UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
☒ANNUAL REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2022
OR
☐TRANSITION REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ________ TO ________
COMMISSION FILE NUMBER 001-40222
BYTE ACQUISITION CORP.
(Exact name of registrant as specified in its
charter)
Cayman Islands N/A
445 Park Avenue, 9th Floor
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including
area code: (917)969-9250
Securities registered pursuant to Section 12(b)
of the Act:
Title of each class Trading Symbols Name of each exchange on which registered
Securities registered pursuant to Section 12(g)
of the Act: None
Indicate by check mark if
the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate by check mark if
the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
Indicate by check mark whether
the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has
been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether
the registrant (1) has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T
during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and has been subject
to such filing requirements for the past 90 days. Yes ☒ No ☐
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.
Emerging growth company ☒
If an emerging growth company,
indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether
the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control
over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that
prepared or issued its audit report. ☐
If securities are registered pursuant
to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect
the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether
any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the
registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether
the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☒ No ☐
The aggregate market value
of the ordinary shares held by non-affiliates of the registrant, computed as of June 30, 2022 (the last business day of the registrant’s
most recently completed second fiscal quarter) was approximately $318,189,737.
As of March 31, 2023 the
Registrant had 3,393,217 of its Class A ordinary shares, $0.0001 par value per share, and 8,092,313 of its Class B ordinary shares, $0.0001
par value per share, outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
None.
TABLE OF CONTENTS
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS AND RISK FACTOR SUMMARY ii
PART I 1
ITEM 1. BUSINESS. 1
ITEM 1A. RISK FACTORS. 18
ITEM 1B. UNRESOLVED STAFF COMMENTS. 53
ITEM 2. PROPERTIES. 53
ITEM 3. LEGAL PROCEEDINGS. 53
ITEM 4. MINE SAFETY DISCLOSURES. 53
ITEM 6. [RESERVED]. 55
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. 59
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. 59
ITEM 9A. CONTROLS AND PROCEDURES. 59
ITEM 9B. OTHER INFORMATION. 60
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS 60
PART III 61
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE. 61
ITEM 11. EXECUTIVE COMPENSATION. 65
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES. 69
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES. 70
SIGNATURES 72
i
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS and risk factor summary
Some of the statements contained
in this report may constitute “forward-looking statements” for purposes of the federal securities laws. Our forward- 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” and similar expressions may identify forward- looking statements, but the absence of these words does not mean that
a statement is not forward-looking. Forward- looking statements in this Annual Report on Form 10-K may include, for example, statements
about:
● our ability to select an appropriate target business or businesses;
● our ability to complete our initial business combination
● our pool of prospective target businesses;
● our public securities’ potential liquidity and trading;
● the lack of a market for our securities;
● the Trust Account not being subject to claims of third parties; or
● our financial performance.
The forward-looking statements
contained in this report are based on our current expectations and beliefs concerning future developments and their potential 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) or other 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 described under the heading “Risk Factors” in this Annual Report. 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 those projected 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 securities
laws.
ii
Summary of Risk Factors
An investment in our securities
involves a high degree of risk. The occurrence of one or more of the events or circumstances described in the section titled “Risk
Factors,” alone or in combination with other events or circumstances, may materially adversely affect our business, financial condition
and operating results. In that event, the trading price of our securities could decline, and you could lose all or part of your investment.
Such risks include, but are not limited to:
iii
iv
PART
I
References in this report
to “we,” “us” or the “Company” refer to BYTE Acquisition Corp. References to our “management”
or our “management team” refer to our officers and directors, and references to the “Sponsor” refer to Byte Holdings
LP, a Cayman Islands limited partnership. References to our “initial shareholders” refer to the holders of Founder Shares.
ITEM 1. BUSINESS.
Introduction
We are a blank check company
incorporated as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase,
reorganization or similar business combination with one or more businesses or entities, which we refer to herein as our “initial
business combination.” While we may pursue an initial business combination target in any business or industry, we intend to focus
our search for targets in the Israeli technology industry, including those engaged in cybersecurity, automotive technology, fintech, enterprise
software, cloud computing, semiconductors, medical technology, AI and robotics and that offer a differentiated technology platform and
products.
Our international management
team is comprised of accomplished technology, finance, investment and merchant banking professionals with strong ties to the Israeli technology
sector. Israel is one of the fastest-growing innovation and technology hubs in the world and has earned the moniker of “Start-up
Nation” as a result of having the largest number of startups per capita in the world. Moreover, Israel is becoming a “Scale-up
Nation” with a number of Unicorns growing rapidly. Although we may pursue an initial business combination opportunity in any industry,
sector or geography, we intend to leverage our intimate knowledge and network and focus on these innovative, high-growth Israeli technology
companies seeking access to the capital markets.
On March 23, 2021, we consummated
our initial public offering of 30,000,000 units (the “Units”). Each Unit consists of one Class A ordinary share of the Company,
par value $0.0001 per share (“Class A ordinary shares”), and one-half of one redeemable warrant of the Company (“Warrant”),
with each whole Warrant entitling the holder thereof to purchase one Class A ordinary share for $11.50 per share, subject to adjustment.
The Units were sold at a price of $10.00 per Unit, generating gross proceeds to the Company of $300,000,000. The underwriter was granted
a 45-day option from the date of the final prospectus relating to the offering to purchase up to 4,500,000 additional Units to cover over-allotments,
if any, at $10.00 per Unit. On April 7, 2021, the underwriter exercised the over-allotment option in part and purchased an additional
2,369,251 Units (the “Over-Allotment Units”), generating gross proceeds of $23,692,510 (such offering, including the exercise
of the over-allotment, the “IPO” or “Public Offering”).
On January 22, 2021, pursuant
to an agreement by and between the Company and Byte Holdings LP (the “Sponsor”), our Sponsor purchased 8,625,000 Class B ordinary
shares (the “founder shares”) for $25,000. Prior thereto, the company had no assets, tangible or intangible. The number of
founder shares outstanding was determined based on the expectation that the founder shares would represent 20% of the outstanding shares
after the IPO.
Simultaneously with the closing
of the IPO, pursuant to a private placement units purchase agreement (the “Private Placement Units Purchase Agreement”), the
Company completed the private sale of an aggregate of 1,030,000 private placement units to the Sponsor at a purchase price of $10.00 per
private placement unit, generating gross proceeds to the Company of $10,300,000 (the “Private Placement”). The private placement
units are identical to the Units sold in the IPO, except that the private placement warrants underlying the private placement units, so
long as they are held by the Sponsor or its permitted transferees, (i) will not be redeemable by us, (ii) may not (including the Class
A ordinary shares issuable upon exercise of these warrants), subject to 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 entitled to registration rights. No underwriting discounts or commissions were paid with respect to such sales.
The Private Placement was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933,
as amended.
1
A total of $323,692,510, comprised
of $317,218,660 of the proceeds from the IPO and sale of the Over-Allotment Units (which amount included $11,329,238 of the underwriters’
deferred discount) and $6,473,850 of the proceeds of sales of the private placement units to the Sponsor, including the Private Placement,
was placed in a U.S.-based trust account at J.P. Morgan Chase Bank, N.A. maintained by Continental Stock Transfer & Trust Company,
acting as trustee. Except with respect to interest earned on the funds held in the trust account that may be released to the Company to
pay its taxes, the funds held in the trust account will not be released from the trust account until the earliest of (i) the completion
of the Company’s initial business combination, (ii) the redemption of any Class A ordinary shares included in the Units sold in
the IPO and sale of the Over-Allotment Units (“public shares”) properly tendered in connection with a shareholder vote to
amend the Company’s amended and restated memorandum and articles of association (the “Articles”) to modify the substance
or timing of the Company’s obligation to allow redemption in connection with its initial business combination or to redeem 100%
of the public shares if the Company does not complete its initial business combination by the Extended Date (as defined below) or with
respect to any other material provisions relating to shareholders’ rights or pre-initial business combination activity and (iii)
the redemption of the public shares if the Company is unable to complete an initial business combination by the Extended Date, subject
to applicable law.
After the payment of underwriting
discounts and commissions (excluding the deferred portion of $11,329,238 in underwriting discounts and commissions, which amount will
be payable upon consummation of our initial business combination if consummated) and approximately $0.7 million in expenses relating to
the Public Offering, approximately $1.8 million of the net proceeds of the Public Offering and Private Placement was not deposited into
the Trust Account and was retained by us for working capital purposes. The net proceeds deposited into the Trust Account remain on deposit
in the Trust Account earning interest. As of December 31, 2022 there was $323,716,979 in investments held in the Trust Account and $1,054,581
of cash held outside the Trust Account available for working capital purposes. As of December 31, 2022, none of the funds had been withdrawn
from the Trust Account to fund the Company’s working capital expenses.
Extension
The Company had until March
23, 2023 to consummate an initial business combination. On March 16, 2023, the Company held an extraordinary general meeting of shareholders
(the “EGM”). In this meeting the shareholders approved amendments to the Company’s Articles to extend the date by which
the Company must complete an initial business combination from March 23, 2023 to September 25, 2023 (the “Extension” and such
date, the “Extended Date”). In connection with the EGM, shareholders holding an aggregate of 30,006,034 shares of the Company’s
Class A Ordinary Shares exercised their right to redeem their shares for $10.20 per share of the funds held in the Company’s trust
account, leaving approximately $24.1 million in the trust account after such redemption.
Non-Redemption Agreements
On March 8, 2023, the Company
entered into non-redemption agreements (collectively, the “Non-Redemption Agreements”) with certain of its existing shareholders
(the “Non-Redeeming Shareholders”) holding Class A Ordinary Shares of the Company. Pursuant to the Non-Redemption Agreements,
each of the Non-Redeeming Shareholders agreed to (a) not redeem 1,000,000 Class A Ordinary Shares held by them on the date of the Non-Redemption
Agreements (the “Shares”) in connection with the vote to amend the Company’s Articles to extend the date by which the
Company has to consummate an initial business combination from March 23, 2023 to September 25, 2023 and (b) vote their Shares in favor
of the Extension presented by the Company for approval by its shareholders. In connection with the foregoing, the Company agreed to pay
to each Non-Redeeming Shareholder $0.033 per Share in cash per month through the Extended Date.
2
Letter of Intent
On March 10, 2023, the Company
issued a press release announcing that it has entered into a non-binding letter of intent (“LOI”) for a business combination
with Airship AI Holdings, Inc. (“Airship AI”). Airship AI, a robust AI-driven edge video, sensor and data management platform
for government agencies and enterprises that gathers unstructured data from surveillance cameras and sensors, applies artificial intelligence
(“AI”) analytics, and provides visualization tools to improve decision making in mission critical environments. Under the
terms of the LOI, the Company and Airship AI would become a combined entity, with Airship AI’s existing equity holders rolling 100%
of their equity into the combined public company. The proposed transaction values Airship AI at an enterprise value of $290 million. The
Company expects to announce additional details regarding the proposed business combination when a definitive merger agreement is executed.
Our Management Team
Our team is comprised
of Israeli technology leaders and entrepreneurs, as well as finance, investment and merchant banking executives with multi-national operational
and transactional experience drawn from top global institutions including Microsoft, Sony, Texas Instruments, Jerusalem Venture Partners,
Societe Generale, Bank of America Corporation, Nomura and BNY Mellon. Furthermore, the members of our Board have a variety of experience
and expertise in growing and operating technology companies, as well as experience as investors and entrepreneurs. We have completed over
50 initial public offerings, mergers and acquisitions and financing transactions amounting to billions of dollars in aggregate deal value.
Our management team also has extensive experience in operating public and private companies, serving on both public and private company
boards of directors, including leading technology companies and financial institutions. As a result, we have strong knowledge and experience
in financial, legal and regulatory matters, initial public offerings and private equity and venture capital.
We capitalize on the significant
contacts and experience of our management team and Board, including Kobi Rozengarten, our Executive Chairman, Samuel Gloor, our Chief
Executive Officer, Chief Financial Officer and director, Vadim Komissarov, a director, Oded Melamed, a director, and Louis Lebedin, a
director, to identify, evaluate and acquire a target business.
We believe that our position
in the Israeli tech ecosystem, as well as our broad networks of contacts and relationships provides us with an important source of potential
initial business combination targets. In addition, we believe that target business candidates may be brought to our attention from various
unaffiliated sources, including investment market participants, private equity groups, investment banking firms, consultants, accounting
firms and large business enterprises.
3
Kobi Rozengarten, our Executive
Chairman, has over 35 years of experience in investment and management positions in the multinational and Israeli technology sector, with
a focus on the fields of semiconductors, cloud computing, and enterprise software. Mr. Rozengarten has been the Chief Executive Officer
of Rozengarten Management Ltd. since December 2008. Mr. Rozengarten has experience as a sponsor of various SPACs since 2019. As an entrepreneur,
venture capitalist and board member, Mr. Rozengarten has led 12 start-ups with a total exit value of over $2.5 billion. Mr. Rozengarten
served from 2007 to 2019 as a General Partner and then as Managing Partner in Jerusalem Venture Partners, a leading Israeli venture capital
firm with $1.5 billion assets under management. In this capacity, Mr. Rozengarten led or co-led more than 25 deals and was instrumental
in leading many of Jerusalem Venture Partners’s exits including the sale of Altair Semiconductor to Sony, CyOptics, Inc. to Avago,
XtremIO to EMC and Dune Network to Broadcom Inc. From 1997 to 2007, Mr. Rozengarten served as a COO and President of Saifun Semiconductors
Ltd., a leading provider of IP solutions for the non-volatile (Flash) memory market, and was responsible for the formulation and execution
of the company’s business strategy and co-led its IPO on Nasdaq, raising $270 million at a valuation of $1 billion. From 1987 to
1996, Mr. Rozengarten held multiple positions, as VP of Operation and VP of Business Development with K&S, a US based leading supplier
of equipment for the semiconductor industry, and was the Managing Director of Micro-Swiss, K&S’s subsidiary in Israel. Mr. Rozengarten
began his career in 1983 as a programmer and Financial Controller at Elbit Systems Ltd., an Israel-based international defense electronics
company. Mr. Rozengarten serves as a member of the Board of Governors of Technion. He holds B.Sc. and M.Sc. degrees in Industrial and
Management Engineering from Technion and participated in an Executive MBA program at Stanford University.
Samuel Gloor has been our Chief
Financial Officer since January 2021 and our Chief Executive Officer since November 2022. Mr. Gloor is an experienced investment banker
that has transacted in the TMT, consumer, healthcare, industrial, oil & gas and specialty finance verticals. Since November 2020,
Mr. Gloor has been the Founder and Managing Member of Sagara Group, LLC, where he specializes in strategic consulting and business services
for growth-stage companies, alternative asset managers and others. From October 2018 to August 2020, Mr. Gloor was a member of the Financial
Institutions Group at Nomura specializing in SPAC and Specialty Finance investment banking. From November 2014 to September 2018, Mr.
Gloor was a member of the Advisory & Financing Group at Societe Generale Corporate & Investment Banking, where he provided event-driven
bridge and term lending and capital structure advisory services to blue-chip corporate clients and completed several prominent financing
transactions supporting M&A and corporate actions. Mr. Gloor received an M.Sc. in Accounting and Finance from the London School of
Economics and Political Science in London, United Kingdom and a BBA from the Norwegian Business School in Oslo, Norway.
Vadim Komissarov, one of our
directors, is a seasoned investment and merchant banker with over 20 years of international experience in technology and telecommunications,
including advising companies in large investments in the high-tech telecom industry. Mr. Komissarov has been a Director and Chief Financial
Officer of Trident Acquisitions Corp since April 2016, the Chief Executive Officer of Trident Acquisitions Corp since November 2020, and
since May 2015, has been the Chief Executive Officer of VK Consulting. From April 2019 to November 2020, Mr. Komissarov was a Founder
and Director of Netfin, which merged and completed a $250 million business combination with Triterras in November 2020. From 2014 through
2015, Mr. Komissarov represented The UMW Holdings Berhad as an Investment Advisor. From 1999 to 2014, Mr. Komissarov held senior level
management positions with Russian investment banks such as Troika Dialog and Vnesheconombank. In his role as Executive Director of Globex
Capital and Chairman of Vnesheconombank Capital Americas, Mr. Komissarov was responsible for its worldwide corporate finance practice
from September 2009 to March 2014. Mr. Komissarov started his investment banking career in 1998 in New York working for international
banks, including Merrill and BNY Mellon, handling private equity transactions and alternative dispute resolution programs for Eastern
European clients. Mr. Komissarov holds an MBA degree from New York University’s Stern School of Business.
4
Oded Melamed, one of our directors,
is an entrepreneur with over 30 years of experience in management positions in the Israeli high-tech sector. Mr. Melamed is currently
the Chief Executive Officer of Kiralis Technologies Ltd., a company enabling the development of safer drugs by providing affordable and
timely access to pure enantiomers. From 2005 to 2019, Mr. Melamed was the founder and Chief Executive Officer of Altair Semiconductor,
a leading semiconductor company in the cellular IoT space. The company was acquired by Sony in 2016 for $212 million. Prior to founding
Altair Semiconductor, Mr. Melamed was Director of Cable Modem Communications at Texas Instruments from 1999 to 2005. In this role, he
managed Altair Semiconductor after its acquisition by Texas Instruments, and played a key role in transitioning the business into profitability.
From 1997 to 1999, Mr. Melamed was product line manager at Libit Signal Processing Ltd., an Israeli fabless semiconductor start-up company
that developed CATV modems. Libit Signal Processing Ltd. was acquired by Texas Instruments in 1999 for $365 million. From 1995 to 1997,
Mr. Melamed was with Motorola Solutions, Inc., and was involved in the development and deployment of the first CDMA cellular system in
Israel. From 1989 to 1995, Mr. Melamed was an officer in the Israel Defense Force, Intelligence Corps. He holds B.Sc. and M.Sc. degrees
in Electrical Engineering, Cum Laude, from Tel-Aviv University, and an EMBA degree from Kellogg-Recanati International Executive MBA program,
Northwestern University/Tel-Aviv University.
Louis Lebedin, one of our
directors, has over 25 years of banking experience with a proven track record of building and leading a world class business. From 2017
to 2019, Mr. Lebedin served as an advisor to Unio Capital LLC, an asset management firm, responsible for product development. From 2006
to 2012, Mr. Lebedin was global head of JP Morgan’s prime brokerage business, a leading provider of clearing and financing services
for equity and fixed income hedge funds. He was responsible for defining and executing the strategy for the business, to expand its market
share while continuing to meet the evolving needs of its hedge fund clients. From 2008 to 2012, Mr. Lebedin served on JP Morgan Clearing
Corp.’s Operations Committee and the Equities Division’s Executive Committee. From 2001 to 2005, Mr. Lebedin was the chief
operating officer and chief financial officer of Bear Stearns’s Global Clearing Services division. Mr. Lebedin joined the Clearance
Division in 1988 assuming the role of controller before being promoted to chief financial officer in 1996. From 1980 to 1987, he worked
at Coopers & Lybrand, rising to the level of audit manager specializing in financial services. Mr. Lebedin holds a B.S. in accounting
from Syracuse University, and he earned his CPA license in 1982.
With respect to the above,
past experience or performance of our management team and the businesses with which they have been associated is not a guarantee of either
(i) our ability to successfully identify and consummate a business combination or (ii) success with respect to any business combination
that we may consummate. You should not rely on the historical record of our management team or the businesses with which they have been
associated as indicative of our future performance.
Business Strategy
We believe that the wide network
of our management team delivers access to a broad spectrum of business combination opportunities across the technology sector and specifically
those that are located in Israel. The concept of special purpose acquisition companies is relatively new to Israeli companies and thought
leaders. Our intimate knowledge and connections within this market will help us identify targets that can best utilize the tools as well
as the operational and financial expertise within our management team, and eventually act as a pathway to the public market for best-in-class private
companies.
We intend to target technology
companies that we consider to have strong management teams, robust growth prospects and that provide a differentiated product or service.
Opportunities range from high-growth, disruptive technologies to more mature, high-margin, stable businesses with established market presence
and leadership position.
5
Because we believe that certain
domains present particularly strong growth opportunities, we intend to focus primarily on the following technology sectors:
● Cybersecurity
● Enterprise software and SaaS
● FinTech
● Automotive technology, including autonomous driving and EV
● Semiconductor
● Medical Technology
● AI
● Robotics
● Cloud computing
While we see opportunities
in the above market segments, we do not limit our search to only those segments of the tech ecosystem, but target a wide variety of companies
that deliver a unique technology solution, disruptive product or service instead. We believe that our extensive experience and demonstrated
success in both investing and operating businesses in this industry has culminated in a unique set of capabilities, such as:
Business Combination Criteria
We have identified the following
general criteria and guidelines that we believe are important in evaluating prospective target companies. We use these criteria and guidelines
in evaluating initial business combination opportunities, but we may decide to enter into our initial business combination with a target
company that does not meet these criteria and guidelines.
6
These criteria are not intended
to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be based, to the extent relevant,
on these general guidelines as well as other considerations, factors and criteria that our management may deem relevant. In the event
that we decide to enter into a business combination with a target company that does not meet the above criteria and guidelines, we will
disclose that the target company does not meet the above named criteria in our shareholder communications related to our initial business
combination, which, as discussed in this prospectus, would be in the form of proxy solicitation or tender offer materials, as applicable,
that we would file with the SEC. In evaluating a prospective target company, we expect to conduct a due diligence review which may encompass,
among other things, meetings with incumbent management and employees, document reviews, interviews of customers and suppliers, inspections
of facilities, as well as reviewing financial and other information which will be made available to us.
Initial Business Combination
Nasdaq rules require that
we must complete one or more business combinations having an aggregate fair market value of at least 80% of the value of the assets held
in the trust account (excluding the deferred underwriting commissions and taxes payable on the interest earned on the trust account) at
the time of our signing a definitive agreement in connection with our initial business combination. We refer to this as the 80% of fair
market value test. Our Board will make the determination as to the fair market value of our initial business combination. If our Board
is not able to independently determine the fair market value of our initial business combination (including with the assistance of financial
advisors), we will obtain an opinion from an independent investment banking firm which 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 will not be able to make an independent
determination of the fair market value of our initial business combination, it may be unable to do so if it is less familiar or experienced
with the business of a particular target or if there is a significant amount of uncertainty as to the value of the target’s assets
or prospects.
We anticipate structuring
our initial business combination so that the post-transaction company in which our public shareholders own shares will own or acquire
100% of the equity interests or assets of the target business or businesses. We may, however, structure our initial business combination
such that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business in order to
meet certain objectives of the target management team or shareholders or for other reasons, but we will only complete such business combination
if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires
a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company
Act. Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our shareholders prior
to the business combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed
to the target and us in the business combination. For example, we could pursue a transaction in which we issue a substantial number of
new shares in exchange for all of the outstanding capital stock 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 shareholders immediately prior to our initial
business combination could own less than a majority of our issued and outstanding shares subsequent to our initial business combination.
If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company,
the portion of such business or businesses that is owned or acquired is what will be taken into account for purposes of Nasdaq’s
80% of fair market value test. If the business combination involves more than one target business, the 80% of fair market value test will
be based on the aggregate value of all of the transactions.
7
We are not prohibited from
pursuing an initial business combination with a company that is affiliated with our sponsor, officers or directors, or completing the
business combination through a joint venture or other form of shared ownership with our sponsor, officers or directors. In the event we
seek to complete an initial business combination with a target that is affiliated with our sponsor, officers or directors, we, or a committee
of independent directors, would obtain an opinion from an independent investment banking firm that 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.
Members of our management
team and our independent directors directly or indirectly own founder shares and/or private placement units and, accordingly, may have
a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial
business combination.
Further, each of our officers
and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation
of any such officers and directors was included by a target business as a condition to any agreement with respect to our initial business
combination.
Each of our officers and directors
presently has, and any of them in the future may have additional, fiduciary or contractual obligations to at least one other entity pursuant
to which such officer or director is or will be required to present a business combination opportunity to such entity. Accordingly, if
any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she
has then current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present
such business combination opportunity to such other entity, subject to their fiduciary duties under Cayman Islands law. Our Articles 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 or her capacity as a director or officer of the company and it is an opportunity that we are able to complete
on a reasonable basis. We do not believe, however, that the fiduciary duties or contractual obligations of our officers or directors will
materially affect our ability to complete our initial business combination.
In addition, our sponsor and
our officers and directors may sponsor or form other special purpose acquisition companies similar to ours or may pursue other business
or investment ventures during the period in which we are seeking an initial business combination. Any such companies, businesses or investments
may present additional conflicts of interest in pursuing an initial business combination. However, we do not believe that any such potential
conflicts would materially affect our ability to complete our initial business combination.
We have previously filed a
Registration Statement on Form 8-A with the SEC to voluntarily register our securities under Section 12 of the Securities Exchange Act
of 1934, as amended, or the Exchange Act. As a result, we are subject to the rules and regulations promulgated under the Exchange Act.
We have no current intention of filing a Form 15 to suspend our reporting or other obligations under the Exchange Act prior or subsequent
to the consummation of our initial business combination.
Status as a Public Company
We believe our structure makes
us an attractive business combination partner to target businesses. As an existing public company, we offer a target business an alternative
to the traditional initial public offering through a merger or other business combination with us. In a business combination transaction
with us, the owners of the target business may, for example, exchange their shares of stock or shares in the target business for our Class
A ordinary shares (or shares of a new holding company) or for a combination of our Class A ordinary shares and cash, allowing us to tailor
the consideration to the specific needs of the sellers. We believe target businesses will find this method a more expeditious and 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, and there are significant expenses, market
and other uncertainties 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 a business combination with us.
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Furthermore, once a proposed
business combination is completed, the target business will have effectively become public, whereas an initial public offering is always
subject to the underwriters’ ability to complete the offering, as well as general market conditions, which could delay or prevent
the offering from occurring or could have negative valuation consequences. Following an initial business combination, we believe the target
business would then have greater access to capital, an additional means of providing management incentives consistent with shareholders’
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 among potential new customers and vendors and aid in attracting talented employees.
While we believe that our
structure and our management team’s backgrounds 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 shareholder approval of any proposed
initial business combination, negatively.
We are an “emerging
growth company,” as defined in the JOBS Act. We will remain an emerging growth company until the earlier of (1) the last day of
the fiscal year (a) following the fifth anniversary of the completion of the IPO, (b) in which we have total annual gross revenue of at
least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Class A ordinary
shares 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 during the prior three-year period.
Additionally, we are a “smaller
reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced
disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller
reporting company until the last day of the fiscal year in which (1) the market value of our ordinary shares held by non-affiliates exceeds
$250 million as of the prior June 30th, or (2) our annual revenues exceeded $100 million during such completed fiscal year and the market
value of our ordinary shares held by non-affiliates exceeds $700 million as of the prior June 30th.
Financial Position
With funds available for a
business combination in the amount of $24.1 million (assuming no further redemptions), 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 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 tailor the consideration to be paid to the target business to fit its needs and desires. However, we have not taken any steps to secure
third party financing and there can be no assurance it will be available to us.
Effecting Our Initial Business Combination
General
We are not presently engaged
in, and we will not engage in, any operations for an indefinite period of time following the IPO. We intend to effectuate our initial
business combination using cash from the proceeds of the IPO and the private placement of the private placement units, the proceeds of
the sale of our shares in connection with our initial business combination (pursuant to forward purchase agreements or backstop agreements
we may enter into following the consummation of the IPO or otherwise), shares issued to the owners of the target, debt issued to bank
or other lenders or the owners of the target, other securities issuances, or a combination of the foregoing. We may seek to complete our
initial business combination with a company or business that may be financially unstable or in its early stages of development or growth,
which would subject us to the numerous risks inherent in such companies and businesses.
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If our initial business combination
is paid for using equity or debt securities, or not all of the funds released from the trust account are used for payment of the consideration
in connection with our initial business combination or used for redemptions of our Class A ordinary shares, we may use the balance
of the cash released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations
of the post-transaction company, the payment of principal or interest due on indebtedness incurred in completing our initial business
combination, to fund the purchase of other companies, or for working capital.
While we may pursue an initial
business combination target in any industry, we intend to focus our search on companies with advanced and highly differentiated solutions
for the technology sector. Accordingly, there is no current basis for investors in the IPO to evaluate the possible merits or risks of
the target business with which we may ultimately complete our initial business combination. Although our management will assess the risks
inherent in a particular target business with which we may combine, we cannot assure you that this assessment will result in our identifying
all risks that a target business may encounter. Furthermore, some of those risks may be outside of our control, meaning that we can do
nothing to control or reduce the chances that those risks will adversely affect a target business.
We may seek to raise additional
funds through a private offering of debt or equity securities in connection with the completion of our initial business combination and
we may effectuate our initial business combination using the proceeds of such offering rather than using the amounts held in the trust
account. In addition, we intend to target businesses with enterprise values that are greater than we could acquire with the net proceeds
of the IPO and the sale of the private placement units, and, as a result, if the cash portion of the purchase price exceeds the amount
available from the trust account, net of amounts needed to satisfy any redemptions by public shareholders, we may be required to seek
additional financing to complete such proposed initial business combination. Subject to compliance with applicable securities laws, we
would expect to complete such financing only simultaneously with the completion of our initial business combination. In the case of an
initial business combination funded with assets other than the trust account assets, our proxy materials or tender offer documents disclosing
the initial business combination would disclose the terms of the financing and, only if required by law, we would seek shareholder approval
of such financing. There is no limitation on our ability to raise funds through the issuance of equity or equity-linked securities or
through loans, advances or other indebtedness in connection with our initial business combination, including pursuant to forward purchase
agreements or backstop agreements we may enter into following consummation of the IPO. At this time, we are not a party to any arrangement
or understanding with any third party with respect to raising any additional funds through the sale of securities or otherwise. None of
our sponsors, officers, directors or shareholders is required to provide any financing to us in connection with or after our initial business
combination.
Sources of Target Businesses
We anticipate that
target business candidates will be brought to our attention from various unaffiliated sources, including investment bankers, private
investment funds and other members of the financial and fintech communities. Target businesses may be brought to our attention by
such unaffiliated sources as a result of being solicited by us through calls or mailings. These sources may also introduce us to
target businesses in which they think we may be interested on an unsolicited basis, since many of these sources will have read this
Annual Report on Form 10-K and know what types of businesses we are targeting. Our officers and directors, as well as their
affiliates, may also bring to our attention target business candidates of which they become aware through their business contacts as
a result of formal or informal inquiries or discussions they may have, as well as attending trade shows or conventions. In addition,
we expect to receive a number of proprietary deal flow opportunities that would not otherwise necessarily be available to us as a
result of the track record and business relationships of our officers and directors. While we do not presently anticipate engaging
the services of professional firms or other individuals that specialize in business acquisitions on any formal basis, we may engage
these firms or other individuals in the future, in which event we may pay a finder’s fee, consulting fee or other compensation
to be determined in an arm’s length negotiation based on the terms of the transaction. We will engage a finder only to the
extent our management determines that the use of a finder may bring opportunities to us that may not otherwise be available to us or
if finders approach us on an unsolicited basis with a potential transaction that our management determines is in our best interest
to pursue. Payment of a finder’s fee is customarily tied to completion of a transaction, in which case any such fee will be
paid out of the funds held in the trust account. In no event, however, will our sponsor or any of our existing officers or
directors, or any entity with which they are affiliated, be paid any finder’s fee, consulting fee or other compensation by the
company prior to, or for any services they render in order to effectuate, the completion of our initial business combination
(regardless of the type of transaction that it is). In addition, we pay Sagara Group, LLC $10,000 per month for office space,
utilities, secretarial and administrative support services provided to members of our management team. We may also elect to make
payment of customary fees to members of our board of directors for director service. Any such payments prior to our initial business
combination will be made from funds held outside the trust account. Other than the foregoing, there will be no finder’s fees,
reimbursement, consulting fee, monies in respect of any payment of a loan or other compensation paid by us to our sponsor, officers
or directors, or any 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).
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We are not prohibited from
pursuing an initial business combination with a business combination target that is affiliated with our sponsor, officers or directors,
or from completing the business combination through a joint venture or other form of shared ownership with our sponsor, officers or directors.
In the event we seek to complete our initial business combination with a business combination target that is affiliated with our sponsor,
officers or directors, we, or a committee of independent directors, would obtain an opinion from an independent investment banking firm
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.
Evaluation of a Target Business and Structuring
of Our Initial Business Combination
In evaluating a prospective
target business, we expect to conduct a due diligence review which may encompass, among other things, meetings with incumbent management
and employees, document reviews, interviews of customers and suppliers, inspection of facilities, as applicable, as well as a review of
financial, operational, legal and other information which will be made available to us. If we determine to move forward with a particular
target, we will proceed to structure and negotiate the terms of the business combination transaction.
The time required to select
and evaluate a target business and to structure and complete our initial business combination, and the costs associated with this process,
are not currently ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation of,
and negotiation with, a prospective target business with which our initial business combination is not ultimately completed will result
in our incurring losses and will reduce the funds we can use to complete another business combination. The company will not pay any consulting
fees to members of our management team, or any of their respective affiliates, for services rendered to or in connection with our initial
business combination.
Lack of Business Diversification
For an indefinite period of
time after the completion of our initial business combination, the prospects for our success may depend entirely on the future performance
of a single business. Unlike other entities that have the resources to complete business combinations with multiple entities in one or
several industries, it is probable that we will not have the resources to diversify our operations and mitigate the risks of being in
a single line of business. By completing our initial business combination with only a single entity, our lack of diversification may:
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 business combination
with that business, our assessment of the target business’s management may not prove to be correct. In addition, the future management
may not have the necessary skills, qualifications or abilities to manage a public company. Furthermore, the future role of members of
our management team, if any, in the target business cannot presently be stated with any certainty. The determination as to whether any
of the members of our management team will remain with the combined company will be made at the time of our initial business combination.
While it is possible that one or more of our directors will remain associated in some capacity with us following our initial business
combination, it is unlikely that any of them will devote their full efforts to our affairs subsequent to our initial business combination.
Moreover, we cannot assure you that members of our management team will have significant experience or knowledge relating to the operations
of the particular target business.
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We cannot assure you that
any of our key personnel will remain in senior management or advisory positions with the combined company. The determination as to whether
any of our key personnel will remain with the combined company will be made at the time of our initial business combination.
Following a business combination,
we may seek to recruit additional managers to supplement the incumbent management of the target business. We cannot assure you that we
will have the ability to recruit additional managers, or that additional managers will have the requisite skills, knowledge or experience
necessary to enhance the incumbent management.
Shareholders May Not Have the Ability to Approve
Our Initial Business Combination
We may conduct redemptions
without a shareholder vote pursuant to the tender offer rules of the SEC subject to the provisions of our Articles. However, we will seek
shareholder approval if it is required by law or applicable stock exchange rule, or we may decide to seek shareholder approval for business
or other reasons.
Under Nasdaq’s listing
rules, shareholder approval would be required for our initial business combination if, for example:
The decision as to whether
we will seek shareholder approval of a proposed business combination in those instances in which shareholder approval is not required
by applicable law or stock exchange listing requirements will be made by us, solely in our discretion, and will be based on business and
legal reasons, which include a variety of factors, including, but not limited to: (i) the timing of the transaction, including in the
event we determine shareholder approval would require additional time and there is either not enough time to seek shareholder approval
or doing so would place the company at a disadvantage in the transaction or result in other additional burdens on the company; (ii) the
expected cost of holding a shareholder vote; (iii) the risk that the shareholders would fail to approve the proposed business combination;
(iv) other time and budget constraints of the company; and (v) additional legal complexities of a proposed business combination that would
be time-consuming and burdensome to present to shareholders.
Permitted Purchases of Our Securities
If we seek shareholder approval
of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to
the tender offer rules, our sponsor, initial shareholders, 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 following the completion of our initial business
combination. There is no limit on the number of shares our initial shareholders, 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 have not formulated any terms or conditions for any such transactions. None of
the funds in the trust account will be used to purchase shares or public warrants in such transactions. If they engage in such transactions,