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
☐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: 001-40206
CF
ACQUISITION CORP. VIII
(Exact
name of registrant as specified in its charter)
(Address of principal executive offices) (Zip Code)
Registrant’s
telephone number, including area code: (212)938-5000
Securities
registered pursuant to Section 12(b) of the Act:
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 Exchange 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 and post 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 definition of “large accelerated filer,” “accelerated filer, “smaller
reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐ Accelerated filer ☐
Non-accelerated filer ☒ Smaller reporting company ☒
Emerging growth company ☒
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition 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 ☐
The
aggregate market value of the units outstanding, other than shares held by persons who may be deemed affiliates of the registrant, computed
by reference to the closing price for the Class A common stock on June 30, 2021, as reported on the
Nasdaq Capital Market was $246,500,000.
As
of March 31, 2022, there were 25,540,000 shares of Class A common stock, par value $0.0001 per share, and 6,250,000 shares of Class B
common stock, par value $0.0001 per share, of the registrant issued and outstanding.
TABLE
OF CONTENTS
PAGE
PART I 1
Item 1. Business 1
Item 1A. Risk Factors 19
Item 1B. Unresolved Staff Comments 21
Item 2. Properties 21
Item 3. Legal Proceedings 21
Item 4. Mine Safety Disclosures 21
Item 6. Reserved 22
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 26
Item 8. Financial Statements and Supplementary Data 26
Item 9A. Controls and Procedure 27
Item 9B. Other Information 27
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 27
PART III 28
Item 10. Directors, Executive Officers and Corporate Governance 28
Item 11. Executive Compensation 33
Item 14. Principal Accounting Fees and Services 39
Item 15. Exhibits and Financial Statement Schedules 40
i
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
Report (as defined below), including, without limitation, statements under the heading “Management’s Discussion and Analysis
of Financial Condition and Results of Operations,” includes forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, or the Exchange Act. These forward-looking statements
can be identified by the use of forward-looking terminology, including the words “believes,” “estimates,” “anticipates,”
“expects,” “intends,” “plans,” “may,” “will,” “potential,” “projects,”
“predicts,” “continue,” or “should,” or, in each case, their negative or other variations or comparable
terminology. There can be no assurance that actual results will not materially differ from expectations. Such statements include, but
are not limited to, any statements relating to our ability to consummate any acquisition or other business combination and any other
statements that are not statements of current or historical facts. These statements are based on management’s current expectations,
but actual results may differ materially due to various factors, including, but not limited to:
● 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;
● 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. Future developments affecting us may not 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. 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.
Unless
otherwise stated in this Report, or the context otherwise requires, references to:
● “board of directors” or “board” are to the board of directors of the Company;
ii
● “DGCL” are to the Delaware General Corporation Law;
● “Exchange Act” are to the Securities Exchange Act of 1934, as amended;
● “FINRA” are to the Financial Industry Regulatory Authority;
● “JOBS Act” are to the Jumpstart Our Business Startups Act of 2012;
● “management” or our “management team” are to our officers;
● “Nasdaq” are to the Nasdaq Stock Market;
● “PCAOB” are to the Public Company Accounting Oversight Board (United States);
● “public stockholders” are to the holders of our public shares;
iii
● “Sarbanes-Oxley Act” are to the Sarbanes-Oxley Act of 2002;
● “SEC” are to the U.S. Securities and Exchange Commission;
● “Securities Act” are to the Securities Act of 1933, as amended;
● “we,” “us,” “Company” or “our Company” are to CF Acquisition Corp. VIII; and
iv
PART
I
Item
1. Business.
Introduction
We
are a blank check company formed on July 8, 2020 as a Delaware corporation for the purpose of effecting an initial business combination.
Since our initial public offering, we have focused our search for an initial business combination on businesses that may provide significant
opportunities for attractive investor returns. Our efforts to identify a prospective target business are not limited to a particular
industry or geographic region, although we are focusing on a target in an industry where we believe our management team’s and founders’
expertise will provide us with a competitive advantage, including the financial services, healthcare, real estate services, technology
and software industries.
Our
management team consists of:
We,
the sponsor, and CF&Co. are all affiliates of Cantor. Cantor is a diversified company specializing in financial and real estate services
for customers operating in the global financial and commercial real estate markets, whose businesses include CF&Co., a leading independent
middle market investment bank and primary dealer; BGC Partners, Inc. (“BGC”), whose common stock trades on the Nasdaq Global
Select Market under the ticker symbol “BGCP”, a leading global financial technology and brokerage business primarily servicing
the global financial markets; and Newmark Group, Inc. (“Newmark”), whose Class A common stock trades on the Nasdaq Global
Select Market under the ticker symbol “NMRK”, a leading full-service commercial real estate services business. We believe
that the combination of our management team’s and our affiliates’ financial services, financial and real estate technology,
and real estate industry expertise and proven ability to grow businesses through acquisitions make us uniquely qualified to pursue acquisitions.
Past
performance of Cantor, its affiliates and our management team is not a guarantee either (i) that we will be able to identify a suitable
candidate for our initial business combination or (ii) of success with respect to any business combination we may consummate. You should
not rely on the historical performance record of Cantor, its affiliates, or our management team as indicative of our future performance.
Initial
Public Offering
On
March 16, 2021, we consummated our initial public offering of 25,000,000 units (including 3,000,000
units sold upon the partial exercise of the underwriters’ over-allotment option). Each unit consists of one public share
and one-fourth of one public warrant, with each public warrant entitling the holder thereof to purchase one share of Class A common stock
for $11.50 per whole share. The units were sold at a price of $10.00 per unit, generating gross proceeds to the Company of $250,000,000.
Simultaneously
with the closing of the initial public offering, we completed the private sale of an aggregate of 540,000 private placement units to
the sponsor at a purchase price of $10.00 per private placement unit, generating gross proceeds of $5,400,000.
A
total of $250,000,000, comprised of $244,600,000 of the proceeds from the initial public offering and $5,400,000 of the proceeds of the
sale of the private placement units, was placed in the trust account maintained by Continental, acting as trustee.
Upon
the closing of our initial public offering, we were required to complete our initial business combination by March 16, 2022, 12 months
from the closing of our initial public offering. On March 8, 2022, at a special meeting of our stockholders, our stockholders approved
the Extension. If our initial business combination is not consummated by September 30, 2022, then we will proceed to liquidate, and we
will distribute all amounts in the trust account.
Our
units, public shares and public warrants are each traded on Nasdaq under the symbols “CFFEU,” “CFFE” and “CFFEW,”
respectively. Our units commenced public trading on March 12, 2021, and our public shares and public warrants commenced separate public
trading on May 3, 2021.
1
Business
Strategy
Our
acquisition and value creation strategy is to identify, acquire and, after our initial business combination, help to build a company
in an industry that complements the experience and expertise of our management team. Our acquisition selection process leverages the
network of contacts developed by our management team and those of the sponsor and its affiliates, including relationships in the financial
services, healthcare, real estate services, technology and software industries, comprising management teams of public and private companies,
investment bankers, private equity sponsors, venture capital investors, advisers, attorneys and accountants that we believe should provide
us with a number of business combination opportunities. We are deploying a proactive sourcing strategy and are focusing on companies
where we believe the combination of our operating experience, relationships, capital and capital markets expertise can be catalysts to
transform a target company and can help accelerate the target’s growth and performance. Following our initial public offering,
our management team began communicating with their network of relationships, including employees of Cantor and its affiliates, to set
forth the type of company that we want to target so that we could begin the process of locating, identifying, pursuing and reviewing
potential target companies and promising leads.
Our
management team and Cantor and its affiliates have experience in:
● sourcing, structuring, acquiring and selling businesses;
● negotiating transactions favorable to investors;
● acquiring and integrating companies; and
Investment
Criteria
We
are seeking to acquire one or more businesses with an aggregate enterprise value of approximately $500 million to $1.25 billion
or more. We developed the following high level, non-exclusive investment criteria that we will use to screen for and evaluate target
businesses. We are seeking to acquire a business that (1) has sustainable competitive advantages, (2) generates, or has the
near-term potential to generate, predicable free cash flows, (3) would benefit from the capabilities of the sponsor and management
team to improve its operations and market position, (4) has an experienced and capable management team, (5) has the potential
to grow both organically and through additional acquisitions and (6) can be acquired at an attractive valuation to maximize potential
returns to our stockholders.
While
we may pursue an acquisition opportunity in any business, industry, sector or geographical location, we are focusing on industries that
complement our management team’s background, and to capitalize on the ability of our officers and directors to identify and acquire
a business or businesses consistent with the experience of our management team and affiliates of the sponsor. We therefore are focusing
on potential target companies in the financial services, healthcare, real estate services, technology and software industries. Within
the universe of potential targets set forth above, an important focus for us will be the following:
2
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 only meets
some but not all of the above criteria and guidelines, we will disclose that the target business does not meet all of the above criteria
in our stockholder communications related to our initial business combination, which, as discussed in this Report, would be in the form
of proxy solicitation materials or tender offer documents that we would file with the SEC.
Initial
Business Combination
So
long as we maintain a listing for our securities on Nasdaq, 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 taxes payable on the interest earned on
the trust account) at the time of our signing a definitive agreement in connection with our initial business combination. Our board of
directors will make the determination as to the fair market value of our initial business combination. If our board of directors is not
able to independently determine the fair market value of our initial business combination, we will obtain an opinion from an independent
investment banking firm or another independent firm that commonly renders valuation opinions with respect to the satisfaction of such
criteria. While we consider it unlikely that our board of directors will not be able to make an independent determination of the fair
market value of our initial business combination, it may be unable to do so if it is less familiar or experienced with the business of
a particular target or if there is a significant amount of uncertainty as to the value of a target’s assets or prospects. Additionally,
pursuant to Nasdaq rules, any initial business combination must be approved by a majority of our independent directors. If we are no
longer listed on Nasdaq, we would not be required to satisfy the above-referenced fair market value test.
We
may, at our option, pursue an Affiliated Joint Acquisition. We do not expect that we would pursue any such opportunity with another special
purpose acquisition company sponsored by Cantor. Any such parties would co-invest only if (i) permitted by applicable regulatory
and other legal limitations; (ii) we and Cantor considered a transaction to be mutually beneficial to us as well as the affiliated
entity; and (iii) other business reasons exist to do so, such as the strategic merits of including such co-investors, the need for
additional capital beyond the amount held in our trust account to fund the initial business combination and/or the desire to obtain committed
capital for closing the initial business combination.
3
An
Affiliated Joint Acquisition may be effected through a co-investment with us in the target business at the time of our initial business
combination, or we could raise additional proceeds to complete the initial business combination by issuing to such parties a specified
future issuance. Any such Affiliated Joint Acquisition or specified future issuance would be in addition to, and would not include, the
FPS. The amount and other terms and conditions of any such specified future issuance would be determined at the time thereof. We are
not obligated to make any specified future issuance and may determine not to do so. This is not an offer for any specified future issuance.
Pursuant to the anti-dilution provisions of our Class B common stock, any such specified future issuance would result in an adjustment
to the conversion ratio such that our initial stockholders and their permitted transferees, if any, would retain their aggregate percentage
ownership at 20% of the sum of the total number of all shares of common stock outstanding upon completion of the initial public offering
(not including the private placement shares) plus all shares issued in the specified future issuance, unless the holders of a majority
of the then-outstanding shares of Class B common stock agreed to waive such adjustment with respect to the specified future issuance
at the time thereof. We cannot determine at this time whether a majority of the holders of our Class B common stock at the time
of any such specified future issuance would agree to waive such adjustment to the conversion ratio. They may waive such adjustment due
to (but not limited to) the following: (i) closing conditions which are part of the agreement for our initial business combination;
(ii) negotiation with Class A stockholders on structuring an initial business combination; (iii) negotiation with parties
providing financing which would trigger the anti-dilution provisions of the Class B common stock; or (iv) as part of the Affiliated
Joint Acquisition. If such adjustment is not waived, the specified future issuance would not reduce the percentage ownership of holders
of our Class B common stock, but would reduce the percentage ownership of holders of our Class A common stock. If such adjustment
is waived, the specified future issuance would reduce the percentage ownership of holders of both classes of our common stock. The issuance
of the FPS will not result in such an adjustment to the conversion ratio of our Class B common stock.
We
anticipate structuring our initial business combination either (i) in such a way so that the post-transaction company in which our
public stockholders own shares will own or acquire 100% of the equity interests or assets of the target business or businesses, or (ii) in
such a way so that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business in
order to meet certain objectives of the target management team or stockholders, or for other reasons, including an Affiliated Joint Acquisition
as described above. However, we will only complete an initial business combination if the post-transaction company owns or acquires 50%
or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for
it not to be required to register as an investment company under the Investment Company Act. Even if the post-transaction company owns
or acquires 50% or more of the voting securities of the target, our stockholders prior to the initial business combination may collectively
own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in the initial business
combination. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the
outstanding capital stock of a target. In this case, we would acquire a 100% controlling interest in the target. However, as a result
of the issuance of a substantial number of new shares, our stockholders immediately prior to our initial business combination could own
less than a majority of our outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests
or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses
that is owned or acquired is what will be taken into account for purposes of Nasdaq’s 80% fair market value test. If the 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 transactions and we will treat the target businesses together as the initial business combination for purposes of a tender offer
or for seeking stockholder approval, as applicable. So long as we obtain and maintain a listing for our securities on Nasdaq, we would
be required to comply with such 80% rule.
We
do not believe we will need to raise additional funds in order to meet the expenditures required for operating our business. However,
if our estimates of the costs of identifying a target business, undertaking in-depth due diligence and negotiating an initial business
combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior
to our initial business combination. Moreover, we may need to obtain additional financing either to complete our initial business combination
or because we become obligated to redeem a significant number of our public shares upon completion of our initial business combination,
in which case we may issue additional securities or incur debt in connection with such business combination. In addition, we are targeting
businesses with enterprise values that are greater than the net proceeds of our initial public offering, the sale of the private placement
units and the sale of the FPS, and, as a result, if any cash portion of the purchase price exceeds the amount available from the trust
account, net of amounts needed to satisfy redemptions by public stockholders, we may be required to seek additional financing to complete
such proposed initial business combination. We may also obtain financing prior to the closing of our initial business combination to
fund our working capital needs and transaction costs in connection with our search for and completion of our initial business combination.
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
arrangements into which we may enter. Subject to compliance with applicable securities laws, we would only complete such financing simultaneously
with the completion of our business combination. If we are unable to complete our initial business combination because we do not have
sufficient funds available to us, we will be forced to cease operations and liquidate the trust account. In addition, following our initial
business combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.
4
Our
Business Combination Process
In
evaluating prospective business combinations, we conduct, and expect to continue to conduct, a thorough due diligence review that encompasses,
among other things, a review of historical and projected financial and operating data, meetings with management and their advisors (if
applicable), on-site inspection of facilities and assets to the extent possible, discussion with customers and suppliers, document reviews,
as well as a review of financial, operational, legal and other information which will be made available to us and which we deem appropriate.
We also utilize our expertise and the sponsor’s expertise in analyzing companies and evaluating operating projections, financial
projections and determining the appropriate return expectations.
We
are not prohibited from pursuing an initial business combination with a business that is affiliated with Cantor or its affiliates or
the sponsor, or our officers or directors, including an Affiliated Joint Acquisition. In the event we seek to complete our initial business
combination with a business that is affiliated with Cantor or its affiliates or the sponsor, or our officers or directors, we, or a committee
of independent directors, will obtain an opinion from an independent investment banking firm or another independent firm that commonly
renders valuation opinions that our initial business combination is fair to our stockholders from a financial point of view. The sponsor
has committed, pursuant to the FPA, to purchase, in a private placement for gross proceeds of $10,000,000 to occur concurrently with
the consummation of our initial business combination, 1,000,000 of our units on substantially the same terms as the sale of units in
the initial public offering at $10.00 per unit, and 250,000 shares of Class A common stock. The funds from the sale of the FPS will be
used as part of the consideration to the sellers in the initial business combination; any excess funds from this private placement will
be used for working capital in the post-transaction company. This commitment is independent of the percentage of stockholders electing
to redeem their public shares and provides us with a minimum funding level for the initial business combination.
Cantor
is the beneficial owner of founder shares and/or private placement units by virtue of its ownership of the sponsor and members of our
management team may indirectly own such securities. Either the sponsor will transfer up to 10,000 founder shares to each of our independent
directors or we will pay cash fees to such directors, at our discretion. Because of such ownership and interests, Cantor and our officers
and directors may have a conflict of interest in determining whether a particular target business is an appropriate business with which
to effectuate our initial business combination. Further, each of our officers 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 were to be included
by a target business as a condition to any agreement with respect to our initial business combination.
All
of our officers are employed by Cantor or its affiliates. Cantor is continuously made aware of potential business opportunities, one
or more of which we may desire to pursue for an initial business combination. While Cantor does not have any duty to offer acquisition
opportunities to us, Cantor may become aware of a potential transaction that is an attractive opportunity for us, which Cantor may decide
to share with us.
The
sponsor, our officers, our directors, Cantor and their affiliates may participate in the formation of, or become an officer or director
of, any other blank check company prior to completion of our initial business combination. In particular, certain of our executive officers
and directors also serve as executive officers or directors of other special purpose acquisition companies sponsored by Cantor as set
forth below, each of which is focused on searching for businesses that may provide significant opportunities for attractive investor
returns in industries similar to the industries in which our search is focused. As a result, the sponsor and our officers or directors
could have conflicts of interest in determining whether to present business combination opportunities to us or to any other blank check
company with which they may become involved.
Each
of our officers and directors presently has, and any of them in the future may have additional, fiduciary, contractual or other obligations
or duties to one or more other entities pursuant to which such officer or director is or will be required to present a business combination
opportunity. The Charter provides that we renounce our interest in any corporate opportunity offered to any director or officer unless
such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company, such opportunity
is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue, and to the extent
the director or officer is permitted to refer that opportunity to us without violating another legal obligation. Accordingly, if any
of our officers or directors becomes aware of a business combination opportunity which is suitable for one or more entities to which
he or she has fiduciary, contractual or other obligations or duties, he or she will honor these obligations and duties to present such
business combination opportunity to such entities first, and only present it to us if such entities reject the opportunity and he or
she determines to present the opportunity to us.
5
Our
Management Team
Members
of our management team are not obligated to devote any specific number of hours to our matters but they intend to devote as much of their
time as they deem necessary to our affairs until we have completed our initial business combination. The amount of time that any member
of our management team will devote in any time period 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
believe our management team’s operating and transaction experience and relationships with companies will provide us with a substantial
number of potential business combination targets. Over the course of their careers, the members of our management team have developed
a broad network of contacts and corporate relationships in various industries. This network has grown through the activities of our management
team sourcing, acquiring and financing businesses, our management team’s relationships with sellers, financing sources and target
management teams and the experience of our management team in executing transactions under varying economic and financial market conditions.
Status
as a Public Company
We
believe our structure makes us an attractive business combination partner to target businesses. As a public company, we offer a target
business an alternative to the traditional initial public offering through a merger or other business combination with us. Following
an initial business combination, we believe the target business would have greater access to capital and additional means of creating
management incentives that are better aligned with stockholders’ interests than it would as a private company. A target business
can further benefit by augmenting its profile among potential new customers and vendors and aid in attracting talented employees. In
a business combination transaction with us, the owners of the target business may, for example, exchange their shares of stock in the
target business for shares of Class A common stock (or shares of a new holding company) or for a combination of shares of Class A
common stock and cash, allowing us to tailor the consideration to the specific needs of the sellers.
Although
there are various costs and obligations associated with being a public company, we believe target businesses will find this method a
more 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 in the initial public offering process, including underwriting discounts and commissions, marketing and road
show efforts that may not be present to the same extent in connection with an initial business combination with us.
Furthermore,
once a proposed initial 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 and an additional means of providing management
incentives consistent with stockholders’ interests and the ability to use its shares as currency for acquisitions. Being a public
company can offer further benefits by augmenting a company’s profile among potential new customers and vendors and aid in attracting
talented employees.
While
we believe that our structure and our management team’s backgrounds will make us an attractive business partner, some potential
target businesses may view our status as a blank check company, such as our lack of an operating history and our ability to seek stockholder
approval of any proposed initial business combination, negatively.
We
are an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As such,
we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies
that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation
requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic
reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and
stockholder approval of any golden parachute payments not previously approved. If some investors find our securities less attractive
as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile.
6
In
addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended
transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other
words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise
apply to private companies. We intend to take advantage of the benefits of this extended transition period.
We
will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following March 16, 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 Class A common stock that is held by non-affiliates exceeds $700 million
as of the prior June 30, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities
during the prior three-year period. References herein to “emerging growth company” will have the meaning associated with
it in the JOBS Act.
Additionally,
we are a “smaller reporting company” as defined in Rule 10(f)(1) of Regulation S-K. Smaller reporting companies may take
advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements.
We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our common stock held
by non-affiliates exceeds $250 million as of the prior June 30, or (2) our annual revenues exceed $100 million during
such completed fiscal year and the market value of our common stock held by non-affiliates exceeds $700 million as of the prior
June 30.
In
addition, only holders of our founder shares have the right to vote on the election of directors prior to the consummation of our initial
business combination. As a result, Nasdaq considers us to be a “controlled company” within the meaning of Nasdaq corporate
governance standards. Under Nasdaq corporate governance standards, a company of which more than 50% of the voting power for the election
of directors is held by an individual, group or another company is a “controlled company” and may elect not to comply with
certain corporate governance requirements. We have utilized, and will continue to utilize, these exemptions.
Financial
Position
With
funds available for an initial business combination in the amount of $221,200,730, based on the balance of our trust account as of March
9, 2022, and after accounting for the funds withdrawn from the trust account for redemptions in connection with the Extension but excluding
the amount loaned by the sponsor under the Extension Loan (as defined below), 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 or leverage 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 any third party financing and there can be no assurance any third party financing will be available to us.
Effecting
Our Initial Business Combination
We
are not presently engaged in, and we will not engage in, any operations other than the pursuit of our business combination, at which
point we will engage in the business of the target we acquire in our initial business combination. We intend to effectuate our initial
business combination using cash from the proceeds of the (i) initial public offering, (ii) private placement of the private placement
units, (iii) $10,000,000 FPA, (iv) sale of our securities in connection with our initial business combination (pursuant to forward purchase
contracts or any backstop agreements we may enter into following the consummation of the initial public offering or otherwise), (v) shares
issued to the owners of the target, (vi) debt issued to bank or other lenders or the owners of the target, or (vii) a combination of
the foregoing. We may seek to complete our initial business combination with a company or business that may be financially unstable or
in its early stages of development or growth, which would subject us to the numerous risks inherent in such companies and businesses.
If
our initial business combination is paid for using equity or debt securities, or not all of the funds released from the trust account
are used for payment of the consideration in connection with our initial business combination or used for redemptions of our Class A
common stock, we may apply the balance of the cash released to us from the trust account, as well as the $10,000,000 from the FPA, 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.
7
In
addition to the transactions contemplated by the FPA, 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 (which may include a specified future issuance), 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 are targeting businesses larger than we could acquire with the net proceeds of our initial public offering,
the sale of the private placement units as well as the $10,000,000 from the FPA, and may as a result be required to seek additional financing
to complete such proposed initial business combination. Subject to compliance with applicable securities laws, we would expect to complete
such financing only simultaneously with the completion of our initial business combination. In the case of an initial business combination
funded with assets other than the trust account assets, our proxy materials or tender offer documents disclosing the initial business
combination would disclose the terms of the financing and, only if required by law, we would seek stockholder approval of such financing.
There are no prohibitions on our ability to raise funds privately, including pursuant to any specified future issuance, or through loans
in connection with our initial business combination. At this time, other than the FPA, 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.
Sources
of Target Businesses
Target
business candidates are brought to our attention from various unaffiliated sources, including investment bankers and investment professionals.
Target businesses are also brought to our attention by such unaffiliated sources as a result of being solicited by us by calls or mailings.
These sources 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 the prospectus of our initial public offering and know what types of businesses we are targeting. Our officers
and directors, as well as the sponsor and its affiliates, have brought, and may bring, to our attention target business candidates that
they become aware of through their business contacts as a result of formal or informal inquiries or discussions they may have. In addition,
we have received a number of proprietary deal flow opportunities that would not otherwise necessarily be available to us as a result
of the business relationships of our officers and directors and the sponsor and its affiliates.
We
may also contact targets that any of the other special purpose acquisition companies sponsored by Cantor had considered if we become
aware that such targets are interested in a potential initial business combination with us and such transaction would be attractive to
our stockholders.
While
we have not and do not anticipate engaging the services of professional firms or other individuals that specialize in business acquisitions
on any formal basis, we may engage these firms or other individuals in the future, in which event we may pay a finder’s fee, consulting
fee, advisory fee or other compensation to be determined in an arm’s length negotiation based on the terms of the transaction.
We will engage a finder only to the extent our management determines that the use of a finder may bring opportunities to us that may
not otherwise be available to us or if finders approach us on an unsolicited basis with a potential transaction that our management determines
is in our best interest to pursue. Payment of finder’s fees is customarily tied to completion of a transaction, in which case any
such fee will be paid out of the funds held in the trust account. In no event, however, will the sponsor or any of our existing officers
or directors, or any entity with which the sponsor or officers are affiliated, be paid any finder’s fee, reimbursement, consulting
fee, monies in respect of any payment of a loan or other compensation by the company prior to, or in connection with any services rendered
for any services they render in order to effectuate, the completion of our initial business combination (regardless of the type of transaction
that it is) other than as described herein. Some of our officers and directors may enter into employment or consulting agreements with
the post-transaction company following our initial business combination. The presence or absence of any such fees or arrangements will
not be used as a criterion in our selection process of an initial business combination candidate.
We
are not prohibited from pursuing an initial business combination with a business that is affiliated with Cantor or its affiliates or
the sponsor, or our officers or directors, including an Affiliated Joint Acquisition. In the event we seek to complete our initial business
combination with an initial business combination target that is affiliated with the sponsor, its affiliates, or our officers or directors,
we, or a committee of independent directors, would obtain an opinion from an independent investment banking firm or another independent
firm that commonly renders valuation opinions that such an initial business combination is fair to our stockholders from a financial
point of view. We are not required to obtain such an opinion in any other context.
8
Each
of our officers and directors presently has, and any of them in the future may have additional, fiduciary, contractual or other obligations
or duties to one or more other entities pursuant to which such officer or director is or will be required to present a business combination
opportunity to such entities. Our officers and directors also may become aware of business opportunities which may be appropriate for
presentation to us and the other entities to which they owe certain fiduciary, contractual or other duties. Accordingly, if any of our
officers or directors becomes aware of a business combination opportunity which is suitable for one or more entities to which he or she
has fiduciary, contractual or other obligations or duties, he or she will honor these obligations and duties to present such business
combination opportunity to such entities first, and only present it to us if such entities reject the opportunity and he or she determines
to present the opportunity to us. These conflicts may not be resolved in our favor and a potential target business may be presented to
another entity prior to its presentation to us. The Charter provides that we renounce our interest in any corporate opportunity offered
to any director or officer unless (i) such opportunity is expressly offered to such person solely in his or her capacity as a director
or officer of our company, (ii) such opportunity is one we are legally and contractually permitted to undertake and would otherwise
be reasonable for us to pursue and (iii) the director or officer is permitted to refer the opportunity to us without violating another
legal obligation.
Selection
of a Target Business and Structuring of our Initial Business Combination
So
long as we maintain a listing for our securities on Nasdaq, 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 taxes payable on the interest earned on
the trust account) at the time of our signing a definitive agreement in connection with our initial business combination. The fair market
value of our initial business combination will be determined by our board of directors based upon one or more standards generally accepted
by the financial community, such as discounted cash flow valuation, a valuation based on trading multiples of comparable public businesses
or a valuation based on the financial metrics of merger and acquisition transactions of comparable businesses. If our board of directors
is not able to independently determine the fair market value of our initial business combination, we will obtain an opinion from an independent
investment banking firm or another independent firm that commonly renders valuation opinions with respect to the satisfaction of such
criteria. While we consider it unlikely that our board of directors will not be able to make an independent determination of the fair
market value of our initial business combination, it may be unable to do so if it is less familiar or experienced with the business of
a particular target or if there is a significant amount of uncertainty as to the value of a target’s assets or prospects. We do
not intend to purchase multiple businesses in unrelated industries in conjunction with our initial business combination. Subject to this
requirement, our management will have virtually unrestricted flexibility in identifying and selecting one or more prospective target
businesses, although we will not be permitted to effectuate our initial business combination with another blank check company or a similar
company with nominal operations.
In
any case, we will only complete an initial business combination in which we own or acquire 50% or more of the outstanding voting securities
of the target or otherwise acquire a controlling interest in the target sufficient for it not to be required to register as an investment
company under the Investment Company Act. If we own or acquire less than 100% of the equity interests or assets of a target business
or businesses, the portion of such business or businesses that are owned or acquired by the post-transaction company is what will be
taken into account for purposes of Nasdaq’s 80% fair market value test. There is no basis for our investors to evaluate the possible
merits or risks of any target business with which we may ultimately complete our initial business combination.
To
the extent we effect our initial business combination with a company or business that may be financially unstable or in its early stages
of development or growth we may be affected by numerous risks inherent in such company or business. Although our management will endeavor
to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all significant
risk factors.
In
evaluating prospective business targets, we have conducted, and expect to continue to conduct, a thorough due diligence review, which
encompasses, among other things, meetings with incumbent management and employees, document reviews, interviews of customers and suppliers,
inspection of facilities, as well as a review of financial and other information that is made available to us.
We
have engaged CF&Co., an affiliate of the sponsor, pursuant to a business combination marketing agreement as an advisor in connection
with our initial business combination to assist us in holding meetings with our stockholders to discuss any potential initial business
combination and the target business’ attributes, introduce us to potential investors that are interested in purchasing our securities
and assist us with our press releases and public filings in connection with our initial business combination. We will pay CF&Co.
a cash fee for such services upon the consummation of the initial business combination as described elsewhere in this Report. In addition,
we may engage CF&Co, or another affiliate of the sponsor, as a financial advisor in connection with our initial business combination
and/or placement agent for any securities offering to occur concurrently with our initial business combination and pay such affiliate
a customary financial advisory and/or placement agent fee in an amount that constitutes a market standard financial advisory or placement
agent fee for comparable transactions. Furthermore, we may acquire a target company that has engaged CF&Co., or another affiliate
of the sponsor, as a financial advisor, and such target company may pay such affiliate a financial advisory fee in connection with our
initial business combination.
Any
costs incurred with respect to the identification and evaluation of a prospective target business with which our initial business combination
is not ultimately completed will result in our incurring losses and will reduce the funds we can use to complete another business combination.
9
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. In addition, we are focusing our search for an initial business combination in a single
industry. By completing our initial business combination with only a single entity, our lack of diversification may:
Limited
Ability to Evaluate the Target’s Management Team
Although
we closely scrutinize the management of a prospective target business when evaluating the desirability of effecting our initial business
combination with that business, our assessment of the target business’ management may not prove to be correct. In addition, the
future management may not have the necessary skills, qualifications or abilities to manage a public company. Furthermore, the future
role of members of our management team, if any, in the target business cannot presently be stated with any certainty. The determination
as to whether any of the members of our management team will remain with the combined company will be made at the time of our initial
business combination. While it is possible that one or more of our directors will remain associated in some capacity with us following
our initial business combination, it is unlikely that any of them will devote their full efforts to our affairs subsequent to our initial
business combination. Moreover, 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.
We