (or $115,000,000 if the underwriters’overallotment option is exercised in full).

(2)

A portion of the offering expenses will be paid from the proceeds of loans from our sponsor of up to $300,000as described in this prospectus under an unsecured promissory note (the “promissory note”). As of February 28, 2022, we had drawn down $300,000 (of up to $300,000 available to us) under the promissory note with our sponsor to be usedfor a portion of the expenses of this offering. These amounts will be repaid upon completion of this offering out of the $650,000 of offering proceeds that has been allocated for the payment of offering expenses (other than underwritingcommissions). In the event that offering expenses are more than as set forth in this table, they will be repaid using a portion of the $1,350,000 of offering proceeds not held in the trust account and set aside for post-closing working capitalexpenses. In the event that offering expenses are less than set forth in this table, any such amounts will be used for post-closing working capital expenses.

(3)

The underwriters have agreed to defer underwriting commissions equal to 3.5% of the gross proceeds of thisoffering. Upon completion of our initial business combination, $3,500,000, which constitutes the underwriter’s deferred commissions (or $4,025,000 if the underwriters’ over-allotment option is exercised in full) will be paid to theunderwriters from the funds held in the trust account, and the remaining funds, less amounts released to the trustee to pay redeeming stockholders, will be released to us and can be used to pay all or a portion of the purchase price of the businessor businesses with which our initial business combination occurs or for general corporate purposes, including payment of principal or interest on indebtedness incurred in connection with our initial business combination, to fund the purchases ofother companies or for working capital. The underwriters will not be entitled to any interest accrued on the deferred underwriting discounts and commissions.

(4)

These expenses are estimates only and do not include interest which may be available to us from the trustaccount. Our actual expenditures for some or all of these items may differ from the estimates set forth herein. For example, we may incur greater legal and accounting expenses than our current estimates in connection with negotiating and structuringour initial business combination based upon the level of complexity of such business combination. In the event we identify an initial business combination target in a specific industry subject to specific regulations, we may incur additionalexpenses associated with legal due diligence and the engagement of special legal counsel. In addition, our staffing needs may vary and as a result, we may engage a number of consultants to assist with legal and financial due diligence. We do notanticipate any change in our intended use of proceeds, other than fluctuations among the current categories of allocated expenses, which fluctuations, to the extent they exceed current estimates for any specific category of expenses, would not beavailable for our expenses.

 

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(5)

Includes estimated amounts that may also be used in connection with our initial business combination to fund a“no shop” provision and commitment fees for financing.

(6)

Assumes we consummate an initial business combination within 15 months from the closing of this offering andexcludes additional $60,000 fees if we extend the period of time to consummate a business combination to up to 21 months.

Of the netproceeds of this offering and the sale of the private placement warrants, $101,500,000 (or $116,725,000 if the underwriters’ over-allotment option is exercised in full), including $3,500,000 (or $4,025,000 if the underwriters’over-allotment option is exercised in full) of deferred underwriting commissions, will be placed in a trust account in the United States, with Continental Stock Transfer & Trust Company acting as trustee, and will be invested only inU.S. government treasury bills with a maturity of 180 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in directU.S. government treasury obligations.

We will have until 15 months from the closing of this offering (or up to 21 months from the closing of thisoffering if we extend the period of time to consummate a business combination by up to three months on up to two occasions as described in more detail in this prospectus) to consummate an initial business combination. We estimate that theinterest earned on the trust account will be approximately $100,500 per year, assuming an interest rate of 0.1% per year; however, we can provide no assurance regarding this amount. Except with respect to interest earned on the funds held in thetrust account that may be released to us to pay our franchise and income tax obligations (less up to $100,000 of interest to pay dissolution expenses), the proceeds from this offering and the sale of the private placement warrants will not bereleased from the trust account until the earliest to occur of: (a) the completion of our initial business combination, (b) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amendedand restated certificate of incorporation (A) to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 15 months from the closing of this offering (orup to 21 months from the closing of this offering if we extend the period of time to consummate a business combination by up to three months on up to two occasions as described in more detail in this prospectus). or (B) with respect to anyother provision relating to stockholders’ rights or pre-initial business combination activity, and (c) the redemption of our public shares if we are unable to complete our initial businesscombination within 15 months from the closing of this offering (or up to 21 months from the closing of this offering if we extend the period of time to consummate a business combination by up to three months on up to two occasions as described inmore detail in this prospectus), subject to applicable law.

The net proceeds held in the trust account may be used as consideration to pay the sellers ofa target business with which we ultimately complete our initial business combination. 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 ofthe consideration in connection with our initial business combination, we may apply the balance of the cash released from the trust account for general corporate purposes, including for maintenance or expansion of operations of the post-transactioncompany, 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. There is no limitation on our ability to raise funds privatelyor through loans in connection with our initial business combination.

We believe that amounts not held in trust will be sufficient to pay the costs andexpenses to which such proceeds are allocated. This belief is based on the fact that while we may begin preliminary due diligence of a target business in connection with an indication of interest, we intend to undertake in-depth due diligence, depending on the circumstances of the relevant prospective business combination, only after we have negotiated and signed a letter of intent or other preliminary agreement that addresses theterms of an initial business combination. However, if our estimate of the costs of undertaking in-depth due diligence and negotiating an initial business combination is less than the actual amount necessary todo so, we may be required to raise additional capital, the amount, availability and cost of which is currently unascertainable. If we are required to seek additional capital,

 

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we could seek such additional capital through loans or additional investments from our sponsor, members of our management team or their affiliates, but such persons are not under any obligationto advance funds to, or invest in, us.

Commencing on the date of this prospectus, we have agreed to pay Mo Fahimi $10,000 per month for his services asChief Financial Officer. Upon completion of our initial business combination or our liquidation, we will cease paying these monthly fees.

Prior to theclosing of this offering, our sponsor has agreed to loan us up to $300,000 to be used for a portion of the expenses of this offering. As of February 28, 2022, we had drawn down $300,000_ (of up to $300,000 available to us) under the promissorynote with our sponsor to be used for a portion of the expenses of this offering. This loan is non-interest bearing, unsecured and due at the earlier of January 31, 2023 or the closing of this offering.The loan will be repaid upon the closing of this offering out of the offering proceeds not held in the trust account.

In addition, in order to financetransaction costs in connection with an intended initial business combination, our sponsor or an affiliate of our sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete ourinitial business combination, we would repay such loaned amounts out of the proceeds of the trust account released to us. Otherwise, such loans would be repaid only out of funds held outside the trust account. In the event that our initial businesscombination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used to repay such loaned amounts. Up to $1,500,000 of such workingcapital loans may be convertible into private placement-equivalent warrants at a price of $1.00 per warrant (which, for example, would result in the holders being issued 1,500,000 warrants if $1,500,000 of notes were so converted) at the option ofthe lender. Such warrants would be identical to the private placement warrants, including as to exercise price, exercisability and exercise period. The terms of such working capital loans by our sponsor or its affiliates, or our officers anddirectors, if any, have not been determined and no written agreements exist with respect to such loans. We do not expect to seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties will bewilling to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.

If we seek stockholder approvalof our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, initial stockholders, directors, officers, advisors or their affiliates maypurchase 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 Nasdaq rules. However, they have no current commitments, plans or intentions to engage in such transactions and havenot 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 informationnot 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 ExchangeAct 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 suchrules. 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 topurchase shares or public warrants in such transactions prior to completion of our initial business combination. See “Proposed Business — Permitted purchases of our securities” for a description of how our sponsor, initialstockholders, directors, officers, advisors or any of their affiliates will select which stockholders to purchase securities from in any private transaction.

 

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The purpose of any such purchases of shares could be to vote such shares in favor of the initial businesscombination 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 ofcash 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 votesuch 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 nototherwise 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, whichmay make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.

We may not redeem ourpublic shares in an amount that would cause our net tangible assets to be less than $5,000,001 either immediately prior to or upon consummation of our initial business combination and after payment of underwriters’ fees and commissions (so thatwe are not subject to the SEC’s “penny stock” rules) and the agreement for our initial business combination may require as a closing condition that we have a minimum net worth or a certain amount of cash. If too many publicstockholders exercise their redemption rights so that we cannot satisfy the net tangible asset requirement or any net worth or cash requirements, we would not proceed with the redemption of our public shares or the initial business combination, andinstead may search for an alternate business combination.

A public stockholder will be entitled to receive funds from the trust account only upon theearliest to occur of: (i) our completion of an initial business combination, (ii) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our second amended and restated certificate ofincorporation (A) to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 15 months from the closing of this offering (or up to 21 months from theclosing of this offering if we extend the period of time to consummate a business combination by up to three months on up to two occasions as described in more detail in this prospectus) or (B) with respect to any other provision relating tostockholders’ rights or pre-initial business combination activity, and (iii) the redemption of our public shares if we are unable to complete our initial business combination within 15 monthsfollowing the closing of this offering (or up to 21 months from the closing of this offering if we extend the period of time to consummate a business combination by up to three months on up to two occasions as described in more detail in thisprospectus), subject to applicable law and as further described herein and any limitations (including but not limited to cash requirements) created by the terms of the proposed initial business combination. In no other circumstances will a publicstockholder have any right or interest of any kind to or in the trust account.

Our sponsor, officers and directors have entered into a letter agreementwith 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. In addition, our initialstockholders have agreed to waive 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 the prescribed time frame. However, ifour sponsor or any of our officers, directors or affiliates acquires public shares in or after this offering, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to complete ourinitial business combination within the prescribed time frame.

 

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DIVIDEND POLICY

We have not paid any cash dividends on our common stock to date and do not intend to pay cash dividends prior to the completion of our initial businesscombination. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of our initial business combination. If we increase ordecrease the size of the offering we will effect a stock dividend or a share contribution back to capital or other appropriate mechanism, as applicable, with respect to our Class B common stock immediately prior to the consummation of theoffering in such amount as to maintain the ownership of our initial stockholders at 20.0% of the issued and outstanding shares of our common stock upon the consummation of this offering (excluding the representative shares). Further, if we incur anyindebtedness in connection with our initial business combination, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith.

 

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DILUTION

The difference between the public offering price per share of Class A common stock, assuming no value is attributed to the warrants included in the unitswe are offering pursuant to this prospectus or the private placement warrants, and the pro forma net tangible book value per share of our Class A common stock after this offering constitutes the dilution to investors in this offering. Suchcalculation does not reflect any dilution associated with the sale and exercise of warrants, including the private placement warrants, which would cause the actual dilution to the public stockholders to be higher, particularly where a cashlessexercise is utilized. Net tangible book value per share is determined by dividing our net tangible book value, which is our total tangible assets less total liabilities (including the value of Class A common stock which may be redeemed forcash), by the number of outstanding shares of our Class A common stock. In calculating the pro forma net tangible book value after this offering, we have given effect to the provision of our amended and restated certificate of incorporationthat will provide that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we do not then become subject to the SEC’s “penny stock” rules).Accordingly, we have calculated pro forma net tangible book value in the table below assuming that holders of approximately 90.6% of our public shares may redeem their shares for a pro rata share of the aggregate amount then on deposit in the trustaccount at a per share redemption price equal to the amount in the trust account.

At December 31, 2021, our net tangible book value was $24,171, orapproximately a net tangible book value of $0.01 per share of common stock (or $0.01 per share of common stock if the underwriters’ over-allotment option is exercised in full). After giving effect to the sale of 10,000,000 shares ofClass A common stock included in the units we are offering by this prospectus (or 11,500,000 shares of Class A common stock if the underwriters’ over-allotment option is exercised in full), the sale of the private placement warrants,and the deduction of underwriting commissions and estimated expenses of this offering, our pro forma net tangible book value at December 31, 2021 would have been $5,000,001, or approximately $1.36 per share (or $5,000,001 or $1.20 per share ifthe underwriters’ over-allotment option is exercised in full), representing an immediate increase in net tangible book value (as decreased by the value of the 8,925,928 shares, which is the maximum number of Class A common stock that maybe redeemed for cash to effect a business combination, or 10,338,637 shares of Class A common stock if the underwriters’ over-allotment option is exercised in full) of $1.35 per share (or $1.19 per share if the underwriters’over-allotment option is exercised in full) to our initial stockholders as of the date of this prospectus and dilution to public stockholders from this offering will be $8.64 per share (or $8.80 if the underwriters’ over-allotment option isexercised in full).

The following table illustrates the dilution to the public stockholders on a per-share basis,assuming no value is attributed to the warrants included in the units or the private placement warrants:

 

   NO EXERCISE OF
OVER-ALLOTMENT
OPTION
  EXERCISE OF
OVER-ALLOTMENT
OPTION IN FULL
 

Public offering price

  $10.00  $10.00 
  

 

 

  

 

 

 

Net tangible book value before this offering

  $0.01  $0.01 

Increase attributable to public stockholders and sale of the private placementwarrants

  $1.35  $1.19 
  

 

 

  

 

 

 

Pro forma net tangible book value after this offering

  $ 1.36  $ 1.20 
  

 

 

  

 

 

 

Dilution to public stockholders

  $8.64  $8.80 
  

 

 

  

 

 

 

Percentage of dilution to public stockholders

   86.4  88.0
  

 

 

  

 

 

 

 

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For purposes of presentation, we have reduced our pro forma net tangible book value after this offering(assuming no exercise of the underwriters’ over-allotment option) by $90,598,170 assuming holders of up to approximately 90.6% of our public shares may redeem their shares for a pro rata share of the aggregate amount then on deposit in thetrust account at a per share redemption price equal to the amount in the trust account as set forth in our tender offer or proxy materials (initially anticipated to be the aggregate amount held in trust two days prior to the commencement of ourtender offer or stockholders meeting, 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 the then-outstanding public shares.

The following table sets forth information with respect to our initial stockholders and the public stockholders:

 

   SHARES
PURCHASED
  TOTAL
CONSIDERATION
  AVERAGE
PRICE PER
SHARE
 
   NUMBER   PERCENTAGE  AMOUNT   PERCENTAGE 

Initial Stockholders(1)

   2,500,000    19.84 $ 25,000    0.02 $ 0.01 

Public Stockholders

   10,000,000    79.37 $100,000,000    99.98 $ 10.000 

Representative shares

   100,000    0.79  —      —    
  

 

 

   

 

 

  

 

 

   

 

 

  
   12,600,000    100.00 $100,025,000    100.0 
  

 

 

   

 

 

  

 

 

   

 

 

  

 

(1)

Assumes no exercise of the underwriters’ over-allotment option and the corresponding forfeiture of anaggregate of 375,000 shares of Class B common stock held by our initial stockholders.

Our amended and restated certificate ofincorporation will provide that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we do not then become subject to the SEC’s “penny stock” rules).Accordingly, we have calculated pro forma net tangible book value in the table below assuming that holders of approximately 90.6% of our public shares may redeem their shares for a pro rata share of the aggregate amount then on deposit in the trustaccount at a per share redemption price equal to the amount in the trust account.

The pro forma net tangible book value per share after the offering iscalculated as follows, subject to the assumptions described above:

 

   WITHOUT
OVER-ALLOTMENT
   WITH
OVER-ALLOTMENT
 

Numerator:

    

Net tangible book value before the offering

  $ 24,171   $ 24,171 

Net proceeds from this offering and sale of the private placement warrants, net of expenses(1)

   102,850,000    118,075,000 

Less: Warrant liabilities

   (3,776,000   (4,137,000

Less: Deferred underwriting commissions

   (3,500,000   (4,025,000

Less: Assumed maximum proceeds available for redemption to effect a business combination(2)

   (90,598,170   (104,937,170
  

 

 

   

 

 

 
  $5,000,001   $ 5,000,001 
  

 

 

   

 

 

 

 

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   WITHOUT
OVER-ALLOTMENT
   WITH
OVER-ALLOTMENT
 

Denominator:

    

Shares of Class B common stock outstanding prior to this offering

   2,875,000    2,875,000 

Shares of Class B common stock forfeited if over-allotment is not exercised

   (375,000   —   

Shares of Class A common stock included in the units offered

   10,000,000    11,500,000 

Representative shares

   100,000    115,000 

Less: Maximum shares that may be redeemed to effect a business combination(2)

   (8,925,928   (10,338,637
  

 

 

   

 

 

 
   3,674,072    4,151,363 
  

 

 

   

 

 

 

 

(1)

Expenses applied against gross proceeds include offering expenses to be capitalized of $650,000 (not including$350,000 for director and officer liability insurance premiums to be paid upon closing of this offering, which amount is not an offering expense to be capitalized) and underwriting commissions of $2,000,000 (or $2,300,000 if the underwriters’over-allotment option is exercised in full) (excluding deferred underwriting fees). See “Use of Proceeds.”

(2)

If we seek stockholder approval of our initial business combination and we do not conduct redemptions inconnection with our initial business combination pursuant to the tender offer rules, our sponsor, initial stockholders, directors, executive officers, advisors or their affiliates may purchase shares or public warrants in privately negotiatedtransactions or in the open market either prior to or following the completion of our initial business combination. In the event of any such purchases of our shares prior to the completion of our initial business combination, the number of shares ofClass A common stock subject to redemption will be reduced by the amount of any such purchases, increasing the pro forma net tangible book value per share. See “Proposed Business — Effecting Our Initial BusinessCombination — Permitted Purchases of Our Securities.”

 

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CAPITALIZATION

The following table sets forth our capitalization at December 31, 2021, and as adjusted to give effect to the sale of our units and the private placementwarrants and the application of the estimated net proceeds derived from the sale of such securities:

 

   ACTUAL   AS
ADJUSTED(6)
 

Promissory note –relatedparty(1)

  $—     $—   

Warrant liabilities(7)

   —      3,776,000 

Deferred underwriting commissions

   —      3,500,000 
  

 

 

   

 

 

 

Class A common stock, subject to redemption, 0 and 10,000,000 shares which are subject topossible redemption, actual and as adjusted, respectively(2)

   —      88,083,081 
  

 

 

   

 

 

 

Preferred stock, $0.0001 par value, 1,000,000 shares authorized; none issued and outstanding,actual and as adjusted, respectively

   —      —   

Class A common stock, $0.0001 par value, 100,000,000 shares authorized; 0 and 100,000 sharesissued and outstanding (excluding 0 and 10,000,000 shares subject to possible redemption), actual and as adjusted, respectively

   —      10 

Class B common stock, $0.0001 par value, 10,000,000 shares authorized, 2,875,000 and2,500,000 shares issued and outstanding, actual and as adjusted, respectively(3)

   287    250 

Additional paid-in capital(4)(5)

   24,713    7,515,659 

Accumulated deficit

   (829   (829
  

 

 

   

 

 

 

Total stockholder’s equity

   24,171    7,515,090 
  

 

 

   

 

 

 

Total capitalization

  $24,171   $102,874,171 
  

 

 

   

 

 

 

 

(1)

Our sponsor has agreed to loan us up to $300,000 to be used for a portion of the expenses of this offering. The“as adjusted” information gives effect to the repayment of any loans made under this note out of the proceeds from this offering and the sale of the private placement warrants. As of, February 28, 2022, we had drawn down $300,000 (ofup to $300,000 available to us) under the promissory note with our sponsor to be used for a portion of the expenses of this offering.

(2)

Upon the completion of our initial business combination, we will provide our public stockholders with theopportunity to redeem their public shares for cash at a per share price equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of the initial business combination, includinginterest earned on the funds held in the trust account and not previously released to us to pay our taxes, if any, divided by the number of the then-outstanding public shares, subject to the limitations described herein whereby redemptions cannotcause our net tangible assets to be less than $5,000,001 and any limitations (including, but not limited to, cash requirements) created by the terms of the proposed business combination. The as adjusted amount is presented net of proceeds allocatedto the public warrants and net of allocated transaction costs related to this offering. The Class A common stock contain redemption rights that make them redeemable by our public stockholders. Accordingly, they are classified within temporaryequity in accordance with the guidance provided in Accounting Standards Codification (“ASC”) 480-10-S99-3A,“Classification and Measurement of Redeemable Securities”.

(3)

Actual share amount is prior to any forfeiture of founder shares by our sponsor and the as adjusted amountassumes no exercise of the underwriters’ over-allotment option.

 

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(4)

As adjusted additional paid-in capital includes actual additional paid-in capital, after adjustment for the assumed forfeiture of 375,000 founder shares, the net proceeds from the offering allocated to the public warrants and the excess of proceeds from the sale of the privateplacement warrants over their estimated fair value at issuance as a deemed capital contribution from our sponsor. We expect to account for the public warrants in equity based on our assessment of the warrant’s specific terms and applicableauthoritative guidance in ASC 480, “Distinguishing Liabilities from Equity” and ASC 815, “Derivatives and Hedging”.

(5)

We will account for the excess of the fair value of the 100,000 representative shares as a cost of thisoffering in accordance with Staff Accounting Bulletin Topic 5A, “Expenses of Offering”. Accordingly, the offering costs will be allocated to the separable financial instruments issued in the offering based on a relative fair value basis,compared to total proceeds received. Offering costs allocated to the public shares will be charged to stockholders’ equity upon completion of this offering.

(6)

Upon the completion of this offering, if the underwriter’s over-allotment option is not exercised in full,we will recognize a derivative liability for the unexercised portion under ASC 815, which will need to be fair-valued.

(7)

We will account for the 5,500,000 private placement warrants, assuming the underwriters’ over-allotmentoption is not exercised) in accordance with the guidance contained in, “Derivatives and Hedging: Contracts in Entity’s Own Equity”. Such guidance provides that because the private placement warrants do not meet the criteria for equitytreatment thereunder, the warrants must be recorded as a liability. Accordingly, we will classify the private placement warrants as a liability at its fair value. This liability is subject to re-measurement at each balance sheet date. With each suchre-measurement, the warrant liability will be adjusted to fair value, with the change in fair value recognized in our statement of operations.

 

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

We are a blank check company incorporated as aDelaware corporation and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar business combination with one or more businesses. We have not selected any specific businesscombination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target. We intend to effectuate our initial business combination using cash from theproceeds of this offering and the private placement of the private placement warrants, the proceeds of the sale of our shares in connection with our initial business combination (including pursuant to forward purchase agreements or backstopagreements we may enter into following the consummation of this offering or otherwise), shares issued to the owners of the target, debt issued to bank or other lenders or the owners of the target, or a combination of the foregoing.

The issuance of additional shares in connection with an initial business combination to the owners of the target or other investors:

 

  

may significantly dilute the equity interest of investors in this offering, which dilution would increase if theanti-dilution provisions in the Class B common stock resulted in the issuance of Class A shares on a greater than one-to-one basis upon conversion of theClass B common stock;

 

  

may subordinate the rights of holders of our common stock if preferred stock is issued with rights senior tothose afforded our common stock;

 

  

could cause a change in control if a substantial number of shares of our common stock is issued, which mayaffect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors;

 

  

may have the effect of delaying or preventing a change of control of us by diluting the stock ownership or votingrights of a person seeking to obtain control of us; and

 

  

may adversely affect prevailing market prices for our Class A common stock and/or warrants.

Similarly, if we issue debt securities or otherwise incur significant debt to bank or other lenders or the owners of a target, it couldresult in:

 

  

default and foreclosure on our assets if our operating revenues after an initial business combination areinsufficient to repay our debt obligations;

 

  

acceleration of our obligations to repay the indebtedness even if we make all principal and interest paymentswhen 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 security is payable on demand;

 

  

our inability to obtain necessary additional financing if the debt security contains covenants restricting ourability to obtain such financing while the debt security 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 thefunds 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 inwhich we operate;

 

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increased vulnerability to adverse changes in general economic, industry and competitive conditions and adversechanges in government regulation;

 

  

limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debtservice requirements, and execution of our strategy; and

 

  

other purposes and other disadvantages compared to our competitors who have less debt.

As indicated in the accompanying financial statements, at December 31, 2021, we had $25,000 in cash and no deferred offering costs. Further, we expect tocontinue to incur significant costs in the pursuit of our initial business combination plans. We cannot assure you that our plans to raise capital or to complete our initial business combination will be successful.

Results of Operations and Known Trends or Future Events

We have neither engaged in any operations nor generated any revenues to date. Our only activities since inception have been organizational activities and thosenecessary to prepare for this offering. Following this offering, we will not generate any operating revenues until after completion of our initial business combination. We will generate non-operating income inthe form of interest income on cash and cash equivalents after this offering. There has been no significant change in our financial or trading position and no material adverse change has occurred since the date of our audited financial statements.After this offering, we expect to incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as expenses as we conduct due diligence on prospective businesscombination candidates. We expect our expenses to increase substantially after the closing of this offering.

Liquidity and Capital Resources

As indicated in the accompanying financial statements, at December 31, 2021, we had $25,000 in cash and working capital of $24,171. Further, we haveincurred and expect to continue to incur significant costs in pursuit of our financing and acquisition plans. We cannot assure you that our plans to raise capital or to consummate an initial business combination will be successful. These factors,among others, raise substantial doubt about our ability to continue as a going concern.

Our liquidity needs have been satisfied prior to the completionof this offering through a capital contribution from our sponsor of $25,000 for the founder shares and up to $300,000 in loans available from our sponsor under an unsecured promissory note, all $300,000 of which had been drawn down as ofFebruary 28, 2022. We estimate that the net proceeds from (i) the sale of the units in this offering, after deducting offering expenses of approximately $650,000, underwriting commissions of $2,000,000 ($2,300,000 if the underwriters’over-allotment option is exercised in full) (excluding deferred underwriting commissions of $3,500,000 (or $4,025,000 if the underwriters’ over-allotment option is exercised in full), and (ii) the sale of the private placement warrants fora purchase price of $5,500,000 (or $6,025,000 if the over-allotment option is exercised in full), will be $102,850,000 (or $118,075,000 if the underwriters’ over-allotment option is exercised in full). Of this amount, $101,500,000 (or$116,725,000 if the underwriters’ over-allotment option is exercised in full) will be held in the trust account, which includes $3,500,000 (or $4,025,000 if the underwriters’ over-allotment option is exercised in full) of deferredunderwriting commissions. The proceeds held in the trust account will be invested only in U.S. government treasury obligations with a maturity of 180 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. The remaining approximately $1,350,000 will not be held in the trust account. In the event that ouroffering expenses exceed our estimate of $650,000, we may fund such excess with funds not to be held in the trust account. In such case, the amount of funds we intend to be held outside the trust account would decrease by a corresponding amount.Conversely, in the event that the offering expenses are less than our estimate of $650,000, the amount of funds we intend to be held outside the trust account would increase by a corresponding amount.

 

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We intend to use substantially all of the funds held in the trust account, including any amountsrepresenting interest earned on the trust account (less deferred underwriting commissions) to complete our initial business combination. We may withdraw interest to pay franchise and income taxes. We estimate our annual franchise tax obligations,based on the number of shares of our common stock authorized and outstanding after the completion of this offering, to be $200,000, which is the maximum amount of annual franchise taxes payable by us as a Delaware corporation per annum, which we maypay from funds from this offering held outside of the trust account or from interest earned on the funds held in our trust account and released to us for this purpose. Our annual income tax obligations will depend on the amount of interest and otherincome earned on the amounts held in the trust account. We expect the interest earned on the amount in the trust account will be sufficient to pay our income taxes. To the extent that our capital stock or debt is used, in whole or in part, asconsideration to complete our initial business combination, the remaining proceeds held in the trust account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue ourgrowth strategies.

Prior to the completion of our initial business combination, we will have available to us the approximately $1,350,000 of proceedsheld outside the trust account. We will use these funds to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective targetbusinesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete an initial business combination.

In order to fund working capital deficiencies or finance transaction costs in connection with an intended initial business combination, our sponsor or anaffiliate of our sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete our initial business combination, we would repay such loaned amounts. In the event that our initialbusiness combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used for such repayment. Up to $1,500,000 of such workingcapital loans may be convertible into private placement-equivalent warrants at a price of $1.00 per warrant (which, for example, would result in the holders being issued 1,500,000 warrants if $1,500,000 of notes were so converted), at the option ofthe lender. Such warrants would be identical to the private placement warrants, including as to exercise price, exercisability and exercise period. The terms of such working capital loans by our sponsor or its affiliates, or our officers anddirectors, if any, have not been determined and no written agreements exist with respect to such loans. We do not expect to seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties will bewilling to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.

We expect our primary liquidityrequirements during that period to include approximately $300,000 for legal, accounting, due diligence, travel and other expenses associated with structuring, negotiating and documenting successful business combinations; $100,000 for legal andaccounting fees related to regulatory reporting requirements; $75,000 for Nasdaq continued listing fees; $150,000 to compensate our CFO for his services; $350,000 for Director and Officer liability insurance premiums and approximately $375,000 forworking capital that will be used for miscellaneous expenses and reserves (including taxes net of anticipated interest income).

These amounts areestimates and may differ materially from our actual expenses. In addition, we could use a portion of the funds not being placed in trust to pay commitment fees for financing, fees to consultants to assist us with our search for a target business oras a down payment or to fund a “no-shop” provision (a provision designed to keep target businesses from “shopping” around for transactions with other companies on terms more favorable tosuch 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 an agreement where we paid for the right to receive exclusivity from a targetbusiness, the amount that would be used as a down payment or to fund a “no-shop” provision would be determined based on the terms of the specific business combination and the amount of our availablefunds at the time. Our forfeiture of such funds (whether as a result of our breach or

 

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otherwise) could result in our not having sufficient funds to continue searching for, or conducting due diligence with respect to, prospective target businesses.

We do not believe we will need to raise additional funds following this offering in order to meet the expenditures required for operating our business.However, if our estimates of the costs of identifying a target business, undertaking in-depth due diligence and negotiating an initial business combination are less than the actual amount necessary to do so,we may have insufficient funds available to operate our business prior to our initial business combination. Moreover, we may need to obtain additional financing either to complete our initial business combination or because we become obligated toredeem a significant number of our public shares upon completion of our initial business combination, in which case we may issue additional securities or incur debt in connection with such business combination. In addition, we intend to targetbusinesses larger than we could acquire with the net proceeds of this offering 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 only complete such financing simultaneously with the completion of our initial business combination. If we are unable to complete our initial business combination because we do not havesufficient funds available to us, we will be forced to cease operations and liquidate the trust account. In addition, following our initial business combination, if cash on hand is insufficient, we may need to obtain additional financing in order tomeet our obligations.

Controls and Procedures

Weare not currently required to evaluate and report on an effective system of internal controls as defined by Section 404 of the Sarbanes-Oxley Act. We will be required to comply with the internal control requirements of the Sarbanes-Oxley Actfor the fiscal year ending December 31, 2023. Only in the event that we are deemed to be a large accelerated filer or an accelerated filer would we be required to comply with the independent registered public accounting firm attestationrequirement. Further, for as long as we remain an emerging growth company as defined in the JOBS Act, we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are notemerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirement.

Prior to the closing of this offering, we have not completed an assessment, nor has our independent registered public accounting firm tested our systems, ofinternal controls. We expect to assess the internal controls of our target business or businesses prior to the completion of our initial business combination and, if necessary, to implement and test additional controls as we may determine arenecessary in order to state that we maintain an effective system of internal controls. A target business may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding the adequacy of internal controls. Many small and mid-sized target businesses we may consider for our initial business combination may have internal controls that need improvement in areas such as:

 

  

staffing for financial, accounting and external reporting areas, including segregation of duties;

 

  

reconciliation of accounts;

 

  

proper recording of expenses and liabilities in the period to which they relate;

 

  

evidence of internal review and approval of accounting transactions;

 

  

documentation of processes, assumptions and conclusions underlying significant estimates; and

 

  

documentation of accounting policies and procedures.

Because it will take time, management involvement and perhaps outside resources to determine what internal control improvements are necessary for us to meetregulatory requirements and market expectations for our operation of a target business, we may incur significant expense in meeting our public reporting responsibilities,

 

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particularly in the areas of designing, enhancing, or remediating internal and disclosure controls. Doing so effectively may also take longer than we expect, thus increasing our exposure tofinancial fraud or erroneous financing reporting.

Once our management’s report on internal controls is complete, we will retain our independentregistered public accounting firm to audit and render an opinion on such report when required by Section 404 of the Sarbanes-Oxley Act. The independent registered public accounting firm may identify additional issues concerning a targetbusiness’s internal controls while performing their audit of internal control over financial reporting.

Quantitative and Qualitative Disclosuresabout Market Risk

The net proceeds of this offering and the sale of the private placement warrants held in the trust account will be invested in U.S.government treasury bills with a maturity of 180 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. Due to the short-term nature of these investments, we believe there will be no associated material exposure to interest rate risk.

Related Party Transactions

On December 28, 2021,our sponsor purchased 2,875,000 founder shares for an aggregate purchase price of $25,000, or approximately $0.009 per share. The number of founder shares issued was determined based on the expectation that such founder shares would represent 20% ofthe outstanding shares upon completion of this offering, assuming our sponsor and our directors and officers do not purchase units in this offering and excluding the representative shares. The per share purchase price of the founder shares wasdetermined by dividing the amount of cash contributed to the company by the aggregate number of founder shares issued. If we increase or decrease the size of the offering we will effect a stock dividend or a share contribution back to capital orother appropriate mechanism, as applicable, with respect to our Class B common stock immediately prior to the consummation of the offering in such amount as to maintain the ownership of our initial stockholders at 20.0% of the issued andoutstanding shares of our common stock upon the consummation of this offering (assuming our sponsor and our directors and officers do not purchase units in this offering and excluding the representative shares).

Commencing on the date of this prospectus, we have agreed to pay Mo Fahimi $10,000 per month for his services as Chief Financial Officer. Upon completion ofour initial business combination or our liquidation, we will cease paying these monthly fees.

Our sponsor, officers and directors, or any of theirrespective affiliates, will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential targetbusinesses and performing due diligence on suitable business combinations. Our audit committee will review on a quarterly basis all payments that were made to our sponsor, officers, directors or our or their affiliates and will determine whichexpenses and the amount of expenses that will be reimbursed. There is no cap or ceiling on the reimbursement of out-of-pocket expenses incurred by such persons inconnection with activities on our behalf.

Prior to the consummation of this offering, our sponsor has agreed to loan us up to $300,000 to be used for aportion of the expenses of this offering, all $300,000 of which had been drawn down as of February 28, 2022. The loan is non-interest bearing, unsecured and are due at the earlier of January 31, 2023or the closing of this offering. The loan will be repaid upon the closing of this offering out of the $650,000 of offering proceeds that has been allocated to the payment of offering expenses (other than underwriting commissions).

In addition, in order to finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate of our sponsor orcertain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete our initial business combination, we would repay such loaned amounts.

 

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In the event that our initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from ourtrust account would be used for such repayment. Up to $1,500,000 of such working capital loans may be convertible into private placement-equivalent warrants at a price of $1.00 per warrant (which, for example, would result in the holders beingissued 1,500,000 warrants if $1,500,000 of notes were so converted), 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. The terms ofsuch working capital loans by our sponsor or its affiliates, or our officers and directors, if any, have not been determined and no written agreements exist with respect to such loans. We do not expect to seek loans from parties other than oursponsor or an affiliate of our 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 our trust account.

Our sponsor has agreed to purchase an aggregate of 5,500,000 warrants (or 6,025,000 warrants if the over-allotment option is exercised in full) at a price of$1.00 per warrant, for an aggregate purchase price of $5,500,000, or $6,025,000 if the over-allotment option is exercised in full. The private placement warrants will be identical to the warrants sold in this offering, except that the privateplacement warrants, so long as they are held by our sponsor or its permitted transferees, (i) will not be redeemable by us, (ii) may not (including the Class A common stock issuable upon exercise of these warrants), subject to certainlimited exceptions, be transferred, assigned or sold by the holders until 30 days after the completion of our initial business combination, (iii) may be exercised by the holders on a cashless basis and (iv) will be entitled toregistration rights. The holders will be permitted to transfer the private placement warrants held by them to certain permitted transferees, including our officers and directors and other persons or entities affiliated with or related to them, butthe transferees receiving such securities will be subject to the same agreements with respect to such securities as our sponsor. Otherwise, the private placement warrants have terms and provisions that are identical to those of the warrants beingsold as part of the units in this offering, including as to exercise price, exercisability and exercise period.

Pursuant to a registration rightsagreement we will enter into with our initial stockholders on or prior to the closing of this offering, we may be required to register certain securities for sale under the Securities Act. These holders, and holders of units issued upon conversionof working capital loans, if any, are entitled under the registration rights agreement to make up to three demands that we register certain of our securities held by them for sale under the Securities Act and to have the securities covered therebyregistered for resale pursuant to Rule 415 under the Securities Act. In addition, these holders have the right to include their securities in other registration statements filed by us. We will bear the costs and expenses of filing any suchregistration statements. See the section of this prospectus entitled “Certain Relationships and Related Party Transactions.”

JOBS Act

On April 5, 2012, the JOBS Act was signed into law. The JOBS Act contains provisions that, among other things, relax certain reportingrequirements for qualifying public companies. We will qualify as an “emerging growth company” and under the JOBS Act will be allowed to comply with new or revised accounting pronouncements based on the effective date for private (notpublicly traded) companies. We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards isrequired for non-emerging growth companies. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effectivedates.

Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act.Subject to certain conditions set forth in the JOBS Act, if, as an “emerging growth company”, we choose to rely on such exemptions we may not be required to, among other things, (i) provide an independent registered public accountingfirm’s attestation report on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may

 

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be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with anyrequirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the report of independent registered public accounting firm providing additional information about the audit and the financial statements(auditor discussion and analysis), and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to median employeecompensation. These exemptions will apply for a period of five years following the completion of this offering or until we are no longer an “emerging growth company,” whichever is earlier.

 

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PROPOSED BUSINESS

Overview

We are a newly organized blank check companyincorporated as a Delaware corporation formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses, which we refer to throughout thisprospectus as our initial business combination or our business combination.

To date, our efforts have been limited to organizational activities as wellas activities related to this offering. We have not selected any specific business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target.We have generated no operating revenues to date and we may not generate operating revenues even after we consummate our initial business combination.

While we may pursue an acquisition opportunity in any industry, sector or geographical location, we intend to focus our search for a target business in therenewable energy industry, in particular, a business with assets used in exploring, developing, producing, transporting, storing, gathering, processing, fractionating, refining, distributing or marketing of natural gas, natural gas liquids, crudeoil or refined products in North America, Central and South America. Renewable energy (“renewables”) refers to energy from a source that is sustainable, such as wind, hydropower, geothermal or solar power.

Past performance of our management team is not a guarantee either (i) of success with respect to any business combination we may consummate, or(ii) that we will be able to identify a suitable candidate for our initial business combination. You should not rely on the historical performance record of our management as indicative of our future performance. In addition, for a list of ourexecutive officers and entities for which a conflict of interest may or does exist between such officers and the company, as well as the priority and preference that such entity has with respect to performance of obligations and presentation ofbusiness opportunities to us, please refer to the table and subsequent explanatory paragraph under “Management — Conflicts of Interest”.

Our officers and directors may become officers or directors of any other blank check company prior to completion of our initial business combination. As aresult, our 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.

Our Board of Directors and Management

Ryan E.M. Cunningham                Chairman and Chief Executive Officer

Ryan Cunningham is the President and Operational Partner of Cunningham Energy, LLC, an independent producer of oil and gaswhich he founded in 2008. He currently directs operations for Cunningham Energy, Marzcorp Oil & Gas Inc., Viper Capital Partners LLC and Raven Ridge Energy LLC. Mr. Cunningham served as operating partner of Black Crow Oil LLCfrom 2008 to 2010_. From 1999 to 2001, Mr. Cunningham was a sales trader with Oppenheimer & Co. (formerly CIBC World Markets), initially with the private client division and then in its institutional trading group with middle marketsand institutional sales trading teams before becoming head sales trader in 2001. Mr. Cunningham has been a Board member of the West Virginia Oil & gas Association since 2013. Mr. Cunningham received a Bachelor of Arts degree onEnvironmental Policy from Rollins College.

Morgan (Mo)Fahimi                Chief Financial Officer and Director Nominee

Since March 2021 Mr. Fahimi has led the sales efforts of Acuris, a media company specializing in high-value content for financialprofessionals and dealogic platforms, which is owned Acuris by ION Investment Group, a financial software and data business. Acuris provides all-encompassing data and intelligence sets for the

 

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equity and fixed income institutional community as well the private equity markets, and is known for its products fixed income research provider Debtwire and Mergermarket, a specialist in M&Aintelligence. Mr. Fahimi joined Mergermarket in 2005 as head of sales, where he led the sales effort of the Debtwire division, a worldwide leading fixed income data and intelligence platform. From 2007 to 2020, Mr. Fahimi was ManagingDirector Head of Sales for the Dealreporter business within Mergermarket, a worldwide leading Risk Arbitrage Data and Intelligence platform, where he was responsible for initiating all commercial relationships and distribution of globalDealreporter., From 2002 to 2004, Mr. Fahimi was an account executive with CIBC World Markets in institutional Middle Market Sales and Trading. Mr. Fahimi is a director of Signal Research, a US and UK based Quantitative, Macro andTechnical Analysis Research firm catering to the Institutional investment community. He received a BA in Economics from Kingston University, London, England.

Abdiel A. Santiago                 Director Nominee

Abdiel Santiago has been the Secretariat (CEO/CIO) of the Fondo de Ahorro de Panamá (Panama’s Sovereign Wealth Fund) since2013. From 2012 to 2013, he was a senior adviser at G-2 Capital focusing on financial restructuring opportunities. From 2005 to 2011, he was an equity investment research executive at Morgan Stanley inNew York covering the energy and industrial sectors. From 1998 to 2002, Mr. Santiago served as a financial analyst/examiner at the US Securities and Exchange Commission overseeing financial/regulatory matters at broker-dealers and assetmanagers. Mr. Santiago received an MBA from the Kellogg School of Management at Northwestern University and a Bachelor’s degree from the University of Denver.

Tyler Hardt                Director Nominee

Tyler Hardt is the Chief Investment Officer of Pelican Bay Capital Bay Management, LLC, which he founded in July 2018. From June2009 to June 2018, Mr. Hardt was an equity analyst on the Domestic Value Team at Artisan Partners Asset Management. From 2004 to 2005, he was a corporate development analyst on the Corporate Mergers & Acquisitions and CorporateStrategy group at AT&T and from 2005 to 2007 he was strategic planning analyst on the Corporate Mergers & Acquisitions and Corporate Strategy group at American Tire Distributors. Mr. Hardt received an MBA with Honors from theWharton School at the University of Pennsylvania, and a Bachelor of Science in Finance from the University of Maryland, where he graduated cum laude.

Gerald M. Titus III                 Director Nominee

Gerald M.Titus III has been a member of Spilman Thomas & Battle, PLLC, a regional law firm based in Charleston, West Virginia since2008 He represents clients in the oil and gas industry. Prior to joining Spilman Thomas & Battle, PLLC, Mr. Titus was an Assistant United States Attorney for the United States Department of Justice. He received JD and Bachelor’sdegrees from Washington and Lee University.

Members of our management team are not obligated to devote any specific number of hours to our matters, butthey 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 that any member of our management team will devote in any time period will vary based onwhether a target business has been selected for our initial business combination and the current stage of the business combination process.

We believeour management team’s operating and transaction experience and relationships with companies will provide us with a substantial number of potential business combination targets. Over the course of their careers, the members of our managementteam have developed a broad network of contacts and corporate relationships in various industries. This network has grown through the activities of our management team sourcing, acquiring and financing businesses, our management team’srelationships with sellers, financing sources and target management teams and the experience of our management team in executing transactions under varying economic and financial market conditions. See the section of this prospectus entitled“Management” for a more complete description of our management team’s experience.

 

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Industry Opportunity

While we may acquire a business in any industry, our strategy is to source, acquire and, after our initial business combination, grow, an oil and gasexploration and production (“E&P”) or midstream business. E&P companies focus on finding, producing and marketing various forms of crude oil and natural gas and midstream businesses, and on gathering, separating, storing andtransporting various hydrocarbons. We believe that there is a unique and timely opportunity to achieve attractive returns by acquiring and developing E&P assets in proven basins with known operational and limited geologic risks. We believe thisopportunity exists due to several key factors:

 

 (i)

the recent fluctuations in commodity prices had an immediate and meaningful impact on the cash flows of E&Pcompanies, creating a need for many E&P firms to issue external capital or sell assets;

 

 (ii)

the heightened activity in U.S. shale operations and global deep-water developments has resulted insmaller mature, ‘brownfield’ production operations being relatively starved of capital resources;

 

 (iii)

digital technologies are having a revolutionary impact on the efficiency of many industry sectors, includingenergy, but relatively little of that technology is currently being applied to ‘brownfield’ mature production, which, harboring abundant data and information, will benefit from integrated digital technologies unlocking critical aspects ofreservoir performance impacting cash flow.

 

 (iv)

the recent fluctuations in commodity prices and declining U.S. shale oil cost structure has substantiallyreduced E&P asset valuations and is moderating drilling and completion costs, and operating costs, resulting in a lower cost to acquire and develop. Volatility of U.S. natural gas futures prices has risen during the past seven months, reachingrecord-high levels in February. Historical volatility measures the magnitude of daily changes in the closing price for a commodity during a specific time in the past. Based on rolling front-month contracts, the30-day historical volatility of the U.S. natural gas futures price was 179.1% for February, almost doubling from January. The previous record natural gas price volatility for any month was October 2009, whenthe historical volatility averaged 123.8% (U.S. Energy Information Administration)

 

 (v)

the short-term commodity price volatility has depressed asset values that don’t reflect our positivelong-term outlook for crude oil and natural gas demand and the need for higher commodity prices to meet expected demand growth. The invasion of Ukraine by Russia and subsequent sanctions on Russia and other actions created significant marketuncertainties about the potential for oil supply disruptions. These events are occurring against a backdrop of low oil inventories and persistent upward oil price pressures (U.S. Energy Information Administration); and

 

 (vi)

the largest oil and gas companies, including ExxonMobil, Royal Dutch Shell, Chevron and BP, are projected tosell a combined $100 billion in oil and gas assets around the world as they focus on top-performing regions according to a new analysis from consulting firm Rystad Energy (October 2020).

We also believe there is significant potential to acquire and, after our initial business combination, grow a midstream business,particularly in international regions with expected and growing hydrocarbon production profiles.

We believe our management team is wellpositioned to take advantage of opportunities within the energy sector and create value for our stockholders. Our management team has a history in oil and gas, with a deep knowledge of the industry and a well-established network ofrelationships with public and private oil and gas companies, National Oil Companies (NOCs), Government Licensing Authorities, equity sponsors, lending institutions, family offices, attorneys and brokers, from which we expect to generate attractiveacquisition opportunities.

While we will consider assets globally that meet our business strategy criteria, we do consider energy assets in Central andSouth America of particular interest given current relative valuation, reservoir potential and/or legacy of development. Notwithstanding above ground political and operating challenges, infrastructure and reservoir quality are of particularimportance for brownfield re-development and midstream investments. According to the BP Statistical Review of World Energy 2019, Latin America (Mexico, Central and South

 

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America) has the highest Reserve to Production ratio, or R/P ratio, of 106 years compared to a global average of 50 years, Africa of 42 years, Europe of 11 years, Commonwealth of IndependentStates (CIS) of 27 years, Middle East of 72 years and North America of 29 years. The size of the reserves and resources relative to current production illustrates a historical relative under-investment in the region.

While we may acquire an E&P business, we also may focus on companies in the renewable energy industry worldwide. We intend to focus on companies that havestrong management teams, high growth potential, and that would benefit from access to capital to fund acquisitions or working capital for organic growth. We believe the renewable energy industry represents an attractive target market with manypotential acquisition opportunities. Renewable energy growth may accelerate in 2022 with recent announcements to spend between $1 and $2 trillion over the next ten years in the U.S., to increase the use of clean energies in the transportation,electricity and building sectors

Business Combination Criteria

Consistent with our acquisition strategy, we have identified the following general criteria and guidelines that we believe are important in evaluatingprospective target businesses. We will use these criteria and guidelines in evaluating acquisition opportunities. While we intend to acquire companies that we believe exhibit one or more of the following characteristics, we may decide to enter intoour initial business combination with a target business that does not meet these criteria and guidelines. We intend to acquire companies that we believe have the following characteristics:

 

  

Management Control: It will be an important factor to have operational control rather than being apassive equity partner. Existing staff needs to have credentials, expertise and performance that are aligned with future operational activity. Potential should exist for local and expatriate recruitment to compliment the special requirements offuture operational activity. Furthermore, the ability to contract specialized consultants and service companies should exist.

 

  

Ease of Operating: Health, Safety, Security, Environmental andSocial (HSSES) standards, procedures and performance will be a critical element of future operational activity; historical records and performance will be an essential element in assessing suitability for future efficient and effective performance.

 

  

Financial Restructuring: Capital Allocation, Cash Flow Analysis,Authority for Expenditure (AFE), Economic Modeling processes and Corporate Finance integration will be essential processes to ensure effective and efficient future operation. An assessment of existing processes should highlight deficiencies andwhere essential restructuring modifications should not be too onerous.

For potential E&P acquisitions, we intend to targetopportunities with:

 

  

Subsurface materiality: Existing production is 10,000bopd, where historical production suggestssignificant increases can be achieved through, but not restricted to a variety of well interventions, infill wells, pressure support, pattern reconfigurations and other operational activity. Independent Reserve Audits demonstrate material ProvenUndeveloped Reserves (PUD’s), together with Probable (P2), Possible (P3) and Contingent Resources exist. Realistic Field Development Plans (FDP’s) are in place or can be constructed. Sufficient surveillance data and information isavailable to envisage significant impact can be achieved with the implementation of various Digital Science and Analysis techniques.

These criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be based, to theextent relevant, on these general guidelines as well as other considerations, factors and criteria that our management may deem relevant. In the event that we decide to enter into our initial business combination with a target business that does notmeet the above criteria and guidelines, we will disclose that the target business does not meet the above criteria in our stockholder communications

 

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related to our initial business combination, which, as discussed in this prospectus, would be in the form of proxy solicitation materials or tender offer documents that we would file with theSEC. The evaluation relating to the merits of a particular initial business combination may be based, to the extent relevant, on these general guidelines as well as other considerations, factors and criteria that our management may deem relevant. Inthe event that we decide to enter into our initial business combination with a target business that does not meet the above criteria and guidelines, we will disclose that the target business does not meet the above criteria in our stockholdercommunications related to our initial business combination, which, as discussed in this prospectus, would be in the form of tender offer documents or proxy solicitation materials that we would file with the SEC.

Sourcing of potential business combination targets

Webelieve that the operational and transactional experience of our management team and the relationships they have developed as a result of such experience, will provide us with a substantial number of potential business combination targets. Theseindividuals and entities have developed a broad network of contacts and corporate relationships around the world. This network has grown through sourcing, acquiring and financing businesses and maintaining relationships with sellers, financingsources and target management teams. Our management team members have significant experience in executing transactions under varying economic and financial market conditions. We believe that these networks of contacts and relationships and thisexperience will provide us with important sources of investment opportunities. In addition, we anticipate that target business candidates may be brought to our attention from various unaffiliated sources, including investment market participants,private equity funds and large business enterprises seeking to divest noncore assets or divisions.

We are not prohibited from pursuing an initialbusiness combination with a business combination target that is affiliated with our sponsor, officers or directors or making the acquisition through a joint venture or other form of shared ownership with our sponsor, officers or directors. In theevent we seek to complete our initial business combination with a company that is affiliated with our sponsor, officers or directors, we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm oranother independent firm that commonly renders valuation opinions for the type of company we are seeking to acquire or an independent accounting firm that our initial business combination is fair to our company from a financial point of view. We arenot required to obtain such an opinion in any other context. If any of our officers or directors becomes aware of a business combination opportunity that falls within the line of business of any entity to which he or she hasthen-current 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, subject to his or her fiduciaryduties. Our officers and directors currently have certain relevant fiduciary duties or contractual obligations that may take priority over their duties to us. Any such entity may co-invest with us in thetarget business at the time of our initial business combination, or we could raise additional proceeds to complete the acquisition by making a specified future issuance to any such entity.

Other acquisition considerations

Unless we complete ourinitial business combination with an affiliated entity, or our Board of Directors cannot independently determine the fair market value of the target business or businesses, we are not required to obtain an opinion from an independent investmentbanking firm, another independent firm that commonly renders valuation opinions for the type of company we are seeking to acquire or from an independent accounting firm that the price we are paying for a target is fair to our company from afinancial point of view. If no opinion is obtained, our stockholders will be relying on the business judgment of our Board of Directors, which will have significant discretion in choosing the standard used to establish the fair market value of thetarget or targets, and different methods of valuation may vary greatly in outcome from one another. Such standards used will be disclosed in our tender offer documents or proxy solicitation materials, as applicable, related to our initial businesscombination.

 

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Members of our management team may directly or indirectly own shares of our common stock and/or privateplacement warrants following this offering, and, accordingly, may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination. Further, each ofour officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors was included by a target business as a condition to anyagreement with respect to our initial business combination.

Each of our directors and officers presently has, and in the future any of our directors andour officers may have additional, fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present acquisition opportunities to such entity. Accordingly, subject to his or herfiduciary duties, if any of our officers or directors becomes aware of an acquisition opportunity which is suitable for an entity to which he or she has then current fiduciary or contractual obligations, he or she will need to honor his or herfiduciary or contractual obligations to present such acquisition opportunity to such entity, and only present it to us if such entity rejects the opportunity. In addition, we may, at our option, pursue an Affiliated Joint Acquisition opportunitywith an entity to which an officer or director has a fiduciary or contractual obligation. Any such entity may co-invest with us in the target business at the time of our initial business combination, orwe could raise additional proceeds to complete the acquisition by making a specified future issuance to any such entity. A director shall be at liberty to vote in respect of any contract or transaction in which he is interested provided that thenature of such interest shall be disclosed at or prior to its consideration or any vote thereon by the board of directors. We do not believe, however, that any fiduciary duties or contractual obligations of our directors or officers would materiallyundermine our ability to complete our business combination.

These criteria are not intended to be exhaustive. Any evaluation relating to the merits of aparticular initial business combination may be based, to the extent relevant, on these general guidelines as well as other considerations, factors and criteria that our management team may deem relevant. In the event that we find an opportunity thathas characteristics more compelling to us than the characteristics described above, we would pursue such opportunity.

Initial BusinessCombination

We will have 15 months from the closing of this offering to consummate an initial business combination. However, if we anticipate that wemay not be able to consummate our initial business combination within 15 months, we may, by resolution of our board if requested by our sponsor, extend the period of time to consummate a business combination by up to three months on two occasions(for a total of up to 21 months to complete a business combination), subject to the sponsor depositing additional funds into the trust account, upon five days advance notice prior to the applicable deadline, $1,000,000, or $1,150,000 if theunderwriters’ over-allotment option is exercised in full ($0.10 per unit in either case), for each of the available three month extensions, providing a total possible business combination period of 21 months at a total payment value of$2,000,000, or $2,300,000 if the underwriters’ over-allotment option is exercised in full (each such extension period being hereinafter referred to as an “Extension Period”). Any such payments would be made in the form of non-interest bearing loans. If we complete our initial business combination, we will, at the option of our sponsor, repay such loaned amounts out of the proceeds of the trust account released to us or convert aportion or all of the total loan amount into warrants at a price of $1.00 per warrant, which warrants will be identical to the private placement warrants. If we do not complete a business combination, we will repay such loans only from funds heldoutside of the trust account. Our stockholders will not be entitled to vote or redeem their shares in connection with any such extension. However, our stockholders will be entitled to vote and redeem their shares in connection with a stockholdermeeting held to approve an initial business combination or in a tender offer undertaken in connection with such an initial business combination if we propose such a business combination during any three-month extension period. If we are unable toconsummate our initial business combination within such time period, we will, as promptly as possible but not more than ten business days thereafter, redeem 100% of our outstanding public shares for a pro rata portion of the funds held in the trustaccount, including a pro rata

 

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portion of any interest earned on the funds held in the trust account and not previously released to us to pay our taxes, and then seek to dissolve and liquidate. However, we may not be able todistribute such amounts as a result of claims of creditors which may take priority over the claims of our public stockholders. In the event of our dissolution and liquidation, the private placement warrants will expire and will be worthless.

Nasdaq rules require that we must complete one or more business combinations having an aggregate fair market value of at least 80% of the value of the assetsheld in the trust account (excluding the deferred underwriting commissions and taxes payable on the interest earned on the trust account) at the time of our signing a definitive agreement in connection with our initial business combination. Ourboard of directors will make the determination as to the fair market value of our initial business combination. If our board of directors is not able to independently determine the fair market value of our initial business combination, we willobtain an opinion from an independent investment banking firm that is a member of FINRA or an independent accounting firm with respect to the satisfaction of such criteria. While we consider it unlikely that our board of directors will not be ableto 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 ofuncertainty as to the value of a target’s assets or prospects. Additionally, pursuant to Nasdaq rules, any initial business combination must be approved by a majority of our independent directors.

We anticipate structuring our initial business combination either (i) in such a way so that the post-transaction company in which our public stockholdersown 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 targetbusiness 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 theoutstanding 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 companyowns 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 targetand 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 sharessubsequent 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 oracquired is what will be taken into account for purposes of Nasdaq’s 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 ofthe transactions and we will treat the target businesses together as the initial business combination for purposes of a tender offer or for seeking stockholder approval, as applicable.

Our Business Combination Process

Inevaluating prospective business combinations, we expect to conduct a thorough due diligence review process that will encompass, among other things, a review of historical and projected financial and operating data, meetings with management and theiradvisors (if applicable), on-site inspection of facilities and assets, discussion with customers and suppliers, legal reviews and other reviews as we deem appropriate.

We are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor or our officers or directors. In theevent we seek to complete our initial business combination with a company that is affiliated with our sponsor, officers or directors, we, or a committee of independent directors, will obtain an opinion from an independent investment banking firmthat is a member of FINRA or an

 

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independent accounting firm that our initial business combination is fair to our company from a financial point of view.

Our officers and directors will indirectly own founder shares and/or private placement warrants following this offering. Because of this ownership, oursponsor and our officers and directors 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 anddirectors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors were to be included by a target business as a condition to any agreement withrespect to our initial business combination.

We have not selected any specific business combination target and we have not, nor has anyone on our behalf,initiated any substantive discussions, directly or indirectly, with any business combination target.

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 ourofficers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he has then-current fiduciary or contractual obligations, he will honor his fiduciary or contractual obligations to present suchopportunity to such entity. We believe, however, that the fiduciary duties or contractual obligations of our officers or directors will not materially affect our ability to complete our initial business combination. Our amended and restatedcertificate of incorporation will provide 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 capacity as a director or officer ofour 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 withoutviolating another legal obligation.

Status as a Public Company

We believe our structure will make us an attractive business combination partner to target businesses. As a public company, we offer a target business analternative to the traditional initial public offering through a merger or other business combination with us. Following an initial business combination, we believe the target business would have greater access to capital and additional means ofcreating management incentives that are better aligned with stockholders’ interests than it would as a private company. A target business can further benefit by augmenting its profile among potential new customers and vendors and aid inattracting talented employees. In a business combination transaction with us, the owners of the target business may, for example, exchange their shares of stock in the target business for our shares of Class A common stock (or shares of a newholding company) or for a combination of our shares of Class A common stock and cash, allowing us to tailor the consideration to the specific needs of the sellers.

Although there are various costs and obligations associated with being a public company, we believe target businesses will find this method a more expeditiousand cost effective method to becoming a public company than the typical initial public offering. The typical initial public offering process takes a significantly longer period of time than the typical business combination transaction process, andthere are significant expenses in the initial public offering process, including underwriting discounts and commissions, marketing and road show efforts that may not be present to the same extent in connection with an initial business combinationwith us.

Furthermore, once a proposed initial business combination is completed, the target business will have effectively become public, whereas aninitial public offering is always subject to the underwriters’ ability to complete the offering, as well as general market conditions, which could delay or prevent the offering from occurring or could have negative valuation consequences.Following an initial business combination, we believe the target business would then have greater access to capital and an additional means of providing management incentives consistent

 

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with stockholders’ interests and the ability to use its shares as currency for acquisitions. Being a public company can offer further benefits by augmenting a company’s profile amongpotential new customers and vendors and aid in attracting talented employees.

While we believe that our structure and our management team’sbackgrounds will make us an attractive business partner, some potential target businesses may view our status as a blank check company, such as our lack of an operating history and our ability to seek stockholder approval of any proposed initialbusiness combination, negatively.

We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified bythe 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, notbeing required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxystatements, 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 someinvestors 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 periodprovided 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 standardswould otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period.

We will remain an emerginggrowth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or(c) in which we are deemed to be a large accelerated filer, which means the market value of our Class A common stock that is held by non-affiliates exceeds $700 million as of the prior June 30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.

Additionally, we are a “smaller reporting company” as defined in Rule 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 thefiscal year in which (1) the market value of our common stock held by non-affiliates exceeds $250 million as of the end of the prior June 30th, or(2) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our common stock held by non-affiliates exceeds $700 million as of the prior June 30th.

Financial Position

With funds available in the trust account for an initial business combination initially in the amount of $98,000,000 after payment of $3,500,000 of deferredunderwriting fees (or $112,700,000 after payment of up to $4,025,000 of deferred underwriting fees if the underwriters’ over-allotment option is exercised in full), in each case before fees and expenses associated with our initial businesscombination, we offer a target business a variety of options such as creating a liquidity event for its owners, providing capital for the potential growth and expansion of its operations or strengthening its balance sheet by reducing its debt orleverage ratio. Because we are able to complete our initial business combination using our cash, debt or equity securities, or a combination of the foregoing, we have the flexibility to use the most efficient combination that will allow us to tailorthe consideration to be paid to the target business to fit its needs and desires. However, we have not taken any steps to secure third party financing and there can be no assurance it will be available to us.

 

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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 following this offering. We intend to effectuateour initial business combination using cash from the proceeds of this offering and the private placement of the private placement warrants, the proceeds of the sale of our shares in connection with our initial business combination (includingpursuant to forward purchase agreements or backstop agreements we may enter into following the consummation of this offering or otherwise), shares issued to the owners of the target, debt issued to bank or other lenders or the owners of the target,or a combination of the foregoing. 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 risksinherent in such companies and businesses.

If our initial business combination is paid for using equity or debt securities, or not all of the fundsreleased 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 thetrust 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, tofund the purchase of other companies or for working capital.

We may seek to raise additional funds through a private offering of debt or equitysecurities 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, weintend to target businesses larger than we could acquire with the net proceeds of this offering and the sale of the private placement warrants, and may as a result be required to seek additional financing to complete such proposed initial businesscombination. 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 withassets 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 suchfinancing. 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 withrespect to raising any additional funds through the sale of securities or otherwise.

Sources of Target Businesses

We anticipate that target business candidates will be brought to our attention from various unaffiliated sources, including investment bankers and investmentprofessionals. Target businesses may be brought to our attention by such unaffiliated sources as a result of being solicited by us by calls or mailings. These sources may also introduce us to target businesses in which they think we may beinterested on an unsolicited basis, since many of these sources will have read this prospectus and know what types of businesses we are targeting. Our officers and directors, as well as our sponsor and their affiliates, may also bring to ourattention target business candidates that they become aware of through their business contacts as a result of formal or informal inquiries or discussions they may have, as well as attending trade shows or conventions. In addition, we expect toreceive a number of proprietary deal flow opportunities that would not otherwise necessarily be available to us as a result of the business relationships of our officers and directors and our sponsor and their affiliates. While we do not presentlyanticipate 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 bringopportunities 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 iscustomarily tied to completion of a transaction, in which case

 

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any such fee will be paid out of the funds held in the trust account. In no event, however, will our sponsor or any of our existing officers or directors, or any entity with which our sponsor orofficers are affiliated, be paid any finder’s fee, reimbursement, consulting fee, monies in respect of any payment of a loan or other compensation by the company prior to, or in connection with any services rendered for any services they renderin order to effectuate, the completion of our initial business combination (regardless of the type of transaction that it is). None of our sponsor, executive officers or directors, or any of their respective affiliates, will be allowed to receiveany compensation, finder’s fees or consulting fees from a prospective business combination target in connection with a contemplated initial business combination. We have agreed to pay our Chief financial Officer a total of $10,000 per month forhis services and to reimburse our sponsor for any out-of-pocket expenses related to identifying, investigating and completing an initial business combination. Some ofour 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 inour selection process of an initial business combination candidate.

We are not prohibited from pursuing an initial business combination with an initialbusiness combination target that is affiliated with our sponsor, officers or directors or making the initial business combination through a joint venture or other form of shared ownership with our sponsor, officers or directors. In the event we seekto complete our initial business combination with an initial business combination target that is affiliated with our sponsor, officers or directors, we, or a committee of independent directors, would obtain an opinion from an independent investmentbanking firm which is a member of FINRA or an independent accounting firm that such an initial business combination is fair to our company from a financial point of view. We are not required to obtain such an opinion in any other context.

As more fully discussed in the section of this prospectus entitled “Management — Conflicts of Interest,” if any of our officers ordirectors becomes aware of an initial business combination opportunity that falls within the line of business of any entity to which he has pre-existing fiduciary or contractual obligations, he may be requiredto 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 takepriority over their duties to us.

Selection of a Target Business and Structuring of our Initial Business Combination

Nasdaq rules require that we must complete one or more business combinations having an aggregate fair market value of at least 80% of the value of the assetsheld in the trust account (excluding the deferred underwriting commissions and taxes payable on the interest earned on the trust account) at the time of our signing a definitive agreement in connection with our initial business combination. The fairmarket value of our initial business combination will be determined by our board of directors based upon one or more standards generally accepted by the financial community, such as discounted cash flow valuation, a valuation based on tradingmultiples of comparable public businesses or a valuation based on the financial metrics of M&A transactions of comparable businesses. If our board of directors is not able to independently determine the fair market value of our initial businesscombination, we will obtain an opinion from an independent investment banking firm that is a member of FINRA or an independent accounting firm with respect to the satisfaction of such criteria. While we consider it unlikely that our board ofdirectors 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 asignificant amount of uncertainty as to the value of a target’s assets or prospects. We do not intend to purchase multiple businesses in unrelated industries in conjunction with our initial business combination. Subject to this requirement, ourmanagement 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 asimilar 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 theoutstanding voting securities of the target or otherwise acquire a controlling interest in the target sufficient for

 

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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 orbusinesses, 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 Nasdaq’s 80% of net assets test. There is no basis for investors in thisoffering to evaluate the possible merits or risks of any target business with which we may ultimately complete our initial business combination.

To theextent 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 ourmanagement will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all significant risk factors.

In evaluating a prospective business target, we expect to conduct a thorough due diligence review, which may encompass, among other things, meetings withincumbent management and 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 thisprocess, 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 willresult in our incurring losses and will reduce the funds we can use to complete another business combination.

Lack of Business Diversification

For an indefinite period of time after the completion of our initial business combination, the prospects for our success may depend entirely on thefuture performance of a single business. Unlike other entities that have the resources to complete business combinations with multiple entities in one or several industries, it is probable that we will not have the resources to diversify ouroperations and mitigate the risks of being in a single line of business. 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 asubstantial adverse impact on the particular industry in which we operate after our initial business combination, and

 

  

cause us to depend on the marketing and sale of a single product or limited number of products or services.

Limited Ability to Evaluate the Target’s Management Team

Although we intend to closely scrutinize the management of a prospective target business when evaluating the desirability of effecting our initial businesscombination 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 combinedcompany 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 themwill devote their full efforts to our affairs subsequent to our initial business combination. Moreover, we cannot assure you that members of our management team will have significant experience or knowledge relating to the operations of theparticular target business.

 

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We cannot assure you that any of our key personnel will remain in senior management or advisory positionswith the combined company. The determination as to whether any of our key personnel will remain with the combined company will be made at the time of our initial business combination.

Following an initial business combination, we may seek to recruit additional managers to supplement the incumbent management of the target business. We cannotassure you that we will have the ability to recruit additional managers, or that additional managers will have the requisite skills, knowledge or experience necessary to enhance the incumbent management.

Stockholders May Not Have the Ability to Approve Our Initial Business Combination

We may conduct redemptions without a stockholder vote pursuant to the tender offer rules of the SEC. However, we will seek stockholder approval if it isrequired by law or applicable stock exchange rule, or we may decide to seek stockholder approval for business or other legal reasons. Presented in the table below is a graphic explanation of the types of initial business combinations we may considerand whether stockholder approval is currently required under Delaware law for each such transaction.

 

TYPE OF TRANSACTION

  

WHETHER
STOCKHOLDER
APPROVALIS
REQUIRED

Purchase of assets

  No

Purchase of stock of target not involving a merger with the company

  No

Merger of target into a subsidiary of the company

  No

Merger of the company with a target

  Yes

Under Nasdaq’s listing rules, stockholder approval would be required for our initial business combination if, forexample:

 

  

we issue shares of Class A common stock that will be equal to or in excess of 20% of the number of shares ofour Class A common stock then outstanding;

 

  

any of our directors, officers or substantial stockholders (as defined by Nasdaq rules) has a 5% or greaterinterest (or such persons collectively have a 10% or greater interest), directly or indirectly, in the target business or assets to be acquired or otherwise and the present or potential issuance of common stock could result in an increase inoutstanding common shares or voting power of 5% or more; or

 

  

the issuance or potential issuance of common stock will result in our undergoing a change of control.

Permitted Purchases of our Securities

If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combinationpursuant to the tender offer rules, our sponsor, initial stockholders, directors, officers, advisors or their affiliates may purchase shares or public warrants in privately negotiated transactions or in the open market either prior to or followingthe 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 lawand Nasdaq rules. However, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. If they engage in such transactions, they will not make anysuch 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 currentlyanticipate 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,

 

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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 reportedpursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements. None of the funds held in the trust account will be used to purchase shares or public warrants in suchtransactions prior to completion of our initial business combination.

The purpose of any such purchases of shares could be to vote such shares in favorof 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 networth 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 publicwarrants 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 businesscombination 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 securitiesmay be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.

Our sponsor, officers, directors and/or their affiliates anticipate that they may identify the stockholders with whom our sponsor, officers, directors ortheir 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 initialbusiness combination. To the extent that our sponsor, 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 redeemtheir shares for a pro rata share of the trust account or vote against our initial business combination, whether or not such stockholder has already submitted a proxy with respect to our initial business combination. Our sponsor, officers,directors, advisors or their affiliates will only purchase shares if such purchases comply with Regulation M under the Exchange Act and the other federal securities laws.

Any purchases by our sponsor, officers, directors and/or their affiliates who are affiliated purchasers underRule 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 harborfrom 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 becomplied with in order for the safe harbor to be available to the purchaser. Our sponsor, officers, directors and/or their affiliates will not make purchases of common stock if the purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchases are subject to such reporting requirements.

Redemption Rights for Public Stockholders upon Completion of our Initial Business Combination

We will provide our public stockholders with the opportunity to redeem all or a portion of their shares of Class A common stock upon the completion of ourinitial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account as of two business days prior to the consummation of the initial businesscombination 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 describedherein. The amount in the trust account is initially anticipated to be approximately $10.15 per public share, without taking into account any interest earned on such funds or additional funds, if any, deposited into the trust account in connectionwith extensions of the period of time to consummate a business combination (as described in more detail in this prospectus). The per-share amount we will distribute to investors who properly redeem theirshares will not be reduced by the deferred underwriting commissions we will pay to the underwriters. Our sponsor, officers and directors have entered into

 

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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 thecompletion of our initial business combination.

Manner of Conducting Redemptions

We will provide our public stockholders with the opportunity to redeem all or a portion of their shares of Class A common stock upon the completion of ourinitial 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 aproposed 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 usto seek stockholder approval under the law or stock exchange listing requirement. Under Nasdaq rules, asset acquisitions and stock purchases would not typically require stockholder approval while direct mergers with our company where we do notsurvive 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 witha target company in a manner that requires stockholder approval, we will not have discretion as to whether to seek a stockholder vote to approve the proposed initial business combination. We may conduct redemptions without a stockholder votepursuant to the tender offer rules of the SEC unless stockholder approval is required by law or stock exchange listing requirements or we choose to seek stockholder approval for business or other legal reasons. So long as we obtain and maintain alisting for our securities on Nasdaq, we will be required to comply with such rules.

If a stockholder vote is not required and we do not decide to hold astockholder vote for business or other legal reasons, we will, pursuant to our amended and restated certificate of incorporation:

 

  

conduct the redemptions pursuant to Rule 13e-4 andRegulation 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 containsubstantially the same financial and other information about the initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies.

Upon the public announcement of our initial business combination, we or our sponsor will terminate any plan established in accordance with Rule 10b5-1 to purchase shares of our Class A common stock in the open market if we elect to redeem our public shares through a tender offer, to comply withRule 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 untilthe expiration of the tender offer period. In addition, the tender offer will be conditioned on public stockholders not tendering more than a specified number of public shares which are not purchased by our sponsor, which number will be based on therequirement that we may not redeem public shares in an amount that would cause our net tangible assets to be less than $5,000,001 either immediately prior to or upon consummation of our initial business combination and after payment ofunderwriters’ fees and commissions (so that we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial businesscombination. 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.

 

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If, however, stockholder approval of the transaction is required by law or stock exchange listingrequirement, or we decide to obtain stockholder approval for business or other legal reasons, we will, pursuant to our amended and restated certificate of incorporation:

 

  

conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the ExchangeAct, 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, provideour 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 orby proxy of shares of outstanding capital stock of the company representing a majority of the voting power of all outstanding shares of capital stock of the company entitled to vote at such meeting. Our initial stockholders will count toward thisquorum and pursuant to the letter agreement, our sponsor, officers and directors have agreed to vote their founder shares and any public shares purchased during or after this offering (including in open market and privately negotiated transactions)in favor of our initial business combination. For purposes of seeking approval of the majority of our outstanding shares of common stock voted, non-votes will have no effect on the approval of our initialbusiness combination once a quorum is obtained. As a result, in addition to our initial stockholders’ founder shares, we would need only 3,800,001, or 38.0%, of the 10,000,000 public shares sold in this offering to be voted in favor of aninitial business combination (assuming all outstanding shares are voted) in order to have our initial business combination approved (assuming the over-allotment option is not exercised). We intend to give approximately 30 days (but not lessthan 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 quorums and voting thresholds, and the voting agreements of ourinitial 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 will provide that in no event will we redeem our public shares in an amount that would cause our nettangible assets to be less than $5,000,001 either immediately prior to or upon consummation of our initial business combination and after payment of underwriters’ fees and commissions (so that we are not subject to the SEC’s “pennystock” 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) cashconsideration 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 termsof 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 cashconditions 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 commonstock submitted for redemption will be returned to the holders thereof.

Limitation on Redemption upon Completion of our Initial Business Combinationif we Seek Stockholder Approval

Notwithstanding the foregoing, if we seek stockholder approval of our initial business combination and we do notconduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation will provide that a public stockholder, together with any

 

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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 berestricted from seeking redemption rights with respect to more than an aggregate of 15% of the shares sold in this offering, which we refer to as the “Excess Shares.” Such restriction shall also be applicable to our affiliates. We believethis 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 toforce 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 thisoffering 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’ abilityto redeem no more than 15% of the shares sold in this offering without our prior consent, we believe we will limit the ability of a small group of stockholders to unreasonably attempt to block our ability to complete our initial businesscombination, 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 inConnection with a Tender Offer or Redemption Rights

We may require our public stockholders seeking to exercise their redemption rights, whether theyare 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 businessdays prior to the 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 whetherwe are requiring public stockholders to satisfy such delivery requirements. 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 thevote 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 touse electronic delivery of their public shares.

There is a nominal cost associated with the above-referenced tendering process and the act ofcertificating 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 feewould 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 suchdelivery must be effectuated.

The foregoing is different from the procedures used by many blank check companies. In order to perfect redemption rights inconnection 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 businesscombination and check a box on the proxy card indicating such holder was seeking to exercise his or her redemption rights. After the initial business combination was approved, the company would contact such stockholder to arrange for him or her todeliver his or her certificate to verify ownership. As a result, the stockholder then had an “option window” after the completion of the initial business combination during which he or she could monitor the price of the company’sstock in the market. If the price rose above the redemption price, he or she could sell his or her shares in the open market before actually delivering his or her shares to the company for cancellation. As a result, the redemption rights, to whichstockholders 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

 

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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 businesscombination is approved.

Furthermore, if a holder of a public share delivered its certificate in connection with an election of redemption rights andsubsequently 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 distributedto holders of our public shares electing to redeem their shares will be distributed promptly after the completion of our initial business combination.

Ifour 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 trustaccount. In such case, we will promptly return any certificates delivered by public holders who elected to redeem their shares.

If our initial proposedinitial business combination is not completed, we may continue to try to complete an initial business combination with a different target until 15 months from the closing of this offering (or up to 21 months from the closing of this offering if weextend the period of time to consummate a business combination by up to three months on up to two occasions as described in greater detail in this prospectus).

Redemption of Public Shares and Liquidation if no Initial Business Combination

Our second amended and restated certificate of incorporation provides that we will have only 15 months from the closing of this offering (or up to 21 monthsfrom the closing of this offering if we extend the period of time to consummate a business combination as discussed in more detail in this prospectus) to complete our initial business combination. If we are unable to complete our initial businesscombination within such 15-month period (or up to 21 months from the closing of this offering if we extend the period of time to consummate a business combination by up to three months on up to two occasionsas described in more detail in this prospectus), 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 aper-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 payour 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 boardof 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 withrespect to our warrants, which will expire worthless if we fail to complete our initial business combination within the 15-month time period (or up to 21 months from the closing of this offering if we extendthe period of time to consummate a business combination by up to three months on up to two occasions as described in more detail in this prospectus).

Oursponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have waived their rights to liquidating distributions from the trust account with respect to any founder shares held by them if we fail to completeour initial business combination within 15 months from the closing of this offering (or up to 21 months from the closing of this offering if we extend the period of time to consummate a business combination by up to three months on up to twooccasions as described in more detail in this prospectus). However, if our sponsor, officers or directors acquire public shares in or after this offering, they will be entitled to liquidating distributions from the trust account with respect to suchpublic shares if we fail to complete our initial business combination within the allotted 15-month time period (or up to 21 months from the closing of this offering if we extend the period of time toconsummate a business combination by up to three months on up to two occasions as described in more detail in this prospectus).

 

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Our sponsor, officers and directors have agreed, pursuant to a written agreement with us, that they will notpropose any amendment to our amended and restated certificate of incorporation (i) to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 15 monthsfrom the closing of this offering (or up to 21 months from the closing of this offering if we extend the period of time to consummate a business combination by up to three months on up to two occasions as described in more detail in thisprospectus), 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 opportunityto 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 includinginterest 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 thatwould cause our net tangible assets to be less than $5,000,001 either immediately prior to or upon consummation of our initial business combination and after payment of underwriters’ fees and commissions (so that we are not subject to theSEC’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 proceedwith the amendment or the related redemption of our public shares at such time. 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.

Any request to redeem suchshares, 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.

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 amountsremaining out of the approximately $1,350,000 of proceeds held outside the trust account, although we cannot assure you that there will be sufficient funds for such purpose. We will depend on sufficient interest being earned on the proceeds held inthe trust account to pay any franchise and income 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 interestaccrued in the trust account not required to pay franchise and income 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 paythose costs and expenses.

If we were to expend all of the net proceeds of this offering and the sale of the private placement warrants, other than theproceeds 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 beapproximately $10.15. The proceeds deposited in the trust account could, however, become subject to the claims of our creditors which would have higher priority than the claims of our public stockholders. We cannot assure you that the actual per-share redemption amount received by stockholders will not be substantially less than $10.15. Under Section 281(b) of the DGCL, our plan of dissolution must provide for all claims against us to be paid infull 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 suchamounts, if any, we cannot assure you that we will have funds sufficient to pay or provide for all creditors’ claims.

Although we will seek to haveall 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 thebenefit 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 tofraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case

 

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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 tothe 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 thirdparty’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 whoseparticular 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.BDO USA, LLP, our independent registered public accounting firm, and the underwriters of the offering, will not execute agreements with us waiving such claims to the monies held in the trust account.

In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, anynegotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason. Our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party for services rendered or productssold 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) $10.15 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 $10.15 per share due to reductions in the value of the trust assets, lesstaxes 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 this offering against certain liabilities, including liabilities under the Securities Act. However, we have not asked our sponsor to reserve for such indemnificationobligations, nor have we independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are securities of our company. Therefore, we cannot assure you that oursponsor would be able to satisfy those obligations. None of our officers or directors will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.

In the event that the proceeds in the trust account are reduced below (i) $10.15 per public share or (ii) such lesser amount per public share held in thetrust 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 (less up to $100,000 of interest to pay dissolutionexpenses), and our sponsor asserts that it is unable to satisfy its indemnification obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal actionagainst our sponsor to enforce its indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification obligations to us, it is possible thatour 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 independentdirectors determine that a favorable outcome is not likely. We have not asked our sponsor to reserve for such indemnification obligations and we cannot assure you that our sponsor would be able to satisfy those obligations. Accordingly, we cannotassure you that due to claims of creditors the actual value of the per-share redemption price will not be less than $10.15 per public share.

We will seek to reduce the possibility that our sponsor will have to indemnify the trust account due to claims of creditors by endeavoring to have allvendors, 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 monies held in the trust account. Our sponsor will alsonot be liable as to any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. We will have access to up to approximately $1,350,000 from the proceeds of thisoffering with which to pay any such potential claims (including costs and expenses incurred in connection with our liquidation, currently estimated to be no more than approximately $100,000). In the event that we liquidate and it is subsequentlydetermined that

 

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the reserve for claims and liabilities is insufficient, stockholders who received funds from our trust account could be liable for claims made by creditors. In the event that our offeringexpenses exceed our estimate of $650,000, we may fund such excess with funds from the funds not to be held in the trust account. In such case, the amount of funds we intend to be held outside the trust account would decrease by a correspondingamount. Conversely, in the event that the offering expenses are less than our estimate of $650,000, the amount of funds we intend to be held outside the trust account would increase by a corresponding amount.

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 adissolution. The pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination within 15 months from the closing of thisoffering (or up to 21 months from the closing of this offering if we extend the period of time to consummate a business combination by up to three months on up to two occasions as described in more detail in this prospectus) may be considered aliquidating 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 suchstockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution.

Furthermore, if the pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we donot complete our initial business combination within 15 months from the closing of this offering (or up to 21 months from the closing of this offering if we extend the period of time to consummate a business combination by up to three months on upto two occasions as described in more detail in this prospectus), 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 thata party may bring or due to other circumstances that are currently unknown), then pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution,instead of three years, as in the case of a liquidating distribution. If we are unable to complete our initial business combination within 15 months from the closing of this offering (or up to 21 months from the closing of this offering if we extendthe period of time to consummate a business combination by up to three months on up to two occasions as described in more detail in this prospectus), we will: (i) cease all operations except for the purpose of winding up, (ii) as promptlyas 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 accountincluding 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 publicshares, 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 reasonablypossible 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 therequirements of other applicable law. Accordingly, it is our intention to redeem our public shares as soon as reasonably possible following our 15th month (or up to the 18th month from the closing of this offering if we extend the period of time to consummate a business combination by up to three months on up to two occasions as described in more detail in thisprospectus) 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 stockholdersmay extend well beyond the third anniversary of such date.

Because we will not be complying with Section 280, Section 281(b) of the DGCLrequires 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

 

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claims that may be potentially brought against us within the subsequent 10 years. However, because we are a blank check company, rather than an operating company, and our operations will belimited 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 obligationcontained 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 anykind 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 trustaccount is remote. Further, our sponsor may be liable only to the extent necessary to ensure that the amounts in the trust account are not reduced below (i) $10.15 per public share or (ii) such lesser amount per public share held in the trustaccount 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 (less up to $100,000 of interest to pay dissolution expenses),and willnot be liable as to any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. In the event that an executed waiver is deemed to be unenforceable against a thirdparty, our sponsor will not be responsible to the extent of any liability for such third-party claims.

If we file a bankruptcy petition or an involuntarybankruptcy 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 withpriority over the claims of our stockholders. To the extent any bankruptcy claims deplete the trust account, we cannot assure you we will be able to return $10.15 per share to our public stockholders. Additionally, if we file a bankruptcy petitionor 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 creditorsand/or may have acted in bad faith, thereby exposing itself and our company to claims of punitive damages, by paying public stockholders from the trust account prior to addressing the claims of creditors. We cannot assure you that claims will not bebrought 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 redeem 100% of our public shares if we do not complete our initial business combination within 15 months from the closing of this offering (or up to 21 months from the closing of thisoffering if we extend the period of time to consummate a business combination by up to three months on up to two occasions as described in more detail in this prospectus) or (B) with respect to any other provision relating to stockholders’rights or pre-initial business combination activity, and (iii) the redemption of all of our public shares if we are unable to complete our business combination within 15 months from the closing of thisoffering (or up to 21 months from the closing of this offering if we extend the period of time to consummate a business combination by up to three months on up to two occasions as described in more detail in this prospectus), subject to applicablelaw. 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 inconnection 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 asdescribed 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 This Offering to Those of Blank Check Companies Subject to Rule 419

The following table compares the terms of this offering to the terms of an offering by a blank check company subject to the provisions of Rule 419. Thiscomparison assumes that the gross proceeds, underwriting

 

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commissions and underwriting expenses of our offering would be identical to those of an offering undertaken by a company subject to Rule 419, and that the underwriters will not exercisetheir over-allotment option. None of the provisions of Rule 419 apply to our offering.

 

   

TERMS OF OUR OFFERING

  

TERMS UNDER A RULE 419 OFFERING

Escrow of offering proceeds

  $101,500,000 of the net proceeds of this offering and the sale of the private placement warrants will be deposited into a trust account in the United States, with Continental Stock Transfer & Trust Company acting astrustee.  Approximately $88,200,000 of the offering proceeds would be deposited into either an escrow account with an insured depositary institution or in a separate bank account established by a broker-dealer in which the broker-dealer actsas trustee for persons having the beneficial interests in the account.

Investment of net proceeds

  $101,500,000 of the net offering proceeds and the sale of the private placement warrants held in trust will be invested only in U.S. government treasury bills with a maturity of 180 days or less or in money market funds meetingcertain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations.  Proceeds could be invested only in specified securities such as a money market fund meeting conditions of the Investment Company Act or in securities that are direct obligations of, or obligations guaranteed as to principal orinterest by, the United States.

Receipt of interest on escrowed funds

  Interest on proceeds from the trust account to be paid to stockholders is reduced by (i) any income or franchise taxes paid or payable, and (ii) in the event of our liquidation for failure to complete our initial businesscombination within the allotted time, up to $100,000 of net interest that may be released to us should we have no or insufficient working capital to fund the costs and expenses of our dissolution and liquidation.  Interest on funds in escrow account would be held for the sole benefit of investors, unless and only after the funds held in escrow were released to us in connection with our completion of a business combination.

Limitation on fair value or net assets of target business

  Nasdaq rules require that we must complete one or more business combinations having an aggregate fair market value of at least 80% of the value of the assets held in the trust account (excluding the deferred underwriting commissionsand taxes payable on the income earned on the trust account) at the time of the agreement to enter into the initial business combination.  The fair value or net assets of a target business must represent at least 80% of the maximum offering proceeds.

 

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TERMS OF OUR OFFERING

  

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Trading of securities issued

  We expect the units will begin trading on or promptly after the date of this prospectus. The Class A common stock and warrants comprising the units will begin separate trading on the 52nd day following the date of this prospectus unless Maxim Group LLC informs us of its decision to allow earlier separate trading, subject to our having filed the Current Report on Form 8-K described below and having issued a press release announcing when such separate trading will begin. We will file the Current Report on Form 8-K promptlyafter the closing of this offering, which is anticipated to take place three business days from the date of this prospectus. If the over-allotment option is exercised following the initial filing of such Current Report on Form 8-K, an additional Current Report on Form 8-K will be filed to provide updated financial information to reflect the exercise of the over-allotment option.  No trading of the units or the underlying Class A common stock and warrants would be permitted until the completion of a business combination. During this period, the securities would be held in the escrow or trustaccount.

Exercise of the warrants

  The warrants cannot be exercised until the later of 30 days after the completion of our initial business combination or 12 months from the closing of this offering.  The warrants could be exercised prior to the completion of a business combination, but securities received and cash paid in connection with the exercise would be deposited in the escrow or trust account.
Election to remain an investor  We will provide our public stockholders with the opportunity to redeem their public shares for cash equal to their pro rata share of the aggregate amount then on deposit in the trust account as of two business days prior to theconsummation of our initial business combination, including interest earned on the funds held in the trust account and not previously released to us to pay our franchise and income taxes, upon the completion of our initial business combination,subject to the limitations described herein. We may  A prospectus containing information pertaining to the business combination required by the SEC would be sent to each investor. Each investor would be given the opportunity to notify the company in writing, within a period of no lessthan 20 business days and no more than 45 business days from the effective date of a post-effective amendment to the company’s registration statement, to decide if it elects to remain a stockholder of the company or require the return of itsinvestment. If the company has not

 

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TERMS OF OUR OFFERING

  

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  not be required by law to hold a stockholder vote. 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 shallbe taken to approve our initial business combination. If we are not required by law and do not otherwise decide to hold a stockholder vote, we will, pursuant to our amended and restated certificate of incorporation, conduct the redemptions pursuantto the tender offer rules of the SEC and file tender offer documents with the SEC which will contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under theSEC’s proxy rules. 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) underthe Exchange Act, and we will not be permitted to complete our initial business combination until the expiration of the tender offer period. If, however, we hold a stockholder vote, we will, like many blank check companies, offer to redeem shares inconjunction with a proxy solicitation pursuant to the proxy rules. 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 theinitial business combination. Additionally, each public stockholder may elect to redeem their public shares irrespective of whether they vote for or against the proposed transaction. A quorum for such meeting will consist of the holders present inperson or by proxy of shares of outstanding capital stock of the  received the notification by the end of the 45th business day, funds and interest or dividends, if any, held in the trust or escrow account are automatically returned to thestockholder. Unless a sufficient number of investors elect to remain investors, all funds on deposit in the escrow account must be returned to all of the investors and none of the securities areissued.

 

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TERMS OF OUR OFFERING

  

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  company representing a majority of the voting power of all outstanding shares of capital stock of the company entitled to vote at such meeting.  

Business combination deadline

  If we are unable to complete an initial business combination within 15 months from the closing of this offering (or up to 21 months from the closing of this offering if we extend the period of time to consummate a businesscombination by up to three months on up to two occasions as described in more detail in this prospectus), we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than tenbusiness days thereafter, redeem 100% of 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 heldin 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 completelyextinguish 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, subjectto 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.  If a business combination has not been completed within 18 months after the effective date of the company’s registration statement, funds held in the trust or escrow account are returned toinvestors.

 

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TERMS OF OUR OFFERING

  

TERMS UNDER A RULE 419 OFFERING

Limitation on redemption rights of stockholders holding more than 15% of the shares soldin this offering if we hold a stockholder vote

  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 second amended and restatedcertificate of incorporation will provide that a public stockholder (including our affiliates), together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as definedunder Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to Excess Shares (more than an aggregate of 15% of the shares sold in this offering). Our public stockholders’ inability to redeem ExcessShares will reduce their influence over our ability to complete our initial business combination and they could suffer a material loss on their investment in us if they sell any Excess Shares in open market transactions.  Many blank check companies provide no restrictions on the ability of stockholders to redeem shares based on the number of shares held by such stockholders in connection with an initial business combination.

Tendering stock certificates in connection with a tender offer or redemptionrights

  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 tothe date set forth in the tender offer documents mailed to such holders or up to two business days prior to the vote on the proposal to approve the initial business combination in the event we distribute proxy materials, or to deliver their sharesto the transfer agent electronically using The Depository Trust Company’s DWAC 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 ourinitial business combination will indicate whether we are requiring public stockholders  In order to perfect redemption rights in connection with their business combinations, holders could vote against a proposed initial business combination and check a box on the proxy card indicating such holders were seeking toexercise their redemption rights. After the business combination was approved, the company would contact such stockholders to arrange for them to deliver their certificate to verifyownership.

 

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  to satisfy such delivery requirements. 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 initialbusiness combination if we distribute proxy materials, as applicable, to tender its shares if it wishes to seek to exercise its redemption rights.  

 

Release of funds  Except with respect to interest earned on the funds held in the trust account that may be released to us to pay our franchise and income tax obligations, the proceeds from this offering and the sale of the private placement warrantsheld in the trust account will not be released from the trust account until 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 astockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 15 monthsfrom the closing of this offering (or up to 21 months from the closing of this offering if we extend the period of time to consummate a business combination by up to three months on up to two occasions as described in this prospectus), or(B) with respect to any other provision relating to stockholders’ rights or pre-business combination activity and (iii) the redemption of 100% of our public shares if we are unable to completean initial business combination within the required time frame (subject to the requirements of applicable law). On the completion of our initial business combination, all amounts held in the trust account will be released to us, less amounts  The proceeds held in the escrow account are not released until the earlier of the completion of a business combination or the failure to effect a business combination within the allottedtime.

 

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TERMS OF OUR OFFERING

  

TERMS UNDER A RULE 419 OFFERING

 

  released to a separate account controlled by the trustee for disbursal to redeeming stockholders. We will use these funds to pay amounts due to any public stockholders who exercise their redemption rights as described above under“Redemption rights for public stockholders upon completion of our initial business combination,” to pay the underwriters their deferred underwriting commissions, to pay all or a portion of the consideration payable to the target or ownersof the target of our initial business combination and to pay other expenses associated with our initial business combination.  

 

Competition

Inidentifying, evaluating and selecting a target business for our initial business combination, we may encounter intense competition from other entities having a business objective similar to ours, including other blank check companies, private equitygroups 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 throughaffiliates. 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 inherentlimitation gives others an advantage in pursuing the initial business combination of a target business. Furthermore, our obligation to pay cash in connection with our public stockholders who exercise their redemption rights may reduce the resourcesavailable to us for our initial business combination and our outstanding rights, warrants and unit purchase option, and the future dilution they potentially represent, may not be viewed favorably by certain target businesses. Either of these factorsmay place us at a competitive disadvantage in successfully negotiating an initial business combination.

Facilities

Our executive offices are located at United Center, 500 Virginia Street East, 10th floor, Charleston, West Virginia 25301. Our executive offices are providedto us by an affiliate of our sponsor.

Human Capital

We currently have one officer. This individual is not obligated to devote any specific number of hours to our matters, but he intends to devote as much of histime as he deems necessary to our affairs until we have completed our initial business combination. The amount of time he will devote in any time period will vary based on whether a target business has been selected for our initial businesscombination 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.

 

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Periodic Reporting and Financial Information

We will register our units, Class A common stock and warrants under the Exchange Act and have reporting obligations, including the requirement that wefile annual, quarterly and current reports with the SEC. In accordance with the requirements of the Exchange Act, our annual reports will contain financial statements audited and reported on by our independent registered public accountants.

We will provide stockholders with audited financial statements of the prospective target business as part of the tender offer materials or proxy solicitationmaterials sent to stockholders to assist them in assessing the target business. In all likelihood, these financial statements will need to be prepared in accordance with, or reconciled to, GAAP, or IFRS, depending on the circumstances, and thehistorical financial statements may be required to be audited in accordance with the standards of the PCAOB. These financial statement requirements may limit the pool of potential targets we may conduct an initial business combination with becausesome targets may be unable to provide such statements in time for us to disclose such statements in accordance with federal proxy rules and complete our initial business combination within the prescribed time frame. We cannot assure you that anyparticular target business identified by us as a potential business combination candidate will have financial statements prepared in accordance with GAAP or that the potential target business will be able to prepare its financial statements inaccordance with the requirements outlined above. To the extent that these requirements cannot be met, we may not be able to acquire the proposed target business. While this may limit the pool of potential business combination candidates, we do notbelieve that this limitation will be material.

We will be required to evaluate our internal control procedures for the fiscal year endingDecember 31, 2023 as required by the Sarbanes-Oxley Act. Only in the event we are deemed to be a large accelerated filer or an accelerated filer, and no longer qualify as an emerging growth company, will we be required to have our internalcontrol procedures audited. A target company may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of their internal controls. The development of the internal controls of any such entity to achieve compliance withthe Sarbanes-Oxley Act may increase the time and costs necessary to complete any such business combination. Prior to the date of this prospectus, we will file a Registration Statement on Form 8-A with theSEC to voluntarily register our securities under Section 12 of the Exchange Act. As a result, we will be subject to the rules and regulations promulgated under the Exchange Act. We have no current intention of filing a Form 15 to suspendour reporting or other obligations under the Exchange Act prior or subsequent to the consummation of our initial business combination.

We will remain anemerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.07 billion,or (c) in which we are deemed to be a large accelerated filer, which means the market value of our shares of Class A common stock that are held by non-affiliates exceeds $700 million as of theprior June 30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.

Legal Proceedings

There is no material litigation,arbitration or governmental proceeding currently pending against us or any members of our management team in their capacity as such.

 

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MANAGEMENT

Officers, Directors and Director Nominees

Our officers,directors and director nominees are as follows:

 

NAME

  AGE   

POSITION

Ryan E. M. Cunningham

   45   Chief Executive Officer and Chairman

Morgan (Mo) Fahimi

   46   Chief Financial Officer and Director Nominee

Abdiel A. Santiago

   41   Director Nominee

Tyler Hardt

   41   Director Nominee

Gerald M. Titus III

   44   Director Nominee

Ryan E.M. Cunningham Ryan Cunningham is our Chairman and Chief Executive Officer. He is thePresident and Operational Partner of Cunningham Energy, LLC, an independent producer of oil and gas which he founded in 2008. He currently directs operations for Cunningham Energy, Marzcorp Oil & Gas Inc., Viper Capital Partners LLC andRaven Ridge Energy LLC. Mr. Cunningham served as operating partner of Black Crow Oil LLC from 2008 to 2010. From 1999 to 2001, Mr. Cunningham was a sales trader with Oppenheimer & Co. (formerly CIBC World Markets),initially with the private client division and then in its institutional trading group with middle markets and institutional sales trading teams before becoming head sales trader in 2001. Mr. Cunningham has been a Board member of the WestVirginia Oil & gas Association since 2013. Mr. Cunningham received a Bachelor of Arts degree on Environmental Policy from Rollins College. Mr. Cunningham is qualified to serve on our Board of Directors because of his experience inthe oil and gas industry.

Morgan (Mo) Fahimi. Mo Fahimi is our Chief Financial Officer and a director nominee. Since March 2021Mr. Fahimi has led the sales efforts of Acuris, a media company specializing in high-value content for financial professionals and dealogic platforms, which is owned Acuris by ION Investment Group, a financial software and data business. Acurisprovides all-encompassing data and intelligence sets for the equity and fixed income institutional community as well the private equity markets, and is known for its products fixed income research providerDebtwire and Mergermarket, a specialist in M&A intelligence. Mr. Fahimi joined Mergermarket in 2005 as head of sales, where he led the sales effort of the Debtwire division, a worldwide leading fixed income data and intelligenceplatform. From 2007 to 2020, Mr. Fahimi was Managing Director Head of Sales for the Dealreporter business within Mergermarket, a worldwide leading Risk Arbitrage Data and Intelligence platform, where he was responsible for initiating allcommercial relationships and distribution of global Dealreporter., From 2002 to 2004, Mr. Fahimi was an account executive with CIBC World Markets in institutional Middle Market Sales and Trading. Mr. Fahimi is a director of SignalResearch, a US and UK based Quantitative, Macro and Technical Analysis Research firm catering to the Institutional investment community. He received a BA in Economics from Kingston University, London, England.

Abdiel A. Santiago. Abdiel Santiago will become a director of our company immediately prior to the effective date of the registration statement ofwhich this prospectus is a part. He has been the Secretariat (CEO/CIO) of the Fondo de Ahorro de Panamá (Panama’s Sovereign Wealth Fund) since 2013. From 2012 to 2013, he was a senior adviser atG-2 Capital focusing on financial restructuring opportunities. From 2005 to 2011, he was an equity investment research executive at Morgan Stanley in New York covering the energy and industrial sectors. From1998 to 2002, Mr. Santiago served as a financial analyst/examiner at the US Securities and Exchange Commission overseeing financial/regulatory matters at broker-dealers and asset managers. Mr. Santiago received an MBA from the KelloggSchool of Management at Northwestern University and a Bachelor’s degree from the University of Denver. Mr. Santiago is qualified to serve on our Board of Directors because of his experience in the energy industry and his financialexperience.

Tyler Hardt. Tyler Hardt will become a director of our company immediately prior to the effective date of the registrationstatement of which this prospectus is a part. He is the Chief Investment Officer of Pelican Bay

 

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Capital Bay Management, LLC, which he founded in July 2018. From June 2009 to June 2018, Mr. Hardt was as an equity analyst on the Domestic Value Team at Artisan Partners AssetManagement. From 2004 to 2005, he was a corporate development analyst on the Corporate Mergers & Acquisitions and Corporate Strategy group at AT&T and from 2005 to 2007 he was strategic planning analyst on the CorporateMergers & Acquisitions and Corporate Strategy group at American Tire Distributors. Mr. Hardt received an MBA with Honors from the Wharton School at the University of Pennsylvania, and a Bachelor of Science in Finance from theUniversity of Maryland, where he graduated cum laude. Mr Hardt is qualified to serve on our Board of Directors because of his mergers and acquisitions experience.

Gerald M. Titus III. Gerald M.Titus III will become a director of our company immediately prior to the effective date of the registration statement ofwhich this prospectus is a part. He has been a member of Spilman Thomas & Battle, PLLC, a regional law firm based in Charleston, West Virginia since 2008. He represents clients in the oil and gas industry. Prior to joining SpilmanThomas & Battle, PLLC, Mr. Titus was an Assistant United States Attorney for the United States Department of Justice. He received JD and Bachelor degrees from Washington and Lee University. Mr. Titus is qualified to serve on ourBoard of Directors because of his legal and business experience, which includes his representation of clients in the oil and gas industry.

Number andTerms of Office of Officers and Directors

We will have five directors upon the commencement of this offering. Our board of directors will be dividedinto two classes with only one class of directors being elected in each year and each class (except for those directors appointed prior to our first annual meeting of stockholders) serving a two-year term. Inaccordance with Nasdaq corporate governance requirements, we are not required to hold an annual meeting until one year after our first fiscal year end following our listing on Nasdaq. The term of office of the first class of directors, consisting ofMessrs. Hardt and Fahimi will expire at our first annual meeting of stockholders. The term of office of the second class of directors, consisting of Messrs. Cunningham, Santiago and Titus, will expire at the second annual meeting of stockholders.

Our officers are appointed by the board of directors and serve at the discretion of the board of directors, rather than for specific terms of office. Ourboard of directors is authorized to appoint persons to the offices set forth in our bylaws as it deems appropriate. Our bylaws provide that our officers may consist of a Chairman of the Board, Chief Executive Officer, Chief Financial Officer,President, Vice Presidents, Secretary, Treasurer, Assistant Secretaries and such other offices as may be determined by the board of directors.

Nasdaqlisting standards require that a majority of our board of directors be independent. An “independent director” is defined generally as a person other than an officer or employee of the company or its subsidiaries or any other individualhaving a relationship which in the opinion of the company’s board of directors, would interfere with the director’s exercise of independent judgment in carrying out the responsibilities of a director. Our board of directors has determinedthat Messrs. Santiago, Hardt and Titus are “independent directors” as defined in the Nasdaq listing standards and applicable SEC rules. Our independent directors will have regularly scheduled meetings at which only independent directorsare present.

Officer and Director Compensation

Except for the $10,000 monthly fee payable to Mo Fahimi for serving as our Chief Financial Officer commencing on the date of this prospectus, none of ourofficers will receive any cash compensation for services rendered to us. Upon completion of our initial business combination or our liquidation, we will cease paying these monthly fees. No compensation of any kind, including any finder’s fee,reimbursement, consulting fee or monies in respect of any payment of a loan, will be paid by us to our sponsor, officers and directors, or any affiliate of our sponsor or officers, prior to, or in connection with any services rendered in order toeffectuate, the consummation of our initial business combination (regardless of the type of transaction that it is).

 

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However, these individuals will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Our audit committeewill review on a quarterly basis all payments that were made to our sponsor, officers or directors, or our or their affiliates. Any such payments prior to an initial business combination will be made using funds held outside the trust account. Otherthan quarterly audit committee review of such payments, we do not expect to have any additional controls in place governing our reimbursement payments to our directors and executive officers for their out-of-pocket expenses incurred in connection with identifying and consummating an initial business combination.

After the completion of our initial business combination, directors or members of our management team who remain with us may be paid consulting or managementfees from the combined company. All of these fees will be fully disclosed to stockholders, to the extent then known, in the tender offer materials or proxy solicitation materials furnished to our stockholders in connection with a proposed initialbusiness combination. We have not established any limit on the amount of such fees that may be paid by the combined company to our directors or members of management. It is unlikely the amount of such compensation will be known at the time of theproposed initial business combination, because the directors of the post-combination business will be responsible for determining officer and director compensation. Any compensation to be paid to our officers will be determined, or recommended tothe board of directors for determination, either by a compensation committee constituted solely by independent directors or by a majority of the independent directors on our board of directors.

We do not intend to take any action to ensure that members of our management team maintain their positions with us after the consummation of our initialbusiness combination, although it is possible that some or all of our officers and directors may negotiate employment or consulting arrangements to remain with us after our initial business combination. The existence or terms of any such employmentor consulting arrangements to retain their positions with us may influence our management’s motivation in identifying or selecting a target business but we do not believe that the ability of our management to remain with us after theconsummation of our initial business combination will be a determining factor in our decision to proceed with any potential business combination. We are not party to any agreements with our officers and directors that provide for benefits upontermination of employment.

Committees of the Board of Directors

Our board of directors will have two standing committees: an audit committee and a compensation committee. Subject tophase-in rules and a limited exception, Nasdaq rules and Rule 10A-3 of the Exchange Act require that the audit committee of a listed company be comprised solely ofindependent directors, and Nasdaq rules require that the compensation committee of a listed company be comprised solely of independent directors.

Audit Committee

Prior to the commencement of thisoffering, we will establish an audit committee of the board of directors. Messrs. Hardt, Santiago and Titus will serve as members of our audit committee, and Mr. Hardt will chair the audit committee. Under the Nasdaq listing standards andapplicable SEC rules, we are required to have at least three members of the audit committee, all of whom must be independent. Each of Messrs. Hardt, Santiago and Titus meet the independent director standard under Nasdaq listing standards and under Rule 10-A-3(b)(1) of the Exchange Act.

Each member of the audit committeeis financially literate and our board of directors has determined that Mr. Hardt qualifies as an “audit committee financial expert” as defined in applicable SEC rules.

 

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We will adopt an audit committee charter, which will detail the principal functions of the audit committee,including:

 

  

the appointment, compensation, retention, replacement, and oversight of the work of the independent registeredpublic accounting firm engaged by us;

 

  

pre-approving all audit and permittednon-audit services to be provided by the independent registered public accounting firm engaged by us, and establishing pre-approval policies and procedures;

 

  

setting clear hiring policies for employees or former employees of the independent registered public accountingfirm, including but not limited to, as required by applicable laws and regulations;

 

  

setting clear policies for audit partner rotation in compliance with applicable laws and regulations;

 

  

obtaining and reviewing a report, at least annually, from the independent registered public accounting firmdescribing (i) the independent registered public accounting firm’s internal quality-control procedures, (ii) any material issues raised by the most recent internal quality-control review, or peer review, of the audit firm, or by anyinquiry or investigation by governmental or professional authorities within the preceding five years respecting one or more independent audits carried out by the firm and any steps taken to deal with such issues and (iii) all relationshipsbetween the independent registered public accounting firm and us to assess the independent registered public accounting firm’s independence;

 

  

reviewing and approving any related party transaction required to be disclosed pursuant to Item 404 ofRegulation S-K promulgated by the SEC prior to us entering into such transaction; and

 

  

reviewing with management, the independent registered public accounting firm, and our legal advisors, asappropriate, any legal, regulatory or compliance matters, including any correspondence with regulators or government agencies and any employee complaints or published reports that raise material issues regarding our financial statements oraccounting policies and any significant changes in accounting standards or rules promulgated by the Financial Accounting Standards Board, the SEC or other regulatory authorities.

Compensation Committee

Prior to the commencement of thisoffering, we will establish a compensation committee of the board of directors. Messrs. Hardt and Titus will serve as members of our compensation committee. Under the Nasdaq listing standards and applicable SEC rules, we are required to have atleast two members of the compensation committee, all of whom must be independent Messrs. Hardt and Titus are independent, and Mr. Titus will chair the compensation committee.

We will adopt a compensation committee charter, which will detail the principal functions of the compensation committee, including:

 

  

reviewing and approving on an annual basis the corporate goals and objectives relevant to our Chief ExecutiveOfficers’ compensation, if any is paid by us, evaluating our Chief Executive Officer’s performance in light of such goals and objectives and determining and approving the remuneration (if any) of our Chief Executive Officer based on suchevaluation;

 

  

reviewing and approving on an annual basis the compensation, if any is paid by us, of all of our other officers;

 

  

reviewing on an annual basis our executive compensation policies and plans;

 

  

implementing and administering our incentive compensation equity-based remuneration plans;

 

  

assisting management in complying with our proxy statement and annual report disclosure requirements;

 

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approving all special perquisites, special cash payments and other special compensation and benefit arrangementsfor our officers and employees;

 

  

if required, producing a report on executive compensation to be included in our annual proxy statement; and

 

  

reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors.

Notwithstanding the foregoing, as indicated above, other than the payment to our Chief Financial Officer of $10,000 per month, for upto 15 months (or up to 21 months from the closing of this offering if we extend the period of time to consummate a business combination by up to three months on up to two occasions as described in more detail in this prospectus), for his andreimbursement of expenses, no compensation of any kind, including finders, consulting or other similar fees, will be paid to any of our existing stockholders, officers, directors or any of their respective affiliates, prior to, or for any servicesthey render in order to effectuate the consummation of an initial business combination. Accordingly, it is likely that prior to the consummation of an initial business combination, the compensation committee will only be responsible for the reviewand recommendation of any compensation arrangements to be entered into in connection with such initial business combination.

The charter will alsoprovide that the compensation committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, legal counsel or other adviser and will be directly responsible for the appointment, compensation and oversight of thework of any such adviser. However, before engaging or receiving advice from a compensation consultant, external legal counsel or any other adviser, the compensation committee will consider the independence of each such adviser, including the factorsrequired by Nasdaq and the SEC.

Director Nominations

We do not have a standing nominating committee though we intend to form a corporate governance and nominating committee as and when required to do so by law orNasdaq rules. In accordance with Rule 5605 of the Nasdaq rules, a majority of the independent directors may recommend a director nominee for selection by the board of directors. The board of directors believes that the independent directors cansatisfactorily carry out the responsibility of properly selecting or approving director nominees without the formation of a standing nominating committee. The directors who will participate in the consideration and recommendation of directornominees are Messrs. Hardt, Santiago and Titus. In accordance with Rule 5605 of the Nasdaq rules, all such directors are independent. As there is no standing nominating committee, we do not have a nominating committee charter in place.

The board of directors will also consider director candidates recommended for nomination by our stockholders during such times as they are seeking proposednominees to stand for election at the next annual meeting of stockholders (or, if applicable, a special meeting of stockholders). Our stockholders that wish to nominate a director for election to our board of directors should follow the proceduresset forth in our bylaws.

We have not formally established any specific, minimum qualifications that must be met or skills that are necessary fordirectors to possess. In general, in identifying and evaluating nominees for director, the board of directors considers educational background, diversity of professional experience, knowledge of our business, integrity, professional reputation,independence, wisdom, and the ability to represent the best interests of our stockholders.

Compensation Committee Interlocks and Insider Participation

None of our officers currently serves, or in the past year has served, as a member of the compensation committee of any entity that has one or moreofficers serving on our board of directors.

 

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Code of Ethics

Prior to the commencement of this offering, we will have adopted a Code of Ethics applicable to our directors, officers and employees. We will file a copy ofour Code of Ethics and our audit and compensation committee charters as exhibits to the registration statement of which this prospectus is a part. You will be able to review these documents by accessing our public filings at the SEC’s web siteat www.sec.gov. In addition, a copy of the Code of Ethics will be provided without charge upon request from us. We intend to disclose any amendments to or waivers of certain provisions of our Code of Ethics in a Current Report on Form 8-K. See the section of this prospectus entitled “Where You Can Find Additional Information.”

Conflicts of Interest

Members of our management team donot have any obligation to present us with any opportunity for a potential business combination of which they become aware, unless presented to such member solely in his or her capacity as a director or officer of the company. Our amended andrestated certificate of incorporation will provide 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 capacity as a director orofficer 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 uswithout violating another legal obligation.

Our officers and directors may become officers or directors of any other blank check company prior tocompletion of our initial business combination. Potential investors should also be aware of the following other potential conflicts of interest:

 

  

None of our officers or directors is required to commit his or her full-time to our affairs and, accordingly, mayhave conflicts of interest in allocating his or her time among various business activities.

 

  

In the course of their other business activities, our officers and directors may become aware of investment andbusiness opportunities which may be appropriate for presentation to us as well as the other entities with which they are affiliated. Our management may have conflicts of interest in determining to which entity a particular business opportunityshould be presented.

 

  

Our initial stockholders have agreed to waive their redemption rights with respect to any founder shares and anypublic shares held by them in connection with the consummation of our initial business combination. Additionally, our initial stockholders have agreed to waive their redemption rights with respect to any founder shares held by them if we fail toconsummate our initial business combination within 15 months after the closing of this offering (or up to 21 months from the closing of this offering if we extend the period of time to consummate a business combination by up to three months on up totwo occasions as described in more detail in this prospectus). If we do not complete our initial business combination within such applicable time period, the proceeds of the sale of the private placement warrants held in the trust account will beused to fund the redemption of our public shares, and the private placement warrants (and the underlying securities) will expire worthless. Our initial stockholders have agreed not to transfer, assign or sell any of their founder shares until theearlier to occur of (i) one year after the date of the consummation of our initial business combination or (ii) the date on which we consummate a liquidation, merger, stock exchange or other similar transaction which results in all of ourstockholders having the right to exchange their shares of Class A common stock for cash, securities or other property (except as described herein under the section of this prospectus entitled “Principal Stockholders — Restrictions onTransfers of Founder Shares and Private Placement Warrants”). Any permitted transferees will be subject to the same restrictions and other agreements of our initial stockholders with respect to any founder shares. Notwithstanding the foregoing,if the closing price of our shares of Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days

 

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within any 30-trading day period commencing 150 days after our initial business combination, the founder shares will no longer be subject to suchtransfer restrictions. With certain limited exceptions, the private placement warrants and the Class A common stock underlying such warrants, will not be transferable, assignable or saleable by our sponsor or its permitted transferees until30 days after the completion of our initial business combination. Since our sponsor and officers and directors may directly or indirectly own common stock and warrants following this offering, our officers and directors may have a conflict ofinterest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination.

 

  

Our officers and directors may have a conflict of interest with respect to evaluating a particular businesscombination if the retention or resignation of any such officers and directors was included by a target business as a condition to any agreement with respect to our initial business combination.

 

  

Our sponsor, officers or directors may have a conflict of interest with respect to evaluating a businesscombination and financing arrangements as we may obtain loans from our sponsor or an affiliate of our sponsor or any of our officers or directors to finance transaction costs in connection with an intended initial business combination. Up to$1,500,000 of such working capital loans may be convertible into private placement-equivalent warrants at a price of $1.00 per warrant (which, for example, would result in the holders being issued 1,500,000 warrants if $1,500,000 of notes were soconverted), 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.

The conflicts described above may not be resolved in our favor.

In general, officers and directors of a corporation incorporated under the laws of the State of Delaware are required to present business opportunities to acorporation if:

 

  

the corporation could financially undertake the opportunity;

 

  

the opportunity is within the corporation’s line of business; and

 

  

it would not be fair to our company and its stockholders for the opportunity not to be brought to the attentionof the corporation.

Accordingly, as a result of multiple business affiliations, our officers and directors may have similar legalobligations relating to presenting business opportunities meeting the above-listed criteria to multiple entities. Furthermore, our amended and restated certificate of incorporation will provide that we renounce our interest in any corporateopportunity 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 permittedto 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.

Below is a table summarizing the entities to which our executive officers, directors and director nominees currently have fiduciary duties or contractualobligations:

 

NAME OF INDIVIDUAL

  

NAME OF AFFILIATED COMPANY

  

AFFILIATION

Ryan E.M. Cunningham

  Cunningham Energy, LLC  Principal and Operational Partner

Morgan (Mo) Fahimi

    

Abdiel A. Santiago

    

Tyler Hardt

  Pelican Bay Capital Management, LLC  Investment Officer

Gerald M. Titus III

    

Accordingly, if any of the above executive officers, directors or director nominees becomes aware of a business combinationopportunity which is suitable for any of the above entities to which he or she has current fiduciary

 

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or contractual obligations, he will honor his fiduciary or contractual obligations to present such business combination opportunity to such entity, and only present it to us if such entityrejects the opportunity.

We are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor, officersor directors. In the event we seek to complete our initial business combination with such a company, we, or a committee of independent directors, would obtain an opinion from an independent investment banking firm which is a member of FINRA, or froman independent accounting firm, that such an initial business combination is fair to our company from a financial point of view.

In the event that wesubmit our initial business combination to our public stockholders for a vote, pursuant to the letter agreement, our sponsor, officers and directors have agreed to vote any founder shares held by them and any public shares purchased during or afterthe offering (including in open market and privately negotiated transactions) in favor of our initial business combination.

Limitation on Liabilityand Indemnification of Officers and Directors

Our second amended and restated certificate of incorporation will provide that our officers anddirectors will be indemnified by us to the fullest extent authorized by Delaware law, as it now exists or may in the future be amended. In addition, our second amended and restated certificate of incorporation will provide that our directors willnot be personally liable for monetary damages to us or our stockholders for breaches of their fiduciary duty as directors, unless they violated their duty of loyalty to us or our stockholders, acted in bad faith, knowingly or intentionally violatedthe law, authorized unlawful payments of dividends, unlawful stock purchases or unlawful redemptions, or derived an improper personal benefit from their actions as directors.

We will enter into agreements with our officers and directors to provide contractual indemnification in addition to the indemnification provided for in oursecond amended and restated certificate of incorporation. Our bylaws also will permit us to secure insurance on behalf of any officer, director or employee for any liability arising out of his actions, regardless of whether Delaware law would permitsuch indemnification. We will purchase a policy of directors’ and officers’ liability insurance that insures our officers and directors against the cost of defense, settlement or payment of a judgment in some circumstances and insures usagainst our obligations to indemnify our officers and directors.

These provisions may discourage stockholders from bringing a lawsuit against ourdirectors for breach of their fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative litigation against officers and directors, even though such an action, if successful, might otherwise benefit us and ourstockholders. Furthermore, a stockholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage awards against officers and directors pursuant to these indemnification provisions.

We believe that these provisions, the directors’ and officers’ liability insurance and the indemnity agreements are necessary to attract and retaintalented and experienced officers and directors.

 

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PRINCIPAL STOCKHOLDERS

The following table sets forth information regarding the beneficial ownership of our common stock as of the date of this prospectus, and as adjusted toreflect the sale of our common stock included in the units offered by this prospectus, and assuming no purchase of units in this offering, by:

 

  

each person known by us to be the beneficial owner of more than 5% of our outstanding shares of common stock;

 

  

each of our executive officers, directors and director nominees that beneficially owns shares of our commonstock; and

 

  

all our executive officers, directors and director nominees as a group.

Unless otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all shares of common stockbeneficially owned by them. The following table does not reflect record or beneficial ownership of the private placement rights or private placement warrants as these warrants are not exercisable within 60 days of the date of this prospectus.

On December 28, 2021, our sponsor purchased 2,875,000 founder shares for an aggregate purchase price of $25,000, or approximately $0.009 per share.In addition, our sponsor has committed, pursuant to a written agreement, to purchase an aggregate of 5,500,000 private placement warrants (or up to 6,025,000 warrants if the over-allotment option is exercised in full) for a purchase price of $1.00per warrant in a private placement that will occur simultaneously with the closing of this offering (assuming the underwriters do not exercise their over-allotment option). The following table presents the number of shares and percentage of ourcommon stock owned by our initial stockholders before and after this offering. The post-offering numbers and percentages presented assume that the underwriters do not exercise their over-allotment option, that our initial stockholders forfeit375,000 founder shares on a pro rata basis, and that there are 12,600,000 shares of our common stock, consisting of (i) 10,100,000 shares of our Class A common stock and (ii) 2,500,000 shares of our Class B common stock, issued andoutstanding after this offering.

 

   BEFORE OFFERING  AFTER OFFERING 

NAME AND ADDRESS OF
BENEFICIAL OWNER(1)

  NUMBER OF
SHARES
BENEFICIALLY
OWNED(2)
  APPROXIMATE
PERCENTAGE OF
OUTSTANDING
COMMON STOCK
  NUMBER OF
SHARES
BENEFICIALLY
OWNED(2)
  APPROXIMATE
PERCENTAGE OF
OUTSTANDING
COMMON STOCK
 

CE Energy Sponsors LLC(3)

   2,875,000   100.0  2,500,000   19.8

Ryan Cunningham(3)

   2,875,000   100.0  2,500,000   19.8

Morgan (Mo) Fahimi(4)

   —        —      

Abdiel A. Santiago(4)

   —        —      

Tyler Hardt(4)

   —        —      

Gerald M. Titus III(4)

   —        —      

All executive officers, directors and director nominees as a group (5 individuals)

   2,875,000   100.0  2,500,000   19.8

 

*

Less than 1%

(1)

Unless otherwise noted, the business address of each of the following entities or individuals is c/o CE EnergyAcquisition Corp., United Center, 500 Virginia Street East, 10th floor, Charleston, West Virginia 25301.

(2)

Interests shown consist solely of founder shares, classified as shares of Class B common stock before theoffering, and founder shares after the offering. Such shares are convertible into shares of Class A common stock on a one-for-one basis, subject to adjustment, asdescribed in the section of this prospectus entitled “Description of Securities”.

 

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(3)

Represents shares held by CE Energy Sponsors, LLC, our sponsor. Ryan Cunningham is the managing member ofAnchor Oil Consulting LLC, managing member of our sponsor and may be deemed to have beneficial ownership of the common stock held directly by our sponsor. Each such person disclaims any beneficial ownership of the reported shares other than to theextent of any pecuniary interest they may have therein, directly or indirectly.

(4)

Does not include any shares held by our sponsor. This individual is a member of our sponsor, as described infootnote 3, but does not have voting or dispositive control over the shares held by our sponsor.

Immediately after this offering,our initial stockholders will beneficially own 19.8% of the then-issued and outstanding shares of our common stock (assuming they do not purchase any units in this offering and excluding the representative shares). Neither our sponsor nor any of ourofficers or directors have expressed an intention to purchase any units in this offering. If we increase or decrease the size of the offering, we will effect a stock dividend or a share contribution back to capital, or other appropriate mechanism,as applicable, with respect to our Class B common stock immediately prior to the consummation of the offering in such amount as to maintain the ownership of our initial stockholders at 20.0% of the issued and outstanding shares of our commonstock upon the consummation of this offering. Because of this ownership block, our initial stockholders may be able to effectively influence the outcome of all matters requiring approval by our stockholders, including the election of directors,amendments to our amended and restated certificate of incorporation and approval of significant corporate transactions, including approval of our initial business combination.

The holders of the founder shares have agreed (A) to vote any shares owned by them in favor of any proposed initial business combination and (B) notto redeem any shares in connection with a stockholder vote to approve a proposed initial business combination or in connection with a tender offer.

Oursponsor and our executive officers and directors are deemed to be our “promoters” as such term is defined under the federal securities laws.

Restrictions on Transfers of Founder Shares and Private Placement Warrants

The founder shares, private placement warrants, and any shares of Class A common stock issued upon conversion or exercise thereof are each subject totransfer restrictions pursuant to lock-up provisions in a letter agreement with us to be entered into by our sponsor, officers and directors. Our initial stockholders have agreed not to transfer, assign orsell any of their founder shares until the earlier to occur of (i) one year after the date of the consummation of our initial business combination or (ii) the date on which we consummate a liquidation, merger, stock exchange or othersimilar transaction which results in all of our stockholders having the right to exchange their shares of Class A common stock for cash, securities or other property (except as described below). Any permitted transferees will be subject to thesame restrictions and other agreements of our initial stockholders with respect to any founder shares. Notwithstanding the foregoing, if the closing price of our shares of Class A common stock equals or exceeds $12.00 per share (as adjusted forstock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing 150 days after our initial business combination, thefounder shares will no longer be subject to such transfer restrictions. In addition, the lock-up provisions of the insider letter provide that the founder shares and the private placement warrants, and anyshares of Class A common stock issued upon conversion or exercise thereof are not transferable or saleable until 30 days after the completion of our initial business combination. However, any such securities may be transferred or sold(a) to our officers or directors, any affiliates or family members of any of our officers or directors, any members of our sponsor, or any affiliates of our sponsor, (b) in the case of an individual, by gift to a member of one of themembers of the individual’s immediate family or to a trust, the beneficiary of which is a member of one of the individual’s immediate family, an affiliate of such person or to a charitable organization; (c) in the case of anindividual, by virtue of laws of descent and distribution upon death of the individual; (d) in the case of an individual, pursuant to a qualified domestic relations order; (e) by private sales or transfers made in connection with theconsummation of an initial business

 

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combination at prices no greater than the price at which the securities were originally purchased; (f) in the event of our liquidation prior to the completion of our initial businesscombination; (g) by virtue of the laws of Delaware or our sponsor’s limited liability company agreement upon dissolution of our sponsor; or (h) in the event of our liquidation, merger, capital stock exchange, reorganization, or othersimilar transaction which results in all of our stockholders having the right to exchange their shares of common stock for cash, securities or other property subsequent to our completion of our initial business combination; provided, however, thatin the case of clauses (a) through (e) or (g) these permitted transferees must enter into a written agreement agreeing to be bound by these transfer restrictions and the other restrictions contained in the letter agreements, and bythe same agreements entered into by our sponsor with respect to such securities (including provisions relating to voting, the trust account and liquidation distributions described elsewhere in this prospectus).

Registration Rights

The holders of the founder shares,private placement warrants, shares of Class A common stock underlying the private placement warrants, the representative shares, and securities that may be issued upon conversion of working capital loans will have registration rights to requireus to register a sale of any of our securities held by them pursuant to a registration rights agreement to be signed prior to or on the effective date of this offering. These holders will be entitled to make up to three demands, excluding short formregistration demands, that we register such securities for sale under the Securities Act. In addition, these holders will have “piggy-back” registration rights to include their securities in other registration statements filed by us.Notwithstanding the foregoing, the underwriters may not exercise their demand and “piggyback” registration rights after five and seven years, respectively, after the effective date of the registration statement of which this prospectusforms a part and may not exercise their demand rights on more than one occasion.

 

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

On December 28, 2021, we issued an aggregate of 2,875,000 founder shares to our sponsor for an aggregate purchase price of $25,000 in cash, orapproximately $0.009 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 upon completion of this offering (excluding the representativeshares). If we increase or decrease the size of the offering we will effect a stock dividend or a share contribution back to capital or other appropriate mechanism, as applicable, with respect to our Class B common stock immediately prior tothe consummation of the offering in such amount as to maintain the ownership of our initial stockholders at 20.0% of the issued and outstanding shares of our common stock upon the consummation of this offering (assuming our sponsor and our directorsand officers do not purchase units in this offering and excluding the representative shares). Up to 375,000 founder shares are subject to forfeiture by our sponsor depending on the extent to which the underwriters’ over-allotment option isexercised. The founder shares (including the Class A common stock issuable upon exercise thereof) may not, subject to certain limited exceptions, be transferred, assigned or sold by the holder.

Our sponsor has agreed to purchase an aggregate of 5,500,000 warrants (or 6,025,000 warrants if the over-allotment option is exercised in full) at a price of$1.00 per warrant, for an aggregate purchase price of $5,500,000, or $6,025,000 if the over-allotment option is exercised in full. The private placement warrants will be identical to the units sold in this offering except that the private placementwarrants, so long as they are held by our sponsor, the underwriters or their permitted transferees, (i) will not be redeemable by us, (ii) may not (including the Class A common stock issuable upon exercise of these warrants), subjectto certain limited exceptions, be transferred, assigned or sold by the holders until 30 days after the completion of our initial business combination, (iii) may be exercised by the holders on a cashless basis and (iv) will be entitledto registration rights. The private placement warrants (including the shares of Class A common stock issuable upon exercise thereof) may not, subject to certain limited exceptions, be transferred, assigned or sold by the holder.

As more fully discussed in the section of this prospectus entitled “Management — Conflicts of Interest,” if any of our officers ordirectors becomes aware of an initial business combination opportunity that falls within the line of business of any entity to which he has then-current fiduciary or contractual obligations, he will honor his fiduciary or contractual obligations topresent such business combination opportunity to such other entity. Our officers and directors currently have certain relevant fiduciary duties or contractual obligations that may take priority over their duties to us.

Commencing on the date of this prospectus, we have agreed to pay Mo Fahimi $10,000 per month for his services as Chief Financial Officer. Upon completion ofour initial business combination or our liquidation, we will cease paying these monthly fees.

Other than the foregoing, no compensation of any kind,including any finder’s fee, reimbursement, consulting fee or monies in respect of any payment of a loan, will be paid by us to our sponsor, officers and directors, or any affiliate of our sponsor or officers, prior to, or in connection with anyservices rendered in order to effectuate, the consummation of an initial business combination (regardless of the type of transaction that it is). However, these individuals will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Our audit committeewill review on a quarterly basis all payments that were made to our sponsor, officers, directors or our or their affiliates and will determine which expenses and the amount of expenses that will be reimbursed. There is no cap or ceiling on thereimbursement of out-of-pocket expenses incurred by such persons in connection with activities on our behalf.

Our sponsor has agreed to loan us up to $300,000 to be used for a portion of the expenses of this offering, all $300,000 of which had been drawn down as ofFebruary 28, 2022. These loans are non-interest bearing, unsecured and are due at the earlier of January 31, 2023 or the closing of this offering. The loan will be repaid upon the closing of thisoffering out of the estimated $650,000 of offering proceeds that has been allocated to the

 

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payment of offering expenses (other than underwriting commissions). The value of our sponsor’s interest in this transaction corresponds to the principal amount outstanding under any suchloan.

In addition, in order to finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate of oursponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete an initial business combination, we would repay such loaned amounts. In the event that the initial business combinationdoes not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used for such repayment. Up to $1,500,000 of such working capital loans may beconvertible into private placement- equivalent warrants at a price of $1.00 per warrant (which, for example, would result in the holders being issued warrants to purchase 1,500,000 shares if $1,500,000 of notes were so converted), at the option ofthe lender. Such warrants would be identical to the private placement warrants, including as to exercise price, exercisability and exercise period. The terms of such working capital loans by our sponsor or its affiliates, or our officers anddirectors, if any, have not been determined and no written agreements exist with respect to such loans. We do not expect to seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties will bewilling to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.

After our initial businesscombination, members of our management team who remain with us may be paid consulting, management or other fees from the combined company with any and all amounts being fully disclosed to our stockholders, to the extent then known, in the tenderoffer or proxy solicitation materials, as applicable, furnished to our stockholders. It is unlikely the amount of such compensation will be known at the time of distribution of such tender offer materials or at the time of a stockholder meeting heldto consider our initial business combination, as applicable, as it will be up to the directors of the post-combination business to determine executive and director compensation.

We will enter into a registration rights agreement with respect to the private placement warrants, the securities issuable upon conversion of working capitalloans (if any) and the shares of Class A common stock issuable upon exercise or conversion or exercise of the foregoing and upon conversion of the founder shares, and the representative shares which is described under the section of thisprospectus entitled “Description of Securities — Registration Rights.”

Related Party Policy

We have not yet adopted a formal policy for the review, approval or ratification of related party transactions. Accordingly, the transactions discussed abovewere not reviewed, approved or ratified in accordance with any such policy.

Prior to the consummation of this offering, we will adopt a code of ethicsrequiring us to avoid, wherever possible, all conflicts of interests, except under guidelines or resolutions approved by our board of directors (or the appropriate committee of our board) or as disclosed in our public filings with the SEC. Under ourcode of ethics, conflict of interest situations will include any financial transaction, arrangement or relationship (including any indebtedness or guarantee of indebtedness) involving the company. A form of the code of ethics that we plan to adoptprior to the consummation of this offering is filed as an exhibit to the registration statement of which this prospectus is a part.

In addition, ouraudit committee, pursuant to a written charter that we will adopt prior to the consummation of this offering, will be responsible for reviewing and approving related party transactions to the extent that we enter into such transactions. Anaffirmative vote of a majority of the members of the audit committee present at a meeting at which a quorum is present will be required in order to approve a related party transaction. A majority of the members of the entire audit committee willconstitute a quorum. Without a meeting, the unanimous written consent of all of the members of the audit committee will be required to approve a related party transaction. A

 

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form of the audit committee charter that we plan to adopt prior to the consummation of this offering is filed as an exhibit to the registration statement of which this prospectus is a part. Wealso require each of our directors and executive officers to complete a directors’ and officers’ questionnaire that elicits information about related party transactions.

These procedures are intended to determine whether any such related party transaction impairs the independence of a director or presents a conflict ofinterest on the part of a director, employee or officer.

To further minimize conflicts of interest, we have agreed not to consummate an initial businesscombination with an entity that is affiliated with any of our sponsor, officers or directors unless we, or a committee of independent directors, have obtained an opinion from an independent investment banking firm which is a member of FINRA or anindependent accounting firm that our initial business combination is fair to our company from a financial point of view. Furthermore, no finder’s fees, reimbursements, consulting fee, monies in respect of any payment of a loan or othercompensation will be paid by us to our sponsor, officers or directors, or any affiliate of our sponsor or officers, for services rendered to us prior to, or in connection with any services rendered in order to effectuate, the consummation of ourinitial business combination (regardless of the type of transaction that it is). However, the following payments will be made to our sponsor, officers or directors, or our or their affiliates, none of which will be made from the proceeds of thisoffering held in the trust account prior to the completion of our initial business combination:

 

  

Repayment of up to an aggregate of $300,000 in loans made to us by our sponsor to cover offering-related andorganizational expenses;

 

  

Payment to Mo Fahimi, our Chief Financial Officer, of $10,000 per month, for up to 15 months (or up to 21 monthsif the period during which we may complete a business combination is extended as described in more detail in this prospectus), for his services;

 

  

Reimbursement for anyout-of-pocket expenses related to identifying, investigating and completing an initial business combination; and

 

  

Repayment of loans which may be made by our sponsor or an affiliate of our sponsor or certain of our officers anddirectors to finance transaction costs in connection with an intended initial business combination, the terms of which have not been determined nor have any written agreements been executed with respect thereto. Up to $1,500,000 of such workingcapital loans may be convertible into private placement-equivalent warrants at a price of $1.00 per warrant (which, for example, would result in the holders being issued 1,500,000 warrants if $1,500,000 of notes were so converted), at the option ofthe lender.

Our audit committee will review on a quarterly basis all payments that were made to our sponsor, officers or directors, orour or their affiliates.

 

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DESCRIPTION OF SECURITIES

Pursuant to our amended and restated certificate of incorporation, our authorized capital stock consists of 100,000,000 shares of Class A common stock,$0.0001 par value, 10,000,000 shares of Class B common stock, $0.0001 par value, and 1,000,000 shares of undesignated preferred stock, $0.0001 par value. The following description summarizes the material terms of our capital stock. Because itis only a summary, it may not contain all the information that is important to you.

Units

Each unit has an offering price of $10.00 and consists of one share of Class A common stock and three-quarters of one redeemable warrant. Only wholewarrants are exercisable. Each whole warrant entitles the holder to purchase one share of common stock. Pursuant to the warrant agreement, a warrant holder may exercise his, her or its warrants only for a whole number of shares of common stock. Thismeans that only a whole warrant may be exercised at any given time by a warrant holder. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. Accordingly, unless you purchase at least four units, youwill not be able to receive or trade a whole warrant.

We expect the Class A common stock and warrants comprising the units will begin separatetrading on the 52nd day following the closing of this offering unless Maxim Group LLC informs us of its decision to allow earlier separate trading, subject to our having filed the Current Reporton Form 8-K described below and having issued a press release announcing when such separate trading will begin. Once the shares of Class A common stock and warrants commence separate trading, holderswill have the option to continue to hold units or separate their units into the component securities. Holders will need to have their brokers contact our transfer agent in order to separate the units into shares of Class A common stock andwarrants.

In no event will the Class A common stock and warrants be traded separately until we have filed with the SEC a Current Report on Form 8-K which includes an audited balance sheet reflecting our receipt of the gross proceeds at the closing of this offering. We will file a Current Report onForm 8-K which includes this audited balance sheet upon the completion of this offering, which is anticipated to take place three business days after the date of this prospectus. If the underwriters’over-allotment option is exercised following the initial filing of such Current Report on Form 8-K, a second or amended Current Report on Form 8-K will befiled to provide updated financial information to reflect the exercise of the underwriters’ over-allotment option.

Common Stock

Upon the closing of this offering, 12,600,000 shares of our common stock will be outstanding (assuming no exercise of the underwriters’ over-allotmentoption and the corresponding forfeiture of 375,000 founder shares by our sponsor), consisting of:

 

  

10,000,000 shares of our Class A common stock underlying the units being offered in this offering;

 

  

100,000 shares issued to Maxim Group LLC or its designees; and

 

  

2,500,000 shares of Class B common stock held by our initial stockholders.

If we increase or decrease the size of the offering we will effect a stock dividend or a share contribution back to capital or other appropriate mechanism, asapplicable, with respect to our Class B common stock immediately prior to the consummation of the offering in such amount as to maintain the ownership of our initial stockholders at 20.0% of the issued and outstanding shares of our common stockupon the consummation of this offering.

Common stockholders of record are entitled to one vote for each share held on all matters to be voted on bystockholders. Holders of the Class A common stock and holders of the Class B common stock will vote together

 

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as a single class on all matters submitted to a vote of our stockholders, except as required by law. Unless specified in our amended and restated certificate of incorporation or bylaws, or asrequired by applicable provisions of the DGCL or applicable stock exchange rules, the affirmative vote of a majority of our shares of common stock that are voted is required to approve any such matter voted on by our stockholders. Our board ofdirectors will be divided into two classes, each of which will generally serve for a term of two years with only one class of directors being elected in each year. There is no cumulative voting with respect to the election of directors, with theresult that the holders of more than 50% of the shares voted for the election of directors can elect all of the directors. Our stockholders are entitled to receive ratable dividends when, as and if declared by the board of directors out of fundslegally available therefor.

Because our amended and restated certificate of incorporation authorizes the issuance of up to 100,000,000 shares ofClass A common stock, if we were to enter into an initial business combination, we may (depending on the terms of such an initial business combination) be required to increase the number of shares of Class A common stock which we areauthorized to issue at the same time as our stockholders vote on the initial business combination to the extent we seek stockholder approval in connection with our initial business combination.

In accordance with Nasdaq corporate governance requirements, we are not required to hold an annual meeting until no later than one year after our first fiscalyear end following our listing on Nasdaq. Under Section 211(b) of the DGCL, we are, however, required to hold an annual meeting of stockholders for the purposes of electing directors in accordance with our bylaws, unless such election is madeby written consent in lieu of such a meeting. We may not hold an annual meeting of stockholders to elect new directors prior to the consummation of our initial business combination, and thus we may not be in compliance with Section 211(b) ofthe DGCL, which requires an annual meeting. Therefore, if our stockholders want us to hold an annual meeting prior to the consummation of our initial business combination, they may attempt to force us to hold one by submitting an application to theDelaware Court of Chancery in accordance with Section 211(c) of the DGCL.

We will provide our stockholders with the opportunity to redeem all or aportion of their public shares upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account as of twobusiness days prior to the consummation of our initial business combination 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 thenoutstanding public shares, subject to the limitations described herein. The amount in the trust account is initially anticipated to be approximately $10.15 per public share, without taking into account any interest earned on such funds or additionalfunds, if any, deposited into the trust account in connection with extensions of the period of time to consummate a business combination (as described in more detail in this prospectus). The per-share amountwe will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions we will pay to the underwriters. Our sponsor, officers and directors have entered into a letter agreement with us, pursuantto 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. Unlike many blank check companies that holdstockholder votes and conduct proxy solicitations in conjunction with their initial business combinations and provide for related redemptions of public shares for cash upon completion of such initial business combinations even when a vote is notrequired by law, if a stockholder vote is not required by law and we do not decide to hold a stockholder vote for business or other legal reasons, we will, pursuant to our second amended and restated certificate of incorporation, conduct theredemptions pursuant to the tender offer rules of the SEC, and file tender offer documents with the SEC prior to completing our initial business combination. Our second amended and restated certificate of incorporation will require these tenderoffer documents to contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under the SEC’s proxy rules. If, however, a stockholder approval of thetransaction is required by law, or we decide to obtain stockholder approval for business or other legal reasons, we will, like many blank check companies, offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rulesand not pursuant to the tender offer rules. 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

 

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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 the company representing amajority of the voting power of all outstanding shares of capital stock of the company entitled to vote at such meeting.

However, the participation ofour sponsor, officers, directors, advisors or their affiliates in privately-negotiated transactions (as described in this prospectus), if any, could result in the approval of our initial business combination even if a majority of our publicstockholders vote, or indicate their intention to vote, against such business combination. For purposes of seeking approval of the majority of our outstanding shares of common stock voted, non-votes will haveno effect on the approval of our initial business combination once a quorum is obtained. 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 quorums and voting thresholds, and the voting agreements of our initial stockholders, may make it more likely that we will consummate our initial business combination.

If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combinationpursuant to the tender offer rules, our amended and restated certificate of incorporation will provide that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert oras a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the shares of common stock sold in this offering, which we refer to as theExcess 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. Our stockholders’ inability to redeem the Excess Shareswill reduce their influence over our ability to complete our initial business combination, and such stockholders could suffer a material loss in their investment if they sell such Excess Shares on the open market. Additionally, such stockholderswill not receive redemption distributions with respect to the Excess Shares if we complete the initial business combination. And, as a result, such stockholders will continue to hold that number of shares exceeding 15% and, in order to dispose suchshares would be required to sell their stock in open market transactions, potentially at a loss.

If we seek stockholder approval in connection with ourinitial business combination, pursuant to the letter agreement our sponsor, officers and directors have agreed to vote their founder shares and any public shares purchased during or after this offering (including in open market and privatelynegotiated transactions) in favor of our initial business combination. As a result, in addition to our initial stockholders’ founder shares, we would need only 3,800,001, or 38.0%, of the 10,000,000 public shares sold in this offering to bevoted in favor of an initial business combination (assuming all outstanding shares are voted) in order to have our initial business combination approved (assuming the over-allotment option is not exercised). Additionally, each public stockholder mayelect to redeem its public shares irrespective of whether they vote for or against the proposed transaction (subject to the limitation described in the preceding paragraph).

Pursuant to our second amended and restated certificate of incorporation, if we are unable to complete our initial business combination within 15 months fromthe closing of this offering (or up to 21 months from the closing of this offering if we extend the period of time to consummate a business combination as described in more detail in this prospectus), we will (i) cease all operations except forthe purpose of winding up, (ii) as promptly as reasonably possible but no more than ten business days thereafter subject to lawfully available funds therefor, redeem the public shares, at a per-shareprice, 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 $100,000of 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 liquidatingdistributions, 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 eachcase to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. Our sponsor,

 

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officers and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive their rights to liquidating distributions from the trust account with respect toany founder shares held by them if we fail to complete our initial business combination within 15 months from the closing of this offering (or up to 21 months from the closing of this offering if we extend the period of time to consummate a businesscombination by up to three months on up to two occasions as described in more detail in this prospectus). However, if our initial stockholders acquire public shares in or after this offering, they will be entitled to liquidating distributions fromthe trust account with respect to such public shares if we fail to complete our initial business combination within the prescribed time period.

In theevent of a liquidation, dissolution or winding up of the company after an initial business combination, our stockholders are entitled to share ratably in all assets remaining available for distribution to them after payment of liabilities and afterprovision is made for each class of stock, if any, having preference over the common stock. Our stockholders have no preemptive or other subscription rights. There are no sinking fund provisions applicable to the common stock, except that we willprovide our stockholders with the opportunity to redeem their public shares for cash equal to their pro rata share of the aggregate amount then on deposit in the trust account, upon the completion of our initial business combination, subject to thelimitations described herein.

Founder Shares

Thefounder shares are identical to the shares of Class A common stock included in the units being sold in this offering, and holders of founder shares have the same stockholder rights as public stockholders, except that (i) the founder sharesare subject to certain transfer restrictions, as described in more detail below, (ii) our sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed (A) to waive their redemption rightswith respect to any founder shares and any public shares held by them in connection with the completion of our initial business combination, (B) to waive their redemption rights with respect to their founder shares and public shares inconnection with a stockholder vote to approve an amendment to our second amended and restated certificate of incorporation (x) to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete ourinitial business combination within 15 months from the closing of this offering (or up to 21 months from the closing of this offering if we extend the period of time to consummate a business combination by up to three months on up to two occasionsas described in more detail in this prospectus).) or (y) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity and (C) to waive theirrights 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 15 months from the closing of this offering (or up to 21 months from theclosing of this offering if we extend the period of time to consummate a business combination by up to three months on up to two occasions ass described in more detail in this prospectus), although they will be entitled to liquidating distributionsfrom the trust account with respect to any public shares they hold if we fail to complete our initial business combination within such time period, (iii) the founder shares are shares of our Class B common stock that will automaticallyconvert into shares of our Class A common stock at the time of our initial business combination, on a one-for-one basis, subject to adjustment as described herein,and (iv) are entitled to registration rights. If we submit our initial business combination to our public stockholders for a vote, our sponsor, officers and directors have agreed pursuant to the letter agreement to vote any founder shares heldby them and any public shares purchased during or after this offering (including in open market and privately negotiated transactions) in favor of our initial business combination.

The shares of Class B common stock will automatically convert into shares of Class A common stock at the time of our initial business combination ona one-for-one basis (subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like), and subject to further adjustment asprovided herein. In the case that additional shares of Class A common stock, or equity-linked securities, are issued or deemed issued in excess of the amounts offered in this prospectus and related to the closing of the initial businesscombination, the ratio at which shares of Class B common stock shall convert into shares of Class A common stock will be adjusted (unless the holders of a majority of the outstanding shares of Class B common stock agree to waive such

 

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adjustment with respect to any such issuance or deemed issuance) so that the number of shares of Class A common stock issuable upon conversion of all shares of Class B common stock willequal, in the aggregate, on an as-converted basis, 20% of the sum of the total number of all shares of common stock outstanding upon completion of this offering plus all shares of Class A common stock andequity-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 initial business combination, any privateplacement-equivalent securities issued to our sponsor or its affiliates upon conversion of loans made to us). We cannot determine at this time whether a majority of the holders of our Class B common stock at the time of any future issuancewould agree to waive such adjustment to the conversion ratio. They may waive such adjustment due to (but not limited to) the following: (i) closing conditions which are part of the agreement for our initial business combination;(ii) negotiation with Class A stockholders on structuring an initial business combination; or (iii) negotiation with parties providing financing which would trigger the anti-dilution provisions of the Class B common stock. Ifsuch adjustment is not waived, the issuance would not reduce the percentage ownership of holders of our Class B common stock, but would reduce the percentage ownership of holders of our Class A common stock. If such adjustment is waived,the issuance would reduce the percentage ownership of holders of both classes of our common stock. Holders of founder shares may also elect to convert their shares of Class B common stock into an equal number of shares of Class A commonstock, subject to adjustment as provided above, at any time. The term “equity-linked securities” refers to any debt or equity securities that are convertible, exercisable or exchangeable for shares of Class A common stock issues in afinancing transaction in connection with our initial business combination, including but not limited to a private placement of equity or debt. Securities could be “deemed issued” for purposes of the conversion rate adjustment if suchshares are issuable upon the conversion or exercise of convertible securities, warrants or similar securities.

Our initial stockholders have agreed notto transfer, assign or sell any of their founder shares until the earlier to occur of (i) one year after the date of the consummation of our initial business combination or (ii) the date on which we consummate a liquidation, merger, stockexchange or other similar transaction which results in all of our stockholders having the right to exchange their shares of Class A common stock for cash, securities or other property (except as described herein under the section of thisprospectus entitled “Principal Stockholders — Restrictions on Transfers of Founder Shares and Private Placement Warrants”). Any permitted transferees will be subject to the same restrictions and other agreements of our initialstockholders with respect to any founder shares. Notwithstanding the foregoing, if the closing price of our shares of Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations,recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing 150 days after our initial business combination, the founder shares will no longer be subject to suchtransfer restrictions.

Preferred Stock

Our secondamended and restated certificate of incorporation will provide that shares of preferred stock may be issued from time to time in one or more series. Our board of directors will be authorized to fix the voting rights, if any, designations, powers,preferences, the relative, participating, optional or other special rights and any qualifications, limitations and restrictions thereof, applicable to the shares of each series. Our board of directors will be able to, without stockholder approval,issue preferred stock with voting and other rights that could adversely affect the voting power and other rights of the holders of the common stock and could have anti-takeover effects. The ability of our board of directors to issue preferred stockwithout stockholder approval could have the effect of delaying, deferring or preventing a change of control of us or the removal of existing management. We have no preferred stock outstanding at the date hereof. Although we do not currently intendto issue any shares of preferred stock, we cannot assure you that we will not do so in the future. No shares of preferred stock are being issued or registered in this offering.

 

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Redeemable Warrants

Public Stockholders’ Warrants

Each wholewarrant entitles the registered holder to purchase one share of our Class A common stock at a price of $11.50 per share, subject to adjustment as discussed below, at any time commencing on the later of 12 months from the closing of thisoffering or 30 days after the completion of our initial business combination. Pursuant to the warrant agreement, a warrant holder may exercise its warrants only for a whole number of shares of Class A common stock. This means that only awhole warrant may be exercised at any given time by a warrant holder. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. Accordingly, unless you purchase at least four units, you will not beable to receive or trade a whole warrant.

We will not be obligated to deliver any shares of Class A common stock pursuant to the exercise of awarrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act with respect to the shares of Class A common stock underlying the warrants is then effective and a prospectus relatingthereto is current, subject to our satisfying our obligations described below with respect to registration. No warrant will be exercisable and we will not be obligated to issue shares of Class A common stock upon exercise of a warrant unlessClass A common stock issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants. In the event that the conditions in thetwo immediately preceding sentences are not satisfied with respect to a warrant, the holder of such warrant will not be entitled to exercise such warrant and such warrant may have no value and expire worthless, in which case the purchaser of a unitcontaining such warrants shall have paid the full purchase price for the unit solely for the shares of Class A common stock underlying such unit. In no event will we be required to net cash settle any warrant.

We are not registering the shares of Class A common stock issuable upon exercise of the warrants at this time. However, we have agreed that as soon aspracticable, but in no event later than 15 business days after the closing of our initial business combination, we will use our best efforts to file with the SEC a registration statement covering the shares of Class A common stock issuable uponexercise of the warrants, to cause such registration statement to become effective and to maintain the effectiveness of such registration statement, and a current prospectus relating to those shares of Class A common stock until the warrantsexpire, as specified in the warrant agreement. If a registration statement covering the shares of Class A common stock issuable upon exercise of the warrants is not effective by the 60thbusiness day after the closing of our initial business combination, warrant holders may, during the period beginning on the 61st business day after the closing of our initial business combinationand ending upon such registration statement being declared effective by the SEC and during any other period when we will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordancewith Section 3(a)(9) of the Securities Act or another exemption. Notwithstanding the above, if our Class A common stock is at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies thedefinition 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 withSection 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, and in the event we do not so elect, we will use our best efforts to register or qualify theshares under applicable blue sky laws to the extent an exemption is not available.

Once the warrants become exercisable, we may call the warrants forredemption (excluding the private placement warrants but including any outstanding warrants issued upon exercise of the unit purchase option issued to the representative and/or its designees):

 

  

in whole and not in part;

 

  

at a price of $0.01 per warrant;

 

  

upon not less than 30 days’ prior written notice of redemption (the“30-day redemption period”) to each warrant holder; and

 

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