UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-K
(Mark
One)
☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the fiscal year ended December 31, 2021
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 001-40725
Oxbridge
Acquisition Corp.
(Exact
name of Registrant as specified in its Charter)
Suite
201, 42 Edward Street
George
Town, Grand Cayman
Cayman
Islands, KY1-9006
(Address
of principal executive offices and zip code)
Registrant’s
telephone number, including area code: (345)749-7570
Securities
registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Ordinary Shares, par value $0.0001 per share OXAC The Nasdaq Capital Market
Warrants each exercisable for one ordinary share OXACW The Nasdaq Capital Market
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 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 has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant
was required to submit such files). 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 definition of “large accelerated filer,” “accelerated filer,”
and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐ Accelerated filer ☐
Non-accelerated filer ☒ Small reporting company ☒
Emerging growth company ☒
If
an emerging growth company, indicate by the 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. ☐
Indicate
by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☒ NO ☐
As of June 30, 2021 (the
last business day of the Registrant’s most recently completed second fiscal quarter), the Registrant’s securities were not
publicly traded. The Registrant’s Class A ordinary shares, par value $0.0001 per share, began trading on The Nasdaq Stock Market
separately from its Units (as defined below) on October 1, 2021. The aggregate market value of the Registrant’s Class A ordinary
shares outstanding, other than shares held by persons who may be deemed affiliates of the Registrant, at December 31, 2021, was approximately
$116,033,850.
As
of March 30, 2022, there were 11,615,000shares of Class A ordinary shares, $0.0001 par
value, and 2,875,000shares of Class B ordinary shares, $0.0001 par
value, issued and outstanding.
Documents
Incorporated by Reference: None.
TABLE
OF CONTENTS
Page
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS ii
PART I 1
Item 1. Business. 1
Item 1A. Risk Factors. 6
Item 1B. Unresolved Staff Comments. 38
Item 2. Properties. 38
Item 3. Legal Proceedings. 38
Item 4. Mine Safety Disclosures. 38
Item 6. [Reserved]. 39
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 44
Item 8. Financial Statements and Supplementary Data 44
Item 9A. Controls and Procedures. 44
Item 9B. Other Information. 45
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 45
PART III 46
Item 10. Directors, Executive Officers and Corporate Governance. 46
Item 11. Executive Compensation. 56
Item 14. Principal Accounting Fees and Services. 61
Item 15. Exhibits, Financial Statement Schedules. 62
SIGNATURES 64
i
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
annual report includes, and oral statements made from time to time by representatives of Oxbridge Acquisition Corp. This Annual Report
on Form 10-K contains statements that are forward-looking and as such are not historical facts. This includes, without limitation, statements
under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding our
financial position, business strategy and the plans and objectives of management for future operations. These statements constitute projections, forecasts and forward-looking
statements, and are not guarantees of performance. Such statements can be identified by the fact that they do not relate strictly to
historical or current facts. When used in this Annual Report, words such as “anticipate,” “believe,” “continue,”
“could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,”
“possible,” “potential,” “predict,” “project,” “should,” “strive,”
“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.
The
forward-looking statements contained in this Annual Report on Form 10-K 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, the following risks, uncertainties and other
factors:
● our being a company with no operating history and no operating revenues;
● our ability to select an appropriate target business or businesses;
● 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;
● our financial performance; and
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
PART
I
References
in this annual report to “we,” “us,” “company,” “OXAC,” or “our company”
are to Oxbridge Acquisition Corp., a Cayman Islands exempted company. References to “management” or our “management
team” are to our officers and directors. References to our “sponsor” are to OAC Sponsor Ltd., a Cayman Islands exempted
company. References to our “initial shareholder” are to our sponsor, the holder of our Class B ordinary shares prior to our
initial public offering.
Item
1. Business.
Introduction
We
are a 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. We have neither engaged in any operations nor generated any operating revenue
to date. Based on our business activities, the Company is a “shell company” as defined under the Exchange Act because we
have no operations and nominal assets consisting almost entirely of cash.
Our
executive offices are located at Suite 201, 42 Edward Street, George Town, Grand Cayman, Cayman Islands and our telephone number is +1
(345) 749-7570. Our corporate website address is www.oxbridgeaq.com. Our website and the information contained on, or that can
be accessed through, the website is not deemed to be incorporated by reference in, and is not considered part of, this annual report.
You should not rely on any such information in making your decision whether to invest in our securities.
Company
History
On
April 12, 2021, our sponsor purchased an aggregate of 2,875,000 Class B ordinary shares (our “founder shares”) for an aggregate
purchase price of $25,000, or approximately $0.009 per share. Our Class B ordinary shares will automatically convert into Class A ordinary
shares, on a one-for-one basis, upon the completion of a business combination. The number of founder shares issued was based on the expectation
that the founder shares would represent 20% of the outstanding Class A ordinary shares and our Class B ordinary shares (collectively,
our “ordinary shares”) upon completion of our initial public offering (the “IPO”).
On
August 16, 2021, we consummated our IPO of 10,000,000 Units at $10.00 per Unit, generating gross proceeds of $100,000,000 and
incurring offering costs of approximately $6,624,000, inclusive of approximately $3,500,000 in deferred underwriting commissions. The
underwriter was granted a 45-day option from the date of the final prospectus relating to the initial public offering to purchase
up to 1,500,000 additional Units to cover over-allotments, if any, at $10.00 per Unit. On August 16, 2021, the underwriters exercised
the over-allotment option in full and, purchased an additional 1,500,000 Over-Allotment Units, generating additional gross proceeds of
$15,000,000, and incurring additional offering costs of $825,000, inclusive of approximately $525,000 of deferred underwriting commissions.
Each warrant entitles the holder thereof to purchase one share of Class A ordinary shares at a price of $11.50 per share, subject to
certain adjustments.
Simultaneously
with the closing of the IPO, we consummated the sale of 5,760,000 warrants to the sponsor and Maxim Group LLC
(“Maxim”), the underwriter in our initial public offering (the “private placement warrants”), at a
price of $1.00 per private placement warrant, generating gross proceeds of $5,760,000. An aggregate of $116,725,000
from the proceeds of the IPO and the private placement warrants was placed in a trust account (the “trust
account”) such that the trust account held $116,725,000 at the time of closing of the IPO. Each private placement
warrant is exercisable to purchase one Class A ordinary share at $11.50 per share, subject to certain adjustments.
On
September 30, 2021, we announced that, commencing October 1, 2021, holders of the 11,500,000 units sold in the IPO may elect to
separately trade the shares of Class A ordinary shares and the warrants included in the units. Those units not separated continued to
trade on The Nasdaq Stock Market LLC (“Nasdaq”) under the symbol “OXACU” and the Class A ordinary shares and
warrants that were separated trade under the symbols “OXAC” and “OXACW,” respectively.
Our
units, Class A ordinary shares and warrants are registered under the Exchange Act and we have reporting obligations, including the requirement
that we file annual, quarterly and current reports with the SEC. The SEC’s website (http://www.sec.gov) contains such reports,
proxy and information statements and other information regarding issuers that file electronically with the SEC. In accordance with the
requirements of the Exchange Act, our annual reports contain financial statements audited and reported on by our independent registered
public accounting firm.
Effecting
a Business Combination
Our
Business Strategy
We
believe that the blockchain technology, artificial intelligence and insurtech sectors are highly fragmented and evolving quickly. Our
business strategy is to identify and consummate an initial business combination with a disruptive and differentiated technology company
that focuses on blockchain technology, artificial intelligence or insurtech technologies. We will seek to acquire established businesses
that we believe are fundamentally sound but potentially in need of financial, operational, strategic or managerial redirection to maximize
value. We may also look at earlier stage companies that exhibit the potential to change the industries in which they participate and
which will offer the potential of sustained high levels of revenue growth and path to profitability.
We
intend to employ a thematic acquisition strategy, and are focused on long-term shareholder value growth and building a leading franchise.
Our strategy is to:
●
target a company with disruptive and differentiated technology;
●
fully leverage the industry experience and broad network of our executive officers, board members and advisors to identify potential
investment opportunities and successfully execute acquisition transactions;
●
deliver creative approaches to transaction sourcing, while exercising pricing discipline; and
●
utilize an understanding of global financial markets and events, financing, restructuring and overall corporate strategy options.
Our
business combination strategy will leverage the following attributes of our management team:
●
Broad network, proprietary contacts, corporate relationships including financing providers and investment market participants, private
equity groups, investment banks, accounting firms, target management teams and companies or individuals that represent sellers);
●
Industry experience developed through operating, managing, marketing and growing businesses in the insurance industry;
●
Investing and building companies in the insurance and InsurTech sector with unique market insights;
●
Substantial experience in navigating the challenges of operating public companies; and
●
Engaging with public market analysts and investors to help companies better communicate their business model, opportunity and strategy
to maximize value for their shareholders.
In
addition to assisting in the sourcing of a potential transaction, members of our management team may join the acquired company as a board
member or in a senior executive capacity or assist in the operation of the acquired company in order to enhance shareholder value by
improving the operational performance of the combined company and undertaking broader strategic initiatives.
Business
Combination Criteria
Our
intent is to seek potential target businesses globally. The maturity and judgment of our team will guide our acquisition process. When
potential targets are being evaluated, we expect to use the following, non-exclusive criteria listed below for determining opportunities.
We will use these criteria when evaluating business combination opportunities, but we may decide to enter into our initial business combination
with a target business that does not meet all or some of these criteria:
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 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 stockholder communications
related to our initial business combination, which, would be in the form of proxy solicitation materials or tender offer documents that
we would file with the Securities and Exchange Commission, or SEC.
Additional
Disclosures
Our
Acquisition Process
Each
of our directors and officers 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 to
such entity. Accordingly, if any of our directors or officers becomes aware of a business combination opportunity that is suitable for
an entity to which he or she has then-current fiduciary or contractual obligations, he or she may need to honor these fiduciary or contractual
obligations to present such business combination opportunity to such entity, subject to his or her fiduciary duties under Cayman Islands
law. We do not believe, however, that the fiduciary duties or contractual obligations of our directors or officers will materially affect
our ability to identify and pursue business combination opportunities or complete our initial business combination.
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) at the time of our signing
a definitive agreement in connection with our initial business combination. We refer to this as the 80% of net assets test. If our Board
of Directors is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion
from an independent investment banking firm or another independent firm that commonly renders valuation opinions for the type of company
we are seeking to acquire or an independent accounting firm. We do not intend to purchase multiple businesses in unrelated industries
in conjunction with our initial business combination. Additionally, pursuant to Nasdaq rules, any initial business combination must be
approved by a majority of our independent directors. Our amended and restated memorandum and articles of association will also provide
that any initial business combination must be approved by at least 75% of our Board of Directors.
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 issued and outstanding 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 issued and outstanding
voting securities of the target or otherwise acquires a controlling interest in the target business 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 our 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 business combination transaction. For example,
we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the issued and outstanding
capital stock, shares or other equity securities of a target business or issue a substantial number of new shares to third-parties in
connection with financing our initial business combination. In this case, we would acquire a 100% controlling interest in the target.
However, as a result of the issuance of a substantial number of new shares, our shareholders immediately prior to our initial business
combination could own less than a majority of our 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 valued for purposes of the 80% fair market value
test. If our initial business combination involves more than one target business, the 80% fair market value test will be based on the
aggregate value of all of the target businesses.
Extension
of Time to Complete Business Combination
We will have until
November 16, 2022 to consummate an initial business combination. However, if we anticipate that we may not be able to consummate our
initial business combination by November 16, 2022, we will, by resolution of our Board of Directors if requested by our sponsor, extend
the period of time to consummate a business combination by an additional three months up to twice (for a total of 21 months through May
16, 2023 to complete a business combination), (each an “Extension Period”), subject to the sponsor depositing additional
funds into the trust account as set out below. In connection with any such extension, public shareholders will not be offered the opportunity
to vote on or redeem their shares. Pursuant to the terms of our amended and restated memorandum and articles of association and the trust
agreement to be entered into between us and Continental Stock Transfer & Trust Company on the date of this prospectus, in order to
extend the time available for us to consummate our initial business combination for an additional three months, our sponsor or its affiliates
or designees must deposit into the trust account $ $1,150,000 on or prior to the date of the deadline. We will only be able to extend
the period of time to consummate a business combination by an additional three months twice (for a total of six months). We will issue
a press release announcing each extension, at least three days prior to the deadline. In addition, we will issue a press release the
day after the deadline, announcing whether the funds have been timely deposited. Our sponsor and its affiliates or designees are obligated
to fund the trust account in order to extend the time for us to complete our initial business combination, but our sponsor will not be
obligated to extend such time.
Facilities
We
maintains our principal executive offices
at Suite 201, 42 Edward Street, George Town, Grand Cayman, Cayman Islands. We pays our sponsor $10,000 per month for office
space, administrative and support services pursuant to the terms of an administrative services agreement between us and our
sponsor. Upon completion of our initial business combination or our liquidation, we will cease paying these monthly
fees. We considers our current office space adequate for our current operations.
Employees
We
currently have two executive officers. These
individuals are not obligated to devote any specific number of hours to our matters, but they intend to devote as much of their time
as they deem necessary to our affairs until we has completed our initial business combination. The amount of time
that any such person will devote in any time period to our company will vary based on whether a target business has been selected for
our initial business combination and the current stage of the business combination process. We do not intend to have any
full-time employees prior to the consummation of an initial business combination.
Competition
We
expect to encounter intense competition from other entities having a business objective similar to ours, including private investors
(which may be individuals or investment partnerships), other blank check companies and other entities, domestic and international, competing
for the types of businesses we intend to acquire. Many of these individuals and entities are well established and have extensive experience
in identifying and effecting, directly or indirectly, acquisitions of companies operating in or providing services to various industries.
Many of these competitors possess greater technical, human and other resources or more local industry knowledge than we do and our financial
resources will be relatively limited when contrasted with those of many of these competitors. Additionally, the number of blank check
companies looking for business combination targets has increased compared to recent years and many of these blank check companies are
sponsored by entities or persons that have significant experience with completing business combinations. While we believe there are numerous
target businesses we could potentially acquire with the net proceeds from our initial public offering and private placement
warrants, if we have not completed our initial business combination within the required time period, our public shareholders may
receive only approximately $10.15 per share, or less in certain circumstances, on the liquidation of our trust account and our
warrants will expire worthless.
Emerging
Growth Company
We
are an “emerging growth company,” as
defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart our
Business Startups Act of 2012, (the “JOBS Act”), and may take advantage of certain exemptions from various reporting requirements
that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required
to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding
executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory
vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
Further,
Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting
standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do
not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting
standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements
that apply to non-emerging growth companies but any such election to opt out is irrevocable.
We
have elected not to opt out of such extended transition
period which means that when a standard is issued or revised and it has different application dates for public or private companies,
we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised
standard. This may make comparison of our financial statements with another public company which is neither an emerging growth
company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of
the potential differences in accounting standards used.
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 our initial public offering, or December 31, 2026, (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 ordinary shares
that is held by non-affiliates exceeds $700 million as of the end of the prior fiscal year’s second fiscal quarter; and (2) the
date on which we have issued more than $1.00 billion in non-convertible debt during the prior three-year period.
Item
1A. Risk Factors.
An
investment in our securities involves a high degree of risk. You should consider carefully all of the risks described below, together
with the other information contained in this Annual Report, including our financial statements and related notes, and the prospectus
relating to our IPO, before making a decision to invest in our securities. If any of the following events occur, our business, financial
condition and operating results may be materially adversely affected. In that event, the trading price of our securities could decline,
and you could lose all or part of your investment. The risks and uncertainties described below are not the only ones we face. Additional
risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that
adversely affect our business, financial condition and operating results.
Summary
of Risk Factors
Our
business is subject to numerous risks and uncertainties. These risks include, but are not limited to, risks associated
with:
● being a newly incorporated exempted company without an operating history;
● our ability to continue as a “going concern;”
● delay in receiving distributions from the trust account;
● lack of opportunity to vote on our proposed business combination;
● lack of protections afforded to investors of blank check companies;
● issuance of equity and/or debt securities to complete a business combination;
● lack of working capital;
● third-party claims reducing the per-share redemption price;
● our shareholders being held liable for claims by third parties against us;
● failure to enforce our sponsor’s indemnification obligations;
● warrant holders limited to exercising warrants only on a “cashless basis;”
● dependence on key personnel;
● conflicts of interest of our sponsor, officers and directors;
● the delisting of our securities by Nasdaq;
● shares being redeemed and warrants becoming worthless;
● our competitors with advantages over us in seeking business combinations;
● ability to obtain additional financing;
● our initial shareholders controlling a substantial interest in us;
● warrants adverse effect on the market price of our ordinary shares;
● disadvantageous timing for redeeming warrants;
● impact of COVID-19 and related risks;
● business combination with a company located in a foreign jurisdiction;
● changes in laws or regulations;
● tax consequences to business combinations; and
RISKS
RELATING TO OUR SEARCH FOR, CONSUMMATION OF, OR INABILITY TO CONSUMMATE, A BUSINESS COMBINATION AND POST-BUSINESS COMBINATION RISKS
Our
public shareholders may not be afforded an opportunity to vote on our proposed business combination, which means we may complete our
initial business combination even though a majority of our public shareholders do not support such a combination.
We
may not hold a shareholder vote to approve our initial business combination unless the business combination would require shareholder
approval under applicable Cayman Islands law or the rules of Nasdaq or if we decide to hold a shareholder vote for business or other
reasons. Examples of transactions that would not ordinarily require shareholder approval under Cayman Islands law or the rules of Nasdaq
include asset acquisitions and capital stock or share purchases, while transactions such as direct mergers with our company or transactions
where we issue more than 20% of our outstanding shares would require shareholder approval. For instance, Nasdaq rules currently allow
us to engage in a tender offer in lieu of a general meeting but would still require us to obtain shareholder approval if we were seeking
to issue more than 20% of our outstanding shares to a target business as consideration in any business combination. Therefore, if we
were structuring a business combination that required us to issue more than 20% of our outstanding shares, we would seek shareholder
approval of such business combination. Except as required by applicable law or Nasdaq rules, the decision as to whether we will seek
shareholder approval of a proposed business combination or will allow shareholders to sell their shares to us in a tender offer will
be made by us, solely in our discretion, and will be based on a variety of factors, such as the timing of the transaction and whether
the terms of the transaction would otherwise require us to seek shareholder approval. Accordingly, we may consummate our initial business
combination even if holders of a majority of the issued and outstanding ordinary shares do not approve of the business combination we
consummate.
Although
we have identified general criteria and guidelines that we believe are important in evaluating prospective target businesses, we may
enter into our initial business combination with a target that does not meet such criteria and guidelines, and as a result, the target
business with which we enter into our initial business combination may not have attributes entirely consistent with our general criteria
and guidelines.
Although
we have identified general criteria and guidelines for evaluating prospective target businesses, it is possible that a target business
with which we enter into our initial business combination will not have all of these positive attributes. If we complete our initial
business combination with a target that does not meet some or all of these guidelines, such combination may not be as successful as a
combination with a business that does meet all of our general criteria and guidelines. In addition, if we announce a prospective business
combination with a target that does not meet our general criteria and guidelines, a greater number of shareholders may exercise their
redemption rights, which may make it difficult for us to meet any closing condition with a target business that requires us to have a
minimum net worth or a certain amount of cash. In addition, if shareholder approval of the transaction is required by applicable law,
or we decide to obtain shareholder approval for business or other legal reasons, it may be more difficult for us to attain shareholder
approval of our initial business combination if the target business does not meet our general criteria and guidelines. If we are unable
to complete our initial business combination, our public shareholders may receive only approximately $10.15 per share on the liquidation
of our trust account and our warrants will expire worthless.
Your
only 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 shareholder approval of the business combination.
At
the time of your investment in us, you will not be provided with an opportunity to evaluate the specific merits or risks of one or more
target businesses. Since our Board of Directors may complete a business combination without seeking shareholder approval, public shareholders
may not have the right or opportunity to vote on the business combination, unless we seek such shareholder approval. Accordingly, if
we do not seek shareholder approval, your only opportunity to affect the investment decision regarding a potential business combination
may be limited to exercising your redemption rights within the period of time (which will be at least 20 business days) set forth in
our tender offer documents mailed to our public shareholders in which we describe our initial business combination.
Because
of our limited resources and the significant competition for business combination opportunities, it may be more difficult for us to complete
our initial business combination. If we are unable to complete our initial business combination, our public shareholders may receive
only approximately $10.15 per share, or less in certain circumstances, on our redemption, and our warrants will expire worthless.
We
expect to encounter intense competition from other entities having a business objective similar to ours, including private investors
(which may be individuals or investment partnerships), other blank check companies and other entities, domestic and international, competing
for the types of businesses we intend to acquire. Many of these individuals and entities are well-established and have extensive experience
in identifying and effecting, directly or indirectly, acquisitions of companies operating in or providing services to various industries.
Many of these competitors possess greater technical, human and other resources or more local industry knowledge than we do and our financial
resources will be relatively limited when contrasted with those of many of these competitors. While we believe there are numerous target
businesses we could potentially acquire with the net proceeds of our initial public offering and the sale of the private placement warrants,
our ability to compete with respect to the acquisition of certain target businesses that are sizable will be limited by our available
financial resources. This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses.
Furthermore, if we are obligated to pay cash for the Class A ordinary shares redeemed and, in the event we seek shareholder approval
of our initial business combination, we make purchases of our Class A ordinary shares, the resources available to us for our initial
business combination may be reduced. Any of these obligations may place us at a competitive disadvantage in successfully negotiating
a business combination. If we are unable to complete our initial business combination, our public shareholders may receive only approximately
$10.15 per share (or less in certain circumstances) on the liquidation of our trust account and our warrants will expire worthless. In
certain circumstances, our public shareholders 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 trust account could be reduced and the per-share redemption amount
received by shareholders may be less than $10.15 per share” and other risk factors herein.
In
recent years, the number of special purpose acquisition companies that have been formed has increased substantially. Many potential targets
for special purpose acquisition companies have already entered into an initial business combination, and there are still many special
purpose acquisition companies seeking targets for their initial business combination, as well as many such companies currently in registration.
As a result, at times, fewer attractive targets may be available, and it may require more time, more effort and more resources to identify
a suitable target and to consummate an initial business combination.
In
addition, because there are more special purpose acquisition companies seeking to enter into an initial business combination with available
targets, the competition for available targets with attractive fundamentals or business models may increase, which could cause targets
companies to demand improved financial terms. Attractive deals could also become scarcer for other reasons, such as economic or industry
sector downturns, geopolitical tensions, or increases in the cost of additional capital needed to close business combinations or operate
targets post-business combination. This could increase the cost of, delay or otherwise complicate or frustrate our ability to find and
consummate an initial business combination, and may result in our inability to consummate an initial business combination on terms favorable
to our investors altogether.
The
ability of our public shareholders to redeem their shares for cash may make our financial condition unattractive to potential business
combination targets, which may make it difficult for us to enter into a business combination with a target.
We
may seek to enter into a business combination transaction agreement with a prospective target that requires as a closing condition that
we have a minimum net worth or a certain amount of cash. If too many public shareholders exercise their redemption rights, we would not
be able to meet such closing condition and, as a result, would not be able to proceed with the business combination. Furthermore, we
will only redeem our public shares so long as (after such redemption) our net tangible assets will be at least $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 “penny stock” rules) or any greater net tangible asset or cash requirement which may
be contained in the agreement relating to our initial business combination. Consequently, if accepting all properly submitted redemption
requests would cause our net tangible assets to be less than $5,000,001 or such greater amount necessary to satisfy a closing condition,
each as described above, we would not proceed with such redemption and the related business combination and may instead search for an
alternate business combination. Prospective targets will be aware of these risks and, thus, may be reluctant to enter into a business
combination transaction with us.
The
ability of our public shareholders to exercise redemption rights with respect to a large number of our shares may not allow us to complete
the most desirable business combination or optimize our capital structure.
At
the time we enter into an agreement for our initial business combination, we will not know how many shareholders may exercise their redemption
rights, and therefore we will need to structure the transaction based on our expectations as to the number of shares that will be submitted
for redemption. If our initial business combination agreement requires us to use a portion of the cash in the trust account to pay the
purchase price, or requires us to have a minimum amount of cash at closing, we will need to reserve a portion of the cash in the trust
account to meet such requirements, or arrange for third party financing. In addition, if a larger number of shares are submitted for
redemption than we initially expected, we may need to restructure the transaction to reserve a greater portion of the cash in the trust
account or arrange for third party financing. Raising additional third-party financing may involve dilutive equity issuances or the incurrence
of indebtedness at higher than desirable levels. Furthermore, this dilution would increase to the extent that the anti-dilution provisions
of the Class B ordinary shares result in the issuance of Class A ordinary shares on a greater than one-to-one basis upon conversion of
the Class B shares at the time of the initial 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
ability of our public shareholders to exercise redemption rights with respect to a large number of our shares could increase the probability
that our initial business combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your shares.
If
our initial business combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price, or
requires us to have a minimum amount of cash at closing, the probability that our initial business combination would be unsuccessful
is increased. If our initial business combination is unsuccessful, you would not receive your pro rata portion of the trust account until
we liquidate the trust account. If you are in need of immediate liquidity, you could attempt to sell your shares in the open market;
however, at such time our shares may trade at a discount to the pro rata amount per share in the trust account. In either situation,
you may suffer a material loss on your investment or lose the benefit of funds expected in connection with our redemption until we liquidate
or you are able to sell your shares in the open market.
The
requirement that we complete our initial business combination within the prescribed time frame may give potential target businesses leverage
over us in negotiating a business combination and may decrease our ability to conduct due diligence on potential business combination
targets as we approach our dissolution deadline, which could undermine our ability to complete our initial business combination on terms
that would produce value for our shareholders.
Any
potential target business with which we enter into negotiations concerning a business combination will be aware that we must complete
our initial business combination by November 16, 2022 or any Extension Period. Consequently, such target business may obtain leverage
over us in negotiating a business combination, knowing that if we do not complete our initial business combination with that particular
target business, we may be unable to complete our initial business combination with any target business. This risk will increase as we
get closer to the timeframe described above. In addition, we may have limited time to conduct due diligence and may enter into our initial
business combination on terms that we would have rejected upon a more comprehensive investigation.
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 for the purpose of winding up and we would redeem our public shares and liquidate, in which case our public shareholders may only
receive approximately $10.15 per share, or less than such amount in certain circumstances, and our warrants will expire worthless.
Our
initial shareholder, officers and directors have agreed that we must complete by November 16, 2022 or during any Extension Period.
We may not be able to find a suitable target business and complete our initial business combination within such time period. If we have
not completed our initial business combination within such time period, we will: (i) cease all operations except for the purpose of winding
up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share
price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including any interest (which interest shall
be net of taxes payable, and 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 shareholders’ rights as shareholders (including the right to receive
further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption,
subject to the approval of our remaining shareholders and our Board of Directors, liquidate and dissolve, subject in each case to our
obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. In such case, our
public shareholders may only receive approximately $10.15 per share, and our warrants will expire worthless. In certain circumstances,
our public shareholders 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 trust account could be reduced and the per-share redemption amount received by shareholders
may be less than $10.15 per share” and other risk factors herein.
Our
search for a business combination, and any target business with which we ultimately consummate a business combination, may be materially
adversely affected by the recent coronavirus (COVID-19) outbreak.
In
December 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China, which has and is continuing to spread throughout
China and other parts of the world, including the United States. On January 30, 2020, the World Health Organization declared the outbreak
of the coronavirus disease (COVID-19) a “Public Health Emergency of International Concern.” On January 31, 2020, U.S. Health
and Human Services Secretary Alex M. Azar II declared a public health emergency for the United States to aid the U.S. healthcare community
in responding to COVID-19, and on March 11, 2020 the World Health Organization characterized the outbreak as a “pandemic”.
A significant outbreak of COVID-19 and other infectious diseases has resulted in a widespread health crisis, which has adversely affected
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 may be unable to complete a business combination if continued
concerns relating to COVID-19 restrict travel, limit the ability to have meetings with potential investors or the target company’s
personnel, vendors or service providers are unavailable to negotiate and consummate a transaction in a timely manner. The extent to which
COVID-19 impacts our search for a business combination will depend on future developments, which are highly uncertain and cannot be predicted,
including new information which may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact,
among others. If the disruptions posed by COVID-19 or other matters of global concern continue for an extensive period of time, our ability
to consummate a business combination, or the operations of a target business with which we ultimately consummate a business combination,
may be materially adversely affected.
If
we seek shareholder approval of our initial business combination, our initial shareholder, directors, officers, advisors and their affiliates
may elect to purchase shares from public shareholders, which may influence a vote on a proposed business combination and reduce the public
“float” of our ordinary shares.
If
we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business
combination pursuant to the tender offer rules, our initial shareholder, directors, officers, advisors or their respective affiliates,
may purchase shares in privately negotiated transactions or in the open market either prior to or following the completion of our initial
business combination, although they are under no obligation to do so. Such a purchase may include a contractual acknowledgement that
such shareholder, although still the record holder of our shares is no longer the beneficial owner thereof and therefore agrees not to
exercise its redemption rights. In the event that our initial shareholders, directors, officers, or their respective affiliates purchase
shares in privately negotiated transactions from public shareholders who have already elected to exercise their redemption rights, such
selling shareholders would be required to revoke their prior elections to redeem their shares. The price per share paid in any such transaction
may be different than the amount per share a public shareholder would receive if it elected to redeem its shares in connection with our
initial business combination. The purpose of such purchases could be to vote such shares in favor of the business combination and thereby
increase the likelihood of obtaining shareholder approval of the business combination or to satisfy a closing condition in an agreement
with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination,
where it appears that such requirement would otherwise not be met. This may result in the completion of our initial business combination
that may not otherwise have been possible.
In