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, 2022
or
☐TRANSITION REPORT PURSUANT TO SECTION
13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number: 001-40206
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
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 definitions 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 ☐
If securities are registered
pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing
reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether
any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the
registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
The aggregate market value
of the outstanding shares of the registrant’s Class A common stock, 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, 2022, as reported on the Nasdaq
Capital Market, was $223,633,938.
As of March 29, 2023, there were 6,976,589 shares of Class A
common stock, par value $0.0001 per share, and 1,250,000 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 21
Item 1B. Unresolved Staff Comments 23
Item 2. Properties 23
Item 3. Legal Proceedings 23
Item 4. Mine Safety Disclosures 23
Item 6. [Reserved] 24
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 31
Item 8. Financial Statements and Supplementary Data 31
Item 9A. Controls and Procedures 32
Item 9B. Other Information 32
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 32
PART III 33
Item 10. Directors, Executive Officers and Corporate Governance 33
Item 11. Executive Compensation 38
Item 14. Principal Accountant Fees and Services 44
Item 15. Exhibits and Financial Statement Schedules 45
i
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Report (as defined below),
including, without limitation, statements under “Item 7. 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 (as defined below)
and Section 21E of the Exchange Act (as defined below). 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 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. For forward-looking statements relating to XBP Europe
(as defined below) and the XBP Europe Business Combination, please see the XBP Europe Proxy Statement (as defined below).
Unless otherwise stated in
this Report, or the context otherwise requires, references to:
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;
iii
● “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 Capital Market;
● “Parent” are to BTC International Holdings, Inc., a Delaware corporation;
● “PCAOB” are to the Public Company Accounting Oversight Board (United States);
● “public stockholders” are to the holders of our public shares;
iv
● “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;
● “SPAC” are to a special purpose acquisition company;
v
● “we,” “us,” “Company” or “our Company” are to CF Acquisition Corp. VIII;
vi
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 have focused on targets 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., 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.,
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.
1
On March 8, 2022, at a special meeting of our stockholders, our stockholders
approved the First Extension. In connection with the First Extension, the sponsor loaned us the First Extension Loan in an aggregate amount
of $4,424,015 ($0.20 for each public share that was not redeemed in connection with the First Extension). The proceeds of the First
Extension Loan were deposited in the trust account on March 9, 2022. The First Extension Loan does not bear interest and is repayable
by us to the sponsor or its designees upon consummation of our initial business combination. In connection with the stockholder vote to
approve the First Extension, 2,879,927 public shares were redeemed at $10.00 a share, resulting in a reduction of $28,799,270 in the amount
held in the trust account.
On September 27, 2022, at a special meeting of our stockholders, our
stockholders approved the Second Extension. In connection with the Second Extension, the sponsor loaned us the Second Extension Loan in
an aggregate amount of $976,832 ($0.33 for each public share that was not redeemed in connection with the Second Extension). The proceeds
of the Second Extension Loan were deposited in the trust account on September 30, 2022. The Second Extension Loan does not bear interest
and is repayable by us to the sponsor or its designees upon consummation of our initial business combination. In connection with the stockholder
vote to approve the Second Extension, 19,159,975 public shares were redeemed at approximately $10.24 a share, resulting in a reduction
of $196,121,351 in the amount held in the trust account.
On March 14, 2023, at a special meeting of our stockholders, our stockholders
approved the Third Extension. In connection with the Third Extension, the sponsor loaned us the Third Extension Loan in an aggregate amount
of up to $344,781 ($0.04 per share per month, or up to $0.24 per share if all six months of the Third Extension are utilized, for each
public share that was not redeemed in connection with the Third Extension). The Third Extension Loan does not bear interest and is repayable
by us to the sponsor or its designees upon consummation of our initial business combination. The proceeds of the Third Extension
Loan will be deposited in the trust account in six equal installments for each month (or portion thereof) that is needed by the Company
to complete an initial business combination. In connection with the stockholder vote to approve the Third Extension, 1,523,509 public
shares were redeemed at approximately $10.69 a share, resulting in a reduction of $16,290,945 in the amount held in the trust account.
Pursuant to the terms and
conditions of the XBP Europe Business Combination, in connection with the consummation of the XBP Europe Business Combination, all amounts
outstanding under each of the First Extension Loan, the Second Extension Loan and the Third Extension Loan will be converted into shares
of Class A common stock in accordance with, and subject to the exceptions set forth in, the Merger Agreement.
We must complete our
initial business combination by September 16, 2023 (or an earlier time if the board determines not to continue to extend the term pursuant
to the Third Extension). If our initial business combination is not consummated by such date, unless we extend such time with the consent
of our stockholders, 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.
XBP Europe Business Combination
On October 9, 2022, the Company
entered into the Merger Agreement with, among other parties, XBP Europe. Capitalized terms used in this section of the Report but not
otherwise defined herein have the meanings given to them in the Merger Agreement. Pursuant to the Merger Agreement, subject to the terms
and conditions set forth therein, Merger Sub will merge with and into XBP Europe whereby the separate existence of Merger Sub will cease
and XBP Europe will be the surviving corporation of the Merger and become a wholly owned subsidiary of the Company. As a result of the
Merger, (i) each share of capital stock of Merger Sub shall automatically be converted into an equal number of shares of common stock
of XBP Europe, (ii) each share of stock of XBP Europe will be cancelled and exchanged for the right to receive a number of shares of Class
A common stock equal to (a) the quotient of (1) (A) the sum of $220,000,000 minus (B) the Company Closing Indebtedness of
XBP Europe (as contemplated by the Merger Agreement) divided by (2) $10.00 plus (b) 1,330,650, and (iii) the
Company will amend the Charter to, among other matters, change its name to XBP Europe Holdings, Inc.
2
Concurrently with the execution
of the Merger Agreement, the Company entered into an Ultimate Parent Support Agreement with ETI-XCV Holdings, LLC (the “Ultimate
Parent”), an indirect parent of Parent and wholly owned subsidiary of Exela Technologies, Inc., pursuant to which, among other things,
the Ultimate Parent agreed (i) to cause its direct and indirect subsidiaries to vote their shares of Parent in favor of the Merger Agreement
and other resolutions needed to consummate the Merger and the XBP Europe Business Combination, and to not transfer such shares, and (ii)
not to take any action that would hinder or prevent the consummation of the Merger and the XBP Europe Business Combination.
Contemporaneously with the
execution of the Merger Agreement, the Company entered into a Sponsor Support Agreement with the sponsor, Parent and XBP Europe, pursuant
to which, among other things, the sponsor agreed (i) to vote its shares of common stock in favor of the Merger Agreement and each of the
transaction proposals, and to not transfer such shares, (ii) to subject certain of its shares of common stock to additional transfer restrictions
after closing, (iii) not to redeem any of its shares of common stock in connection with the XBP Europe Business Combination, (iv) to waive
the anti-dilution rights with respect to the shares of Class B common stock under the Charter, (v) upon closing, to forfeit for cancellation
733,400 of its shares of Class B common stock, and (vi) to convert its right to repayment under any outstanding loans due to the sponsor
by the Company upon closing to be repaid in shares of Class A common stock at a value of $10.00 per share, except as otherwise set forth
in the Merger Agreement.
Concurrently with the execution
of the Merger Agreement, the Company entered into a Lock-Up Agreement with XBP Europe and the Parent, pursuant to which the Parent agreed
that securities of the Company held by it immediately following the closing will be locked-up and subject to transfer restrictions, as
described below, subject to certain exceptions. The securities held by the Parent will be locked-up until the earlier of: (i) the one
(1) year anniversary of the date of the closing, and (ii) the date on which the Company consummates a liquidation, merger, capital stock
exchange, reorganization, or other similar transaction after the closing which results in all of the Company’s stockholders having
the right to exchange their shares of common stock for cash, securities or other property.
Certain existing agreements
of the Company, included but not limited to the BCMA, have been or will be amended or amended and restated in connection with the XBP
Europe Business Combination, all as further described in the XBP Europe Proxy Statement.
For more information on the
XBP Europe Business Combination and the agreements described above, please see the Form 8-K filed by the Company with the SEC on October
11, 2022 and the XBP Europe Proxy Statement.
3
Business Strategy
Our acquisition and value
creation strategy is to identify and acquire 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 have deployed a proactive
sourcing strategy and have focused on companies where we believe the combination of our operating experience, relationships, capital and
capital markets expertise can help accelerate the target’s growth and performance.
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
While we initially sought
to acquire one or more businesses with an aggregate enterprise value of approximately $500 million to $1.25 billion or more, following
the Extensions, and in light of the reductions of the amount held in the trust account resulting from redemptions in connection with the
Extensions, we entered into the Merger Agreement to effect the XBP Europe Business Combination, which provided for an enterprise value
below that range. At the time of the initial public offering, we developed the following high level, non-exclusive investment criteria
that we use to screen for and evaluate target businesses. We sought 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 focused on industries that complement our management team’s
background. We therefore focused on potential target companies in the financial services, healthcare, real estate services, technology
and software industries.
4
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. The board determined
that pursuing a potential business combination with XBP Europe would be an attractive opportunity for us and our stockholders for a number
of reasons, including, but not limited to, (1) that XBP Europe had an existing pan-European business with over 2,000 clients,
many of whom have been long term clients with long term relationships, (2) that XBP Europe has plans to increase its financial performance
and cash flows, (3) that Exela agreed to continue to provide services to XBP Europe after the closing of the XBP Europe Business
Combination, (4) that if XBP Europe is successful in executing its strategy, we will have acquired XBP Europe at an attractive valuation.
For more information, please see the XBP Europe Proxy Statement.
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. The XBP Europe Business Combination was, and, 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.
Based on the valuation analysis
of our management and board of directors, we have determined that the fair market value of XBP Europe was significantly in excess of 80%
of the assets held in the trust account and the 80% test was therefore satisfied. For more information, see the XBP Europe Proxy Statement.
We may, at our option, pursue
an Affiliated Joint Acquisition. We do not expect that we would pursue any such opportunity with another SPAC 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.
5
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, such as the XBP Europe 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, 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.
6
Our Business Combination Process
In evaluating prospective
business combinations, we have conducted, and, if applicable, will 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, document reviews, as well as a review of financial, operational, legal
and other information which has been and will be made available to us and which we deem appropriate. We have utilized 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. While XBP Europe is not affiliated with the sponsor or our officers or directors,
in the event we do not consummate the XBP Europe Business Combination and 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. The sponsor has transferred founder shares and private placement shares to our independent directors and we have
agreed to pay a cash fee to one of our independent directors, as further described herein. 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 SPACs 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.
7
Our Management Team
Members of our management
team are not obligated to devote any specific number of hours to our matters but they 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 devotes
in any time period will vary based on the current stage of the business combination process we are in.
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, such as XBP Europe. 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, such as the XBP Europe Business Combination, 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 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.
8
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 $1.235 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 consolidated 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 shares of Class B common stock 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.
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 remaining in the trust account at the time of the business combination, (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.
9
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 remaining 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
have been brought to our attention from various unaffiliated sources, including investment bankers and investment professionals. 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.
If the XBP Europe Business
Combination is not consummated, we may also contact targets that any of the other SPACs 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. If the XBP Europe Business Combination is not consummated, 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. While XBP Europe is not affiliated with the sponsor or our officers or directors,
in the event we do not consummate the XBP Europe Business Combination and 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.
10
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 XBP Europe Business Combination fulfilled
such criteria, and if the XBP Europe Business Combination is not consummated, any business combination must fulfill such criteria. 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, if applicable, will conduct, a thorough due diligence review, which encompasses and may encompass,