As filed with the Securities and Exchange Commission on February 19, 2021.
Registration No. 333-252861
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 1
to
FORM S-1
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
Anzu Special Acquisition Corp I
(Exact name of registrant as specified in its charter)
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Delaware
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6770
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86-1369123
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(State or other jurisdiction of
incorporation or organization)
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(Primary Standard industrial
Classification Code Number)
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(I.R.S. Employer
Identification Number)
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12610 Race Track Road, Suite 250
Tampa, FL 33626
Telephone: (202) 742-5870
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Dr. Whitney Haring-Smith
Chief Executive Officer
Anzu Special Acquisition Corp I
12610 Race Track Road, Suite 250
Tampa, FL 33626
Telephone: (202) 742-5870
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
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Justin R. Salon
Andrew P. Campbell
Morrison & Foerster LLP
2100 L Street, NW, Suite 900
Washington, DC 20037
(202) 887-1500
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Derek J. Dostal
Deanna L. Kirkpatrick
Davis Polk & Wardwell LLP
450 Lexington Avenue
New York, NY 10017
(212) 450-4000
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Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this registration statement.
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box: ☐
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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.
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Large accelerated filer ☐
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Accelerated filer ☐
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Non-accelerated filer ☒
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Smaller reporting company ☒
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Emerging growth company ☒
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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 7(a)(2)(B) of the Securities Act.
CALCULATION OF REGISTRATION FEE
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Title of Each Class of Security Being Registered
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Amount
Being
Registered
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Proposed Maximum
Offering Price per
Security(1)
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Proposed Maximum
Aggregate Offering
Price(1)
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Amount of
Registration
Fee(6)
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Units, each consisting of one share of Class A common stock, $0.0001 par value per share, and one-third of one redeemable warrant(2)
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40,250,000 |
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$ |
10.00 |
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$ |
402,500,000 |
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$ |
43,913 |
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Shares of Class A common stock included as part of the units(3)(4)
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40,250,000 |
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— |
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— |
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—(5) |
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Redeemable warrants included as part of the units(3)(4)
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13,416,667 |
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— |
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— |
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—(5) |
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Total
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$ |
402,500,000 |
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$ |
43,913
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(1)
Estimated solely for the purpose of calculating the registration fee.
(2)
Includes 5,250,000 units, which may be issued upon exercise of a 45-day option granted to the underwriters to cover over-allotments, if any.
(3)
Pursuant to Rule 416 under the Securities Act, there are also being registered an indeterminable number of additional securities as may be issued to prevent dilution resulting from stock splits, stock dividends or similar transactions.
(4)
Maximum number of shares of our Class A common stock and redeemable warrants, as applicable, included in the units described above, including those that may be issued upon exercise of a 45-day option granted to the underwriters.
(5)
No fee pursuant to Rule 457(g) under the Securities Act.
(6)
$31,367 of such amount was previously paid.
The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine
The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED FEBRUARY 19, 2021
PRELIMINARY PROSPECTUS
$350,000,000
Anzu Special Acquisition Corp I
35,000,000 Units
Anzu Special Acquisition Corp I is a newly incorporated blank check company, incorporated as a Delaware corporation for the purpose of effecting a merger, share exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses, which we refer to throughout this prospectus as our initial business combination. We have not selected any business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target. While we may pursue an initial business combination target in any industry or geographic location (subject to certain limitations described in this prospectus), we intend to focus our search for a target business by concentrating our efforts in identifying high-quality businesses with transformative technologies for industrial applications.
This is an initial public offering of our securities. Each unit has an offering price of $10.00 and consists of one share of our Class A common stock and one-third of one redeemable warrant. Each whole warrant entitles the holder thereof to purchase one share of our Class A common stock at a price of $11.50 per share, subject to adjustment as provided herein. Only whole warrants are exercisable. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. The warrants will become exercisable on the later of 30 days after the completion of our initial business combination and 12 months from the closing of this offering, and will expire five years after the completion of our initial business combination or earlier upon redemption or liquidation, as described in this prospectus. We have also granted the underwriters a 45-day option to purchase up to an additional 5,250,000 units to cover over-allotments, if any.
We will provide our public stockholders with the opportunity to redeem all or a portion of their shares of our Class A common stock upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account described below calculated as of two business days prior to the completion of our initial business combination, including interest (which interest shall be net of taxes payable), divided by the number of then issued and outstanding shares of our Class A common stock that were sold as part of the units in this offering, which we refer to collectively as our public shares, subject to the limitations described herein. If we have not completed our initial business combination within 24 months from the closing of this offering, we will redeem 100% of the public shares at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (less up to $100,000 of interest to pay dissolution expenses and which interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares, subject to applicable law and as further described herein.
Our sponsor, Anzu SPAC GP I LLC, a Delaware limited liability company (which we refer to as our “sponsor” throughout this prospectus), has committed to purchase an aggregate of 11,000,000 warrants (or 12,050,000 warrants if the underwriters’ over-allotment option is exercised in full) at a price of $1.00 per warrant ($11,000,000 in the aggregate or $12,050,000 in the aggregate if the underwriters’ over-allotment option is exercised in full) in a private placement that will close simultaneously with the closing of this offering. We refer to these warrants throughout this prospectus as the private placement warrants. Each private placement warrant entitles the holder thereof to purchase one share of our Class A common stock at $11.50 per share, subject to adjustment as provided herein.
Our initial stockholders currently hold 10,062,500 shares of our Class B common stock (which we refer to as “founder shares” as further described herein), up to 1,312,500 of which are subject to forfeiture by our sponsor depending on the extent to which the underwriters’ over-allotment option is exercised. The shares of our Class B common stock will automatically convert into shares of our Class A common stock at the time of our initial business combination, or earlier at the option of the holder, on a one-for-one basis, subject to adjustment as provided herein. In the case that additional shares of our Class A common stock, or equity-linked securities (as described herein), are issued or deemed issued in excess of the amounts issued in this offering and related to the closing of our initial business combination, the ratio at which the shares of our Class B common stock will convert into shares of our Class A common stock will be adjusted (unless the holders of a majority of the issued and outstanding shares of our Class B common stock agree to waive such anti-dilution adjustment with respect to any such issuance or deemed issuance) so that the number of shares of our Class A common stock issuable upon conversion of all shares of our Class B common stock will equal, in the aggregate, 20% of the sum of all shares of our Class A common stock issued and outstanding upon the completion of this offering, plus all shares of our Class A common stock and equity-linked securities issued or deemed issued in connection with our initial business combination, excluding
any shares or equity-linked securities issued, or to be issued, to any seller in the business combination. Prior to our initial business combination, holders of shares of our Class B common stock will have the right to appoint all of our directors and may remove members of the board of directors for any reason. On any other matter submitted to a vote of our stockholders, holders of shares of our Class B common stock and holders of shares of our Class A common stock will vote together as a single class, except as required by applicable law or stock exchange rule.
Prior to this offering, there has been no public market for our units, shares of our Class A common stock or warrants. We intend to apply to list our units on the Nasdaq Capital Market (“Nasdaq”) under the symbol “ANZU.U” on or promptly after the date of this prospectus. We cannot guarantee that our securities will be approved for listing on Nasdaq. The shares of our Class A common stock and warrants constituting the units will begin separate trading on the 52nd day following the date of this prospectus (or, if such date is not a business day, the following business day) unless the representatives of the underwriters (which we refer to in this prospectus as the “representatives”) inform us of their decision to allow earlier separate trading, subject to our filing a Current Report on Form 8-K with the Securities and Exchange Commission (the “SEC”) containing an audited balance sheet of the company reflecting our receipt of the gross proceeds of this offering and issuing a press release announcing when such separate trading will begin. Once the securities constituting the units begin separate trading, we expect that the shares of our Class A common stock and warrants will be listed on Nasdaq under the symbols “ANZU” and “ANZUWS,” respectively.
We are an “emerging growth company” and a “smaller reporting company” under applicable federal securities laws and will be subject to reduced public company reporting requirements. Investing in our securities involves risks. See “Risk Factors” beginning on page 32. Investors will not be entitled to protections normally afforded to investors in Rule 419 blank check offerings.
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Price to Public
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Underwriting
Discounts and
Commissions(1)
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Proceeds, Before
Expenses, to Us
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Per Unit
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$10.00
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$0.55
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$9.45
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Total
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$350,000,000
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$19,250,000
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$330,750,000
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(1)
Includes $0.35 per unit, or $12,250,000 (or $14,087,500 if the underwriters’ over-allotment option is exercised in full) in the aggregate, payable to the underwriters for deferred underwriting commissions to be placed in a trust account located in the United States as described herein. Does not include certain fees and expenses payable to the underwriters in connection with this offering See also “Underwriting” for a description of compensation and other items of value payable to the underwriters.
Of the proceeds we receive from this offering and the sale of the private placement warrants described in this prospectus, $350,000,000, or $402,500,000 if the underwriters’ over-allotment option is exercised in full ($10.00 per unit), will be deposited into a U.S.-based trust account at Bank of America, N.A, with American Stock Transfer & Trust Company acting as trustee. Except with respect to interest earned on the funds held in the trust account that may be released to us to pay our taxes, if any, the funds held in the trust account will not be released from the trust account until the earliest to occur of: (1) our completion of an initial business combination; (2) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity; and (3) the redemption of our public shares if we have not completed an initial business combination within 24 months from the closing of this offering, subject to applicable law. The proceeds deposited in the trust account could become subject to the claims of our creditors, if any, which could have priority over the claims of our public stockholders.
The underwriters are offering the units for sale on a firm commitment basis. Delivery of the units will be made on or about , 2021.
Neither the SEC nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
Joint Book-Running Managers
BofA SecuritiesBarclays
The date of this prospectus is , 2021
We are responsible for the information contained in this prospectus. We have not authorized anyone to provide any information or to make any representations other than those contained in this prospectus. We and the underwriters take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell only the units offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date.
TABLE OF CONTENTS
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1 |
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13 |
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32 |
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65 |
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66 |
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70 |
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71 |
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73 |
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75 |
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81 |
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115 |
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125 |
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128 |
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131 |
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148 |
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158 |
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165 |
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165 |
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165 |
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F-1
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Until , 2021, all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to unsold allotments or subscriptions.
SUMMARY
This summary only highlights the more detailed information appearing elsewhere in this prospectus. You should read this entire prospectus carefully, including the information under “Risk Factors” and our financial statements and the related notes included elsewhere in this prospectus, before investing.
Anzu Special Acquisition Corp I is a newly incorporated blank check company, incorporated as a Delaware corporation for the purpose of effecting a merger, share exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses, which we refer to throughout this prospectus as our initial business combination. We have not selected any business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target. While we may pursue an initial business combination target in any industry or geographic location, we intend to focus our search for a target business that capitalizes on our sponsor’s sector expertise, network and experience.
Definitions
Unless otherwise stated in this prospectus or the context otherwise requires, references to:
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“amended and restated certificate of incorporation” are to our amended and restated certificate of incorporation to be in effect upon completion of this offering;
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“Anzu Partners” are to Anzu Partners LLC, a Florida limited liability company, and its affiliates;
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“directors” are to our current directors and our director nominees named in this prospectus;
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“founder shares” are to shares of our Class B common stock initially purchased by our sponsor in a private placement prior to this offering and shares of our Class A common stock that will be issued upon the conversion thereof as provided herein;
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“initial stockholders” are to our sponsor and the other holders of our founder shares prior to this offering (if any);
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“letter agreement” are to the letter agreement, the form of which is filed as an exhibit to the registration statement of which this prospectus forms a part;
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“management” or our “management team” are to our directors and officers;
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“common stock” are to shares of our Class A common stock and our Class B common stock;
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“private placement warrants” are to the warrants issued to our sponsor in a private placement simultaneously with the closing of this offering;
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“public stockholders” are to the holders of our public shares, including our sponsor, directors and officers to the extent our sponsor, directors or officers purchase public shares, provided their status as a “public stockholder” shall only exist with respect to such public shares;
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“public shares” are to shares of our Class A common stock sold as part of the units in this offering (whether they are purchased in this offering or thereafter in the open market);
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“sponsor” are to Anzu SPAC GP I LLC, a Delaware limited liability company and an affiliate of Anzu Partners LLC;
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“warrants” are to our redeemable warrants sold as part of the units in this offering (whether they are purchased in this offering or thereafter in the open market); and
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“we,” “us,” “our” and our “company” are to Anzu Special Acquisition Corp I, a Delaware corporation.
All references in this prospectus to shares of the company being forfeited shall take effect as surrenders for no consideration of such shares as a matter of Delaware law. All references to the conversion of shares of our Class B common stock shall take effect as a redemption of such shares of our Class B common stock and issuance of the corresponding shares of our Class A common stock as a matter of
Delaware law. Any stock dividends described in this prospectus shall take effect as share capitalizations as a matter of Delaware law. Unless we tell you otherwise, the information in this prospectus assumes that the underwriters will not exercise their over-allotment option and the forfeiture by our sponsor of 1,312,500 founder shares.
Our Company
We are a newly incorporated blank check company, incorporated as a Delaware corporation for the purpose of effecting a merger, share exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. We have not selected any business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target. We intend to effectuate our initial business combination using cash from the proceeds of this offering and the sale of the private placement warrants, debt or a combination of cash, shares of stock and debt.
We plan to utilize the financial, operational, public market and investment evaluation experience of our management, members of our board of directors and the advisory board and members of management of Anzu Partners, an entity of which our Chief Executive Officer is a Co-Founder and Managing Partner, to identify and complete our initial business combination with a company that we believe has compelling potential for value creation. Over the course of their careers, the members of our management team, board and advisory board and their affiliates (including Anzu Partners) have developed a broad network of contacts and corporate relationships, including deep networks in industrial technology and global management consulting, that we believe will serve as a useful source of opportunities.
While we may pursue an initial business combination target in any industry, we currently intend to concentrate our efforts in identifying high-quality businesses with transformative technologies for industrial applications. Within this focus, we will seek to pursue opportunities with market-leading companies, including from corporate spin-outs, closely-held companies, and institutionally-backed businesses. We believe we will be able to provide significant value due to our ability to drive growth, global scaling and profitability in companies, along with our flexibility in understanding and addressing complex business situations and structures.
Anzu Partners
Anzu Partners was founded in 2014 and is an investment firm that focuses on industrial and life sciences technology companies with potential to transform their industries. Through its team of over 45 professionals, Anzu Partners manages approximately $400 million in capital commitments across two venture funds, a revenue-based investing (“RBI”) mezzanine fund and a set of special purpose vehicles (“SPVs”). The venture capital funds focus on investments in early-stage companies, ranging from pre-revenue to post-commercialization, primarily in the U.S. and Canada with selective investments in Europe and Asia Pacific. RBI provides capital as an alternative to traditional venture and debt financing that supports post-revenue companies across North America, Europe and Asia Pacific. Each SPV typically focuses on investments in a single target portfolio company. The SPVs have each invested in one target asset, which are varied in type, including real estate and operating companies.
Anzu Partners has a robust team of investment, technical, and operational professionals to drive results for its portfolio companies and investors. Anzu’s principals, several of whom are Boston Consulting Group (“BCG”) alumni, have over 60 years of combined experience as global investors and consultants, and have built a commercial support network spanning key industrial markets across the globe.
Our Management Team, Board and Advisors
Management Team
Our management team at Anzu Special Acquisition Corp I is led by our Chairman, William Wulfsohn, our Chief Executive Officer, Dr. Whitney Haring-Smith, our Chief Financial Officer, John W. Joy, and our General Counsel, Peter J. Ganz, who combined have over 80 years of experience in advising, investing in and
running private and public companies across a broad range of industries and sectors, as well as leading complex divestitures and spin-outs.
Mr. Wulfsohn is the former Chief Executive Officer and Chairman of Ashland Global Holdings, Inc. (“Ashland”), where he led Ashland’s transition to a focused specialty chemicals company and oversaw multiple spinouts and divestitures. This included the successful $5.3 billion separation of Valvoline, where Mr. Wulfsohn served as the founding chairman for the first year. Prior to Ashland, he was the President and Chief Executive Officer of Carpenter Technology Corporation from 2010-2014. Mr. Wulfsohn currently serves as a board director for Avient, formerly known as PolyOne. He was also previously a consultant with McKinsey & Co. and senior executive with PPG, Honeywell, and Rohm and Haas. Mr. Wulfsohn received his bachelor’s degree from the University of Michigan in Chemical Engineering and his master of business administration from Harvard Business School.
Dr. Haring-Smith is a co-founding managing partner at Anzu Partners, an investment firm focused on industrial technologies and life sciences. At Anzu Partners, he led the acquisition of Axsun Technologies Inc., the Koninklijke Philips N.V. spin-out, returning approximately eight times investors’ invested capital, and MultiMechanics, which was acquired by Siemens in 2019. In addition, he led the IPO-crossover investment into Ai-Media, a global provider of technology-enabled live and recorded captioning, transcription and translation services, led the mezzanine financing for Pivotal Systems Corporation, a gas flow monitoring provider and control technology platform for the global semiconductor industry, and serves on boards of multiple private technology companies. He was formerly a Principal with BCG in San Francisco, Hong Kong, Nigeria and the United Kingdom, where he led transformations for multi-billion-dollar business units of large publicly-traded companies. Dr. Haring-Smith received his bachelor’s degree and master’s degree from Yale University in Political Science and his doctorate from Oxford University as a Rhodes Scholar.
Mr. Joy is the former Vice President of Corporate Development at Ashland, where his significant transaction experience included: the IPO / spin-out of Valvoline ($5.3 billion transaction value); the acquisitions of International Specialty Products ($3.2 billion transaction value) and Hercules ($3.4 billion transaction value); the sales of Ashland Water Technologies ($1.8 billion transaction value), Ashland's composites business and butanediol facility in Marl, Germany ($1 billion transaction value) and Ashland's distribution business ($1 billion transaction value). Prior to Ashland, he was a director at PepsiCo, where he led financial planning and analysis for a $9 billion division. Mr. Joy received his bachelor’s degree from Colgate University in Mathematical Economics and his master of management from Kellogg Graduate School of Management at Northwestern University.
Mr. Ganz is the former Senior Vice President, General Counsel and Secretary and Chief Compliance Officer at Ashland, where he was a member of the executive committee and was responsible for managing Ashland’s legal and corporate governance matters, as well as overseeing Ashland’s ethics and compliance, government relations, risk and insurance and real estate functions. Prior to Ashland, he was Executive Vice President, General Counsel and Secretary at Foster Wheeler, a $5 billion publicly traded company, and General Counsel and Secretary at G-I Holdings (formerly GAF Corporation), a $3.5 billion group of related companies. Mr. Ganz received his bachelor’s degree from Duke University and his juris doctorate from Harvard Law School.
Our Board
In addition to Messrs. Wulfsohn and Haring-Smith, at the closing of this offering, our board will be comprised of Teresa A. Harris, Priya Cherian Huskins and Susan J. Kantor, each of whom is independent.
Ms. Harris is a finance, strategy and business development executive with experience in industrial technology software. She has served on the board of directors of Altair since 2016, including during its IPO process and listing on the NASDAQ in 2017. She is chair of the compensation committee and a member of the audit and M&A committees. Ms. Harris is also on the board of USA Climbing, Landmark West and a private technology company, Bungie, which created the Halo and Destiny video game franchises. She was formerly the senior-most U.S. executive for strategy finance and M&A for Vivendi, the $30 billion European media company, where she was a lead negotiator of a $5.8 billion transaction with NBC Universal. Ms. Harris received her bachelor’s degree from Stanford University in Economics and her master of business administration from Yale School of Management in Finance.
Ms. Huskins is an executive advisor for public companies and fast-growing private companies on risk mitigation. She is currently a partner and senior vice president at Woodruff Sawyer, where she has been focused on Director & Officer (D&O) insurance since 2003. In addition to serving on the board of Woodruff Sawyer, Ms. Huskins also serves on the board of Realty Income Corporation, an S&P 500 public company, where she serves on the corporate governance and nominating committee and is the Chair of the compensation committee. She also serves on the board of NMI Holdings, Inc. and is an advisory board member of the Stanford Rock Center for Corporate Governance. She is a former senior associate at Wilson Sonsini Goodrich & Rosati (WSGR), a prominent law firm, where she advised companies on M&A and corporate law transactions. Ms. Huskins received her bachelor’s degree from Harvard College and her juris doctorate from the University of Chicago Law School.
Ms. Kantor has experience leading international finance, tax, treasury, risk, compliance and technology enablement for global services organizations. She is a former National Advisory Partner for PwC, a former CFO and Treasurer for PRTM, and a former CFO at Monitor Group. During her time at PRTM, she completed several successful M&A transactions in the U.S. and abroad, including the sale of PRTM to PwC. Ms. Kantor previously served as an executive with Parexel, a clinical research organization, and the Boston Consulting Group. Ms. Kantor is currently on the board of Teknor Apex, a billion dollar privately-held material science company, Guest Services, a hospitality company, Point Pleasant Resort, and she serves as the audit committee chair for the International Council on Clean Transportation (ICCT). Ms. Kantor previously served as a board director for Lionbridge Technologies when it was a $550 million publicly held company. She received her bachelor’s degree from Grove City College in Accounting and Business Administration and her CPA in MA.
Please see “Management—Directors, Director Nominees and Officers” for additional information.
Anzu Partners Advisory Board
Anzu Partners maintains an overall firm-level advisory board that we believe will be useful in the sourcing of potential business combination opportunities. The advisory board is comprised of Arindam Bhattacharya, Adm. (ret.) David Buss, Steve Chai, Michael Danaher, David Dean, Carl Eibl, Bob Galyen, Curtis Maas, Takashi Mitachi, Ron Nicol, Stacey Olson, Dr. Norah Shire and Dr. Jimmy Williams.
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Mr. Bhattacharya is a Senior Partner at BCG and former head of the firm’s India and co-leader of Global Advantage practices. He received his PhD and master of science in manufacturing engineering from the University of Warwick, his master of business administration from the Indian Institute of Management (Ahmedabad), and his bachelor’s degree in engineering from the Indian Institute of Technology (Kharagpur).
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Vice Adm. (ret.) Buss held numerous leadership positions in the U.S. Navy, where he served for 37 years, most recently as the Commander, Naval Air Forces, the Navy’s “Air Boss,” managing billions of dollars of naval air assets. He is currently the Chief Executive Officer of OpenDrives, Inc., a Los Angeles-based data storage technology company after previously serving as President of Cubic Global Defense, Inc., a unit of Cubic Corporation, where he led all aspects of Cubic's global military training business. Admiral Buss received his bachelor’s degree in physics from the U.S. Naval Academy.
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Mr. Chai is a former BCG Senior Partner and Managing Director of BCG’s Korea business, where he advised many of the largest Korean conglomerates on strategy and organizational performance. He is an independent outside board member for AIA Korea and LG International. He has advanced degrees in engineering from the University of Southern California, and he received his master of business administration from Wharton School of Business at the University of Pennsylvania.
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Mr. Danaher is a senior partner with Wilson Sonsini, a leading global law firm. His practice focuses on assisting a wide range of emerging technology companies, their senior executives and boards. Mr. Danaher received his bachelor’s degree from Yale University and his juris doctorate from Stanford Law School where he received the Order of Coif.
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Dr. Dean is a former Senior Partner at BCG and former head of the firm’s Global Technology & Telecoms practice. Based in Munich, he is now a Senior Advisor to the firm, and also acts
as an independent advisor to technology firms in Europe and elsewhere. He is the Chairman of the Supervisory Board of SUSS MicroTec SE, a leading supplier semiconductor manufacturing equipment and in addition serves as an Independent Director with several Axiata Group Berhad companies in Southeast Asia. He has a PhD in physics from Oxford University.
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Mr. Eibl is a Venture Partner at Anzu Partners. Mr. Eibl has over a decade of experience supporting materials, software & analytics, and semiconductor-related businesses, including with Maxwell Technologies (acquired by Tesla in 2019), Stratagene Corporation (acquired by Agilent in 2007), and Mycogen Corporation (acquired by Dow Chemical Company in 1998). Mr. Eibl is a former Chairman of The Sanford Burnham Prebys Medical Discovery Institute and a former Vice Chairman of the board of CONNECT. He has been a member of the San Diego Coastal Chapter of the Young Presidents Organization (YPO) since 1994. Carl holds a juris doctorate from Boston University School of Law and a bachelor’s degree and master’s degree from Cornell University.
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Mr. Galyen has served successfully in numerous leadership roles, including as Chief Technology Officer of Contemporary Amperex Technology Ltd. (CATL), one of the world’s largest battery producers. Mr. Galyen previously served as a senior executive at Magna International, and staff levels of Delphi and GM. Mr. Galyen received bachelor’s degrees in biological sciences and chemistry and his master’s degree in chemistry from Ball State University. He is on the Lugar Center for Renewable Energy and the Dean’s Executive Advisory Board for Ball State University.
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Mr. Maas is an experienced business executive and investor, and is the Chairman and CEO of the RDI Group, a diversified manufacturer. He serves on the board of Nuburu Inc., TCA and various other companies. Currently he is Board Chair of Quest Academy in Palatine, Illinois, and a board member and long-time supporter of Junior Achievement of Chicago, a non-profit organization. Mr. Maas holds a bachelor of science in mechanical engineering from Northwestern University and a master of business administration from the University of Chicago.
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Mr. Mitachi is the former Chairman of BCG Japan and currently serves on the boards of several major Japanese and international corporations, including DMG Mori, Rakuten, Unicharm Tokio Marine Holdings, and Lotte Holdings. He has a master of business administration from Harvard Business School, and a bachelor’s degree from Kyoto University.
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Mr. Nicol is a former Chairman of BCG North America, where he also served as global leader of the Organization practice and global leader of the Technology, Media & Telecommunications practice. He is on the board of Austin Industries, one of the largest construction companies in the United States. Mr. Nicol is the Chairman Emeritus of the Fuqua School of Business at Duke University, where he also received his master of business administration. He received his bachelor's degree in physics from the U.S. Naval Academy, and he is a board member of the United States Naval Academy Foundation.
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Ms. Olson is an energy executive with experience in strategy development, technical innovation, cost management, safety and operational performance. She served as operational executive for Chevron in Appalachia (shale), Thailand, United Kingdom, Indonesia, Venezuela, Nigeria, and California, managing units of up to 2000 personnel. Ms. Olson managed multi-billion-dollar capital investment projects in new fields, including the largest steam flood operation in the world. She served as the operational leader during Chevron's sale of its Appalachian shale assets for approximately $735 million in 2020. She is a member of International Women's Forum and McKinsey Executive Women in Energy. She began career as drilling engineer at BP. Ms. Olson received her bachelor's degree in petroleum engineering from Louisiana State University, master of business administration from Tulane University, and honorary doctorate from Waynesburg University.
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Dr. Shire has served successfully in numerous leadership roles at AstraZeneca, most recently as Global Clinical Program Lead for immuno-oncology. She previously worked as an executive
MedImmune and Merck. Dr. Shire received her bachelor’s degree from Williams College, her master of public health from Johns Hopkins, and her PhD in biostatistics and epidemiology from the University of Cincinnati College of Medicine.
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Dr. Williams is the Executive Director for the Engineering & Technology Innovation Management program at Carnegie Mellon University. He is a former Vice President of Global Engineering for Pall Corporation, Senior Director of Global Technology Advantage for Alcoa, and Director of Manufacturing for Boeing. He currently serves on the board of Innovation Works Pittsburgh. Dr. Williams received his bachelor’s degree in Mechanical Engineering from Texas A&M, his master of business administration from Lindenwood College, and his PhD in Technology Strategy from Washington University in St. Louis.
Anzu Partners’ Advisory Board members will not perform board or committee functions, nor will they have any voting or decision-making capacity on our behalf. They also will not be subject to the fiduciary requirements to which our board members are subject. Anzu Partners may modify or expand its roster of Advisory Board members as we source potential business combination targets or create value in businesses that we may pursue or acquire. In addition, Anzu Partners presently retains additional advisors not listed above who may or may not be useful in the pursuit of a business combination.
Our Market Opportunity
We believe that technology and globalization are creating enormous opportunities for disruption and value creation in industrial markets. Many of these technologies can be transformative for industrial markets but require the right expertise and global connections to leverage the opportunities within the public markets.
Within the broader market space of industrial technology, we intend to focus on three primary sources for a business combination:
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Industrial technology leaders. The Company intends to leverage its relationships in the venture capital and private equity communities to identify market leading businesses whose preferred path is entry into the public markets. We believe that market leading businesses may view the public markets as a more attractive exit relative to a sale of the business because of the opportunity to continue to grow independently with access to public market capital.
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Corporate spin-outs. We believe that spin-out targets provide distinct advantages to a SPAC transaction and that our team has the capability to drive attractive risk-adjusted returns. We also believe there are a large number of high-value spin-out opportunities as a result of significant historical industry consolidation and other driving forces, such as increasing antitrust and foreign compliance activities. In addition, these corporate units, unlike many early-stage companies, have well-developed financial profiles that are often sizeable and profitable on a standalone basis, allowing them to more easily sustain public scrutiny. Similarly, established corporate units typically have strong internal compliance processes already in place, allowing them to more easily fulfill the requirements of public markets. We believe we have the support infrastructure required to assist a divestiture target in its transition away from a corporate parent, particularly given that our management team has significant experience in divestitures, spin-outs and post-merger integrations, including at the BCG and Ashland.
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Closely-held companies. We believe that many industrial technology leaders have developed themselves as closely held entities. These businesses, whether founder-led or family-owned, face some of the same challenges of a corporate spin-out as a potentially new public entity. We view our skillsets as former management consultants and business leaders who have successfully brought companies into the public markets as competitive advantages in identifying, underwriting and combining with these businesses.
Our Mission
Our mission is to identify, combine and maximize the value of businesses that focus on market-leading industrial technology companies, including corporate spin-outs, closely-held companies and
institutionally-backed businesses. We will seek to identify high-quality businesses, particularly businesses with transformative technologies for industrial applications, and use our company-building expertise and network of technical and corporate connections to drive innovation into large industrial markets.
We are confident that we can provide a number of significant benefits to potential targets and public market investors that can potentially lead to attractive long-term risk-adjusted returns in the public markets. These benefits include, but are not limited to, the following:
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Team. Our board of directors is led by an executive with a decade of public company operational leadership experience, supported by an experienced transaction team with global reach to identify business combination targets;
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Track record. Our team members have led and executed multiple global transactions, have managed IPO spin-outs with over $5 billion in enterprise value and have handled divestitures—going beyond the textbook and into the practice of getting transactions done at scale in the public market;
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While in the Anzu Partners’ portfolio, Axsun grew sales by approximately 50% while achieving profitability, and under Dr. Haring-Smith’s investment leadership, Axsun exited with approximately eight times investors’ invested capital; and
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Mr. Wulfsohn, Mr. Joy and Mr. Ganz served on the executive team during Ashland’s successful transformation from a conglomerate to a focused, high-margin specialty chemicals company.
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Public company experience. Our management team and board of directors have decades of public company leadership experience, including the IPO spin-out of Valvoline from Ashland Global Holdings, the IPO of Altair and two foreign-listed IPOs;
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Technical expertise. Our team has deep technical knowledge to be able to assess the long-term competitiveness of industrial technologies, with the Anzu Partners’ team collectively holding over eight PhDs—from Georgia Tech, MIT, Oxford University (UK), Stanford, University of California Los Angeles, University of California San Diego and University of Texas at Austin; and
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Global network. Our management team, board and advisory board and their affiliates have developed a broad network of contacts and corporate relationships, including deep networks in industrial technology and global management consulting.
Our Acquisition and Value Creation Strategy
We believe our management team is well positioned to identify distinctive opportunities, primarily in the United States, across the industrial technology space, including corporate spin-outs, closely-held companies, and institutionally-backed businesses. We intend to leverage our team’s extensive network and deep technical and commercial knowledge to source potential targets and create value following the completion of the initial business combination, including the following:
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Deep technical knowledge to assess long-term competitiveness of industrial technologies and spin-outs;
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Familiarity with private companies—particularly closely-held and institutionally-backed businesses—that are less likely to pursue independent IPOs; and
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Experience in public markets to be a trusted counterparty in a target company’s transition to the public markets and a strong supporting platform of personnel to assist in launch of public entity.
We also believe that Anzu Partners’ experience and track record in the industrial technology space, as well as our management team’s understanding of complex business situations and structures, will make us a preferred partner for these potential targets.
Consistent with our strategy, we will seek to identify companies that have compelling growth potential and a combination of the following characteristics. We will use these criteria and guidelines in
evaluating business combination opportunities, but we may decide to pursue and consummate an initial business combination with a target business that does not meet the following criteria and guidelines. We intend to pursue target businesses that we believe possess, among others:
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significant market share in leading growth segments;
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financial scale required to stand as an independent public company;
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sustained historical growth over multiple years within major markets;
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established management teams who have experience running businesses at scale and that we believe are ready to enter the public markets; and
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clear current financial metrics that can drive valuation and support value expansion in the public markets.
Any evaluation relating to the merits of a particular initial business combination target may be based on these general criteria and guidelines as well as other considerations, factors and criteria that our management team may deem relevant in its discretion.
Additional Disclosures
Our Acquisition Process
We have not selected any business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target. Certain members of our management team are employed by either Anzu Partners or one of its affiliates. Anzu Partners is continuously made aware of potential business opportunities, one or more of which we may desire to pursue for our initial business combination, but we have not (nor has anyone on our behalf) contacted, or had any discussions, formal or otherwise, with any prospective target business with respect to a business combination transaction with us.
All of our officers and certain of our directors have fiduciary and contractual duties to either Anzu Partners and to certain companies in which it has invested or to certain other entities. These entities may compete with us for acquisition opportunities. While the risk is partially mitigated as a result of Anzu Partners’ venture funds seeking targets of different enterprise sizes than us, if these entities decide to pursue any such opportunity, we may be precluded from pursuing such opportunities. Subject to his or her fiduciary duties under applicable law, none of the members of our management team who are also employed by our sponsor or its affiliates have any obligation to present us with any opportunity for a potential business combination of which they become aware. Our sponsor and directors and officers are also not prohibited from sponsoring, investing or otherwise becoming involved with, any other blank check companies, including in connection with their initial business combinations, prior to us completing our initial business combination. Our management team, in their capacities as directors, officers or employees of our sponsor or its affiliates or in their other endeavors, may choose to present potential business combinations to the related entities described above, current or future entities affiliated with or managed by our sponsor, or third parties, before they present such opportunities to us, subject to his or her fiduciary duties under applicable law and any other applicable fiduciary duties. Our amended and restated certificate of incorporation 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 the company and it is an opportunity that we are able to complete on a reasonable basis. In addition, Messrs. Wulfsohn, Joy and Ganz are subject to certain non-compete agreements or other obligations with respect to Ashland. For more information, see the section entitled “Management—Conflicts of Interest.”
Our directors and officers presently have, and any of them in the future may have, additional, fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present a business combination opportunity to such entity. Accordingly, if any of our directors or officers becomes aware of a business combination opportunity that is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, he or she may need to honor these fiduciary or contractual obligations to present such business combination opportunity to such entity, subject to his or her fiduciary duties under applicable law. Our directors and officers are also not required to commit any
specified amount of time to our affairs, and, accordingly, will have conflicts of interest in allocating management time among various business activities, including identifying potential business combinations and monitoring the related due diligence. See “Risk Factors—Certain of our directors and officers are now, and all of them may in the future become, affiliated with entities engaged in business activities similar to those intended to be conducted by us and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should be presented.”
We do not believe, however, that the fiduciary duties or contractual obligations of our directors or officers will materially adversely affect our ability to identify and pursue business combination opportunities or complete our initial business combination.
You should not rely on the historical record of our founders’ and management’s performance as indicative of our future performance. See “Risk Factors—Past performance by our management team and their respective affiliates may not be indicative of future performance of an investment in the company.”
Initial Business Combination
Nasdaq rules require that our initial business combination must be with one or more operating businesses or assets with a fair market value equal to at least 80% of the net assets held in the trust account (net of amounts disbursed to management for working capital purposes, if permitted, and excluding the amount of any deferred underwriting discount held in trust). We refer to this as the 80% of net assets test. If our board of directors is not able independently to determine the fair market value of the target business or businesses, we may obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions with respect to the satisfaction of such criteria. Although we may purchase multiple businesses in related industries in connection with our initial business combination, we do not currently intend to purchase multiple businesses in unrelated industries in conjunction with our initial business combination, although there is no assurance that will be the case.
We anticipate structuring our initial business combination so that the post-transaction company in which our public stockholders own shares will own or acquire 100% of the issued and outstanding equity interests or assets of the target business or businesses. We may, however, structure our initial business combination such that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management team or stockholders or for other reasons, but we will only complete such business combination if the post- transaction company owns or acquires 50% or more of the issued and outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended (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 our initial business combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in our initial business combination transaction. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the issued and outstanding capital stock, shares or other equity securities of a target, or issue a substantial number of new shares to third-parties in connection with financing our initial business combination. In this case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our stockholders immediately prior to our initial business combination could own less than a majority of our issued and outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% of net assets test. If our initial business combination involves more than one target business, the 80% of net assets test will be based on the aggregate value of all of the target businesses. Notwithstanding the foregoing, if we are not then listed on Nasdaq for whatever reason, we would no longer be required to meet the foregoing 80% of net assets test.
Prior to the effectiveness of the registration statement of which this prospectus forms a part, we will file a Registration Statement on Form 8-A with the SEC to voluntarily register our securities under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). As a result, we will be subject to the rules and regulations promulgated under the Exchange Act. We have no current intention of
filing a Form 15 to suspend our reporting or other obligations under the Exchange Act prior or subsequent to the consummation of our initial business combination.
Corporate Information
We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). 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 of 2002 (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.
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 the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our shares of common stock that is held by non-affiliates exceeds $700 million as of the end of that year’s second fiscal quarter, and (2) the date on which we have issued more than $1.00 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 Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our shares of common stock held by non-affiliates exceeds $250 million as of the end of that year’s second fiscal quarter, or (2) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our shares of common stock held by non-affiliates exceeds $700 million as of the end of that year’s second fiscal quarter.
We are a Delaware corporation incorporated on December 28, 2020. Our executive offices are located at 12610 Race Track Road, Suite 250 Tampa, FL 33626 and our telephone number is (202) 742-5870. Upon completion of this offering, our corporate website address will be www.AnzuSPAC.com. Our website and the information contained on, or that can be accessed through, the website is not deemed to be incorporated by reference in, and is not considered part of, this prospectus or the registration statement of which this prospectus is a part. You should not rely on any such information in making your decision whether to invest in our securities.
We are a newly incorporated company that has conducted no operations and has generated no revenues. Until we complete our initial business combination, we will have no operations and will generate no operating revenues. In making your decision whether to invest in our securities, you should take into account not only the background of our management team, but also the special risks we face as a blank check company. This offering is not being conducted in compliance with Rule 419 promulgated under the Securities Act. Accordingly, you will not be entitled to protections normally afforded to investors in Rule 419 blank check offerings. For additional information concerning how Rule 419 blank check offerings differ from this offering, please see “Proposed Business—Comparison of This Offering to Those of Blank Check Companies Subject to Rule 419.” You should carefully consider these and the other risks set forth in the section entitled “Risk Factors” included elsewhere in this prospectus.
Summary Risk Factors
Our company is subject to numerous risks described in the section entitled “Risk Factors” and elsewhere in this prospectus. You should carefully consider these risks before making an investment. Some of these risks relating to our business objectives, our organization and structure and this offering include:
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We are a newly incorporated company with no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.
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Our public stockholders may not be afforded an opportunity to vote on our proposed business combination, which means we may complete our initial business combination even though a majority of our public stockholders do not support such a combination.
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If we seek stockholder approval of our initial business combination, our initial stockholders, directors and officers have agreed to vote in favor of such initial business combination, regardless of how our public stockholders vote.
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Your only opportunity to affect the investment decision regarding a potential business combination will be limited to the exercise of your right to redeem your shares from us for cash, unless we seek stockholder approval of such business combination.
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The ability of our public stockholders to redeem their shares for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult for us to enter into a business combination with a target.
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The requirement that we complete our initial business combination within the prescribed time frame may give potential target businesses leverage over us in negotiating a business combination and may limit the time we have in which to conduct due diligence on potential business combination targets, in particular as we approach our dissolution deadline, which could undermine our ability to complete our initial business combination on terms that would produce value for our stockholders.
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Our search for a business combination, and any target business with which we ultimately consummate a business combination, may be materially adversely affected by the COVID-19 outbreak and other events and the status of debt and equity markets.
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We may not be able to complete our initial business combination within the prescribed time frame, in which case we would cease all operations except for the purpose of winding up and we would redeem our public shares and liquidate, in which case our public stockholders may receive only $10.00 per share, or less than such amount in certain circumstances, and our warrants will expire worthless.
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If we seek stockholder approval of our initial business combination, our sponsor, directors, officers, advisors or any of their respective affiliates may elect to purchase shares or warrants from public stockholders, which may influence a vote on a proposed business combination and reduce the public “float” of our securities.
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Because of our limited resources and the significant competition for business combination opportunities, it may be more difficult for us to complete our initial business combination. If we have not completed our initial business combination within the required time period, our public stockholders may receive only approximately $10.00 per share, or less in certain circumstances, on our redemption of their shares, and our warrants will expire worthless.
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We may have limited ability to assess the management of a prospective target business and, as a result, may affect our initial business combination with a target business whose management may not have the skills, qualifications or abilities to manage a public company.
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We may be able to complete only one business combination with the proceeds of this offering and the sale of the private placement warrants, which will cause us to be solely dependent on a single business which may have a limited number of products or services. This lack of diversification may negatively impact our operations and profitability.
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We are dependent upon our directors and officers and their departure could adversely affect our ability to operate.
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Our key personnel may negotiate employment or consulting agreements with a target business in connection with a particular business combination. These agreements may provide for them to receive compensation following our initial business combination and as a result, may cause them to have conflicts of interest in determining whether a particular business combination is the most advantageous.
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Our directors and officers will allocate their time to other businesses thereby causing conflicts of interest in their determination as to how much time to devote to our affairs. This conflict of interest could have a negative impact on our ability to complete our initial business combination.
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Our directors, officers, security holders and their respective affiliates may have competitive pecuniary interests that conflict with our interests.
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The ability of our public stockholders to exercise redemption rights with respect to a large number of our shares could increase the probability that our initial business combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your shares.
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You will not have any rights or interests in funds from the trust account, except under certain limited circumstances. To liquidate your investment, therefore, you may be forced to sell your public shares and/or warrants, potentially at a loss.
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Nasdaq may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.
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You will not be entitled to protections normally afforded to investors of many other blank check companies.
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If we seek stockholder approval of our initial business combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a “group” of stockholders are deemed to hold in excess of 15% of the shares of our Class A common stock, you will lose your ability to redeem all such shares in excess of 15% of shares of our Class A common stock.
THE OFFERING
In making your decision whether to invest in our securities, you should take into account not only the backgrounds of the members of our management team, but also the special risks we face as a blank check company and the fact that this offering is not being conducted in compliance with Rule 419 promulgated under the Securities Act. You will not be entitled to protections normally afforded to investors in Rule 419 blank check offerings. You should carefully consider these and the other risks set forth in the section below entitled “Risk Factors” of this prospectus.
35,000,000 units (or 40,250,000 units if the underwriters’ over-allotment option is exercised in full), at $10.00 per unit, each unit consisting of:
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one share of our Class A common stock; and
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one-third of one redeemable warrant
Units: “ANZU.U”
Shares of our Class A common stock: “ANZU”
Warrants: “ANZUWS”
Trading commencement and separation of shares of our Class A common stock and warrants
The units will begin trading on or promptly after the date of this prospectus. The shares of our Class A common stock and warrants constituting the units will begin separate trading on the 52nd day following the date of this prospectus (or, if such date is not a business day, the following business day) unless the representatives inform us of their decision to allow earlier separate trading, subject to our having filed the Current Report on Form 8-K described below and having issued a press release announcing when such separate trading will begin. Once the shares of our Class A common stock and warrants commence separate trading, holders will have the option to continue to hold units or separate their units into the component securities. Holders will need to have their brokers contact our transfer agent in order to separate the units into shares of our Class A common stock and warrants. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. Accordingly, unless you purchase at least three units, you will not be able to receive or trade a whole warrant.
Additionally, the units will automatically separate into their component parts and will not be traded after completion of our initial business combination.
Separate trading of the shares of our Class A common stock and warrants is prohibited until we have filed a Current Report on Form 8-K
In no event will the shares of our Class A common stock and warrants be traded separately until we have filed with the SEC a Current Report on Form 8-K which includes an audited balance sheet of the company reflecting our receipt of the gross proceeds at the closing of this offering. We will file the Current Report on Form 8-K promptly after the closing of this offering. If the underwriters’ over-allotment option is exercised following the initial filing of such Current Report on Form 8-K, a second or amended Current Report on Form 8-K will be
filed to provide updated financial information to reflect the exercise of the underwriters’ over-allotment option.
Units:
Number issued and outstanding before this offering
0
Number issued and outstanding after this offering
35,000,000(1)
Shares of common stock:
Number issued and outstanding before this offering
10,062,500(2)(3)
Number issued and outstanding after this offering
43,750,000(1)(3)(4)
Warrants:
Number of private placement warrants to be sold in a private placement simultaneously with this offering
11,000,000(1)
Number of warrants to be outstanding after this offering and the sale of private placement warrants
22,666,667(1)
Each whole warrant offered in this offering is exercisable to purchase one share of our Class A common stock, subject to adjustment as provided herein. Only whole warrants are exercisable. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. We structured each unit to contain one-third of one redeemable warrant, with each whole warrant exercisable for one share of our Class A common stock, in order to reduce the dilutive effect of the warrants upon completion of our initial business combination as compared to units that each contain a whole warrant to purchase one whole share, which we believe will make us a more attractive business combination partner for target businesses.
(1)
Assumes no exercise of the underwriters’ over-allotment option and the forfeiture by our sponsor of 1,312,500 founder shares.
(2)
Consists solely of founder shares and includes up to 1,312,500 shares of common stock that are subject to forfeiture by our sponsor depending on the extent to which the underwriters’ over-allotment option is exercised.
(3)
Founder shares are currently classified as shares of our Class B common stock, which shares will convert into shares of our Class A common stock at the time of our initial business combination, or earlier at the option of the holder, on a one-for-one basis, subject to adjustment as described below adjacent to the caption “Founder shares conversion and anti-dilution rights.”
(4)
Includes 35,000,000 public shares and 8,750,000 founder shares.
$11.50 per share, subject to adjustment as described herein.
In addition, if (x) we issue additional shares of common stock or equity-linked securities for capital raising purposes in connection with the closing of our initial business combination at an issue price or effective issue price of less than $9.20 per share of common stock (with such issue price or effective issue price to be determined in good faith by our board of directors and, in the case of any such issuance to our sponsor or its affiliates, without taking into account any founder shares held by our sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of our initial business combination on the date of the completion of our initial business combination (net of redemptions), and (z) the volume weighted average trading price of shares of our Class A common stock during the 20 trading day period starting on the trading day prior to the day on which we consummate our initial business combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, the $18.00 per share redemption trigger price described below under “Redemption of warrants when the price per share of our Class A common stock equals or exceeds $18.00” and “Redemption of warrants when the price per share of our Class A common stock equals or exceeds $10.00” will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price, and the $10.00 per share redemption trigger price described below under “Redemption of warrants when the price per share of our Class A common stock equals or exceeds $10.00” will be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price.
The warrants will become exercisable on the later of:
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30 days after the completion of our initial business combination; and
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12 months from the closing of this offering;
provided in each case that we have an effective registration statement under the Securities Act covering the issuance of the shares of our Class A common stock issuable upon exercise of the warrants and a current prospectus relating to them is available and such shares are registered, qualified or exempt from registration under the securities, or blue sky, laws of the state of residence of the holder (or we permit holders to exercise their warrants on a cashless basis under the circumstances specified in the warrant agreement, including as a result of a notice of redemption described below under “Redemption of warrants when the price per share of our Class A common stock equals or exceeds $10.00”).
We are not registering the shares of our Class A common stock issuable upon exercise of the warrants at this time. However, we have agreed that as soon as practicable, but in no event later than 15 business days after the closing of our initial business combination, we will use our commercially reasonable efforts to file with the SEC a registration statement covering the issuance of the shares of our Class A common
stock issuable upon exercise of the warrants, and we will use our commercially reasonable efforts to cause the same to become effective within 60 business days after the closing of our initial business combination and to maintain the effectiveness of such registration statement and a current prospectus relating to those shares of our Class A common stock until the warrants expire or are redeemed. Notwithstanding the above, if shares of our Class A common stock are, at the time of any exercise of a warrant, not listed on a national securities exchange such that they do not satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement.
The warrants will expire at 5:00 p.m., New York City time, five years after the completion of our initial business combination or earlier upon redemption or liquidation. On the exercise of any warrant, the warrant exercise price will be paid directly to us and not placed in the trust account.
Redemption of warrants when the price per share of our Class A common stock equals or exceeds $18.00
Once the warrants become exercisable, we may redeem the outstanding warrants (except as described herein with respect to the private placement warrants):
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in whole and not in part;
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at a price of $0.01 per warrant;
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upon not less than 30 days’ prior written notice of redemption to each warrant holder; and
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if, and only if, the last reported sale price of shares of our Class A common stock for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which we send the notice of redemption to the warrant holders (the “Reference Value”) equals or exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “Description of Securities—Redeemable Warrants—Public Stockholders’ Warrants—Anti-dilution Adjustments”).
We will not redeem the warrants as described above unless a registration statement under the Securities Act covering the issuance of the shares of our Class A common stock issuable upon exercise of the warrants is then effective and a current prospectus relating to those shares of our Class A common stock is available throughout the 30-day redemption period. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws.
Except as described below, none of the private placement warrants will be redeemable by us so long as they are held by our sponsor or its permitted transferees.
Redemption of warrants when the price per share of our Class A common stock equals or exceeds $10.00
Once the warrants become exercisable, we may redeem the outstanding warrants in whole and not in part;
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at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares determined by reference to the table set forth under “Description of Securities—Redeemable Warrants—Public Stockholders’ Warrants” based on the redemption date and the “fair market value” of shares of our Class A common stock (as defined below) except as otherwise described in “Description of Securities—Redeemable Warrants—Public Stockholders’ Warrants”;
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if, and only if, the Reference Value (as defined above under “Redemption of warrants when the price per share of our Class A common stock equals or exceeds $18.00”) equals or exceeds $10.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “Description of Securities—Redeemable Warrants—Public Stockholders’ Warrants—Anti-dilution Adjustments”); and
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if the Reference Value is less than $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “Description of Securities—Redeemable Warrants—Public Stockholders’ Warrants—Anti-dilution Adjustments”), the private placement warrants must also concurrently be called for redemption on the same terms as the outstanding public warrants, as described above.
The “fair market value” of shares of our Class A common stock for the above purpose shall mean the volume weighted average price of shares of our Class A common stock during the 10 trading days immediately following the date on which the notice of redemption is sent to the holders of warrants. This redemption feature differs from the typical warrant redemption features used in other blank check offerings. We will provide our warrant holders with the final fair market value no later than one business day after the 10-trading day period described above ends. In no event will the warrants be exercisable in connection with this redemption feature for more than 0.361 shares of our Class A common stock per warrant (subject to adjustment).
No fractional shares of our Class A common stock will be issued upon redemption. If, upon redemption, a holder would be entitled to receive a fractional interest in a share, we will round down to the nearest whole number of the number of shares of our Class A common stock to be issued to the holder. Please see the section entitled “Description of Securities—Redeemable Warrants—Public Stockholders’ Warrants” for additional information.
On December 30, 2020, our sponsor subscribed for an aggregate of 7,187,500 shares of our Class B common stock, par value $0.0001 per share, for an aggregate purchase price of $25,000, or approximately $0.004 per share. On February 19, 2021, we effected a stock dividend
of 2,875,000 shares of Class B Common Stock to our sponsor, resulting in our initial stockholders holding an aggregate of 10,062,500 founder shares. In February 2021, our sponsor transferred 25,000 founder shares to each of Teresa A. Harris, Priya Cherian Huskins and Susan J. Kantor, our independent director nominees.
Prior to the initial investment in the company of $25,000 by our sponsor, the company had no assets, tangible or intangible. The purchase price of these founder shares was determined by dividing the amount of cash contributed to us by the number of founder shares issued. Our initial stockholders will collectively own 20% of our issued and outstanding shares after this offering (assuming they do not purchase any units in this offering). If we increase or decrease the size of this offering, we will effect a capitalization or share repurchase or redemption or other appropriate mechanism, as applicable, with respect to our founder shares immediately prior to the consummation of this offering in such amount as to maintain the number of founder shares at 20% of our issued and outstanding shares of common stock upon the consummation of this offering. Up to 1,312,500 founder shares are subject to forfeiture by our sponsor depending on the extent to which the underwriters’ over-allotment option is exercised.
The founder shares are identical to the shares of our Class A common stock included in the units being sold in this offering, except that:
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prior to our initial business combination, only holders of the founder shares have the right to vote on the appointment of directors and holders of a majority of our founder shares may remove a member of the board of directors for any reason;
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the founder shares are subject to certain transfer restrictions, as described in more detail below;
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our initial stockholders, directors and officers have entered into a letter agreement with us, pursuant to which they have agreed to waive: (1) their redemption rights with respect to any founder shares and public shares held by them, as applicable, in connection with the completion of our initial business combination; (2) their redemption rights with respect to any founder shares and public shares held by them in connection with a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity; and (3) their rights to liquidating distributions from the trust account with respect to any founder shares they hold if we fail to complete our initial business combination within 24 months from the closing of this offering or during any extended time that we have to consummate a business combination beyond 24 months as a result of a stockholder vote to amend our certificate of incorporation (an “Extension Period”) (although they will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete our initial business combination within the prescribed time frame). If we submit our initial business combination to our
public stockholders for a vote, our initial stockholders, directors and officers have agreed to vote any founder shares and public shares held by them in favor of our initial business combination. As a result, in addition to the founder shares, we would need 13,125,001, or 37.5% (assuming all issued and outstanding shares are voted and the over-allotment option is not exercised), or 2,187,501, or 6.25% (assuming only the minimum number of shares representing a quorum are voted and the over-allotment option is not exercised), of the 35,000,000 public shares sold in this offering to be voted in favor of an initial business combination in order to have such initial business combination approved;
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the founder shares will automatically convert into shares of our Class A common stock at the time of our initial business combination, or earlier at the option of the holder, on a one-for-one basis, subject to adjustment pursuant to certain anti-dilution rights, as described in more detail below; and
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the founder shares are entitled to registration rights.
Transfer restrictions on founder shares
Our initial stockholders have agreed not to transfer, assign or sell any of their founder shares until the earlier to occur of: (A) one year after the completion of our initial business combination; and (B) subsequent to our initial business combination (x) if the last reported sale price of our Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, rights issuances, consolidations, reorganizations, recapitalizations and other similar transactions) for any 20 trading days within any 30- trading day period commencing at least 150 days after our initial business combination or (y) the date on which we complete a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of our public stockholders having the right to exchange their shares of common stock for cash, securities or other property (except with respect to permitted transferees as described herein under “Principal Stockholders—Transfers of Founder Shares and Private Placement Warrants”). Any permitted transferees would be subject to the same restrictions and other agreements of our initial stockholders with respect to any founder shares. We refer to such transfer restrictions throughout this prospectus as the lock-up.
Founder shares conversion and anti-dilution rights
As of the date of this prospectus, we have 10,062,500 shares of our Class B common stock, par value $0.0001 per share, issued and outstanding. The shares of our Class B common stock will automatically convert into shares of our Class A common stock at the time of our initial business combination, or earlier at the option of the holder, on a one-for-one basis, subject to adjustment for stock splits, stock dividends, rights issuances, consolidations, reorganizations, recapitalizations and the like, and subject to further adjustment as provided herein. In the case that additional shares of our Class A common stock, or equity-linked securities, are issued or deemed issued in excess of the amounts issued in this offering and related to the closing of our initial business combination, the ratio at which the shares of our Class B common stock will convert into shares of our Class A common stock will be adjusted (unless the holders of a majority of the issued and outstanding shares of our Class B common stock agree to
waive such anti-dilution adjustment with respect to any such issuance or deemed issuance) so that the number of shares of our Class A common stock issuable upon conversion of all shares of our Class B common stock will equal, in the aggregate, on an as-converted basis, 20% of the sum of all shares of common stock issued and outstanding upon the completion of this offering plus all shares of our Class A common stock and equity-linked securities issued or deemed issued in connection with our initial business combination, excluding any shares or equity-linked securities issued, or to be issued, to any seller in our initial business combination. The term “equity-linked securities” refers to any debt or equity securities that are convertible, exercisable or exchangeable for shares of our Class A common stock issued in a financing transaction in connection with our initial business combination, including but not limited to a private placement of equity or debt.
Appointment of directors; Voting rights
Prior to the consummation of our initial business combination, only holders of shares of our Class B common stock will have the right to vote on the election of directors. Holders of our Class A common stock will not be entitled to vote on the election of directors during such time. These provisions of our amended and restated certificate of incorporation may only be amended if approved by the holders of at least 90% of our common stock voting at a stockholder meeting. With respect to any other matter submitted to a vote of our stockholders, including any vote in connection with our initial business combination, except as required by applicable law or stock exchange rule, holders of shares of our Class A common stock and holders of shares of our Class B common stock will vote together as a single class, with each share entitling the holder to one vote.
Private placement warrants
Our sponsor has committed to purchase an aggregate of 11,000,000 warrants (or 12,050,000 warrants if the underwriters’ over-allotment option is exercised in full) at a price of $1.00 per warrant ($11,000,000 in the aggregate or $12,050,000 in the aggregate if the underwriters’ over-allotment option is exercised in full) in a private placement that will close simultaneously with the closing of this offering.
Each private placement warrant is exercisable to purchase one share of our Class A common stock at a price of $11.50 per share, subject to adjustment as provided herein. If we do not complete our initial business combination within 24 months from the closing of this offering or during any Extension Period, the proceeds of the sale of the private placement warrants held in the trust account will be used to fund the redemption of our public shares (subject to the requirements of applicable law) and the private placement warrants will expire worthless. The private placement warrants will not be redeemable by us (except as described above under “Redemption of warrants when the price per share of our Class A common stock equals or exceeds $10.00”) so long as they are held by our sponsor or its permitted transferees. If the private placement warrants are held by holders other than our sponsor or its permitted transferees, the private placement warrants will be redeemable by us in all redemption scenarios and exercisable by the holders on the same basis as the warrants included in the units being sold in this offering. Our sponsor, as well as its permitted transferees, have the option to exercise the private placement warrants on a cashless basis.
Transfer restrictions on private placement warrants
The private placement warrants (including the shares of our Class A common stock issuable upon exercise of the private placement warrants) will not be transferable, assignable or salable until 30 days after the completion of our initial business combination, except as described herein under “Principal Stockholders—Transfers of Founder Shares and Private Placement Warrants.”
Proceeds to be held in trust account
The rules of Nasdaq provide that at least 90% of the gross proceeds from this offering and the sale of the private placement warrants be deposited in a trust account. Of the $361,000,000 in proceeds we will receive from this offering and the sale of the private placement warrants described in this prospectus, or $414,550,000 if the underwriters’ overallotment option is exercised in full, $350,000,000 ($10.00 per unit), or $402,500,000 ($10.00 per unit) if the underwriters’ over-allotment option is exercised in full (including $12,250,000 (or $14,087,500 if the underwriters’ over-allotment option is exercised in full) in deferred underwriting commissions), will be deposited into a U.S.-based trust account at Bank of America, N.A, with American Stock Transfer & Trust Company acting as trustee, and $4.0 million will be used to pay expenses in connection with the closing of this offering and for working capital following this offering. The funds in the trust account will be invested only in U.S. government treasury bills with a maturity of 185 days or less or in money market funds investing solely in U.S. Treasuries.
Except with respect to interest earned on the funds held in the trust account that may be released to us to pay our taxes, if any, the funds held in the trust account will not be released from the trust account until the earliest to occur of: (1) our completion of an initial business combination; (2) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity; and (3) the redemption of our public shares if we have not completed an initial business combination within 24 months from the closing of this offering, subject to applicable law. The proceeds deposited in the trust account could become subject to the claims of our creditors, if any, which could have priority over the claims of our public stockholders.
Anticipated expenses and funding sources
Unless and until we complete our initial business combination, no proceeds held in the trust account will be available for our use, except the withdrawal of interest to pay taxes or to redeem our public shares in connection with an amendment to our amended and restated certificate of incorporation, as described above. Based upon current interest rates, we expect the trust account to generate approximately $350,000 of interest annually (assuming an interest rate of 0.10% per
year). Unless and until we complete our initial business combination, we may pay our expenses only from:
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the net proceeds of this offering and the sale of the private placement warrants not held in the trust account, which will be approximately $2,000,000 in working capital after the payment of approximately $2,000,000 in expenses relating to this offering; and
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any loans or additional investments from our sponsor, members of our management team or any of their respective affiliates or other third parties, although they are under no obligation to loan funds to, or otherwise invest in, us; and provided that any such loans will not have any claim on the proceeds held in the trust account unless such proceeds are released to us upon completion of our initial business combination.
Conditions to completing our initial business combination
There is no limitation on our ability to raise funds privately or through loans in connection with our initial business combination. Nasdaq rules require that an initial business combination must be with one or more operating businesses or assets with a fair market value equal to at least 80% of the net assets held in the trust account (net of amounts disbursed to management for working capital purposes, if permitted, and excluding the amount of any deferred underwriting discount held in trust). Although we may purchase multiple businesses in related industries in connection with our initial business combination, we do not currently intend to purchase multiple businesses in unrelated industries in conjunction with our initial business combination, although there is no assurance that will be the case. Notwithstanding the foregoing, if we are not then listed on Nasdaq for any reason, we would no longer be required to meet the foregoing 80% of net assets test.
If our board of directors is not able independently to determine the fair market value of the target business or businesses, we may obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions with respect to the satisfaction of such criteria. We will complete our initial business combination only if the post-transaction company in which our public stockholders own shares will own or acquire 50% or more of the issued and outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for it not to be required to register as an investment company under the Investment Company Act. Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our stockholders prior to our initial business combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in our initial business combination transaction. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% of net assets test; provided that in the event that our initial business combination involves more than one target business, the 80% of net assets test will be based on the aggregate value of all of the target businesses.
Permitted purchases and other transactions with respect to our securities
If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, directors, officers, advisors or any of their respective affiliates may purchase public shares or warrants in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination. Any such price per share may be different than the amount per share a public stockholder would receive if it elected to redeem its shares in connection with our initial business combination. Additionally, at any time at or prior to our initial business combination, subject to applicable securities laws (including with respect to material nonpublic information), our sponsor, directors, officers, advisors or any of their respective affiliates may enter into transactions with investors and others to provide them with incentives to acquire public shares, vote their public shares in favor of our initial business combination or not redeem their public shares. However, our sponsor, directors, officers, advisors or any of their respective affiliates are under no obligation or duty to do so and they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds held in the trust account will be used to purchase public shares or warrants in such transactions. Such persons will be subject to restrictions in making any such purchases when they are in possession of any material non-public information or if such purchases are prohibited by Regulation M under the Exchange Act. See “Proposed Business—Permitted purchases and other transactions with respect to our securities” for a description of how our sponsor, directors, officers, advisors or any of their respective affiliates will select which stockholders to enter into private transactions with. We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will comply with such rules. Our sponsor, directors, officers, advisors or any of their respective affiliates will be restricted from making any purchases if such purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act.
Redemption rights for public stockholders upon completion of our initial business combination
We will provide our public stockholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of our initial business combination, including interest (which interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares, subject to the limitations described herein.
The amount in the trust account is initially anticipated to be $10.00 per public share. The per-share amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred
underwriting commissions we will pay to the underwriters. The redemption rights will include the requirement that a beneficial holder must identify itself in order to validly redeem its shares. There will be no redemption rights upon the completion of our initial business combination with respect to our warrants. Our initial stockholders, directors and officers have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares and public shares held by them in connection with the completion of our initial business combination.
Manner of conducting redemptions
We will provide our public stockholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination either (1) in connection with a stockholder meeting called to approve the business combination or (2) by means of a tender offer. The decision as to whether we will seek stockholder approval of a proposed business combination or conduct a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would require us to seek stockholder approval under applicable law or stock exchange listing requirement. Asset acquisitions and stock purchases would not typically require stockholder approval while direct mergers with our company where we do not survive and any transactions where we issue more than 20% of our issued and outstanding shares of common stock or seek to amend our amended and restated certificate of incorporation would typically require stockholder approval. We intend to conduct redemptions without a stockholder vote pursuant to the tender offer rules of the SEC unless stockholder approval is required by applicable law or stock exchange listing requirement or we choose to seek stockholder approval for business or other reasons.
If a stockholder vote is not required and we do not decide to hold a stockholder vote for business or other reasons, we will, pursuant to our amended and restated certificate of incorporation:
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conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers; and
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file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies.
Upon the public announcement of our initial business combination, if we elect to conduct redemptions pursuant to the tender offer rules, we and our sponsor will terminate any plan established in accordance with Rule 10b5-1 to purchase our shares of common stock in the open market, in order to comply with Rule 14e-5 under the Exchange Act.
In the event we conduct redemptions pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a) under the Exchange Act, and we will not be permitted to complete our initial business combination until the expiration of the tender offer period. In addition, the tender offer will be conditioned on public stockholders not tendering more than a
specified number of public shares, which number will be based on the requirement that we may not redeem public shares in an amount that would cause our net tangible assets to be less than $5,000,001 following such redemptions, or any greater net tangible asset or cash requirement that may be contained in the agreement relating to our initial business combination. If public stockholders tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete such initial business combination.
If, however, stockholder approval of the transaction is required by applicable law or stock exchange listing requirement, or we decide to obtain stockholder approval for business or other reasons, we will:
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conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules; and
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file proxy materials with the SEC.
We expect that a final proxy statement would be mailed to public stockholders at least 10 days prior to the stockholder vote. However, we expect that a draft proxy statement would be made available to such stockholders well in advance of such time, providing additional notice of redemption if we conduct redemptions in conjunction with a proxy solicitation. Although we are not required to do so, we currently intend to comply with the substantive and procedural requirements of Regulation 14A in connection with any stockholder vote even if we are not able to maintain our Nasdaq listing or Exchange Act registration.
If we seek stockholder approval, unless otherwise required by applicable law, regulation or stock exchange rules, we will complete our initial business combination only if a majority of the shares of common stock voted are voted in favor of our initial business combination. A quorum for such meeting will consist of the holders present in person or by proxy of shares of outstanding capital stock of the company representing a majority of the voting power of all outstanding shares of capital stock of the company entitled to vote at such meeting. Shares held by our initial stockholders, officers and directors will be included in determining the presence of a quorum and have agreed to vote any founder shares and any public shares held by them in favor of our initial business combination. We expect that at the time of any stockholder vote relating to our initial business combination, our initial stockholders and their permitted transferees will own at least 20% of the issued and outstanding shares of our common stock entitled to vote thereon. As a result, in addition to the founder shares, we would need 13,125,001, or 37.5% (assuming all issued and outstanding shares are voted and the option to purchase additional units is not exercised) or 2,187,501, or 6.25% (assuming only the minimum number of shares representing a quorum are voted and the over-allotment option is not exercised), of the 35,000,000 public shares sold in this offering to be voted in favor of a transaction in order to have such initial business combination approved. These quorum and voting thresholds and agreements may make it more likely that we will consummate our initial business combination.
Our amended and restated certificate of incorporation will provide that in no event will we redeem our public shares in an amount that would cause our net tangible assets, after payment of the deferred underwriting commissions, to be less than $5,000,001 (so that we do not then become subject to the SEC’s “penny stock” rules). Redemptions of our public shares may also be subject to a higher net tangible asset test or cash requirement pursuant to an agreement relating to our initial business combination. For example, the proposed business combination may require: (1) cash consideration to be paid to the target or its owners; (2) cash to be transferred to the target for working capital or other general corporate purposes; or (3) the retention of cash to satisfy other conditions in accordance with the terms of the proposed business combination. In the event the aggregate cash consideration we would be required to pay for all shares of common stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares, and all shares of common stock submitted for redemption will be returned to the holders thereof.
Tendering stock certificates in connection with a tender offer or redemption rights
We may require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to either tender their certificates to our transfer agent prior to the date set forth in the tender offer documents or proxy materials mailed to such holders, or up to two business days prior to the scheduled vote on the proposal to approve our initial business combination in the event we distribute proxy materials, or to deliver their shares to the transfer agent electronically using The Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, at the holder’s option, rather than simply voting against the initial business combination. The tender offer or proxy materials, as applicable, that we will furnish to holders of our public shares in connection with our initial business combination will indicate whether we are requiring public stockholders to satisfy such delivery requirements, which will include the requirement that a beneficial holder must identify itself in order to validly redeem its shares.
Limitation on redemption rights of stockholders holding more than 15% of the shares sold in this offering if we hold stockholder vote
Notwithstanding the foregoing redemption rights, if we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation will provide that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the shares sold in this offering, without our prior consent. We believe the restriction described above will discourage stockholders from accumulating large blocks of shares, and subsequent
attempts by such holders to use their ability to redeem their shares as a means to force us or our sponsor or its affiliates to purchase their shares at a significant premium to the then-current market price or on other undesirable terms. Absent this provision, a public stockholder holding more than an aggregate of 15% of the shares sold in this offering could threaten to exercise its redemption rights against a business combination if such holder’s shares are not purchased by us or our sponsor or its affiliates at a premium to the then-current market price or on other undesirable terms. By limiting our stockholders’ ability to redeem to no more than 15% of the shares sold in this offering, we believe we will limit the ability of a small group of stockholders to unreasonably attempt to block our ability to complete our initial business combination, particularly in connection with a business combination with a target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. However, we would not be restricting our stockholders’ ability to vote all of their shares (including all shares held by those stockholders that hold more than 15% of the shares sold in this offering) for or against our initial business combination.
Redemption rights in connection with proposed amendments to our certificate of
incorporation
Our amended and restated certificate of incorporation will provide that any of its provisions related to pre-business combination activity (including the requirement to fund the trust account and not release such amounts except in specified circumstances and to provide redemption rights to public stockholders as described herein) may be amended if approved by holders of at least 65% of our common stock, and corresponding provisions of the trust agreement governing the release of funds from our trust account may be amended if approved by holders of 65% of our common stock. In all other instances (other than the election of directors), our amended and restated certificate of incorporation will provide that it may be amended by holders of a majority of our common stock entitled to vote thereon, subject to applicable provisions of the Delaware General Corporation Law (the “DGCL”) or applicable stock exchange rules. Prior to an initial business combination, we may not issue additional securities that can vote on amendments to our amended and restated certificate of incorporation or on our initial business combination or that would entitle holders thereof to receive funds from the trust account. Our initial stockholders, who will beneficially own 20% of our common stock upon the closing of this offering (assuming they do not purchase any units in this offering), may participate in any vote to amend our amended and restated certificate of incorporation and/or trust agreement and will have the discretion to vote in any manner they may choose. Our sponsor, officers and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to stockholders’ rights or preinitial business combination activity, unless we provide our public stockholders with the opportunity to redeem their shares of common
stock upon approval of any such amendment at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (net of permitted withdrawals), divided by the number of then outstanding public shares. Our sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares and any public shares held by them in connection with the completion of our initial business combination. Any permitted transferees would be subject to the same restrictions and other agreements of our initial stockholders with respect to any founder shares.
Release of funds in trust account on closing of our initial business combination
On the completion of our initial business combination, all amounts held in the trust account will be disbursed directly by the trustee or released to us to pay amounts due to any public stockholders who properly exercise their redemption rights as described above under “Redemption rights for public stockholders upon completion of our initial business combination,” to pay the underwriters their deferred underwriting commissions, to pay all or a portion of the consideration payable to the target or owners of the target of our initial business combination and to pay other expenses associated with our initial business combination. If our initial business combination is paid for using equity or debt, 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 the redemption of our public shares, we may apply the balance of the cash released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations of the post-business combination businesses, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working capital.
Redemption of public shares and distribution and liquidation if no initial business
combination
Our amended and restated certificate of incorporation provides that we will have only 24 months from the closing of this offering to complete our initial business combination. If we have not completed our initial business combination within such 24-month period or during any Extension Period, we will:
(1)
cease all operations except for the purpose of winding up
(2)
as promptly as reasonably possible but not more than 10 business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (less up to $100,000 of interest to pay dissolution expenses and which interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any); and
(3)
as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, liquidate and dissolve, subject in each case to
our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to complete our initial business combination within the 24-month time period or during any Extension Period.
Our initial stockholders have entered into a letter agreement with us, pursuant to which they have waived their rights to liquidating distributions from the trust account with respect to their founder shares if we fail to complete our initial business combination within 24 months from the closing of this offering or during any Extension Period. However, if our initial stockholders acquire public shares, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to complete our initial business combination within the allotted 24-month time frame. The underwriters have agreed to waive their rights to their deferred underwriting commission held in the trust account in the event we do not complete our initial business combination within the allotted time frame and, in such event, such amounts will be included with the funds held in the trust account that will be available to fund the redemption of our public shares.
Our sponsor, officers and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity, unless we provide our public stockholders with the opportunity to redeem their public shares of common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (which interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares. However, we may not redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 following such redemptions.
Limited payments to insiders
There will be no finder’s fees, reimbursements or cash payments made by us to our sponsor, directors or officers, or our or any of their respective affiliates, for services rendered to us prior to or in connection with the completion of our initial business combination, other than the following payments, none of which will be made from the proceeds of this offering and the sale of the private placement warrants held in the trust account prior to the completion of our initial business combination:
•
repayment of an aggregate of up to $300,000 in loans made to us by our sponsor to cover offering-related and organizational expenses;
•
payment to an affiliate of our sponsor of a total of $40,520.83 per month for office space, administrative and support services;
•
reimbursement for any out-of-pocket expenses related to identifying, investigating, pursuing and completing an initial business combination; and
•
repayment of loans which may be made by our sponsor or an affiliate of our sponsor or certain of our directors and officers to fund working capital deficiencies or finance transaction costs in connection with an intended initial business combination, the terms of which have not been determined nor have any written agreements been executed with respect thereto. Up to $1,500,000 of such loans may be convertible into warrants at a price of $1.00 per warrant at the option of the lender.
These payments may be funded using the net proceeds of this offering and the sale of the private placement warrants not held in the trust account or, upon completion of the initial business combination, from any amounts remaining from the proceeds of the trust account released to us in connection therewith.
Our audit committee will review on a quarterly basis all payments that were made by us to our sponsor, directors or officers, or our or any of their respective affiliates.
Prior to the effectiveness of the registration statement of which this prospectus forms a part, we will have established and will maintain an audit committee to, among other things, monitor compliance with the terms described above and the other terms relating to this offering. If any noncompliance is identified, then the audit committee will be charged with the responsibility to promptly take all action necessary to rectify such noncompliance or otherwise to cause compliance with the terms of this offering. For more information, see the section entitled “Management—Committees of the Board of Directors—Audit Committee.”
All of our officers and certain of our directors have fiduciary and contractual duties to Anzu Partners and to certain companies in which it has invested or certain other entities. These entities may compete with us for acquisition opportunities. While the risk is partially mitigated as a result of Anzu Partners’ venture funds seeking targets of different enterprise sizes than us, if these entities decide to pursue any such opportunity, we may be precluded from pursuing such opportunities. Subject to his or her fiduciary duties under applicable law, none of the members of our management team who are also employed by our sponsor or its affiliates have any obligation to present us with any opportunity for a potential business combination of which they become aware. Our sponsor and directors and officers are also not prohibited from sponsoring, investing or otherwise becoming involved with, any other blank check companies, including in connection with their initial business combinations, prior to us completing our initial business combination. Our management team, in their capacities as directors, officers or employees of our sponsor or its affiliates or in their other endeavors, may choose to present potential business combinations to the related entities described above, current or future entities affiliated with or managed by our sponsor, or third parties, before they present such opportunities to us, subject to his or her fiduciary duties under applicable law and any other applicable fiduciary duties. Our amended and restated certificate of incorporation 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 the company and it is an opportunity that we are able to complete on a reasonable basis. In addition, Messrs. Wulfsohn, Joy and Ganz are subject to certain non-compete agreements or other obligations with respect to Ashland. For more information, see the section entitled “Management Conflicts of Interest.”
Our directors and officers presently have, and any of them in the future may have, additional, fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present a business combination opportunity to such entity. Accordingly, if any of our directors or officers becomes aware of a business combination opportunity that is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, he or she may need to honor these fiduciary or contractual obligations to present such business combination opportunity to such entity, subject to his or her fiduciary duties under applicable law. See “Risk Factors—Certain of our directors and officers are now, and all of them may in the future become, affiliated with entities engaged in business activities similar to those intended to be conducted by us and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should be presented.”
We do not believe, however, that the fiduciary duties or contractual obligations of our directors or officers will materially adversely affect our ability to identify and pursue business combination opportunities or complete our initial business combination.
Our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (other than our independent auditors) for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below (1) $10.00 per public share or (2) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the trust account and except as to any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, our sponsor will not be responsible to the extent of any liability for such third-party claims. We have not independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are securities of our company and, therefore, our sponsor may not be able to satisfy those obligations. We have not asked our sponsor to reserve for such obligations.
RISK FACTORS
An investment in our securities involves a high degree of risk. You should consider carefully all of the risks described below, together with the other information contained in this prospectus, before making a decision to invest in our units. If any of the following events occur, our business, financial condition and operating results may be materially adversely affected. In that event, the trading price of our securities could decline, and you could lose all or part of your investment.
Risks Relating to Our Business and Strategy
We are a newly incorporated company with no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.
We are a newly incorporated company incorporated under the laws of the Delaware with no operating results, and we will not commence operations until obtaining funding through this offering. Because we lack an operating history, you have no basis upon which to evaluate our ability to achieve our business objective of completing our initial business combination with one or more target businesses. We have no plans, arrangements or understandings with any prospective target business concerning a business combination and may be unable to complete our initial business combination. If we fail to complete our initial business combination, we will never generate any operating revenues.
Our public stockholders may not be afforded an opportunity to vote on our proposed business combination, which means we may complete our initial business combination even though a majority of our public stockholders do not support such a combination.
We may not hold a stockholder vote to approve our initial business combination unless the business combination would require stockholder approval under applicable law or stock exchange rules or if we decide to hold a stockholder vote for business or other reasons. For instance, Nasdaq rules currently allow us to engage in a tender offer in lieu of a stockholder meeting, but would still require us to obtain stockholder approval if we were seeking to issue more than 20% of our issued and outstanding shares to a target business as consideration in any business combination. Therefore, if we were structuring a business combination that required us to issue more than 20% of our issued and outstanding shares, we would seek stockholder approval of such business combination. However, except as required by applicable law or stock exchange rules, the decision as to whether we will seek stockholder approval of a proposed business combination or will allow stockholders to sell their shares to us in a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would otherwise require us to seek stockholder approval. Accordingly, we may consummate our initial business combination even if holders of a majority of the issued and outstanding shares of common stock do not approve of the business combination we consummate. Please see the section entitled “Proposed Business—Effecting Our Initial Business Combination—Stockholders may not have the ability to approve our initial business combination” for additional information.
If we seek stockholder approval of our initial business combination, our initial stockholders, directors and officers have agreed to vote in favor of such initial business combination, regardless of how our public stockholders vote.
Unlike some other blank check companies in which the initial stockholders agree to vote their founder shares in accordance with the majority of the votes cast by the public stockholders in connection with an initial business combination, our initial stockholders, directors and officers have agreed (and their permitted transferees will agree), pursuant to the terms of a letter agreement entered into with us, to vote their founder shares and any public shares held by them in favor of our initial business combination. As a result, in addition to the founder shares, we would need 13,125,001, or 37.5% (assuming all issued and outstanding shares are voted and the over-allotment option is not exercised), or 2,187,501, or 6.25% (assuming only the minimum number of shares representing a quorum are voted and the over-allotment option is not exercised), of the 35,000,000 public shares sold in this offering to be voted in favor of an initial business combination in order to have such initial business combination approved. Our directors and officers have also entered into the letter agreement, imposing similar obligations on them with respect to public shares acquired by them,
if any. We expect that our initial stockholders and their permitted transferees will own at least 20% of the issued and outstanding shares of our common stock at the time of any such stockholder vote. Accordingly, if we seek stockholder approval of our initial business combination, it is more likely that the necessary stockholder approval will be received than would be the case if such persons agreed to vote their founder shares in accordance with the majority of the votes cast by our public stockholders.
Your only opportunity to affect the investment decision regarding a potential business combination will be limited to the exercise of your right to redeem your shares from us for cash, unless we seek stockholder approval of such business combination.
At the time of your investment in us, you will not be provided with an opportunity to evaluate the specific merits or risks of any target businesses. Additionally, since our board of directors may complete a business combination without seeking stockholder approval, public stockholders may not have the right or opportunity to vote on the business combination, unless we seek such stockholder approval. Accordingly, if we do not seek stockholder approval, your only opportunity to affect the investment decision regarding a potential business combination may be limited to exercising your redemption rights within the period of time (which will be at least 20 business days) set forth in our tender offer documents mailed to our public stockholders in which we describe our initial business combination.
The ability of our public stockholders to redeem their shares for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult for us to enter into a business combination with a target.
We may seek to enter into a business combination transaction agreement with a prospective target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. If too many public stockholders exercise their redemption rights, we would not be able to meet such closing condition and, as a result, would not be able to proceed with the business combination. The amount of the deferred underwriting commissions payable to the underwriters will not be adjusted for any shares that are redeemed in connection with a business combination and such amount of deferred underwriting discount is not available for us to use as consideration in an initial business combination. If we are able to consummate an initial business combination, the per-share value of shares held by non-redeeming stockholders will reflect our obligation to pay and the payment of the deferred underwriting commissions. Furthermore, in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 following such redemptions, or any greater net tangible asset or cash requirement that may be contained in the agreement relating to our initial business combination. Consequently, if accepting all properly submitted redemption requests would cause our net tangible assets to be less than $5,000,001 or such greater amount necessary to satisfy a closing condition as described above, we would not proceed with such redemption and the related business combination and may instead search for an alternate business combination. Prospective targets will be aware of these risks and, thus, may be reluctant to enter into a business combination transaction with us.
The ability of our public stockholders to exercise redemption rights with respect to a large number of our shares may not allow us to complete the most desirable business combination or optimize our capital structure.
At the time we enter into an agreement for our initial business combination, we will not know how many stockholders may exercise their redemption rights and, therefore, we will need to structure the transaction based on our expectations as to the number of shares that will be submitted for redemption. If our initial business combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price, or requires us to have a minimum amount of cash at closing, we will need to reserve a portion of the cash in the trust account to meet such requirements, or arrange for third-party financing. In addition, if a larger number of shares is submitted for redemption than we initially expected, we may need to restructure the transaction to reserve a greater portion of the cash in the trust account or arrange for third- party financing. Raising additional third-party financing may involve dilutive equity issuances or the incurrence of indebtedness at higher than desirable levels. The above considerations may limit our ability to complete the most desirable business combination available to us or optimize our capital structure.
The requirement that we complete our initial business combination within the prescribed time frame may give potential target businesses leverage over us in negotiating a business combination and may limit the time we have in which to conduct due diligence on potential business combination targets, in particular as we approach our dissolution deadline, which could undermine our ability to complete our initial business combination on terms that would produce value for our stockholders.
Any potential target business with which we enter into negotiations concerning a business combination will be aware that we must complete our initial business combination within 24 months from the closing of this offering. Consequently, such target business may obtain leverage over us in negotiating a business combination, knowing that if we do not complete our initial business combination with that particular target business, we may be unable to complete our initial business combination with any target business. This risk will increase as we get closer to the end of the 24-month period. In addition, we may have limited time to conduct due diligence and may enter into our initial business combination on terms that we would have rejected upon a more comprehensive investigation.
Our search for a business combination, and any target business with which we ultimately consummate a business combination, may be materially adversely affected by the COVID-19 outbreak and other events and the status of debt and equity markets.
The COVID-19 outbreak has adversely affected, and other events (such as terrorist attacks, natural disasters or a significant outbreak of other infectious diseases) could adversely affect, economies and financial markets worldwide, business operations and the conduct of commerce generally, and the business of any potential target business with which we consummate a business combination could be, or may already have been, materially and adversely affected. Furthermore, we may be unable to complete a business combination if concerns relating to COVID-19 continue to restrict travel, limit the ability to have meetings with potential investors or limit the ability to conduct due diligence, or the target company’s personnel, vendors and services providers are unavailable to negotiate and consummate a transaction in a timely manner. The extent to which COVID-19 impacts our search for a business combination will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others. If the disruptions posed by COVID-19 or other events (such as terrorist attacks, natural disasters or a significant outbreak of other infectious diseases) continue for an extensive period of time, our ability to consummate a business combination, or the operations of a target business with which we ultimately consummate a business combination, may be materially adversely affected.
In addition, our ability to consummate a transaction may be dependent on the ability to raise equity and debt financing which may be impacted by COVID-19 and other events (such as terrorist attacks, natural disasters or a significant outbreak of other infectious diseases), including as a result of increased market volatility and decreased market liquidity and third-party financing being unavailable on terms acceptable to us or at all.
Finally, the outbreak of COVID-19 may also have the effect of heightening many of the other risks described in this “Risk Factors” section, such as those related to the market for our securities and cross-border transactions.
We may not be able to complete our initial business combination within the prescribed time frame, in which case we would cease all operations except for the purpose of winding up and we would redeem our public shares and liquidate, in which case our public stockholders may receive only $10.00 per share, or less than such amount in certain circumstances, and our warrants will expire worthless.
Our sponsor, directors and officers have agreed that we must complete our initial business combination within 24 months from the closing of this offering. We may not be able to find a suitable target business and complete our initial business combination within such time period. Our ability to complete our initial business combination may be negatively impacted by general market conditions, volatility in the capital and debt markets and the other risks described herein, including as a result of terrorist attacks, natural disasters or a significant outbreak of infectious diseases. For example, the outbreak of COVID-19 continues to grow both in the U.S. and globally and, while the extent of the impact of the outbreak on us will depend on future developments, it could limit our ability to complete our initial business combination,
including as a result of increased market volatility, decreased market liquidity and third-party financing being unavailable on terms acceptable to us or at all. Additionally, the outbreak of COVID-19 and other events (such as terrorist attacks, natural disasters or a significant outbreak of other infectious diseases) may negatively impact businesses we may seek to acquire.
If we have not completed our initial business combination within such time period or during any Extension Period, we will: (1) cease all operations except for the purpose of winding up; (2) as promptly as reasonably possible but not more than 10 business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (less up to $100,000 of interest to pay dissolution expenses and which interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any); and (3) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. In such case, our public stockholders may receive only $10.00 per share, or less than $10.00 per share, on the redemption of their shares, and our warrants will expire worthless. See “— If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00 per share” and other risk factors herein.
If we seek stockholder approval of our initial business combination, our sponsor, directors, officers, advisors or any of their respective affiliates may elect to purchase shares or warrants from public stockholders, which may influence a vote on a proposed business combination and reduce the public “float” of our securities.
If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, directors, officers, advisors or any of their respective affiliates may purchase public shares or warrants in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination. Any such price per share may be different than the amount per share a public stockholder would receive if it elected to redeem its shares in connection with our initial business combination. Additionally, at any time at or prior to our initial business combination, subject to applicable securities laws (including with respect to material nonpublic information), our sponsor, directors, officers, advisors or any of their respective affiliates may enter into transactions with investors and others to provide them with incentives to acquire public shares, vote their public shares in favor of our initial business combination or not redeem their public shares. However, our sponsor, directors, officers, advisors or any of their respective affiliates are under no obligation or duty to do so and they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. See “Proposed Business—Permitted purchases and other transactions with respect to our securities” for a description of how our sponsor, directors, officers, advisors or any of their respective affiliates will select which stockholders to enter into private transactions with. The purpose of such purchases could be to vote such shares in favor of our initial business combination and thereby increase the likelihood of obtaining stockholder approval of our initial business combination or to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met. The purpose of any such purchases of public warrants could be to reduce the number of public warrants outstanding or to vote such warrants on any matters submitted to the warrant holders for approval in connection with our initial business combination. This may result in the completion of our initial business combination that may not otherwise have been possible.
In addition, if such purchases are made, the public “float” of our securities and the number of beneficial holders of our securities may be reduced, possibly making it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.
Because of our limited resources and the significant competition for business combination opportunities, it may be more difficult for us to complete our initial business combination. If we have not completed our initial business combination within the required time period, our public stockholders may receive only approximately $10.00 per share, or less in certain circumstances, on our redemption of their shares, and our warrants will expire worthless.
We expect to encounter intense competition from other entities having a business objective similar to ours, including private investors (which may be individuals or investment partnerships), other blank check companies and other entities, domestic and international, competing for the types of businesses we intend to acquire. Many of these individuals and entities are well established and have extensive experience in identifying and effecting, directly or indirectly, acquisitions of companies operating in or providing services to various industries. Many of these competitors possess greater technical, human and other resources or more local industry knowledge than we do and our financial resources will be relatively limited when contrasted with those of many of these competitors. While we believe there are numerous target businesses we could potentially acquire with the net proceeds of this offering and the sale of the private placement warrants, our ability to compete with respect to the acquisition of certain target businesses that are sizable will be limited by our available financial resources. This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses. Furthermore, in the event we seek stockholder approval of our initial business combination and we are obligated to pay cash for shares of our Class A common stock, it will potentially reduce the resources available to us for our initial business combination. Any of these obligations may place us at a competitive disadvantage in successfully negotiating our initial business combination. If we have not completed our initial business combination within the required time period, our public stockholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless. See “— If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00 per share” and other risk factors herein.
If the funds not being held in the trust account are insufficient to allow us to operate for at least the 24 months following the closing of this offering, we may be unable to complete our initial business combination.
The funds available to us outside of the trust account may not be sufficient to allow us to operate for at least the 24 months following the closing of this offering, assuming that our initial business combination is not completed during that time. We expect to incur significant costs in pursuit of our acquisition plans. Management’s plans to address this need for capital through this offering and potential loans from certain of our affiliates are discussed in the section of this prospectus titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” However, our affiliates are not obligated to make loans to us in the future, and we may not be able to raise additional financing from unaffiliated parties necessary to fund our expenses. Any such event in the future may negatively impact the analysis regarding our ability to continue as a going concern at such time.
We believe that, upon the closing of this offering, the funds available to us outside of the trust account will be sufficient to allow us to operate for at least the 24 months following the closing of this offering; however, we cannot assure you that our estimate is accurate. Of the funds available to us, we could use a portion of the funds available to us to pay fees to consultants to assist us with our search for a target business. We could also use a portion of the funds as a down payment or to fund a “no-shop” provision (a provision in letters of intent designed to keep target businesses from “shopping” around for transactions with other companies or investors on terms more favorable to such target businesses) with respect to a particular proposed business combination, although we do not have any current intention to do so. If we entered into a letter of intent where we paid for the right to receive exclusivity from a target business and were subsequently required to forfeit such funds (whether as a result of our breach or otherwise), we might not have sufficient funds to continue searching for, or conduct due diligence with respect to, a target business. If we have not completed our initial business combination within the required time period, our public stockholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless. See “— If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00 per share” and other risk factors herein.
If the net proceeds of this offering and the sale of the private placement warrants not being held in the trust account are insufficient, it could limit the amount available to fund our search for a target business or businesses and complete our initial business combination and we may depend on loans from our sponsor or management team to fund our search, to pay our taxes and to complete our initial business combination.
Of the net proceeds of this offering and the sale of the private placement warrants, only approximately $2,000,000 will be available to us initially outside the trust account to fund our working capital requirements. In the event that our offering expenses exceed our estimate of $2,000,000, we may fund such excess with funds not to be held in the trust account. In such case, the amount of funds we intend to be held outside the trust account would decrease by a corresponding amount. Conversely, in the event that the offering expenses are less than our estimate of $2,000,000, the amount of funds we intend to be held outside the trust account would increase by a corresponding amount. If we are required to seek additional capital, we would need to borrow funds from our sponsor, management team or other third parties to operate or may be forced to liquidate. Neither our sponsor, members of our management team nor any of their respective affiliates is under any obligation to loan funds to, or otherwise invest in, us in such circumstances. Any such loans may be repaid only from funds held outside the trust account or from funds released to us upon completion of our initial business combination. If we have not completed our initial business combination within the required time period because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the trust account. In such case, our public stockholders may receive only $10.00 per share, or less in certain circumstances, and our warrants will expire worthless. See “— If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00 per share” and other risk factors herein.
Subsequent to our completion of our initial business combination, we may be required to take write-downs or write- offs, restructuring and impairment or other charges that could have a significant negative effect on our financial condition, results of operations and the price of our securities, which could cause you to lose some or all of your investment.
Even if we conduct extensive due diligence on a target business with which we combine, we cannot assure you that this diligence will identify all material issues that may be present with a particular target business that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors outside of the target business and outside of our control will not later arise. As a result of these factors, we may be forced to later write down or write off assets, restructure our operations, or incur impairment or other charges that could result in our reporting losses. Even if our due diligence successfully identifies certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis. Even though these charges may be non-cash items and not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to negative market perceptions about us or our securities. In addition, charges of this nature may cause us to violate net worth or other covenants to which we may be subject as a result of assuming pre- existing debt held by a target business or by virtue of our obtaining post-combination debt financing. Accordingly, any stockholder or warrant holder who chooses to remain a stockholder or warrant holder, respectively, following our initial business combination could suffer a reduction in the value of their securities. Such stockholders and warrant holders are unlikely to have a remedy for such reduction in value.
If we are deemed to be an investment company under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted, which may make it difficult for us to complete our initial business combination.
If we are deemed to be an investment company under the Investment Company Act, our activities may be restricted, including:
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restrictions on the nature of our investments; and
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restrictions on the issuance of securities; each of which may make it difficult for us to complete our initial business combination.
In addition, we may have imposed upon us burdensome requirements, including:
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registration as an investment company with the SEC;
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adoption of a specific form of corporate structure; and
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reporting, record keeping, voting, proxy and disclosure requirements and other rules and regulations that we are currently not subject to.
We do not believe that our anticipated principal activities will subject us to the Investment Company Act. The proceeds held in the trust account may be invested by the trustee only in U.S. government treasury bills with a maturity of 185 days or less or in money market funds investing solely in U.S. Treasuries and meeting certain conditions under Rule 2a-7 under the Investment Company Act. Because the investment of the proceeds will be restricted to these instruments, we believe we will meet the requirements for the exemption provided in Rule 3a-1 promulgated under the Investment Company Act. If we were deemed to be subject to the Investment Company Act, compliance with these additional regulatory burdens would require additional expenses for which we have not allotted funds and may hinder our ability to complete a business combination. If we have not completed our initial business combination within the required time period, our public stockholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless.
Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, including our ability to negotiate and complete our initial business combination, and results of operations.
We are subject to laws and regulations enacted by national, regional and local governments. In particular, we will be required to comply with certain SEC and other legal requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations and their interpretation and application may also change from time to time and those changes could have a material adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on our business, including our ability to negotiate and complete our initial business combination, and results of operations.
Because we are not limited to a particular industry or any specific target businesses with which to pursue our initial business combination, you will be unable to ascertain the merits or risks of any particular target business’s operations.
Although we expect to focus our search for a target business by concentrating our efforts in identifying high-quality businesses with transformative technologies for industrial applications, we may seek to complete a business combination with an operating company of any size (subject to our satisfaction of the 80% of net assets test) and in any industry, sector or geographic area. However, we will not, under our amended and restated certificate of incorporation, be permitted to effectuate our initial business combination solely with another blank check company or similar company with nominal operations. Because we have not yet selected or approached any specific target business with respect to a business combination, there is no basis to evaluate the possible merits or risks of any particular target business’s operations, results of operations, cash flows, liquidity, financial condition or prospects. To the extent we complete our initial business combination, we may be affected by numerous risks inherent in the business operations with which we combine. For example, if we combine with a financially unstable business or an entity lacking an established record of sales or earnings, we may be affected by the risks inherent in the business and operations of a financially unstable or development stage entity. Although our directors and officers will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all of the significant risk factors or that we will have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that those risks will adversely impact a target business. We also cannot assure you that an investment in our units will not ultimately prove to be less favorable to our investors than a direct investment, if such opportunity were available, in a business combination target. Accordingly, any stockholder or warrant holder who chooses to remain a stockholder or warrant holder, respectively, following our initial business combination could suffer a reduction in the value of their securities. Such stockholders and warrant holders are unlikely to have a remedy for such reduction in value.
Past performance by our management team and their respective affiliates may not be indicative of future performance of an investment in the company.
Information regarding performance by our management team and their respective affiliates, including Anzu Partners, is presented for informational purposes only. Past performance by our management team and their respective affiliates is not a guarantee either (1) that we will be able to identify a suitable candidate for our initial business combination or (2) of success with respect to any business combination we may consummate. You should not rely on the historical record of our management team or their affiliates or any related investment’s performance as indicative of our future performance of an investment in the company or the returns the company will, or is likely to, generate going forward.
We may seek acquisition opportunities outside our target industries, which may be outside of our management’s areas of expertise.
Although we intend to target a business combination with one or more businesses with transformative technologies for industrial applications, we may consider a business combination outside of our target focus, which may be outside of our management’s areas of expertise. If a business combination candidate is presented to us and we determine that such candidate offers an attractive acquisition opportunity for our company, we may pursue it. In the event we elect to pursue an acquisition outside of the areas of our management’s expertise, our management’s expertise may not be directly applicable to its evaluation or operation, and the information contained in this prospectus regarding the areas of our management’s expertise would not be relevant to an understanding of the business that we elect to acquire. As a result, our management may not be able to adequately ascertain or assess all of the significant risk factors relevant to such acquisition. Accordingly, any stockholder or warrant holder who chooses to remain a stockholder or warrant holder, respectively, following our initial business combination could suffer a reduction in the value of their securities. Such stockholders and warrant holders are unlikely to have a remedy for such reduction in value.
Although we have identified general criteria and guidelines that we believe are important in evaluating prospective target businesses, we may enter into our initial business combination with a target that does not meet such criteria and guidelines, and as a result, the target business with which we enter into our initial business combination may not have attributes entirely consistent with our general criteria and guidelines.
Although we have identified general criteria and guidelines for evaluating prospective target businesses, it is possible that a target business with which we enter into our initial business combination will not have all of these positive attributes. If we complete our initial business combination with a target that does not meet some or all of these criteria and guidelines, such combination may not be as successful as a combination with a business that does meet all of our general criteria and guidelines. In addition, if we announce a prospective business combination with a target that does not meet our general criteria and guidelines, a greater number of stockholders may exercise their redemption rights, which may make it difficult for us to meet any closing condition with a target business that requires us to have a minimum net worth or a certain amount of cash. In addition, if stockholder approval of the transaction is required by applicable law or stock exchange listing requirements, or we decide to obtain stockholder approval for business or other reasons, it may be more difficult for us to attain stockholder approval of our initial business combination if the target business does not meet our general criteria and guidelines. If we have not completed our initial business combination within the required time period, our public stockholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless.
We may seek acquisition opportunities with an early stage company, a financially unstable business or an entity lacking an established record of revenue or earnings.
To the extent we complete our initial business combination with an early stage company, a financially unstable business or an entity lacking an established record of sales or earnings, we may be affected by numerous risks inherent in the operations of the business with which we combine. These risks include investing in a business without a proven business model and with limited historical financial data, volatile revenues or earnings, intense competition and difficulties in obtaining and retaining key personnel. Although
our directors and officers will endeavor to evaluate the risks inherent in a particular target business, we may not be able to properly ascertain or assess all of the significant risk factors and we may not have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that those risks will adversely impact a target business.
We are not required to obtain an opinion regarding fairness. Consequently, you may have no assurance from an independent source that the price we are paying for the business is fair to our company from a financial point of view.
Unless we complete our initial business combination with an affiliated entity, we are not required to obtain an opinion that the price we are paying is fair to our company from a financial point of view. If no opinion is obtained, our stockholders will be relying on the judgment of our board of directors, who will determine fair market value based on standards generally accepted by the financial community. Such standards used will be disclosed in our tender offer documents or proxy solicitation materials, as applicable, related to our initial business combination.
Resources could be wasted in researching acquisitions that are not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we have not completed our initial business combination within the required time period, our public stockholders may receive only approximately $10.00 per share, or less than such amount in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless.
We anticipate that the investigation of each specific target business and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require substantial management time and attention and substantial costs for accountants, attorneys and others. If we decide not to complete a specific initial business combination, the costs incurred up to that point for the proposed transaction likely would not be recoverable. Furthermore, if we reach an agreement relating to a specific target business, we may fail to complete our initial business combination for any number of reasons including those beyond our control. Any such event will result in a loss to us of the related costs incurred which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we have not completed our initial business combination within the required time period, our public stockholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless.
Our ability to successfully effect our initial business combination and to be successful thereafter will be dependent upon the efforts of our key personnel, some of whom may join us following our initial business combination. The loss of our or a target’s key personnel could negatively impact the operations and profitability of our post- combination business.
Our ability to successfully effect our initial business combination is dependent upon the efforts of our key personnel. Our key personnel may or may not remain with the target. Although some of our key personnel may remain with the target business in senior management, board or advisory positions following our initial business combination, it is likely that some or all of the management of the target business will remain in place. While we intend to closely scrutinize any individuals we engage after our initial business combination, we cannot assure you that our assessment of these individuals will prove to be correct. These individuals may be unfamiliar with the requirements of operating a company regulated by the SEC, which could cause us to have to expend time and resources helping them become familiar with such requirements.
In addition, the directors and officers of an acquisition candidate may resign upon completion of our initial business combination. The departure of a business combination target’s key personnel could negatively impact the operations and profitability of our post-combination business. The role of an acquisition candidate’s key personnel upon the completion of our initial business combination cannot be ascertained at this time. Although we contemplate that certain members of an acquisition candidate’s management team will remain associated with the acquisition candidate following our initial business combination, it is possible that members of the management of an acquisition candidate will not wish to remain in place. The loss of key personnel could negatively impact the operations and profitability of our post-combination business.
We may have limited ability to assess the management of a prospective target business and, as a result, may affect our initial business combination with a target business whose management may not have the skills, qualifications or abilities to manage a public company.
When evaluating the desirability of effecting our initial business combination with a prospective target business, our ability to assess the target business’s management may be limited due to a lack of time, resources or information. Our assessment of the capabilities of the target’s management, therefore, may prove to be incorrect and such management may lack the skills, qualifications or abilities we suspected. Should the target’s management not possess the skills, qualifications or abilities necessary to manage a public company, the operations and profitability of the post-combination business may be negatively impacted. Accordingly, any stockholder or warrant holder who chooses to remain a stockholder or warrant holder, respectively, following our initial business combination could suffer a reduction in the value of their securities. Such stockholders and warrant holders are unlikely to have a remedy for such reduction in value.
The directors and officers of an acquisition candidate may resign upon completion of our initial business combination. The departure of a business combination target’s key personnel could negatively impact the operations and profitability of our post-combination business. The role of an acquisition candidate’s key personnel upon the completion of our initial business combination cannot be ascertained at this time. Although we contemplate that certain members of an acquisition candidate’s management team will remain associated with the acquisition candidate following our initial business combination, it is possible that members of the management of an acquisition candidate will not wish to remain in place.
We may be able to complete only one business combination with the proceeds of this offering and the sale of the private placement warrants, which will cause us to be solely dependent on a single business which may have a limited number of products or services. This lack of diversification may negatively impact our operations and profitability.
The net proceeds from this offering and the sale of the private placement warrants will provide us with $352,000,000 (or $404,500,000 if the underwriters’ over-allotment option is exercised in full) that we may use to complete our initial business combination (which includes $12,250,000, or $14,087,500 if the underwriters’ over-allotment option is exercised in full, of deferred underwriting commissions being held in the trust account, and is after estimated offering expenses of $2,000,000).
We may effectuate our initial business combination with a single target business or multiple target businesses simultaneously or within a short period of time. However, we may not be able to effectuate our initial business combination with more than one target business because of various factors, including the existence of complex accounting issues and the requirement that we prepare and file pro forma financial statements with the SEC that present operating results and the financial condition of several target businesses as if they had been operated on a combined basis. By completing our initial business combination with only a single entity our lack of diversification may subject us to numerous economic, competitive and regulatory risks. Further, we would not be able to diversify our operations or benefit from the possible spreading of risks or offsetting of losses, unlike other entities which may have the resources to complete several business combinations in different industries or different areas of a single industry. Accordingly, the prospects for our success may be:
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solely dependent upon the performance of a single business, property or asset; or
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dependent upon the development or market acceptance of a single or limited number of products, processes or services.
This lack of diversification may subject us to numerous economic, competitive and regulatory risks, any or all of which may have a substantial adverse impact upon the particular industry in which we may operate subsequent to our initial business combination.
We may attempt to simultaneously complete business combinations with multiple prospective targets, which may hinder our ability to complete our initial business combination and give rise to increased costs and risks that could negatively impact our operations and profitability.
If we determine to simultaneously acquire several businesses that are owned by different sellers, we will need for each of such sellers to agree that our purchase of its business is contingent on the simultaneous
closings of the other business combinations, which may make it more difficult for us, and delay our ability, to complete our initial business combination. With multiple business combinations, we could also face additional risks, including additional burdens and costs with respect to possible multiple negotiations and due diligence investigations (if there are multiple sellers) and the additional risks associated with the subsequent assimilation of the operations and services or products of the acquired companies in a single operating business. If we are unable to adequately address these risks, it could negatively impact our profitability and results of operations.
We may attempt to complete our initial business combination with a private company about which little information is available, which may result in a business combination with a company that is not as profitable as we suspected, if at all.
In pursuing our acquisition strategy, we may seek to effectuate our initial business combination with a privately held company. Very little public information generally exists about private companies, and we could be required to make our decision on whether to pursue a potential initial business combination on the basis of limited information, which may result in a business combination with a company that is not as profitable as we suspected, if at all.
Our management may not be able to maintain control of a target business after our initial business combination. We cannot provide assurance that, upon loss of control of a target business, new management will possess the skills, qualifications or abilities necessary to profitably operate such business.
We may structure our initial business combination so that the post-transaction company in which our public stockholders own shares will own less than 100% of the equity interests or assets of a target business, but we will complete such business combination only if the post-transaction company owns or acquires 50% or more of the issued and outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for us not to be required to register as an investment company under the Investment Company Act. We will not consider any transaction that does not meet such criteria. Even if the post-transaction company owns 50% or more of the voting securities of the target, our stockholders prior to our initial business combination may collectively own a minority interest in the post business combination company, depending on valuations ascribed to the target and us in our initial business combination transaction. For example, we could pursue a transaction in which we issue a substantial number of new shares of common stock in exchange for all of the issued and outstanding capital stock, shares or other equity securities of a target, or issue a substantial number of new shares to third-parties in connection with financing our initial business combination. In this case, we would acquire a 100% interest in the target. However, as a result of the issuance of a substantial number of new shares of common stock, our stockholders immediately prior to such transaction could own less than a majority of our issued and outstanding shares of common stock subsequent to such transaction. In addition, other minority stockholders may subsequently combine their holdings resulting in a single person or group obtaining a larger share of the company’s shares than we initially acquired. Accordingly, this may make it more likely that our management will not be able to maintain our control of the target business.
We may be unable to obtain additional financing to complete our initial business combination or to fund the operations and growth of a target business, which could compel us to restructure or abandon a particular business combination.
Although we believe that the net proceeds of this offering and the sale of the private placement warrants will be sufficient to allow us to complete our initial business combination, because we have not yet selected any target business we cannot ascertain the capital requirements for any particular transaction. If the net proceeds of this offering and the sale of the private placement warrants prove to be insufficient, either because of the size of our initial business combination, the depletion of the available net proceeds in search of a target business, the obligation to redeem for cash a significant number of shares from stockholders who elect redemption in connection with our initial business combination or the terms of negotiated transactions to purchase shares in connection with our initial business combination, we may be required to seek additional financing or to abandon the proposed business combination. We cannot assure you that such financing will be available on acceptable terms, if at all. To the extent that additional financing proves to
be unavailable when needed to complete our initial business combination, we would be compelled to either restructure the transaction or abandon that particular business combination and seek an alternative target business candidate.
In addition, even if we do not need additional financing to complete our initial business combination, we may require such financing to fund the operations or growth of the target business. The failure to secure additional financing could have a material adverse effect on the continued development or growth of the target business. None of our directors, officers or stockholders is required to provide any financing to us in connection with or after our initial business combination. If we have not completed our initial business combination within the required time period, our public stockholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of our trust account, and our warrants will expire worthless.
Because we must furnish our stockholders with target business financial statements, we may lose the ability to complete an otherwise advantageous initial business combination with some prospective target businesses.
The federal proxy rules require that a proxy statement with respect to a vote on a business combination meeting certain financial significance tests include historical and/or pro forma financial statement disclosure in periodic reports. We will include the same financial statement disclosure in connection with our tender offer documents, whether or not they are required under the tender offer rules. These financial statements may be required to be prepared in accordance with, or be reconciled to, accounting principles generally accepted in the United States of America, or U.S. GAAP, or international financial reporting standards as issued by the International Accounting Standards Board, or IFRS, depending on the circumstances and the historical financial statements may be required to be audited in accordance with the standards of the Public Company Accounting Oversight Board (United States), or PCAOB. These financial statement requirements may limit the pool of potential target businesses we may acquire because some targets may be unable to provide such financial statements in time for us to disclose such financial statements in accordance with federal proxy rules and complete our initial business combination within the prescribed time frame.
Compliance obligations under the Sarbanes-Oxley Act may make it more difficult for us to effectuate our initial business combination, require substantial financial and management resources, and increase the time and costs of completing an acquisition.
Section 404 of the Sarbanes-Oxley Act requires that we evaluate and report on our system of internal controls beginning with our Annual Report on Form 10-K for the year ending December 31, 2022. Only in the event we are deemed to be a large accelerated filer or an accelerated filer, and no longer qualify as an emerging growth company, will we be required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting. The fact that we are a blank check company makes compliance with the requirements of the Sarbanes-Oxley Act particularly burdensome on us as compared to other public companies because a target business with which we seek to complete our initial business combination may not be in compliance with the provisions of the Sarbanes- Oxley Act regarding adequacy of its internal controls. The development of the internal control of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition.
If our management team pursues a company with operations or opportunities outside of the United States for our initial business combination, we may face additional burdens in connection with investigating, agreeing to and completing such combination, and if we effect such initial business combination, we would be subject to a variety of additional risks that may negatively impact our operations.
If our management team pursues a company with operations or opportunities outside of the United States for our initial business combination, we would be subject to risks associated with cross-border business combinations, including in connection with investigating, agreeing to and completing our initial business combination, conducting due diligence in a foreign market, having such transaction approved by any local governments, regulators or agencies and changes in the purchase price based on fluctuations in foreign exchange rates.
If we effect our initial business combination with such a company, we would be subject to any special considerations or risks associated with companies operating in an international setting (including how relevant governments respond to such factors), including any of the following:
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costs and difficulties inherent in managing cross-border business operations and complying with commercial and legal requirements of overseas markets;
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rules and regulations regarding currency redemption;
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complex corporate withholding taxes on individuals;
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laws governing the manner in which future business combinations may be effected;
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tariffs and trade barriers;
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regulations related to customs and import/export matters;
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longer payment cycles;
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tax consequences, such as tax law changes, including termination or reduction of tax and other incentives that the applicable government provides to domestic companies, and variations in tax laws as compared to the United States;
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currency fluctuations and exchange controls, including devaluations and other exchange rate movements;
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rates of inflation, price instability and interest rate fluctuations;
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liquidity of domestic capital and lending markets;
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challenges in collecting accounts receivable;
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cultural and language differences;
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employment regulations;
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energy shortages;
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crime, strikes, riots, civil disturbances, terrorist attacks, natural disasters, wars and other forms of social instability;
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deterioration of political relations with the United States;
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obligatory military service by personnel; and
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government appropriation of assets.
We may not be able to adequately address these additional risks. If we were unable to do so, we may be unable to complete such combination or, if we complete such combination, our operations might suffer, either of which may adversely impact our results of operations and financial condition.
If our management following our initial business combination is unfamiliar with U.S. securities laws, they may have to expend time and resources becoming familiar with such laws, which could lead to various regulatory issues.
Following our initial business combination, any or all of our management could resign from their positions as officers of the company, and the management of the target business at the time of the business combination could remain in place. Management of the target business may not be familiar with U.S. securities laws. If new management is unfamiliar with U.S. securities laws, they may have to expend time and resources becoming familiar with such laws. This could be expensive and time-consuming and could lead to various regulatory issues which may adversely affect our operations.
After our initial business combination, our results of operations and prospects could be subject, to a significant extent, to the economic, political, social and government policies, developments and conditions in the country in which we operate.
The economic, political and social conditions, as well as government policies, of the country in which our operations are located could affect our business. Economic growth could be uneven, both
geographically and among various sectors of the economy and such growth may not be sustained in the future. If in the future such country’s economy experiences a downturn or grows at a slower rate than expected, there may be less demand for spending in certain industries. A decrease in demand for spending in certain industries could materially and adversely affect our ability to find an attractive target business with which to consummate our initial business combination and if we effect our initial business combination, the ability of that target business to become profitable.
We may face risks related to companies in our target industries.
If we are successful in completing a business combination with a target business in the industrial applications sector, we may be subject to, and possibly adversely affected by, the following risks:
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an inability to compete effectively in a highly competitive environment with many incumbents having substantially greater resources;
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an inability to manage rapid change, increasing expectations and growth;
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a reliance on proprietary technology to provide services and to manage our operations, and the failure of this technology to operate effectively, or our failure to use such technology effectively;
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an inability to deal with our subscribers’ or customers’ privacy concerns;
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an inability to attract and retain subscribers or customers;
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an inability to license or enforce intellectual property rights on which our business may depend;
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any significant disruption in our computer systems or those of third parties that we would utilize in our operations;
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an inability by us, or a refusal by third parties, to license content to us upon acceptable terms;
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potential liability for negligence, copyright, or trademark infringement or other claims based on the nature and content of materials that we may distribute;
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competition for advertising revenue;
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disruption or failure of our networks, systems or technology as a result of computer viruses, “cyber- attacks,” misappropriation of data or other malfeasance, as well as outages, natural disasters, terrorist attacks, accidental releases of information or similar events;
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an inability to obtain necessary hardware, software and operational support; and
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reliance on third-party vendors or service providers.
Any of the foregoing could have an adverse impact on our operations following a business combination. However, our efforts in identifying prospective target businesses will not be limited to businesses with transformative technologies for industrial applications. Accordingly, if we acquire a target business in another industry, these risks we will be subject to risks attendant with the specific industry in which we operate or target business which we acquire, which may or may not be different than those risks listed above.
As the number of special purpose acquisition companies evaluating targets increases, attractive targets may become scarcer and there may be more competition for attractive targets. This could increase the cost of our initial business combination and could even result in our inability to find a target or to consummate an initial business combination.
In recent years, the number of special purpose acquisition companies that have been formed has increased substantially. Many potential targets for special purpose acquisition companies have already entered into an initial business combination, and there are still many special purpose acquisition companies preparing for an initial public offering, as well as many such companies currently in registration. As a result, at times, fewer attractive targets may be available to consummate an initial business combination.
In addition, because there are more special purpose acquisition companies seeking to enter into an initial business combination with available targets, the competition for available targets with attractive fundamentals or business models may increase, which could cause targets companies to demand improved financial terms. Attractive deals could also become scarcer for other reasons, such as economic or industry sector downturns, geopolitical tensions, or increases in the cost of additional capital needed to close business combinations or operate targets post-business combination. This could increase the cost of, delay or otherwise complicate or frustrate our ability to find and consummate an initial business combination, and may result in our inability to consummate an initial business combination on terms favorable to our investors altogether.
Risks Related to Our Organization and Structure
Our directors may decide not to enforce the indemnification obligations of our sponsor, resulting in a reduction in the amount of funds in the trust account available for distribution to our public stockholders.
In the event that the proceeds in the trust account are reduced below the lesser of (1) $10.00 per public share or (2) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes, and our sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment may choose not to do so in any particular instance. If our independent directors choose not to enforce these indemnification obligations, the amount of funds in the trust account available for distribution to our public stockholders may be reduced below $10.00 per share.
We are dependent upon our directors and officers and their departure could adversely affect our ability to operate.
Our operations are dependent upon a relatively small group of individuals and in particular, Mr. Wulfsohn, Dr. Haring-Smith, Mr. Joy and Mr. Ganz. We believe that our success depends on the continued service of our directors and officers, at least until we have completed our initial business combination. In addition, our directors and officers are not required to commit any specified amount of time to our affairs and, accordingly, will have conflicts of interest in allocating their time among various business activities, including identifying potential business combinations and monitoring the related due diligence. Moreover, certain of our directors and officers have time and attention requirements for investment funds of which affiliates of our sponsor are the investment managers. We do not have an employment agreement with, or key-man insurance on the life of, any of our directors or officers. The unexpected loss of the services of one or more of our directors or officers could have a detrimental effect on us.
Our key personnel may negotiate employment or consulting agreements with a target business in connection with a particular business combination. These agreements may provide for them to receive compensation following our initial business combination and as a result, may cause them to have conflicts of interest in determining whether a particular business combination is the most advantageous.
Our key personnel may be able to remain with the company after the completion of our initial business combination only if they are able to negotiate employment or consulting agreements in connection with the business combination. Such negotiations would take place simultaneously with the negotiation of the business combination and could provide for such individuals to receive compensation in the form of cash payments and/or our securities for services they would render to us after the completion of our initial business combination. The personal and financial interests of such individuals may influence their motivation in identifying and selecting a target business, subject to his or her fiduciary duties under applicable law. However, we believe the ability of such individuals to remain with us after the completion of our initial business combination will not be the determining factor in our decision as to whether or not we will proceed with any potential business combination. There is no certainty, however, that any of our key personnel will remain with us after the completion of our initial business combination. We cannot assure you that any of our
key personnel will remain in senior management or advisory positions with us. The determination as to whether any of our key personnel will remain with us will be made at the time of our initial business combination.
Our directors and officers will allocate their time to other businesses thereby causing conflicts of interest in their determination as to how much time to devote to our affairs. This conflict of interest could have a negative impact on our ability to complete our initial business combination.
Our directors and officers are not required to, and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our operations and our search for a business combination and their other businesses. We do not intend to have any full-time employees prior to the completion of our initial business combination. Each of our officers is engaged in several other business endeavors for which he may be entitled to substantial compensation and our officers are not obligated to contribute any specific number of hours per week to our affairs. In particular, all of our officers and certain of our directors have fiduciary and contractual duties to Anzu Partners and to certain companies in which it has invested or to certain other entities, including companies in industries we may target for our initial business combination. Certain of our independent directors also serve as officers and/or board members for other entities. If our officers’ and directors’ other business affairs require them to devote substantial amounts of time to such affairs in excess of their current commitment levels, it could limit their ability to devote time to our affairs, which may have a negative impact on our ability to complete our initial business combination. For a complete discussion of our officers’ and directors’ other business affairs, please see “Management—Directors, Director Nominees and Officers.”
Certain of our directors and officers are now, and all of them may in the future become, affiliated with entities engaged in business activities similar to those intended to be conducted by us and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should be presented.
Following the completion of this offering and until we consummate our initial business combination, we intend to engage in the business of identifying and combining with one or more businesses. Our sponsor and directors and officers are, or may in the future become, affiliated with entities that are engaged in a similar business. For example, Dr. Haring-Smith, Mr. Joy and Mr. Ganz each of the foregoing owe fiduciary duties under applicable law to Anzu Partners or other entities. For more information, see the section entitled “Management—Conflicts of Interest.” Our sponsor and directors and officers are also not prohibited from sponsoring, investing or otherwise becoming involved with, any other blank check companies, including in connection with their initial business combinations, prior to us completing our initial business combination. Moreover, certain of our directors and officers have time and attention requirements for investment funds of which affiliates of our sponsor are the investment managers.
Our directors and officers 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 or contractual duties. Accordingly, they may have conflicts of interest in determining to which entity a particular business opportunity should be presented. These conflicts may not be resolved in our favor and a potential target business may be presented to other entities prior to its presentation to us, subject to his or her fiduciary duties under applicable law. Our amended and restated certificate of incorporation 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 the company and it is an opportunity that we are able to complete on a reasonable basis.
For a complete discussion of our officers’ and directors’ business affiliations and the potential conflicts of interest that you should be aware of, please see “Management—Directors, Director Nominees and Officers,” “Management—Conflicts of Interest” and “Certain Relationships and Related Party Transactions.”
Our directors, officers, security holders and their respective affiliates may have competitive pecuniary interests that conflict with our interests.
We have not adopted a policy that prohibits our directors, officers, security holders or their respective affiliates from having a direct or indirect pecuniary or financial interest in any investment to be
acquired or disposed of by us or in any transaction to which we are a party or have an interest. In fact, we may enter into a business combination with a target business that is affiliated with our sponsor, our directors or officers, although we do not intend to do so. Nor do we have a policy that prohibits any such persons from engaging for their own account in business activities of the types conducted by us. Accordingly, such persons or entities may have a conflict between their interests and ours. As a result, there may be substantial overlap between companies that would be a suitable business combination for us and companies that would make an attractive target for such other affiliates.
We may engage in a business combination with one or more target businesses that have relationships with entities that may be affiliated with our sponsor, directors or officers which may raise potential conflicts of interest.
In light of the involvement of our sponsor, directors and officers with other entities, we may decide to acquire one or more businesses affiliated with our sponsor, directors and officers. Certain of our directors and officers also serve as officers and board members for other entities, including those described under “Management—Conflicts of Interest.” Such entities may compete with us for business combination opportunities. Our sponsor, directors and officers are not currently aware of any specific opportunities for us to complete our initial business combination with any entities with which they are affiliated, and there have been no preliminary discussions concerning a business combination with any such entity or entities. Although we will not be specifically focusing on, or targeting, any transaction with any affiliated entities, we would pursue such a transaction if we determined that such affiliated entity met our criteria and guidelines for a business combination as set forth in “Proposed Business—Effecting Our Initial Business Combination—Selection of a target business and structuring of our initial business combination” and such transaction was approved by a majority of our independent and disinterested directors. Despite our agreement that we, or a committee of independent and disinterested directors, will obtain an opinion from an independent investment banking firm or another valuation or appraisal firm that regularly renders fairness opinions on the type of target business we are seeking to acquire, regarding the fairness to our company from a financial point of view of a business combination with one or more businesses affiliated with our sponsor, directors or officers, potential conflicts of interest still may exist and, as a result, the terms of the business combination may not be as advantageous to our public stockholders as they would be absent any conflicts of interest.
Since our initial stockholders will lose their entire investment in us if our initial business combination is not completed, a conflict of interest may arise in determining whether a particular business combination target is appropriate for our initial business combination.
On December 30, 2020, our sponsor subscribed for an aggregate of 7,187,500 founder shares for an aggregate purchase price of $25,000, or approximately $0.004 per share. On February 19, 2021, we effected a stock dividend of 2,875,000 shares of Class B Common Stock to our sponsor, resulting in our initial stockholders holding an aggregate of 10,062,500 founder shares. In February 2021, our sponsor transferred 25,000 founder shares to each of Teresa A. Harris, Priya Cherian Huskins and Susan J. Kantor, our independent director nominees. Our initial stockholders will collectively own 20% of our issued and outstanding shares after this offering (assuming they do not purchase any units in this offering). If we increase or decrease the size of this offering, we will effect a stock dividend or share repurchase or redemption or other appropriate mechanism, as applicable, immediately prior to the consummation of this offering in such amount as to maintain the number of founder shares at 20% of our issued and outstanding shares of common stock upon the consummation of this offering. The founder shares will be worthless if we do not complete an initial business combination.
In addition, our sponsor has committed to purchase an aggregate of 11,000,000 (or 12,050,000 warrants if the underwriters’ over-allotment option is exercised in full) private placement warrants, each exercisable for one Class A common stock, for a purchase price of $11,000,000 in the aggregate or $12,050,000 in the aggregate if the underwriters’ over-allotment option is exercised in full, or $1.00 per warrant, that will also be worthless if we do not complete a business combination. Each private placement warrant may be exercised for one share of our Class A common stock at a price of $11.50 per share, subject to adjustment as provided herein.
The founder shares are identical to the shares of common stock included in the units being sold in this offering except that: (1) prior to our initial business combination, only holders of the founder shares
have the right to vote on the appointment of directors and holders of a majority of our founder shares may remove a member of the board of directors for any reason; (2) the founder shares are subject to certain transfer restrictions contained in a letter agreement that our initial stockholders, directors and officers have entered into, (3) pursuant to such letter agreement, our initial stockholders, directors and officers have agreed to waive: (i) their redemption rights with respect to any founder shares and public shares held by them, as applicable, in connection with the completion of our initial business combination; (ii) their redemption rights with respect to any founder shares and public shares held by them in connection with a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to stockholders’ rights or pre- initial business combination activity; and (iii) their rights to liquidating distributions from the trust account with respect to any founder shares they hold if we fail to complete our initial business combination within 24 months from the closing of this offering or during any Extension Period (although they will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete our initial business combination within the prescribed time frame); (4) the founder shares will automatically convert into shares of our Class A common stock at the time of our initial business combination, or earlier at the option of the holder, on a one-for-one basis, subject to adjustment pursuant to certain anti-dilution rights, as described in more detail below; and (5) the founder shares are entitled to registration rights. If we submit our initial business combination to our public stockholders for a vote, our initial stockholders have agreed (and their permitted transferees will agree), pursuant to the terms of a letter agreement entered into with us, to vote their founder shares and any public shares held by them purchased during or after this offering in favor of our initial business combination. While we do not expect our board of directors to approve any amendment to or waiver of the letter agreement or registration rights agreement prior to our initial business combination, it may be possible that our board of directors, in exercising its business judgment and subject to its fiduciary duties, chooses to approve one or more amendments to or waivers of such agreements in connection with the consummation of our initial business combination. Any such amendments or waivers would not require approval from our stockholders, may result in the completion of our initial business combination that may not otherwise have been possible, and may have an adverse effect on the value of an investment in our securities.
The personal and financial interests of our sponsor, directors and officers may influence their motivation in identifying and selecting a target business combination, completing an initial business combination and influencing the operation of the business following the initial business combination. This risk may become more acute as the 24-month deadline following the closing of this offering nears, which is the deadline for the completion of our initial business combination.
We do not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for us to complete a business combination with which a substantial majority of our stockholders do not agree.
Our amended and restated certificate of incorporation does not provide a specified maximum redemption threshold, except that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 following such redemptions, or any greater net tangible asset or cash requirement that may be contained in the agreement relating to our initial business combination. As a result, we may be able to complete our initial business combination even though a substantial majority of our public stockholders do not agree with the transaction and have redeemed their shares or, if we seek stockholder approval of our initial business combination and do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, have entered into privately negotiated agreements to sell their shares to our sponsor, directors, officers, advisors or any of their respective affiliates. In the event the aggregate cash consideration we would be required to pay for all public shares that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares, and all shares of common stock submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business combination.
In order to effectuate an initial business combination, blank check companies have, in the past, amended various provisions of their charters and modified governing instruments, including their warrant agreements. We cannot assure you that we will not seek to amend our amended and restated certificate of incorporation or governing instruments in a manner that will make it easier for us to complete our initial business combination that some of our stockholders may not support.
In order to effectuate an initial business combination, blank check companies have, in the recent past, amended various provisions of their charters and modified governing instruments, including their warrant agreements. For example, blank check companies have amended the definition of business combination, increased redemption thresholds, extended the time to consummate an initial business combination and, with respect to their warrants, amended their warrant agreements to require the warrants to be exchanged for cash and/or other securities. We cannot assure you that we will not seek to amend our amended and restated certificate of incorporation or governing instruments, including the warrant agreement, or extend the time to consummate an initial business combination in order to effectuate our initial business combination. To the extent any of such amendments would be deemed to fundamentally change the nature of any of the securities offered through this registration statement, we would register, or seek an exemption from registration for, the affected securities.
Certain provisions of our amended and restated certificate of incorporation that relate to our pre-business combination activity (and corresponding provisions of the agreement governing the release of funds from our trust account) may be amended with the approval of holders of not less than 65% of our common stock, which is a lower amendment threshold than that of some other blank check companies. It may be easier for us, therefore, to amend our amended and restated certificate of incorporation and the trust agreement to facilitate the completion of an initial business combination that some of our stockholders may not support.
Our amended and restated certificate of incorporation will provide that any of its provisions (other than amendments relating to the appointment of directors, which require the approval by a majority of at least 90% of our common stock voting at a stockholder meeting) related to pre-business combination activity (including the requirement to fund the trust account and not release such amounts except in specified circumstances and to provide redemption rights to public stockholders as described herein) may be amended if approved by holders of at least 65% of our common stock, and corresponding provisions of the trust agreement governing the release of funds from our trust account may be amended if approved by holders of 65% of our common stock. In all other instances, our amended and restated certificate of incorporation will provide that it may be amended by holders of a majority of our common stock, subject to applicable provisions of the DGCL, or applicable stock exchange rules. We may not issue additional securities that can vote on amendments to our amended and restated certificate of incorporation or on our initial business combination. Our initial stockholders, who will beneficially own 20% of our common stock upon the closing of this offering (assuming they do not purchase any units in this offering), may participate in any vote to amend our amended and restated certificate of incorporation and/or trust agreement and will have the discretion to vote in any manner they choose. As a result, we may be able to amend the provisions of our amended and restated certificate of incorporation which will govern our pre-business combination behavior more easily than some other blank check companies, and this may increase our ability to complete our initial business combination with which you do not agree. Our stockholders may pursue remedies against us for any breach of our amended and restated certificate of incorporation.
Our sponsor, officers and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity, unless we provide our public stockholders with the opportunity to redeem their shares of our Class A common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, divided by the number of then outstanding public shares. These agreements are contained in a letter agreement that we have entered into with our sponsor, officers and directors. Our stockholders are not parties to, or third-party beneficiaries of, these agreements and, as a result, will not have the ability to
pursue remedies against our sponsor, officers or directors for any breach of these agreements. As a result, in the event of a breach, our stockholders would need to pursue a stockholder derivative action, subject to applicable law.
Our initial stockholders will control the election of our board of directors until consummation of our initial business combination and will hold a substantial interest in us. As a result, they will appoint all of our directors prior to our initial business combination and may exert a substantial influence on actions requiring stockholder vote, potentially in a manner that you do not support.
Upon the closing of this offering, our initial stockholders will own 20% of the issued and outstanding shares of our common stock (assuming they do not purchase any units in this offering). In addition, the founder shares, all of which are held by our initial stockholders, will entitle the holders to elect all of our directors prior to the consummation of our initial business combination. Holders of our public shares will have no right to vote on the election of directors during such time. These provisions of our amended and restated certificate of incorporation may only be amended by a majority of at least 90% of our common stock voting at a stockholder meeting. As a result, you will not have any influence over the election of directors prior to our initial business combination.
Neither our initial stockholders nor, to our knowledge, any of our officers or directors, have any current intention to purchase additional securities, other than as disclosed in this prospectus. Factors that would be considered in making such additional purchases would include consideration of the current trading price of our Class A common stock. In addition, as a result of their substantial ownership in our company, our initial stockholders may exert a substantial influence on other actions requiring a stockholder vote, potentially in a manner that you do not support, including amendments to our amended and restated certificate of incorporation and approval of major corporate transactions. If our initial stockholders purchase any shares of our Class A common stock in this offering or in the aftermarket or in privately negotiated transactions, this would increase their influence over these actions. Accordingly, our initial stockholders will exert significant influence over actions requiring a stockholder vote at least until the completion of our initial business combination.
We may amend the terms of the warrants in a manner that may be adverse to holders of public warrants with the approval by the holders of at least 65% of the then outstanding public warrants.
Our warrants will be issued in registered form under a warrant agreement between American Stock Transfer & Trust Company, as warrant agent, and us. The warrant agreement provides that (a) the terms of the warrants may be amended without the consent of any holder for the purpose of (i) curing any ambiguity or correct any mistake, including to conform the provisions of the warrant agreement to the description of the terms of the warrants and the warrant agreement set forth in this prospectus, or defective provision or (ii) adding or changing any provisions with respect to matters or questions arising under the warrant agreement as the parties to the warrant agreement may deem necessary or desirable and that the parties deem to not adversely affect the rights of the registered holders of the warrants under the warrant agreement and (b) all other modifications or amendments require the vote or written consent of at least 65% of the then outstanding public warrants, provided that any amendment that solely affects the terms of the private placement warrants or any provision of the warrant agreement solely with respect to the private placement warrants will also require at least 65% of the then outstanding private placement warrants. Accordingly, we may amend the terms of the public warrants in a manner adverse to a holder if holders of at least 65% of the then outstanding public warrants approve of such amendment. Although our ability to amend the terms of the public warrants with the consent of at least 65% of the then outstanding public warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, shorten the exercise period or decrease the number of shares of common stock purchasable upon exercise of a warrant.
A provision of our warrant agreement may make it more difficult for us to consummate an initial business combination.
Unlike some blank check companies, if
(i)
we issue additional shares of common stock or equity-linked securities for capital raising
purposes in connection with the closing of our initial business combination at a Newly Issued Price of less than $9.20 per share of common stock,
(ii)
the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of our initial business combination on the date of the completion of our initial business combination (net of redemptions), and
(iii)
the Market Value is below $9.20 per share,
then the exercise price of the warrants will be adjusted to be equal to 115% of the higher of the Market Value and the Newly Issued Price, the $18.00 per share redemption trigger price described below under “Description of Securities—Redeemable Warrants—Public Stockholders’ Warrants—Redemption of warrants when the price per share of our Class A common stock equals or exceeds $18.00” and “ Description of Securities—Redeemable Warrants—Public Stockholders’ Warrants—Redemption of warrants when the price per share of our Class A common stock equals or exceeds $10.00” will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price, and the $10.00 per share redemption trigger price described below under “ Description of Securities—Redeemable Warrants—Public Stockholders’ Warrants—Redemption of warrants when the price per share of our Class A common stock equals or exceeds $10.00” will be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price. This may make it more difficult for us to consummate an initial business combination with a target business.
Our warrant agreement will designate the courts of the State of New York or the United States District Court for the Southern District of New York as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by holders of our warrants, which could limit the ability of warrant holders to obtain a favorable judicial forum for disputes with our company.
Our warrant agreement will provide that, subject to applicable law, (i) any action, proceeding or claim against us arising out of or relating in any way to the warrant agreement, including under the Securities Act, will be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and (ii) that we irrevocably submit to such jurisdiction, which jurisdiction shall be the exclusive forum for any such action, proceeding or claim. We will waive any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum.
Notwithstanding the foregoing, these provisions of the warrant agreement will not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal district courts of the United States of America are the sole and exclusive forum. Any person or entity purchasing or otherwise acquiring any interest in any of our warrants shall be deemed to have notice of and to have consented to the forum provisions in our warrant agreement. If any action, the subject matter of which is within the scope the forum provisions of the warrant agreement, is filed in a court other than a court of the State of New York or the United States District Court for the Southern District of New York (a “foreign action”) in the name of any holder of our warrants, such holder shall be deemed to have consented to: (x) the personal jurisdiction of the state and federal courts located in the State of New York in connection with any action brought in any such court to enforce the forum provisions (an “enforcement action”), and (y) having service of process made upon such warrant holder in any such enforcement action by service upon such warrant holder’s counsel in the foreign action as agent for such warrant holder.
This choice-of-forum provision may limit a warrant holder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with our company, which may discourage such lawsuits. Alternatively, if a court were to find this provision of our warrant agreement inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially and adversely affect our business, financial condition and results of operations and result in a diversion of the time and resources of our management and board of directors.
Provisions in our amended and restated certificate of incorporation and Delaware law may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for shares of our Class A common stock and could entrench management.
Our amended and restated certificate of incorporation will contain provisions that may discourage unsolicited takeover proposals that stockholders may consider to be in their best interests. These provisions
include three-year director terms and the ability of the board of directors to designate the terms of and issue new series of preferred stock, which may make more difficult the removal of management and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities.
Section 203 of the DGCL affects the ability of an “interested stockholder” to engage in certain business combinations, for a period of three years following the time that the stockholder becomes an “interested stockholder.” We will elect in our certificate of incorporation not to be subject to Section 203 of the DGCL. Nevertheless, our certificate of incorporation will contain provisions that have the same effect as Section 203 of the DGCL, except that it will provide that affiliates of our sponsor and their transferees will not be deemed to be “interested stockholders,” regardless of the percentage of our voting stock owned by them, and will therefore not be subject to such restrictions. These charter provisions may limit the ability of third parties to acquire control of our company.
Provisions in our amended and restated certificate of incorporation and Delaware law may have the effect of discouraging lawsuits against our directors and officers.
Our amended and restated certificate of incorporation will require, to the fullest extent permitted by law, that (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee to us or our stockholders, (iii) any action asserting a claim against us, our directors, officers or employees arising pursuant to any provision of the DGCL or our amended and restated certificate of incorporation or bylaws, or (iv) any action asserting a claim against us, our directors, officers or employees governed by the internal affairs doctrine may be brought only in the Court of Chancery in the State of Delaware, except any action (A) as to which the Court of Chancery of the State of Delaware determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), (B) which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, (C) for which the Court of Chancery does not have subject matter jurisdiction, or (D) arising under the Securities Act, as to which the Court of Chancery and the federal district court for the District of Delaware shall have concurrent jurisdiction. If an action is brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process on such stockholder’s counsel. Although we believe this provision benefits us by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies, a court may determine that this provision is unenforceable, and to the extent it is enforceable, the provision may have the effect of discouraging lawsuits against our directors and officers, although our stockholders will not be deemed to have waived our compliance with federal securities laws and the rules and regulations thereunder.
Our amended and restated certificate of incorporation will provide that the exclusive forum provision will be applicable to the fullest extent permitted by applicable law. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. As a result, the exclusive forum provision will not apply to suits brought to enforce any duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities
Act or the rules and regulations thereunder. As noted above, our amended and restated certificate of incorporation will provide that the Court of Chancery and the federal district court for the District of Delaware shall have concurrent jurisdiction over any action arising under the Securities Act. Accordingly, there is uncertainty as to whether a court would enforce such provision, and our stockholders will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder.
Although we believe this provision benefits us by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies, the provision may have the effect of discouraging lawsuits against our directors and officers.
We may not hold an annual stockholder meeting until after the consummation of our initial business combination. Our public stockholders will not have the right to elect or remove directors prior to the consummation of our initial business combination.
We may not hold an annual meeting of stockholders until after we consummate our initial business combination (unless required by Nasdaq) and thus may not be in compliance with Section 211(b) of the DGCL, which requires an annual meeting of stockholders be held for the purposes of electing directors in accordance with a company’s bylaws unless such election is made by written consent in lieu of such a meeting. Therefore, if our stockholders want us to hold an annual meeting prior to the consummation of our initial business combination, they may attempt to force us to hold one by submitting an application to the Delaware Court of Chancery in accordance with Section 211(c) of the DGCL.
We are an emerging growth company and a smaller reporting company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to emerging growth companies or smaller reporting companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.
We are an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not 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 nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. As a result, our stockholders may not have access to certain information they may deem important. We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our shares of common stock held by non-affiliates exceeds $700 million as of the end of any second quarter of a fiscal year, in which case we would no longer be an emerging growth company as of the end of such fiscal year. We cannot predict whether investors will find our securities less attractive because we will rely on these exemptions. If some investors find our securities less attractive as a result of our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities and the trading prices of our securities may be more volatile.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. We have elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our shares of common stock held by non-affiliates exceeds $250 million as of the end of that year’s second fiscal quarter, and (2) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our shares of common stock held by non-affiliates exceeds $700 million as of the end of that year’s second fiscal quarter. To the extent we take advantage of such reduced disclosure obligations, it may also make comparison of our financial statements with other public companies difficult or impossible.
Risks Related to Ownership of Our Securities and This Offering
The ability of our public stockholders to exercise redemption rights with respect to a large number of our shares could increase the probability that our initial business combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your shares.
If our initial business combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price, or requires us to have a minimum amount of cash at closing, the probability that our initial business combination would be unsuccessful increases. If our initial business combination is unsuccessful, you would not receive your pro rata portion of the trust account until we liquidate the trust account. If you are in need of immediate liquidity, you could attempt to sell your shares in the open market; however, at such time our shares may trade at a discount to the pro rata amount per share in the trust account. In either situation, you may suffer a material loss on your investment or lose the benefit of funds expected in connection with our redemption until we liquidate or you are able to sell your shares in the open market.
If a stockholder fails to receive notice of our offer to redeem our public shares in connection with our initial business combination, or fails to comply with the procedures for tendering its shares, such shares may not be redeemed.
We will comply with the tender offer rules or proxy rules, as applicable, when conducting redemptions in connection with our initial business combination. Despite our compliance with these rules, if a stockholder fails to receive our tender offer or proxy materials, as applicable, such stockholder may not become aware of the opportunity to redeem its shares. In addition, the tender offer documents or proxy materials, as applicable, that we will furnish to holders of our public shares in connection with our initial business combination will describe the various procedures that must be complied with in order to validly tender or redeem public shares. In the event that a stockholder fails to comply with these procedures, its shares may not be redeemed. See “Proposed Business—Manner of Conducting Redemptions—Tendering stock certificates in connection with a tender offer or redemption rights.”
You will not have any rights or interests in funds from the trust account, except under certain limited circumstances. To liquidate your investment, therefore, you may be forced to sell your public shares and/or warrants, potentially at a loss.
Our public stockholders will be entitled to receive funds from the trust account only upon the earliest to occur of: (1) our completion of an initial business combination, and then only in connection with those shares of our Class A common stock that such stockholder properly elected to redeem, subject to the limitations described herein; (2) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity; and (3) the redemption of our public shares if we have not completed an initial business combination within 24 months from the closing of this offering, subject to applicable law. In addition, if we are unable to complete an initial business combination within 24 months from the closing of this offering for any reason, compliance with Delaware law may require that we submit a plan of dissolution to our then-existing stockholders for approval prior to the distribution of the proceeds held in our trust account. In that case, public stockholders may be forced to wait beyond 24 months from the closing of this offering before they receive funds from our trust account. In no other circumstances will a stockholder have any right or interest of any kind to or in the trust account. Holders of warrants will not have any right to the proceeds held in the trust account with respect to the warrants. Accordingly, to liquidate your investment, you may be forced to sell your public shares and/or warrants, potentially at a loss.
Nasdaq may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.
We intend to apply to list our units on Nasdaq on or promptly after the date of this prospectus and our Class A common stock and warrants on or promptly after their date of separation. We cannot guarantee
that our securities will be approved for listing on Nasdaq. Although after giving effect to this offering we expect to meet, on a pro forma basis, the minimum initial listing standards set forth in the Nasdaq listing standards, we cannot assure you that our securities will be, or will continue to be, listed on Nasdaq in the future or prior to our initial business combination. In order to continue listing our securities on Nasdaq prior to our initial business combination, we must maintain certain financial, distribution and share price levels. Generally, we must maintain a minimum amount in stockholders’ equity (generally $2,500,000) and a minimum number of holders of our securities (generally 300 public holders). Additionally, in connection with our initial business combination, we will be required to demonstrate compliance with Nasdaq’s initial listing requirements, which are more rigorous than Nasdaq’s continued listing requirements, in order to continue to maintain the listing of our securities on Nasdaq. For instance, our share price would generally be required to be at least $4.00 per share and our stockholder’s equity would generally be required to be at least $5,000,000. We cannot assure you that we will be able to meet those initial listing requirements at that time.
If Nasdaq delists any of our securities from trading on its exchange and we are not able to list our securities on another national securities exchange, we expect such securities could be quoted on an over-the- counter market. If this were to occur, we could face significant material adverse consequences, including:
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a limited availability of market quotations for our securities;
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reduced liquidity for our securities;
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a determination that our Class A common stock is a “penny stock” which will require brokers trading in our Class A common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;
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a limited amount of news and analyst coverage; and
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a decreased ability to issue additional securities or obtain additional financing in the future.
The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” Because we expect that our units and eventually shares of our Class A common stock and warrants will be listed on Nasdaq, our units, shares of our Class A common stock and warrants will qualify as covered securities under such statute. Although the states are preempted from regulating the sale of covered securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. While we are not aware of a state having used these powers to prohibit or restrict the sale of securities issued by special purpose acquisition companies, certain state securities regulators view blank check companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities of blank check companies in their states. Further, if we were no longer listed on Nasdaq, our securities would not qualify as covered securities under such statute and we would be subject to regulation in each state in which we offer our securities.
You will not be entitled to protections normally afforded to investors of many other blank check companies.
Since the net proceeds of this offering and the sale of the private placement warrants are intended to be used to complete an initial business combination with a target business that has not been selected, we may be deemed to be a “blank check” company under the U.S. securities laws. However, because we will have net tangible assets in excess of $5,000,000 upon the successful completion of this offering and the sale of the private placement warrants and will file a Current Report on Form 8-K, including an audited balance sheet of the company demonstrating this fact, we are exempt from rules promulgated by the SEC to protect investors in blank check companies, such as Rule 419. Accordingly, investors will not be afforded the benefits or protections of those rules. Among other things, this means our units will be immediately tradable and we will have a longer period of time to complete our initial business combination than do companies subject to Rule 419. Moreover, if this offering were subject to Rule 419, that rule would prohibit the release of any interest earned on funds held in the trust account to us unless and until the funds in the trust account were released to us in connection with our completion of an initial business combination. For a more
detailed comparison of our offering to offerings that comply with Rule 419, please see “Proposed Business—Comparison of This Offering to Those of Blank Check Companies Subject to Rule 419.”
If we seek stockholder approval of our initial business combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a “group” of stockholders are deemed to hold in excess of 15% of the shares of our Class A common stock, you will lose your ability to redeem all such shares in excess of 15% of shares of our Class A common stock.
If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the shares sold in this offering, which we refer to as the “Excess Shares,” without our prior consent. However, we would not be restricting our stockholders’ ability to vote all of their shares (including Excess Shares) for or against our initial business combination. Your inability to redeem the Excess Shares will reduce your influence over our ability to complete our initial business combination and you could suffer a material loss on your investment in us if you sell Excess Shares in open market transactions. Additionally, you will not receive redemption distributions with respect to the Excess Shares if we complete our initial business combination. And as a result, you will continue to hold that number of shares exceeding 15% and, in order to dispose of such shares, would be required to sell your shares in open market transactions, potentially at a loss.
If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00 per share.
Our placing of funds in the trust account may not protect those funds from third-party claims against us. Although we will seek to have all vendors, service providers (other than our independent registered public accounting firm), prospective target businesses and other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public stockholders, such parties may not execute such agreements, or even if they execute such agreements they may not be prevented from bringing claims against the trust account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against our assets, including the funds held in the trust account. If any third party refuses to execute an agreement waiving such claims to the monies held in the trust account, our management will perform an analysis of the alternatives available to it and will enter into an agreement with a third party that has not executed a waiver only if management believes that such third party’s engagement would be significantly more beneficial to us than any alternative.
Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third-party consultant whose particular expertise or skills are believed by management to be superior to those of other consultants that would agree to execute a waiver or in cases where we are unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason. Upon redemption of our public shares, if we have not completed our initial business combination within the required time period, or upon the exercise of a redemption right in connection with our initial business combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought against us within the 10 years following redemption. Accordingly, the per-share redemption amount received by public stockholders could be less than the $10.00 per public share initially held in the trust account, due to claims of such creditors.
Our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (other than our independent auditors) for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below (1) $10.00 per public share or (2) such lesser amount per public share held in the
trust account as of the date of the liquidation of the trust account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the trust account and except as to any claims under our indemnity of the underwriter of this offering against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, our sponsor will not be responsible to the extent of any liability for such third-party claims. We have not independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are securities of our company. Our sponsor may not have sufficient funds available to satisfy those obligations. We have not asked our sponsor to reserve for such obligations, and therefore, no funds are currently set aside to cover any such obligations. As a result, if any such claims were successfully made against the trust account, the funds available for our initial business combination and redemptions could be reduced to less than $10.00 per public share. In such event, we may not be able to complete our initial business combination, and you would receive such lesser amount per public share in connection with any redemption of your public shares. None of our directors or officers will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.
The securities in which we invest the funds held in the trust account could bear a negative rate of interest, which could reduce the value of the assets held in trust such that the per-share redemption amount received by public stockholders may be less than $10.00 per share.
The proceeds held in the trust account will be invested only in U.S. government treasury bills with a maturity of 185 days or less or in money market funds investing solely in U.S. Treasuries. While short-term U.S. government treasury obligations currently yield a positive rate of interest, they have briefly yielded negative interest rates in recent years. Central banks in Europe and Japan pursued interest rates below zero in recent years, and the Open Market Committee of the Federal Reserve has not ruled out the possibility that it may in the future adopt similar policies in the United States. In the event that we are unable to complete our initial business combination or make certain amendments to our amended and restated certificate of incorporation, our public stockholders are entitled to receive their pro-rata share of the proceeds held in the trust account, plus any interest income, net of taxes paid or payable (less, in the case we are unable to complete our initial business combination, $100,000 of interest). Negative interest rates could reduce the value of the assets held in trust such that the per-share redemption amount received by public stockholders may be less than $10.00 per share.
If, after we distribute the proceeds in the trust account to our public stockholders, we file a winding-up or bankruptcy petition or an involuntary winding-up or bankruptcy petition is filed against us that is not dismissed, a bankruptcy court may seek to recover such proceeds, and the members of our board of directors may be viewed as having breached their fiduciary duties to our creditors, thereby exposing the members of our board of directors and us to claims of punitive damages.
If, after we distribute the proceeds in the trust account to our public stockholders, we file a winding-up or bankruptcy petition or an involuntary winding-up or bankruptcy petition is filed against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or insolvency laws as a voidable performance. As a result, a liquidator could seek to recover some or all amounts received by our stockholders. In addition, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith by paying public stockholders from the trust account prior to addressing the claims of creditors, thereby exposing itself and us to claims of punitive damages.
If, before distributing the proceeds in the trust account to our public stockholders, we file a winding-up or bankruptcy petition or an involuntary winding-up or bankruptcy petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our stockholders and the per-share amount that would otherwise be received by our stockholders in connection with our liquidation may be reduced.
If, before distributing the proceeds in the trust account to our public stockholders, we file a winding-up or bankruptcy petition or an involuntary winding-up or bankruptcy petition is filed against us
that is not dismissed, the proceeds held in the trust account could be subject to applicable insolvency law, and may be included in our liquidation estate and subject to the claims of third parties with priority over the claims of our stockholders. To the extent any liquidation claims deplete the trust account, the per-share amount that would otherwise be received by our stockholders in connection with our liquidation would be reduced.
If we have not completed our initial business combination within the allotted time period, our public stockholders may be forced to wait beyond such allotted time period before redemption from our trust account.
If we have not completed our initial business combination within 24 months from the closing of this offering or during any Extension Period, we will distribute the aggregate amount then on deposit in the trust account, including interest (less up to $100,000 of interest to pay dissolution expenses and which interest shall be net of taxes payable), pro rata to our public stockholders by way of redemption and cease all operations except for the purposes of winding up of our affairs, as further described herein. Any redemption of public stockholders from the trust account shall be effected automatically by function of our amended and restated certificate of incorporation prior to any voluntary winding up. If we are required to windup, liquidate the trust account and distribute such amount therein, pro rata, to our public stockholders, as part of any liquidation process, such winding up, liquidation and distribution must comply with the applicable provisions of Delaware law. In that case, investors may be forced to wait beyond the allotted time period before the redemption proceeds of our trust account become available to them and they receive the return of their pro rata portion of the proceeds from our trust account. We have no obligation to return funds to investors prior to the date of our redemption or liquidation unless, prior thereto, we consummate our initial business combination or amend certain provisions of our amended and restated certificate of incorporation and then only in cases where investors have properly sought to redeem their shares of our Class A common stock. Only upon our redemption or any liquidation will public stockholders be entitled to distributions if we have not completed our initial business combination within the required time period and do not amend certain provisions of our amended and restated certificate of incorporation prior thereto.
Our stockholders may be held liable for claims by third parties against us to the extent of distributions received by them upon redemption of their shares.
Under the DGCL, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. The pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination within 24 months of the closing of this offering may be considered a liquidating distribution under Delaware law. If a corporation complies with certain procedures set forth in Section 280 of the DGCL intended to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during which any third-party claims can be brought against the corporation, a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution. However, it is our intention to redeem our public shares as soon as reasonably possible following the 24th month from the closing of this offering in the event we do not complete our initial business combination and, therefore, we do not intend to comply with the foregoing procedures.
Because we do not intend to comply with Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that will provide for our payment of all existing and pending claims or claims that may be potentially brought against us within the 10 years following our dissolution. However, because we are a blank check company, rather than an operating company, and our operations will be limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment bankers, consultants, etc.) or prospective target businesses. If our plan of distribution complies with Section 281(b) of the DGCL, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would likely be barred after the third anniversary of the dissolution. We cannot assure you that we will properly
assess all claims that may be potentially brought against us. As such, our stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of our stockholders may extend beyond the third anniversary of such date. Furthermore, if the pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination within 24 months of the closing of this offering is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful, then pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidating distribution.
We are not registering the issuance of the shares of our Class A common stock issuable upon exercise of the warrants under the Securities Act or any state securities laws at this time, and such registration may not be in place when an investor desires to exercise warrants, thus precluding such investor from being able to exercise its warrants except on a cashless basis and potentially causing such warrants to expire worthless.
We are not registering the issuance of the shares of our Class A common stock issuable upon exercise of the warrants under the Securities Act or any state securities laws at this time. However, under the terms of the warrant agreement, we have agreed that, as soon as practicable, but in no event later than 15 business days after the closing of our initial business combination, we will use our commercially reasonable efforts to file with the SEC a registration statement covering the issuance of such shares, and we will use our commercially reasonable efforts to cause the same to become effective within 60 business days after the closing of our initial business combination and to maintain the effectiveness of such registration statement and a current prospectus relating to those shares of our Class A common stock until the warrants expire or are redeemed. We cannot assure you that we will be able to do so if, for example, any facts or events arise which represent a fundamental change in the information set forth in the registration statement or prospectus, the financial statements contained or incorporated by reference therein are not current, complete or correct or the SEC issues a stop order. If the shares issuable upon exercise of the warrants are not registered under the Securities Act in accordance with the above requirements, we will be required to permit holders to exercise their warrants on a cashless basis, in which case, the number of shares of our Class A common stock that you will receive upon cashless exercise will be based on a formula subject to a maximum amount of shares equal to 0.361 shares of our Class A common stock per warrant (subject to adjustment). However, no warrant will be exercisable for cash or on a cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption from registration is available. Notwithstanding the above, if shares of our Class A common stock are, at the time of any exercise of a warrant, not listed on a national securities exchange such that they do not satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement, but we will use our commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. In no event will we be required to net cash settle any warrant, or issue securities or other compensation in exchange for the warrants in the event that we are unable to register or qualify the shares underlying the warrants under applicable state securities laws and no exemption is available. If the issuance of the shares upon exercise of the warrants is not so registered or qualified or exempt from registration or qualification, the holder of such warrant shall not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In such event, holders who acquired their warrants as part of a purchase of units will have paid the full unit purchase price solely for the shares of our Class A common stock included in the units. There may be a circumstance where an exemption from registration exists for holders of our private placement warrants to exercise their warrants while a corresponding exemption does not exist for holders of the public warrants included as part of units sold in this offering. In such an instance, our sponsor and its permitted transferees (which may include our directors and executive officers) would be able to exercise their warrants and sell the shares of common stock underlying their warrants while holders of our public warrants would not be able to exercise their warrants and sell the underlying shares of common stock. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register
or qualify the underlying shares of our Class A common stock for sale under all applicable state securities laws. As a result, we may redeem the warrants as set forth above even if the holders are otherwise unable to exercise their warrants.
The grant of registration rights to our initial stockholders and their permitted transferees may make it more difficult to complete our initial business combination, and the future exercise of such rights may adversely affect the market price of shares of our Class A common stock.
Pursuant to an agreement to be entered into on or prior to the closing of this offering, at or after the time of our initial business combination, our initial stockholders and their permitted transferees can demand that we register the resale of their founder shares after those shares convert to shares of our Class A common stock. In addition, our sponsor and its permitted transferees can demand that we register the resale of the private placement warrants and the shares of our Class A common stock issuable upon exercise of the private placement warrants, and holders of warrants that may be issued upon conversion of working capital loans may demand that we register the resale of such warrants or the shares of our Class A common stock issuable upon exercise of such warrants. We will bear the cost of registering these securities. The registration and availability of such a significant number of securities for trading in the public market may have an adverse effect on the market price of shares of our Class A common stock. In addition, the existence of the registration rights may make our initial business combination more costly or difficult to conclude. This is because the stockholders of the target business may increase the equity stake they seek in the combined entity or ask for more cash consideration to offset the negative impact on the market price of shares of our Class A common stock that is expected when the shares of common stock owned by our initial stockholders or their permitted transferees, our private placement warrants or warrants issued in connection with working capital loans are registered for resale.
We may issue additional shares of our Class A common stock or shares of preferred stock to complete our initial business combination or under an employee incentive plan after completion of our initial business combination. We may also issue shares of our Class A common stock upon the conversion of the shares of our Class B common stock at a ratio greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions contained in our amended and restated certificate of incorporation. Any such issuances would dilute the interest of our stockholders and likely present other risks.
Our amended and restated certificate of incorporation authorizes the issuance of up to 400,000,000 shares of our Class A common stock, par value $0.0001 per share, 40,000,000 shares of our Class B common stock, par value $0.0001 per share, and 1,000,000 undesignated shares of preferred stock, par value $0.0001 per share. Immediately after this offering, there will be 342,333,333 and 31,250,000 (assuming in each case that the underwriters have not exercised their over-allotment option) authorized but unissued shares of our Class A common stock and shares of our Class B common stock, respectively, available for issuance, which amount takes into account shares reserved for issuance upon exercise of outstanding warrants but not upon conversion of the shares of our Class B common stock into shares of our Class A common stock. Shares of our Class B common stock are convertible into shares of our Class A common stock, initially at a one-for-one ratio but subject to adjustment as set forth herein. Immediately after this offering, there will be no shares of preferred stock issued and outstanding.
We may issue a substantial number of additional shares of our Class A common stock, and may issue shares of preferred stock, in order to complete our initial business combination or under an employee incentive plan after completion of our initial business combination. We may also enter into forward purchase agreements or other commitments to purchase our securities after closing of this offering and prior to completion of our initial business combination. We may also issue shares of our Class A common stock to redeem the warrants as described in “Description of Securities—Redeemable Warrants—Public Stockholders’ Warrants—Redemption of warrants when the price per share of our Class A common stock equals or exceeds $10.00” or upon conversion of the shares of our Class B common stock at a ratio greater than one-to-one at the time of our initial business combination as a result of the anti- dilution provisions contained in our amended and restated certificate of incorporation. However, our amended and restated certificate of incorporation provides, among other things, that prior to our initial business combination, we may not issue additional shares of common stock that would entitle the holders thereof to
(1) receive funds from the trust account or (2) vote as a class with our public shares on any initial business combination. The issuance of additional shares of common stock or shares of preferred stock:
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may significantly dilute the equity interest of investors in this offering, which dilution would increase if the anti-dilution provisions in the shares of our Class B common stock resulted in the issuance of shares of our Class A common stock on a greater than one-to-one basis upon conversion of the shares of our Class B common stock;
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may subordinate the rights of holders of shares of common stock if shares of preferred stock are issued with rights senior to those afforded our shares of common stock;
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could cause a change of control if a substantial number of our shares of common stock is issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present directors and officers;
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may have the effect of delaying or preventing a change of control of us by diluting the share ownership or voting rights of a person seeking to obtain control of us;
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may adversely affect prevailing market prices for our units, shares of common stock and/or warrants; and
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may not result in adjustment to the exercise price of our warrants.
The exercise price for the public warrants is higher than in many similar blank check company offerings in the past, and, accordingly, the warrants are more likely to expire worthless.
The exercise price of the public warrants is higher than is typical in many similar blank check companies in the past. Historically, the exercise price of a warrant was generally a fraction of the purchase price of the units in the initial public offering. The exercise price for our public warrants is $11.50 per share, subject to adjustment as provided herein. As a result, the warrants are more likely to expire worthless.
We may redeem your unexpired warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless.
We have the ability to redeem the outstanding warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant if, among other things, the Reference Value equals or exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “Description of Securities—Redeemable Warrants—Public Stockholders’ Warrants—Anti-dilution Adjustments”). Please see “Description of Securities—Redeemable Warrants—Public Stockholders’ Warrants—Redemption of warrants when the price per share of our Class A common stock equals or exceeds $18.00.” If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws. As a result, we may redeem the warrants as set forth above even if the holders are otherwise unable to exercise the warrants. Redemption of the outstanding warrants as described above could force you to: (1) exercise your warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so; (2) sell your warrants at the then-current market price when you might otherwise wish to hold your warrants; or (3) accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, we expect would be substantially less than the market value of your warrants. None of the private placement warrants will be redeemable by us (except as described below under “Description of Securities—Redeemable Warrants—Public Stockholders’ Warrants—Redemption of warrants when the price per share of our Class A common stock equals or exceeds $10.00”) so long as they are held by our sponsor or its permitted transferees.
In addition, we have the ability to redeem the outstanding warrants at any time after they become exercisable and prior to their expiration, at a price of $0.10 per warrant if, among other things, the Reference Value equals or exceeds $10.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “Description of Securities—Redeemable Warrants—Public Stockholders’ Warrants—Anti-dilution Adjustments”). In such a case, the holders will be able to exercise their warrants prior to redemption for a number of shares of our Class A
common stock determined based on the redemption date and the fair market value of shares of our Class A common stock. Please see “Description of Securities—Redeemable Warrants—Public Stockholders’ Warrants—Redemption of warrants when the price per share of our Class A common stock equals or exceeds $10.00.” The value received upon exercise of the warrants (1) may be less than the value the holders would have received if they had exercised their warrants at a later time where the underlying share price is higher and (2) may not compensate the holders for the value of the warrants, including because the number of shares of common stock received is capped at 0.361 shares of our Class A common stock per warrant (subject to adjustment) irrespective of the remaining life of the warrants.
Our sponsor paid an aggregate of $25,000, or approximately $0.003 per founder share, and, accordingly, you will experience immediate and substantial dilution upon the purchase of shares of our Class A common stock.
The difference between the public offering price per share (allocating all of the unit purchase price to the shares of common stock and none to the warrant included in the unit) and the pro forma net tangible book value per share of common stock after this offering constitutes the dilution to you and the other investors in this offering. Our sponsor acquired the founder shares at a nominal price, significantly contributing to this dilution. Upon the closing of this offering, and assuming no value is ascribed to the warrants included in the units, you and the other public stockholders will incur an immediate and substantial dilution of approximately 95.1% (or $9.51 per share, assuming no exercise of the underwriters’ over-allotment option), the difference between the pro forma net tangible book value per share of $0.49 and the initial offering price of $10.00 per unit. This dilution would increase to the extent that the anti-dilution provisions of the shares of our Class B common stock result in the issuance of shares of our Class A common stock on a greater than one-to-one basis upon conversion of the shares of our Class B common stock at the time of our initial business combination and would become exacerbated to the extent that public stockholders seek redemptions from the trust. In addition, because of the anti-dilution protection in the founder shares, any equity or equity-linked securities issued in connection with our initial business combination would be disproportionately dilutive to shares of our Class A common stock.
Our warrants and founder shares may have an adverse effect on the market price of shares of our Class A common stock and make it more difficult to effectuate our initial business combination.
We will be issuing warrants to purchase 11,666,666 Class A common stock (or 13,416,666 shares of our Class A common stock if the underwriters’ over-allotment option is exercised in full), at a price of $11.50 per whole share (subject to adjustment as provided herein), as part of the units offered by this prospectus and, simultaneously with the closing of this offering, we will be issuing in a private placement an aggregate of 11,000,000 (or 12,050,000 warrants if the underwriters’ over-allotment option is exercised in full) private placement warrants, each exercisable to purchase one share of our Class A common stock at a price of $11.50 per share, subject to adjustment as provided herein. Our initial stockholders currently hold 10,062,500 shares of our Class B common stock (up to 1,312,500 of which are subject to forfeiture by our sponsor depending on the extent to which the underwriters’ over-allotment option is exercised). The shares of our Class B common stock are convertible into shares of our Class A common stock on a one-for-one basis, subject to adjustment as set forth herein. In addition, if our sponsor, an affiliate of our sponsor or certain of our directors and officers make any working capital loans, up to $1,500,000 of such loans may be converted into warrants, at the price of $1.00 per warrant at the option of the lender. Such warrants would be identical to the private placement warrants. To the extent we issue shares of our Class A common stock to effectuate a business combination, the potential for the issuance of a substantial number of additional shares of our Class A common stock upon exercise of these warrants or conversion rights could make us a less attractive acquisition vehicle to a target business. Any such issuance will increase the number of issued and outstanding shares of our Class A common stock and reduce the value of the shares of our Class A common stock issued to complete the business combination. Therefore, our warrants and founder shares may make it more difficult to effectuate a business combination or increase the cost of acquiring the target business.
The private placement warrants are identical to the warrants sold as part of the units in this offering except that, so long as they are held by our sponsor or its permitted transferees: (1) they will not be redeemable by us (except as described below under “Description of Securities—Redeemable Warrants—Public Stockholders’ Warrants—Redemption of warrants when the price per share of our Class A common
stock equals or exceeds $10.00”); (2) they (including the shares of our Class A common stock issuable upon exercise of these warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by our sponsor until 30 days after the completion of our initial business combination; (3) they may be exercised by the holders on a cashless basis; and (4) they (including the shares of common stock issuable upon exercise of these warrants) are entitled to registration rights.
Because each unit contains one-third of one redeemable warrant and only a whole warrant may be exercised, the units may be worth less than units of other blank check companies.
Each unit contains one-third of one redeemable warrant. Pursuant to the warrant agreement, no fractional warrants will be issued upon separation of the units, and only whole warrants will trade. This is different from other offerings similar to ours whose units include one share of common stock and one whole warrant to purchase one share. We have established the components of the units in this way in order to reduce the dilutive effect of the warrants upon completion of a business combination since the warrants will be exercisable in the aggregate for one-third of the number of shares compared to units that each contain a whole warrant to purchase one whole share, thus making us, we believe, a more attractive business combination partner for target businesses. Nevertheless, this unit structure may cause our units to be worth less than if they included a warrant to purchase one whole share.
The determination of the size of this offering and the terms of the securities offered is more arbitrary than the size of an offering and the terms of the securities offered of an operating company in a particular industry.
Prior to this offering there has been no public market for any of our securities. In determining the size of this offering, management held customary organizational meetings with the underwriters, both prior to our inception and thereafter, with respect to the state of capital markets, generally, and the amount the underwriters believed they reasonably could raise on our behalf. Factors considered in determining the size of this offering and terms of the units, including the shares of our Class A common stock and warrants underlying the units, include:
•
the history and prospects of companies whose principal business is the acquisition of other companies;
•
prior offerings of those companies;
•
our prospects for acquiring an operating business at attractive values;
•
a review of debt to equity ratios in leveraged transactions;
•
our capital structure;
•
an assessment of our management and their experience in identifying operating companies;
•
general conditions of the securities markets at the time of this offering; and
•
other factors as were deemed relevant.
There is currently no market for our securities and a market for our securities may not develop, which would adversely affect the liquidity and price of our securities.
There is currently no market for our securities. Stockholders therefore have no access to information about prior market history on which to base their investment decision. Following this offering, the price of our securities may vary significantly due to one or more potential business combinations and general market or economic conditions, including as a result of the COVID-19 outbreak and other events (such as terrorist attacks, natural disasters or a significant outbreak of other infectious diseases). Furthermore, an active trading market for our securities may never develop or, if developed, it may not be sustained. You may be unable to sell your securities unless a market can be established and sustained.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some statements contained in this prospectus are forward-looking in nature. Our forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this prospectus may include, for example, statements about:
•
our ability to select an appropriate target business or businesses;
•
our ability to complete our initial business combination;
•
our expectations around the performance of a prospective target business or businesses;
•
our success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial business combination;
•
our directors and officers allocating their time to other businesses and potentially having conflicts of interest with our business or in approving our initial business combination;
•
our potential ability to obtain additional financing to complete our initial business combination;
•
our pool of prospective target businesses and our target industries;
•
our ability to consummate an initial business combination due to the uncertainty resulting from the recent COVID-19 pandemic;
•
the ability of our directors and officers to generate a number of potential business combination opportunities;
•
our public securities’ potential liquidity and trading;
•
the lack of a market for our securities;
•
the use of proceeds not held in the trust account or available to us from interest income on the trust account balance;
•
the trust account not being subject to claims of third parties; or
•
our financial performance following this offering.
The forward-looking statements contained in this prospectus are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the heading “Risk Factors.” 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.
USE OF PROCEEDS
We are offering 35,000,000 units at an offering price of $10.00 per unit. We estimate that the net proceeds of this offering together with the funds we will receive from the sale of the private placement warrants will be used as set forth in the following table.
| |
|
|
Without
Over-Allotment
Option
|
|
|
Over-Allotment
Option
Exercised
|
|
|
Gross proceeds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross proceeds from units offered to public(1)
|
|
|
|
$ |
350,000,000 |
|
|
|
|
$ |
402,500,000 |
|
|
|
Gross proceeds from private placement warrants offered in the private placement
|
|
|
|
|
11,000,000 |
|
|
|
|
|
12,050,000 |
|
|
|
Total gross proceeds
|
|
|
|
|
361,000,000 |
|
|
|
|
|
414,550,000 |
|
|
|
Estimated offering expenses(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underwriting commissions (excluding deferred portion)(3)
|
|
|
|
|
7,000,000 |
|
|
|
|
|
8,050,000 |
|
|
|
Legal fees and expenses
|
|
|
|
|
300,000 |
|
|
|
|
|
300,000 |
|
|
|
Accounting fees and expenses
|
|
|
|
|
40,000 |
|
|
|
|
|
40,000 |
|
|
|
Printing and engraving expenses
|
|
|
|
|
37,000 |
|
|
|
|
|
37,000 |
|
|
|
SEC filing fee
|
|
|
|
|
43,913 |
|
|
|
|
|
43,913 |
|
|
|
FINRA filing fee
|
|
|
|
|
60,875 |
|
|
|
|
|
60,875 |
|
|
|
Travel and road show
|
|
|
|
|
10,000 |
|
|
|
|
|
10,000 |
|
|
|
Directors and officers insurance premiums(4)
|
|
|
|
|
1,400,000 |
|
|
|
|
|
1,400,000 |
|
|
|
Nasdaq listing and filing fees
|
|
|
|
|
75,000 |
|
|
|
|
|
75,000 |
|
|
|
Miscellaneous expenses(5)
|
|
|
|
|
33,212 |
|
|
|
|
|
33,212 |
|
|
|
Total estimated offering expenses (other than underwriting commissions)
|
|
|
|
|
2,000,000 |
|
|
|
|
|
2,000,000 |
|
|
|
Proceeds after estimated offering expenses
|
|
|
|
|
352,000,000 |
|
|
|
|
|
404,500,000 |
|
|
|
Held in trust account(3)
|
|
|
|
$ |
350,000,000 |
|
|
|
|
$ |
402,500,000 |
|
|
|
% of public offering size
|
|
|
|
|
100% |
|
|
|
|
|
100% |
|
|
|
Not held in trust account(2)
|
|
|
|
|
2,000,000 |
|
|
|
|
|
2,000,000 |
|
|
The following table shows the use of the approximately $2,000,000 of net proceeds not held in the trust account(6).
| |
|
|
Amount
|
|
|
% of Total
|
|
|
Payment for office space, administrative and support services
|
|
|
|
$ |
972,500 |
|
|
|
|
|
48.63% |
|
|
|
Legal, accounting, due diligence, travel and other expenses in connection with any
business combination(7)
|
|
|
|
$ |
670,000 |
|
|
|
|
|
33.5% |
|
|
|
Legal and accounting fees related to regulatory reporting obligations
|
|
|
|
$ |
190,500 |
|
|
|
|
|
9.53% |
|
|
|
Nasdaq continued listing fees
|
|
|
|
$ |
127,125 |
|
|
|
|
|
6.36% |
|
|
|
Other miscellaneous expenses
|
|
|
|
$ |
39,875 |
|
|
|
|
|
1.98% |
|
|
|
Total
|
|
|
|
$ |
2,000,000 |
|
|
|
|
|
100% |
|
|
(1)
Includes amounts payable to public stockholders who properly redeem their shares in connection with our successful completion of the initial business combination.
(2)
As of December 31, 2020, we had borrowed no amount under the $300,000 promissory note with our sponsor. These loans will be repaid upon completion of this offering out of the $2,000,000 of offering proceeds that has been allocated for the payment of offering expenses (other than underwriting commissions) not held in the trust account. These expenses are estimates only. In the event that deferred offering expenses are less than as set forth in this table, any such amounts will be used for post-closing working capital expenses. In the event that the offering expenses are more than as set forth in this table, we may fund such excess with funds not held in the trust account.
(3)
The underwriters have agreed to defer underwriting commissions equal to 3.5% of the gross proceeds of this offering. Upon completion of our initial business combination, $12,250,000, which constitutes the underwriters’ deferred commissions (or $14,087,500 if the underwriters’ over-allotment option is exercised in full) will be paid to the underwriters from the funds held in the trust account, and the remaining funds, less amounts used to pay redeeming stockholders, will be released to us and can be used to pay all or a portion of the acquisition price of the business or businesses with which our initial business combination occurs or for general corporate purposes, including payment of principal or interest on indebtedness incurred in connection with our initial business combination, to fund the purchases of other companies or for working capital. The underwriters will not be entitled to any interest accrued on the deferred underwriting discounts and commissions.
(4)
This amount represents the approximate amount of annualized director and officer liability insurance premiums we anticipate paying following the completion of this offering and until we complete a business combination.
(5)
Includes organizational and administrative expenses and may include amounts related to above-listed expenses in the event actual amounts exceed estimates.
(6)
These expenses are estimates only. Our actual expenditures for some or all of these items may differ from the estimates set forth herein. For example, we may incur greater legal and accounting expenses than our current estimates in connection with negotiating and structuring a business combination based upon the level of complexity of such business combination. In the event we identify an acquisition target in a specific industry subject to specific regulations, we may incur additional expenses associated with legal due diligence and the engagement of special legal counsel. In addition, our staffing needs may vary and as a result, we may engage a number of consultants to assist with legal and financial due diligence. We do not anticipate any change in our intended use of proceeds, other than fluctuations among the current categories of allocated expenses, which fluctuations, to the extent they exceed current estimates for any specific category of expenses, would not be available for our expenses. The amount in the table above does not include interest available to us from the trust account. Based on current interest rates, we would expect approximately $350,000 be available to us from interest earned on the funds held in the trust account over the 12 months following the closing of this offering; however, we can provide no assurances regarding this amount. This estimate assumes an interest rate of 0.10% per annum based upon current yields of securities in which the trust account may be invested. In addition, in order to fund working capital deficiencies or finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate of our sponsor or certain of our directors and officers may, but are not obligated to, loan us funds as may be required. If we complete our initial business combination, we may repay such loaned amounts out of the proceeds of the trust account released to us. Otherwise, such loans may be repaid only out of funds held outside the trust account. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used to repay such loaned amounts. Up to $1,500,000 of such loans may be convertible into warrants at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the private placement warrants issued to our sponsor. The terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans. We do not expect to seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.
(7)
Includes estimated amounts that may also be used in connection with our initial business combination to fund a “no shop” provision and commitment fees for financing.
The rules of Nasdaq provide that at least 90% of the gross proceeds from this offering and the sale of the private placement warrants be deposited in a trust account. Of the net proceeds of this offering and the sale of the private placement warrants, $350,000,000 (or $402,500,000 if the underwriters’ over-allotment option is exercised in full), including $12,250,000 (or $14,087,500 if the underwriters’ over-allotment option is exercised in full) of deferred underwriting commissions, will, upon the consummation of this offering, be placed in a U.S.-based trust account at Bank of America, N.A, with American Stock Transfer
& Trust Company acting as trustee. The funds in the trust account will be invested only in U.S. government treasury bills with a maturity of 185 days or less or in money market funds investing solely in U.S. Treasuries and meeting certain conditions under Rule 2a-7 under the Investment Company Act. Based on current interest rates, we estimate that the interest earned on the trust account will be approximately $350,000 per year, assuming an interest rate of 0.10% per year. We will not be permitted to withdraw any of the principal or interest held in the trust account except for the withdrawal of interest to pay taxes, if any. The funds held in the trust account will not otherwise be released from the trust account until the earliest of : (1) our completion of an initial business combination; (2) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity; and (3) the redemption of our public shares if we have not completed an initial business combination within 24 months from the closing of this offering, subject to applicable law. Based on current interest rates, we expect that interest earned on the trust account will be sufficient to pay taxes.
The net proceeds held in the trust account may be used as consideration to pay the sellers of a target business with which we ultimately complete our initial business combination and to pay the deferred underwriting commissions. If our initial business combination is paid for using equity or debt, 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 the redemption of our public shares, we may apply the balance of the cash released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations of the post-transaction company, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working capital.
We believe that amounts not held in trust will be sufficient to pay the costs and expenses to which such proceeds are allocated. This belief is based on the fact that while we may begin preliminary due diligence of a target business in connection with an indication of interest, we intend to undertake in-depth due diligence, depending on the circumstances of the relevant prospective acquisition, only after we have negotiated and signed a letter of intent or other preliminary agreement that addresses the terms of a business combination. However, if our estimate of the costs of undertaking in-depth due diligence and negotiating a business combination is less than the actual amount necessary to do so, we may be required to raise additional capital, the amount, availability and cost of which is currently unascertainable. If we are required to seek additional capital, we could seek such additional capital through loans or additional investments from our sponsor, members of our management team or any of their respective affiliates, but such persons are not under any obligation to loan funds to, or otherwise invest in, us.
We will enter into an Administrative Services Agreement pursuant to which we will pay an affiliate of our sponsor a total of $40,520.83 per month for office space, administrative and support services. Upon completion of our initial business combination or our liquidation, we will cease paying these monthly fees.
Our sponsor has agreed to loan us up to $300,000 under an unsecured promissory note to be used for a portion of the expenses of this offering. As of December 31, 2020, we had borrowed no amount under the $300,000 promissory note with our sponsor. These loans are non-interest bearing, unsecured and are due at the earlier of March 31, 2022 and the closing of this offering. These loans will be repaid upon completion of this offering out of the $2,000,000 of offering proceeds that has been allocated for the payment of offering expenses (other than underwriting commissions) not held in the trust account.
In addition, in order to fund working capital deficiencies or finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate of our sponsor or certain of our directors and officers may, but are not obligated to, loan us funds as may be required. If we complete our initial business combination, we may repay such loaned amounts out of the proceeds of the trust account released to us. Otherwise, such loans may be repaid only out of funds held outside the trust account. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used to repay such loaned amounts. Up to $1,500,000 of such loans may be convertible into warrants at a
price of $1.00 per warrant at the option of the lender. The warrants would be identical to the private placement warrants issued to our sponsor. The terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans. We do not expect to seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.
If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, directors, officers, advisors or any of their respective affiliates may also purchase shares in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination. Please see “Proposed Business—Permitted purchases and other transactions with respect to our securities” for a description of how such persons will determine from which stockholders to seek to acquire shares. The price per share paid in any such transaction may be different than the amount per share a public stockholder would receive if it elected to redeem its shares in connection with our initial business combination. However, such persons have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. Such persons will be subject to restrictions in making any such purchases when they are in possession of any material non-public information or if such purchases are prohibited by Regulation M under the Exchange Act. We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will comply with such rules.
We may not redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 following such redemptions and the agreement for our initial business combination may require as a closing condition that we have a minimum net worth or a certain amount of cash. If too many public stockholders exercise their redemption rights so that we cannot satisfy the net tangible asset requirement or any net worth or cash requirements, we would not proceed with such redemption and the related business combination, and may instead search for an alternate business combination.
Our public stockholders will be entitled to receive funds from the trust account only upon the earliest to occur of: (1) our completion of an initial business combination, and then only in connection with those shares of our Class A common stock that such stockholder properly elected to redeem, subject to the limitations described herein; (2) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity; and (3) the redemption of our public shares if we have not completed an initial business combination within 24 months from the closing of this offering, subject to applicable law. In no other circumstances will a stockholder have any right or interest of any kind to or in the trust account. Holders of warrants will not have any right to the proceeds held in the trust account with respect to the warrants.
Our initial stockholders, directors and officers have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares and public shares held by them in connection with the completion of our initial business combination or certain amendments to our amended and restated certificate of incorporation as described elsewhere in this prospectus. In addition, our initial stockholders have agreed to waive their rights to liquidating distributions from the trust account with respect to their founder shares if we fail to complete our initial business combination within the prescribed time frame. However, if our initial stockholders acquire public shares, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to complete our initial business combination within the prescribed time frame.
DIVIDEND POLICY
We have not paid any cash dividends on our shares of common stock to date and do not intend to pay cash dividends prior to the completion of our initial business combination. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of our initial business combination. The payment of any cash dividends subsequent to our initial business combination will be within the discretion of our board of directors at such time. On February 19, 2021, we effected a stock dividend of 2,875,000 shares of Class B Common Stock to our sponsor, resulting in our initial stockholders holding an aggregate of 10,062,500 founder shares. In addition, our board of directors is not currently contemplating and does not anticipate declaring any additional stock dividends in the foreseeable future, except if we increase the size of this offering, in which case we will effect a stock dividend or other appropriate mechanism immediately prior to the consummation of this offering in such amount as to maintain the number of founder shares at 20% of the issued and outstanding shares of our common stock upon the consummation of this offering. Further, if we incur any indebtedness in connection with our initial business combination, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith.
DILUTION
The difference between the public offering price per share of our Class A common stock, assuming no value is attributed to the warrants included in the units we are offering pursuant to this prospectus or the private placement warrants, and the pro forma net tangible book value per share of common stock after this offering constitutes the dilution to investors in this offering. Such calculation does not reflect any dilution associated with the sale and exercise of warrants, including the private placement warrants, which would cause the actual dilution to the public stockholders to be higher, particularly where a cashless exercise is utilized. Net tangible book value per share is determined by dividing our net tangible book value, which is our total tangible assets less total liabilities (including the value of shares of our Class A common stock which may be redeemed for cash), by the number of issued and outstanding shares of common stock.
At December 31, 2020, our net tangible book value deficit was $(70,693), or approximately $(0.01) per share of our Class B common stock. After giving effect to the sale of 35,000,000 shares of our Class A common stock included in the units we are offering by this prospectus, the sale of the private placement warrants and the deduction of underwriting commissions and estimated expenses of this offering, our pro forma net tangible book value at December 31, 2020, would have been $5,000,009 or $0.49 per share, representing an immediate increase in net tangible book value (as decreased by the value of the 33,477,429 shares of our Class A common stock that may be redeemed for cash and assuming no exercise of the underwriters’ over-allotment option) of $0.50 per share to our initial stockholders as of the date of this prospectus and an immediate dilution of $9.51 per share or 95.1% to our public stockholders not exercising their redemption rights. The dilution to new investors if the underwriters exercise the over-allotment option in full would be an immediate dilution of $9.58 per share or 95.80%.
The following table illustrates the dilution to the public stockholders on a per-share basis, assuming no value is attributed to the warrants included in the units or the private placement warrants:
| |
Public offering price
|
|
|
|
|
|
|
|
|
|
$ |
10.00 |
|
|
| |
Net tangible book value before this offering
|
|
|
|
$ |
(0.01) |
|
|
|
|
|
|
|
|
| |
Increase attributable to public stockholders
|
|
|
|
$ |
0.50 |
|
|
|
|
|
|
|
|
| |
Pro forma net tangible book value after this offering and the sale of the private placement warrants
|
|
|
|
|
|
|
|
|
|
$ |
0.49 |
|
|
| |
Dilution to public stockholders
|
|
|
|
|
|
|
|
|
|
$ |
9.51 |
|
|
| |
Percentage of dilution to new investors
|
|
|
|
|
|
|
|
|
|
|
95.10% |
|
|
For purposes of presentation, we have reduced our pro forma net tangible book value after this offering (assuming no exercise of the underwriters’ over-allotment option) by $334,774,290 because holders of up to approximately 95.65% of our public shares may redeem their shares for a pro rata share of the aggregate amount then on deposit in the trust account at a per-share redemption price equal to the amount in the trust account calculated as of two business days prior to the consummation of the initial business combination, including interest (which interest shall be net of taxes payable), divided by the number of shares of our Class A common stock sold in this offering.
The following table sets forth information with respect to our initial stockholders and the public stockholders:
| |
|
|
Shares Purchased
|
|
|
Total Consideration
|
|
|
Average
Price Per
Share
|
|
| |
|
|
Number
|
|
|
Percentage
|
|
|
Amount
|
|
|
Percentage
|
|
|
Initial Stockholders(1)(2)
|
|
|
|
|
8,750,000 |
|
|
|
|
|
20.00% |
|
|
|
|
$ |
25,000 |
|
|
|
|
|
0.01% |
|
|
|
|
$ |
0.003 |
|
|
|
Public Stockholders
|
|
|
|
|
35,000,000 |
|
|
|
|
|
80.00% |
|
|
|
|
$ |
350,000,000 |
|
|
|
|
|
99.99% |
|
|
|
|
$ |
10.00 |
|
|
| |
|
|
|
|
43,750,000 |
|
|
|
|
|
100.00% |
|
|
|
|
$ |
350,000,000 |
|
|
|
|
|
100.00% |
|
|
|
|
|
|
|
|
(1)
Assumes the full forfeiture of 1,312,500 shares that are subject to forfeiture by our sponsor depending on the extent to which the underwriters’ over-allotment option is exercised.
(2)
Assumes conversion of shares of our Class B common stock into shares of our Class A common stock on a one-for-one basis. The dilution to public stockholders would increase to the extent that the anti- dilution provisions of the shares of our Class B common stock result in the issuance of shares of our Class A common stock on a greater than one-to-one basis upon such conversion.
The pro forma net tangible book value per share after this offering is calculated as follows:
| |
Numerator:
|
|
|
|
|
|
|
|
| |
Net tangible book deficit before this offering
|
|
|
|
$ |
(70,693) |
|
|
| |
Proceeds from this offering and sale of the private placement warrants, net of expenses (including non-deferred underwriting commissions)
|
|
|
|
|
352,000,000 |
|
|
| |
Offering costs accrued for and paid in advance, excluded from net tangible book value before this offering
|
|
|
|
|
94,992 |
|
|
| |
Less: deferred underwriters’ commissions payable
|
|
|
|
|
(12,250,000) |
|
|
| |
Less: amount of shares of our Class A common stock subject to redemption to maintain net tangible assets of $5,000,001
|
|
|
|
|
(334,774,290) |
|
|
| |
|
|
|
|
$ |
5,000,009 |
|
|
| |
Denominator:
|
|
|
|
|
|
|
|
| |
Shares of our Class B common stock issued and outstanding prior to this offering
|
|
|
|
|
10,062,500 |
|
|
| |
Shares forfeited if over-allotment is not exercised
|
|
|
|
|
(1,312,500) |
|
|
| |
Shares of our Class A common stock included in the units offered
|
|
|
|
|
35,000,000 |
|
|
| |
Less: shares subject to redemption to maintain net tangible assets of $5,000,001
|
|
|
|
|
(33,477,429) |
|
|
| |
|
|
|
|
|
10,272,571 |
|
|
CAPITALIZATION
The following table sets forth our capitalization at December 31, 2020, and as adjusted to give effect to the sale of our 35,000,000 units in this offering for $350,000,000 (or $10.00 per unit) and the sale of 11,000,000 private placement warrants for $11,000,000 (or $1.00 per warrant) and the application of the estimated net proceeds derived from the sale of such securities:
| |
|
|
December 31, 2020
|
|
| |
|
|
Actual
|
|
|
As
Adjusted(2)
|
|
|
Promissory note(1)
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
Deferred underwriting commissions
|
|
|
|
|
— |
|
|
|
|
|
12,250,000 |
|
|
|
Shares of our Class A common stock, subject to redemption; 0 shares actual and
33,477,429 shares as adjusted(3)
|
|
|
|
|
— |
|
|
|
|
|
334,774,290 |
|
|
|
Stockholders’ equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock, $0.0001 par value, 1,000,000 shares authorized (actual and as
adjusted); none issued or outstanding (actual and as adjusted)
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
Class A common stock, $0.0001 par value, 400,000,000 shares authorized (actual
and as adjusted); no shares issued and outstanding (actual); 1,522,571 shares
issued and outstanding (excluding 33,477,429 shares subject to redemption) (as
adjusted)
|
|
|
|
|
— |
|
|
|
|
|
152 |
|
|
|
Class B common stock, $0.0001 par value, 40,000,000 shares authorized (actual
and as adjusted); 10,062,500 issued and outstanding (actual), 8,750,000 issued
and outstanding (as adjusted)(4)
|
|
|
|
|
1,006 |
|
|
|
|
|
875 |
|
|
|
Additional paid-in capital(5)
|
|
|
|
|
23,994 |
|
|
|
|
|
4,999,683 |
|
|
|
Accumulated deficit
|
|
|
|
|
(701) |
|
|
|
|
|
(701) |
|
|
|
Total stockholders’ equity
|
|
|
|
$ |
24,299 |
|
|
|
|
$ |
5,000,009 |
|
|
|
Total capitalization
|
|
|
|
$ |
24,299 |
|
|
|
|
$ |
352,024,299 |
|
|
(1)
Our sponsor has agreed to loan us up to $300,000 under an unsecured promissory note to be used for a portion of the expenses of this offering, which loan is due at the earlier of March 31, 2022 or the closing of this offering. As of December 31, 2020, we had borrowed no amount under the $300,000 promissory note with our sponsor.
(2)
Assumes the full forfeiture of 1,312,500 shares that are subject to forfeiture by our sponsor depending on the extent to which the underwriters’ over-allotment option is exercised. The proceeds of the sale of such shares will not be deposited into the trust account, the shares will not be eligible for redemption from the trust account nor will they be eligible to vote upon the initial business combination.
(3)
Upon the completion of our initial business combination, we will provide our public stockholders with the opportunity to redeem their public shares for cash equal to their pro rata share of the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of the initial business combination, including interest (which interest shall be net of taxes payable), subject to the limitations described herein whereby our net tangible assets will be maintained at a minimum of $5,000,001 following such redemptions, and any limitations (including, but not limited to, cash requirements) created by the terms of the proposed business combination. The “as adjusted” amount of shares of common stock, subject to redemption equals the “as adjusted” total assets of $352,024,299, less the “as adjusted” total liabilities of $12,250,000, less the “as adjusted” total stockholder’s equity. The value of shares of our Class A common stock that may be redeemed is equal to $10.00 per share (which is the assumed redemption price) multiplied by 33,477,429 shares of our Class A common stock, which is the maximum number of shares of our Class A common stock that may be redeemed for a $10.00 purchase price per share and still maintain at least $5,000,001 of net tangible assets.
(4)
Actual share amount is prior to any forfeiture of founder shares by our sponsor and as adjusted share amount assumes no exercise of the underwriters’ over-allotment option.
(5)
The “as adjusted” additional paid-in capital calculation is equal to the “as adjusted” total stockholder’s equity of $5,000,009, minus Class A common stock (par value) of $152, less Class B common stock (par value) of $875, minus the accumulated deficit of $(701).
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
We are a newly incorporated blank check company, incorporated as a Delaware corporation for the purpose of effecting a merger, share exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. We have not selected any business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target. We intend to effectuate our initial business combination using cash from the proceeds of this offering and the sale of the private placement warrants, debt or a combination of cash, shares of stock and debt.
The issuance of additional shares of common stock or shares of preferred stock in a business combination:
•
may significantly dilute the equity interest of investors in this offering, which dilution would increase if the anti-dilution provisions in the shares of our Class B common stock resulted in the issuance of shares of our Class A common stock on a greater than one-to-one basis upon conversion of the shares of our Class B common stock;
•
may subordinate the rights of holders of shares of common stock if shares of preferred stock are issued with rights senior to those afforded our shares of common stock;
•
could cause a change of control if a substantial number of our shares of common stock is issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present directors and officers;
•
may have the effect of delaying or preventing a change of control of us by diluting the share ownership or voting rights of a person seeking to obtain control of us;
•
may adversely affect prevailing market prices for our units, shares of common stock and/or warrants; and
•
may not result in adjustment to the exercise price of our warrants.
Similarly, if we issue debt or otherwise incur significant indebtedness, it could result in:
•
default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations;
•
acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;
•
our immediate payment of all principal and accrued interest, if any, if the debt is payable on demand;
•
our inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing while the debt is outstanding;
•
our inability to pay dividends on shares of our common stock;
•
using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on shares of our common stock if declared, expenses, capital expenditures, acquisitions and other general corporate purposes;
•
limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;
•
increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and
•
limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt.
Results of Operations and Known Trends or Future Events
We have neither engaged in any operations nor generated any revenues to date. Our only activities since inception have been organizational activities and those necessary to prepare for this offering.
Following this offering, we will not generate any operating revenues until after completion of our initial business combination. We will generate non-operating income in the form of interest income on cash and cash equivalents after this offering. There has been no significant change in our financial or trading position and no material adverse change has occurred since the date of our audited financial statements. After this offering, we expect to incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses. We expect our expenses to increase substantially after the closing of this offering.
Liquidity and Capital Resources
Our liquidity needs have been satisfied prior to the completion of this offering through receipt of $25,000 from the sale of the founder shares to our sponsor and up to $300,000 in loans from our sponsor under an unsecured promissory note. As of December 31, 2020, we had borrowed no amount under the $300,000 promissory note with our sponsor. We estimate that the net proceeds from (1) the sale of the units in this offering, after deducting offering expenses of approximately $2,000,000 and underwriting commissions of $7,000,000 ($8,050,000 if the underwriters’ over-allotment option is exercised in full) (excluding deferred underwriting commissions of $12,250,000, $14,087,500 if the underwriters’ over- allotment option is exercised in full), and (2) the sale of the private placement warrants for a purchase price of $11,000,000 (or $12,050,000 in the aggregate if the underwriters’ over-allotment option is exercised in full), will be $352,000,000 (or $404,500,000 if the underwriters’ over-allotment option is exercised in full). Of this amount, $350,000,000 or $402,500,000 if the underwriters’ over-allotment option is exercised in full, including $12,250,000 (or $14,087,500 if the underwriters’ over-allotment option is exercised in full) in deferred underwriting commissions will be deposited into the trust account. The funds in the trust account will be invested only in U.S. government treasury bills with a maturity of 185 days or less or in money market funds investing solely in U.S. Treasuries. The remaining $2,000,000 will not be held in the trust account. In the event that our offering expenses exceed our estimate of $2,000,000 we may fund such excess with funds not to be held in the trust account. In such case, the amount of funds we intend to be held outside the trust account would decrease by a corresponding amount. Conversely, in the event that the offering expenses are less than our estimate of $2,000,000, the amount of funds we intend to be held outside the trust account would increase by a corresponding amount.
We intend to use substantially all of the funds held in the trust account, including any amounts representing interest earned on the trust account (which interest shall be net of permitted withdrawals) to complete our initial business combination. We will make permitted withdrawals from the trust account to pay our taxes, including franchise taxes and income taxes. Delaware franchise tax is based on our authorized shares or on our assumed par and non-par capital, whichever yields a lower result. Under the authorized shares method, each share is taxed at a graduated rate based on the number of authorized shares with a maximum aggregate tax of $200,000 per year. Under the assumed par value capital method, Delaware taxes each $1,000,000 of assumed par value capital at the rate of $400; where assumed par value would be (1) our total gross assets following this offering, divided by (2) our total issued shares of common stock following this offering, multiplied by (3) the number of our authorized shares following this offering. Based on the number of shares of our common stock authorized and outstanding and our estimated total gross proceeds after the completion of this offering, our annual franchise tax obligation is expected to be capped at the maximum amount of annual franchise taxes payable by us as a Delaware corporation of $200,000. Our annual income tax obligations will depend on the amount of interest and other income earned on the amounts held in the trust account. We expect the only taxes payable by us out of the funds in the trust account will be income and franchise taxes. We expect the interest earned on the amount in the trust account will be sufficient to pay our taxes. To the extent that our capital stock or debt is used, in whole or in part, as
consideration to complete our initial business combination, the remaining proceeds held in the trust account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.
Prior to the completion of our initial business combination, we will have available to us $2,000,000 of proceeds held outside the trust account. We will use these funds primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, structure, negotiate and complete a business combination, and to pay taxes to the extent the interest earned on the trust account is not sufficient to pay our taxes.
In order to fund working capital deficiencies or finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate of our sponsor or certain of our directors and officers may, but are not obligated to, loan us funds as may be required. If we complete our initial business combination, we may repay such loaned amounts out of the proceeds of the trust account released to us. Otherwise, such loans may be repaid only out of funds held outside the trust account. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used to repay such loaned amounts. Up to $1,500,000 of such loans may be convertible into warrants at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the private placement warrants issued to our sponsor. The terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans. We do not expect to seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.
We expect our primary liquidity requirements during that period to include approximately $670,000 for legal, accounting, due diligence, travel and other expenses in connection with any business combinations; $190,500 for legal and accounting fees related to regulatory reporting requirements; $127,125 for Nasdaq continued listing fees; $972,500 for office space, administrative and support services; and $39,875 for general working capital that will be used for miscellaneous expenses and reserves net of estimated interest income.
These amounts are estimates and may differ materially from our actual expenses. In addition, we could use a portion of the funds not being placed in trust to pay commitment fees for financing, fees to consultants to assist us with our search for a target business or as a down payment or to fund a “no-shop” provision (a provision designed to keep target businesses from “shopping” around for transactions with other companies or investors on terms more favorable to such target businesses) with respect to a particular proposed business combination, although we do not have any current intention to do so. If we entered into an agreement where we paid for the right to receive exclusivity from a target business, the amount that would be used as a down payment or to fund a “no-shop” provision would be determined based on the terms of the specific business combination and the amount of our available funds at the time. Our forfeiture of such funds (whether as a result of our breach or otherwise) could result in our not having sufficient funds to continue searching for, or conducting due diligence with respect to, prospective target businesses.
We do not believe we will need to raise additional funds following this offering in order to meet the expenditures required for operating our business. However, if our estimates of the costs of identifying a target business, undertaking in-depth due diligence and negotiating an initial business combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our initial business combination. Moreover, we may need to obtain additional financing either to complete our initial business combination or because we become obligated 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.
As indicated in the accompanying financial statements, at December 31, 2020, we had $25,000 in cash, working capital of $(70,693) and deferred offering costs of $94,992. Further, we expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to raise capital or to complete our initial business combination will be successful. These factors, among others, raise substantial doubt about our ability to continue as a going concern.
Controls and Procedures
We are not currently required to maintain an effective system of internal controls as defined by Section 404 of the Sarbanes-Oxley Act. We will be required to comply with the internal control reporting requirements of the Sarbanes-Oxley Act for the fiscal year ending December 31, 2022. Only in the event that we are deemed to be a large accelerated filer or an accelerated filer, and no longer qualify as an emerging growth company, will we be required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting. Further, for as long as we remain an emerging growth company, we intend 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 independent registered public accounting firm attestation requirement.
Prior to the closing of this offering, we have not completed an assessment, nor have our registered independent accounting firm tested our systems, of internal controls. We expect to assess the internal controls of our target business or businesses prior to the completion of our initial business combination and, if necessary, to implement and test additional controls as we may determine are necessary in order to state that we maintain an effective system of internal controls. A target business may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding the adequacy of internal controls. Many small and mid- sized target businesses we may consider for our initial business combination may have internal controls that need improvement in areas such as:
•
staffing for financial, accounting and external reporting areas, including segregation of duties;
•
reconciliation of accounts;
•
proper recording of expenses and liabilities in the period to which they relate;
•
evidence of internal review and approval of accounting transactions;
•
documentation of processes, assumptions and conclusions underlying significant estimates; and
•
documentation of accounting policies and procedures.
Because it will take time, management involvement and perhaps outside resources to determine what internal control improvements are necessary for us to meet regulatory requirements and market expectations for our operation of a target business, we may incur significant expenses in meeting our public reporting responsibilities, particularly in the areas of designing, enhancing, or remediating internal and disclosure controls. Doing so effectively may also take longer than we expect, thus increasing our exposure to financial fraud or erroneous financing reporting.
Once our management’s report on internal controls is complete, we will retain our registered independent accounting firm to audit and render an opinion on such report when required by Section 404 of the Sarbanes-Oxley Act. The independent auditors may identify additional issues concerning a target business’s internal controls while performing their audit of internal control over financial reporting.
Quantitative and Qualitative Disclosures about Market Risk
The net proceeds of this offering and the sale of the private placement warrants held in the trust account will be invested in U.S. government treasury bills with a maturity of 185 days or less or in money market funds investing solely in U.S. Treasuries and meeting certain conditions under Rule 2a-7 under the Investment Company Act. Due to the short-term nature of these investments, we believe there will be no associated material exposure to interest rate risk.
Related Party Transactions
On December 30, 2020, our sponsor purchased 7,187,500 founder shares for an aggregate purchase price of $25,000, or approximately $0.004 per share. The purchase price of the founder shares was determined by dividing the amount of cash contributed to the company by the number of founder shares issued. On February 19, 2021, we effected a stock dividend of 2,875,000 shares of Class B Common Stock to
our sponsor, resulting in our initial stockholders holding an aggregate of 10,062,500 founder shares. In February 2021, our sponsor transferred 25,000 founder shares to each of Teresa A. Harris, Priya Cherian Huskins and Susan J. Kantor, our independent director nominees. Our initial stockholders will collectively own 20% of our issued and outstanding shares after this offering (assuming they do not purchase any units in this offering). If we increase or decrease the size of this offering, we will effect a stock dividend or share repurchase or redemption or other appropriate mechanism, as applicable, with respect to our founder shares immediately prior to the consummation of this offering in such amount as to maintain the number of founder shares at 20% of our issued and outstanding shares of common stock upon the consummation of this offering. Up to 1,312,500 founder shares are subject to forfeiture by our sponsor depending on the extent to which the underwriters’ over-allotment option is exercised.
We will enter into an Administrative Services Agreement pursuant to which we will also pay an affiliate of our sponsor a total of $40,520.83 per month for office space, administrative and support services. Upon completion of our initial business combination or our liquidation, we will cease paying these monthly fees.
Our sponsor, directors and officers, or any of their respective affiliates, will be reimbursed for any out- of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Our audit committee will review on a quarterly basis all payments that were made by us to our sponsor, directors, officers or our or any of their respective affiliates and will determine which expenses and the amount of expenses that will be reimbursed. There is no cap or ceiling on the reimbursement of out-of-pocket expenses incurred by such persons in connection with activities on our behalf.
Our sponsor has agreed to loan us up to $300,000 under an unsecured promissory note to be used for a portion of the expenses of this offering. As of December 31, 2020, we had borrowed no amount under the $300,000 promissory note with our sponsor. These loans are non-interest bearing, unsecured and are due at the earlier of March 31, 2022 or the closing of this offering. These loans will be repaid upon completion of this offering out of the $2,000,000 of offering proceeds that has been allocated for the payment of offering expenses (other than underwriting commissions) not held in the trust account.
In addition, in order to fund working capital deficiencies or finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate of our sponsor or certain of our directors and officers may, but are not obligated to, loan us funds as may be required. If we complete our initial business combination, we may repay such loaned amounts out of the proceeds of the trust account released to us. Otherwise, such loans may be repaid only out of funds held outside the trust account. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used to repay such loaned amounts. Up to $1,500,000 of such loans may be convertible into warrants at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the private placement warrants issued to our sponsor. The terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans. We do not expect to seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.
Our sponsor has committed to purchase an aggregate of 11,000,000 (or 12,050,000 warrants if the underwriters’ over-allotment option is exercised in full) private placement warrants at a price of $1.00 per warrant ($11,000,000 in the aggregate or $12,050,000 in the aggregate if the underwriters’ over-allotment option is exercised in full) in a private placement that will occur simultaneously with the closing of this offering. Each private placement warrant entitles the holder to purchase one share of our Class A common stock at a price of $11.50 per share, subject to adjustment as provided herein. The private placement warrants are identical to the warrants sold as part of the units in this offering except that, so long as they are held by our sponsor or its permitted transferees: (1) they will not be redeemable by us (except as described below under “Description of Securities—Redeemable Warrants—Public Stockholders’ Warrants—Redemption of warrants when the price per share of our Class A common stock equals or exceeds $10.00”); (2) they (including the shares of our Class A common stock issuable upon exercise of these warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by our sponsor until 30 days after the
completion of our initial business combination; (3) they may be exercised by the holders on a cashless basis; and (4) they (including the shares of common stock issuable upon exercise of these warrants) are entitled to registration rights.
Pursuant to a registration rights agreement that we will enter into with our initial stockholders on or prior to the closing of this offering, we may be required to register certain securities for sale under the Securities Act. These holders, and holders of warrants issued upon conversion of working capital loans, if any, are entitled under the registration rights agreement to make up to three demands that we register certain of our securities held by them for sale under the Securities Act and to have the securities covered thereby registered for resale pursuant to Rule 415 under the Securities Act. In addition, these holders have the right to include their securities in other registration statements filed by us. However, the registration rights agreement provides that we will not be required to effect or permit any registration or cause any registration statement to become effective until the securities covered thereby are released from their lock-up restrictions, as described herein. We will bear the costs and expenses of filing any such registration statements. See “Principal Stockholders—Registration Rights.”
Off-Balance Sheet Arrangements; Commitments and Contractual Obligations; Quarterly Results
As of December 31, 2020, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4) (ii) of Regulation S-K and did not have any commitments or contractual obligations. No unaudited quarterly operating data is included in this prospectus as we have conducted no operations to date.
JOBS Act
On April 5, 2012, the JOBS Act was signed into law. The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We will qualify as an “emerging growth company” and under the JOBS Act will be allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.
Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an “emerging growth company,” we choose to rely on such exemptions we may not be required to, among other things: (1) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act; (2) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act; (3) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis); and (4) disclose certain executive compensation-related items such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of this offering or until we are no longer an “emerging growth company,” whichever is earlier.
PROPOSED BUSINESS
Our Company
We are a newly incorporated blank check company, incorporated as a Delaware corporation for the purpose of effecting a merger, share exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. We have not selected any business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target. We intend to effectuate our initial business combination using cash from the proceeds of this offering and the sale of the private placement warrants, debt or a combination of cash, shares of stock and debt.
We plan to utilize the financial, operational, public market and investment evaluation experience of our management, members of our board of directors and the advisory board and members of management of Anzu Partners, an entity of which our Chief Executive Officer is a Co-Founder and Managing Partner, to identify and complete our initial business combination with a company that we believe has compelling potential for value creation. Over the course of their careers, the members of our management team, board and advisory board and their affiliates (including Anzu Partners) have developed a broad network of contacts and corporate relationships, including deep networks in industrial technology and global management consulting, that we believe will serve as a useful source of opportunities.
While we may pursue an initial business combination target in any industry, we currently intend to concentrate our efforts in identifying high-quality businesses with transformative technologies for industrial applications. Within this focus, we will seek to pursue opportunities with market-leading companies, including from corporate spin-outs, closely-held companies, and institutionally-backed businesses. We believe we will be able to provide significant value due to our ability to drive growth, global scaling and profitability in companies, along with our flexibility in understanding and addressing complex business situations and structures.
Anzu Partners
Anzu Partners was founded in 2014 and is an investment firm that focuses on industrial and life sciences technology companies with potential to transform their industries. Through its team of over 45 professionals, Anzu Partners manages approximately $400 million in capital commitments across two venture funds, a revenue-based investing (“RBI”) mezzanine fund and a set of special purpose vehicles (“SPVs”). The venture capital funds focus on investments in early-stage companies, ranging from pre-revenue to post-commercialization, primarily in the U.S. and Canada with selective investments in Europe and Asia Pacific. RBI provides capital as an alternative to traditional venture and debt financing that supports post-revenue companies across North America, Europe and Asia Pacific. Each SPV typically focuses on investments in a single target portfolio company. The SPVs have each invested in one target asset, which are varied in type, including real estate and operating companies.
Anzu Partners has a robust team of investment, technical, and operational professionals to drive results for its portfolio companies and investors. Anzu’s principals, several of whom are BCG alumni, have over 60 years of combined experience as global investors and consultants, and have built a commercial support network spanning key industrial markets across the globe.
Our Management Team, Board and Advisors
Management Team
Our management team at Anzu Special Acquisition Corp I is led by our Chairman, William Wulfsohn, our Chief Executive Officer, Dr. Whitney Haring-Smith, our Chief Financial Officer, John W. Joy, and our General Counsel, Peter J. Ganz, who combined have over 80 years of experience in advising, investing in and running private and public companies across a broad range of industries and sectors, as well as leading complex divestitures and spin-outs.
Mr. Wulfsohn is the former Chief Executive Officer and Chairman of Ashland, where he led Ashland’s transition to a focused specialty chemicals company and oversaw multiple spinouts and divestitures.
This included the successful $5.3 billion separation of Valvoline, where Mr. Wulfsohn served as the founding chairman for the first year. Prior to Ashland, he was the President and Chief Executive Officer of Carpenter Technology Corporation from 2010-2014. Mr. Wulfsohn currently serves as a board director for Avient, formerly known as PolyOne. He was also previously a consultant with McKinsey & Co. and senior executive with PPG, Honeywell, and Rohm and Haas. Mr. Wulfsohn received his bachelor’s degree from the University of Michigan in Chemical Engineering and his master of business administration from Harvard Business School.
Dr. Haring-Smith is a co-founding managing partner at Anzu Partners, an investment firm focused on industrial technologies and life sciences. At Anzu Partners, he led the acquisition of Axsun Technologies Inc., the Koninklijke Philips N.V. spin-out, returning approximately eight times investors’ invested capital, and MultiMechanics, which was acquired by Siemens in 2019. In addition, he led the IPO-crossover investment into Ai-Media, a global provider of technology-enabled live and recorded captioning, transcription and translation services, led the mezzanine financing for Pivotal Systems Corporation, a gas flow monitoring provider and control technology platform for the global semiconductor industry, and serves on boards of multiple private technology companies. He was formerly a Principal with BCG in San Francisco, Hong Kong, Nigeria and the United Kingdom, where he led transformations for multi-billion-dollar business units of large publicly-traded companies. Dr. Haring-Smith received his bachelor’s degree and master’s degree from Yale University in Political Science and his doctorate from Oxford University as a Rhodes Scholar.
Mr. Joy is the former Vice President of Corporate Development at Ashland, where his significant transaction experience included: the IPO / spin-out of Valvoline ($5.3 billion transaction value); the acquisitions of International Specialty Products ($3.2 billion transaction value) and Hercules ($3.4 billion transaction value); the sales of Ashland Water Technologies ($1.8 billion transaction value), Ashland's composites business and butanediol facility in Marl, Germany ($1 billion transaction value) and Ashland's distribution business ($1 billion transaction value). Prior to Ashland, he was a director at PepsiCo, where he led financial planning and analysis for a $9 billion division. Mr. Joy received his bachelor’s degree from Colgate University in Mathematical Economics and his master of management from Kellogg Graduate School of Management at Northwestern University.
Mr. Ganz is the former Senior Vice President, General Counsel and Secretary and Chief Compliance Officer at Ashland, where he was a member of the executive committee and was responsible for managing Ashland’s legal and corporate governance matters, as well as overseeing Ashland’s ethics and compliance, government relations, risk and insurance and real estate functions. Prior to Ashland, he was Executive Vice President, General Counsel and Secretary at Foster Wheeler, a $5 billion publicly traded company, and General Counsel and Secretary at G-I Holdings (formerly GAF Corporation), a $3.5 billion group of related companies. Mr. Ganz received his bachelor’s degree from Duke University and his juris doctorate from Harvard Law School.
Our Board
In addition to Messrs. Wulfsohn and Haring-Smith, at the closing of this offering, our board will be comprised of Teresa A. Harris, Priya Cherian Huskins and Susan J. Kantor, each of whom is independent.
Ms. Harris is a finance, strategy and business development executive with experience in industrial technology software. She has served on the board of directors of Altair since 2016, including during its IPO process and listing on the NASDAQ in 2017. She is chair of the compensation committee and a member of the audit and M&A committees. Ms. Harris is also on the board of USA Climbing, Landmark West and a private technology company, Bungie, which created the Halo and Destiny video game franchises. She was formerly the senior-most U.S. executive for strategy finance and M&A for Vivendi, the $30 billion European media company, where she was a lead negotiator of a $5.8 billion transaction with NBC Universal. Ms. Harris received her bachelor’s degree from Stanford University in Economics and her master of business administration from Yale School of Management in Finance.
Ms. Huskins is an executive advisor for public companies and fast-growing private companies on risk mitigation. She is currently a partner and senior vice president at Woodruff Sawyer, where she has been focused on Director & Officer (D&O) insurance since 2003. In addition to serving on the board of Woodruff Sawyer, Ms. Huskins also serves on the board of Realty Income Corporation, an S&P 500 public company,
where she serves on the corporate governance and nominating committee and is the Chair of the compensation committee. She also serves on the board of NMI Holdings, Inc. and is an advisory board member of the Stanford Rock Center for Corporate Governance. She is a former senior associate at Wilson Sonsini Goodrich & Rosati (WSGR), a prominent law firm, where she advised companies on M&A and corporate law transactions. Ms. Huskins received her bachelor’s degree from Harvard College and her juris doctorate from the University of Chicago Law School.
Ms. Kantor has experience leading international finance, tax, treasury, risk, compliance and technology enablement for global services organizations. She is a former National Advisory Partner for PwC, a former CFO and Treasurer for PRTM, and a former CFO at Monitor Group. During her time at PRTM, she completed several successful M&A transactions in the U.S. and abroad, including the sale of PRTM to PwC. Ms. Kantor previously served as an executive with Parexel, a clinical research organization, and the Boston Consulting Group. Ms. Kantor is currently on the board of Teknor Apex, a billion dollar privately-held material science company, Guest Services, a hospitality company, Point Pleasant Resort, and she serves as the audit committee chair for the International Council on Clean Transportation (ICCT). Ms. Kantor previously served as a board director for Lionbridge Technologies when it was a $550 million publicly held company. She received her bachelor’s degree from Grove City College in Accounting and Business Administration and her CPA in MA.
Please see “Management—Directors, Director Nominees and Officers” for additional information.
Anzu Partners Advisory Board
Anzu Partners maintains an overall firm-level advisory board that we believe will be useful in the sourcing of potential business combination opportunities. The advisory board is comprised of Arindam Bhattacharya, Adm. (ret.) David Buss, Steve Chai, Michael Danaher, David Dean, Carl Eibl, Bob Galyen, Curtis Maas, Takashi Mitachi, Ron Nicol, Stacey Olson, Dr. Norah Shire and Dr. Jimmy Williams.
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Mr. Bhattacharya is a Senior Partner at BCG and former head of the firm’s India and co-leader of Global Advantage practices. He received his PhD and master of science in manufacturing engineering from the University of Warwick, his master of business administration from the Indian Institute of Management (Ahmedabad), and his bachelor’s degree in engineering from the Indian Institute of Technology (Kharagpur).
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Vice Adm. (ret.) Buss held numerous leadership positions in the U.S. Navy, where he served for 37 years, most recently as the Commander, Naval Air Forces, the Navy’s “Air Boss,” managing billions of dollars of naval air assets. He is currently the Chief Executive Officer of OpenDrives, Inc., a Los Angeles-based data storage technology company after previously serving as President of Cubic Global Defense, Inc., a unit of Cubic Corporation, where he led all aspects of Cubic's global military training business. Admiral Buss received his bachelor’s degree in physics from the U.S. Naval Academy.
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Mr. Chai is a former BCG Senior Partner and Managing Director of BCG’s Korea business, where he advised many of the largest Korean conglomerates on strategy and organizational performance. He is an independent outside board member for AIA Korea and LG International. He has advanced degrees in engineering from the University of Southern California, and he received his master of business administration from Wharton School of Business at the University of Pennsylvania.
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Mr. Danaher is a senior partner with Wilson Sonsini, a leading global law firm. His practice focuses on assisting a wide range of emerging technology companies, their senior executives and boards. Mr. Danaher received his bachelor’s degree from Yale University and his juris doctorate from Stanford Law School where he received the Order of Coif.
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Dr. Dean is a former Senior Partner at BCG and former head of the firm’s Global Technology & Telecoms practice. Based in Munich, he is now a Senior Advisor to the firm, and also acts as an independent advisor to technology firms in Europe and elsewhere. He is the Chairman of the Supervisory Board of SUSS MicroTec SE, a leading supplier semiconductor manufacturing equipment and in addition serves as an Independent Director with several Axiata Group Berhad companies in Southeast Asia. He has a PhD in physics from Oxford University.
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Mr. Eibl is a Venture Partner at Anzu Partners. Mr. Eibl has over a decade of experience supporting materials, software & analytics, and semiconductor-related businesses, including with Maxwell Technologies (acquired by Tesla in 2019), Stratagene Corporation (acquired by Agilent in 2007), and Mycogen Corporation (acquired by Dow Chemical Company in 1998). Mr. Eibl is a former Chairman of The Sanford Burnham Prebys Medical Discovery Institute and a former Vice Chairman of the board of CONNECT. He has been a member of the San Diego Coastal Chapter of the Young Presidents Organization (YPO) since 1994. Carl holds a juris doctorate from Boston University School of Law and a bachelor’s degree and master’s degree from Cornell University.
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Mr. Galyen has served successfully in numerous leadership roles, including as Chief Technology Officer of Contemporary Amperex Technology Ltd. (CATL), one of the world’s largest battery producers. Mr. Galyen previously served as a senior executive at Magna International, and staff levels of Delphi and GM. Mr. Galyen received bachelor’s degrees in biological sciences and chemistry and his master’s degree in chemistry from Ball State University. He is on the Lugar Center for Renewable Energy and the Dean’s Executive Advisory Board for Ball State University.
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Mr. Maas is an experienced business executive and investor, and is the Chairman and CEO of the RDI Group, a diversified manufacturer. He serves on the board of Nuburu Inc., TCA and various other companies. Currently he is Board Chair of Quest Academy in Palatine, Illinois, and a board member and long-time supporter of Junior Achievement of Chicago, a non-profit organization. Mr. Maas holds a bachelor of science degree in mechanical engineering from Northwestern University and a master of business administration from the University of Chicago.
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Mr. Mitachi is the former Chairman of BCG Japan and currently serves on the boards of several major Japanese and international corporations, including DMG Mori, Rakuten, Unicharm Tokio Marine Holdings, and Lotte Holdings. He has a master of business administration from Harvard Business School and a bachelor’s degree from Kyoto University.
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Mr. Nicol is a former Chairman of BCG North America, where he also served as global leader of the Organization practice and global leader of the Technology, Media & Telecommunications practice. He is on the board of Austin Industries, one of the largest construction companies in the United States. Mr. Nicol is the Chairman Emeritus of the Fuqua School of Business at Duke University, where he also received his master of business administration. He received his bachelor's degree in physics from the U.S. Naval Academy, and he is a board member of the United States Naval Academy Foundation.
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Ms. Olson is an energy executive with experience in strategy development, technical innovation, cost management, safety and operational performance. She served as operational executive for Chevron in Appalachia (shale), Thailand, United Kingdom, Indonesia, Venezuela, Nigeria, and California, managing units of up to 2000 personnel. Ms. Olson managed multi-billion-dollar capital investment projects in new fields, including the largest steam flood operation in the world. She served as the operational leader during Chevron’s sale of its Appalachian shale assets for approximately $735 million in 2020. She is a member of International Women’s Forum and McKinsey Executive Women in Energy. She began career as drilling engineer at BP. Ms. Olson received her bachelor’s degree in petroleum engineering from Louisiana State University, master of business administration from Tulane University, and honorary doctorate from Waynesburg University.
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Dr. Shire has served successfully in numerous leadership roles at AstraZeneca, most recently as Global Clinical Program Lead for immuno-oncology. She previously worked as an executive MedImmune and Merck. Dr. Shire received her bachelor’s degree from Williams College, her master of public health from Johns Hopkins, and her PhD in biostatistics and epidemiology from the University of Cincinnati College of Medicine.
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Dr. Williams is the Executive Director for the Engineering & Technology Innovation Management program at Carnegie Mellon University. He is a former Vice President of Global
Engineering for Pall Corporation, Senior Director of Global Technology Advantage for Alcoa, and Director of Manufacturing for Boeing. He currently serves on the board of Innovation Works Pittsburgh. Dr. Williams received his bachelor’s degree in Mechanical Engineering from Texas A&M, his master of business administration from Lindenwood College, and his PhD in Technology Strategy from Washington University in St. Louis.
Anzu Partners’ Advisory Board members will not perform board or committee functions, nor will they have any voting or decision-making capacity on our behalf. They will also not be subject to the fiduciary requirements to which our board members are subject. Anzu Partners may modify or expand its roster of Advisory Board members as we source potential business combination targets or create value in businesses that we may pursue or acquire. In addition, Anzu Partners presently retains additional advisors not listed above who may or may not be useful in the pursuit of a business combination.
Our Market Opportunity
We believe that technology and globalization are creating enormous opportunities for disruption and value creation in industrial markets. Many of these technologies can be transformative for industrial markets but require the right expertise and global connections to leverage the opportunities within the public markets.
Within the broader market space of industrial technology, we intend to focus on three primary sources for a business combination:
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Industrial technology leaders. The Company intends to leverage its relationships in the venture capital and private equity communities to identify market leading businesses whose preferred path is entry into the public markets. We believe that market leading businesses may view the public markets as a more attractive exit relative to a sale of the business because of the opportunity to continue to grow independently with access to public market capital.
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Corporate spin-outs. We believe that spin-out targets provide distinct advantages to a SPAC transaction and that our team has the capability to drive attractive risk-adjusted returns. We also believe that there are a large number of high-value spin-out opportunities as a result of significant historical industry consolidation and other driving forces, such as increasing antitrust and foreign compliance activities. In addition, these corporate units, unlike many early-stage companies, have well-developed financial profiles that are often sizeable and profitable on a standalone basis, allowing them to more easily sustain public scrutiny. Similarly, established corporate units typically have strong internal compliance processes already in place, allowing them to more easily fulfill the requirements of public markets. We believe we have the support infrastructure required to assist a divestiture target in its transition away from a corporate parent, particularly given that our management team has significant experience in divestitures, spin-outs and post-merger integrations, including at the BCG and Ashland.
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Closely-held companies. We believe that many industrial technology leaders have developed themselves as closely held entities. These businesses, whether founder-led or family-owned, face some of the same challenges of a corporate spin-out as a potentially new public entity. We view our skillsets as former management consultants and business leaders who have successfully brought companies into the public markets as competitive advantages in identifying, underwriting and combining with these businesses.
Our Mission
Our mission is to identify, combine and maximize the value of businesses that focus on market-leading industrial technology companies, including corporate spin-outs, closely-held companies and institutionally-backed businesses. We will seek to identify high-quality businesses, particularly businesses with transformative technologies for industrial applications, and use our company-building expertise and network of technical and corporate connections to drive innovation into large industrial markets.
We are confident that we can provide a number of significant benefits to potential targets and public market investors that can potentially lead to attractive long-term risk-adjusted returns in the public markets. These benefits include, but are not limited to, the following:
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Team. Our board of directors is led by an executive with a decade of public company operational leadership experience, supported by an experienced transaction team with global reach to identify business combination targets;
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Track record. Our team members have led and executed multiple global transactions, have managed IPO spin-outs with over $5 billion in enterprise value and have handled divestitures—going beyond the textbook and into the practice of getting transactions done at scale in the public market;
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While in the Anzu Partners’ portfolio, Axsun grew sales by approximately 50% while achieving profitability, and under Dr. Haring-Smith’s investment leadership, Axsun exited with approximately eight times investors’ invested capital; and
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Mr. Wulfsohn, Mr. Joy and Mr. Ganz served on the executive team during Ashland’s successful transformation from a conglomerate to a focused, high-margin specialty chemicals company.
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Public company experience. Our management team and board of directors have decades of public company leadership experience, including the IPO spin-out of Valvoline from Ashland Global Holdings, the IPO of Altair and two foreign-listed IPOs;
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Technical expertise. Our team has deep technical knowledge to be able to assess the long-term competitiveness of industrial technologies, with the Anzu Partners’ team collectively holding over eight PhDs—from Georgia Tech, MIT, Oxford University (UK), Stanford, University of California Los Angeles, University of California San Diego and University of Texas at Austin; and
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Global network. Our management team, board and advisory board and their affiliates have developed a broad network of contacts and corporate relationships, including deep networks in industrial technology and global management consulting.
Our Acquisition and Value Creation Strategy
We believe our management team is well positioned to identify distinctive opportunities, primarily in the United States, across the industrial technology space, including corporate spin-outs, closely-held companies, and institutionally-backed businesses. We intend to leverage our team’s extensive network and deep technical and commercial knowledge to source potential targets and create value following the completion of the initial business combination, including the following:
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Deep technical knowledge to assess long-term competitiveness of industrial technologies and spin-outs;
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Familiarity with private companies—particularly closely-held and institutionally-backed businesses—that are less likely to pursue independent IPOs; and
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Experience in public markets to be a trusted counterparty in a target company’s transition to the public markets and a strong supporting platform of personnel to assist in launch of public entity.
We also believe that Anzu Partners’ experience and track record in the industrial technology space, as well as our management team’s understanding of complex business situations and structures, will make us a preferred partner for these potential targets.
Consistent with our strategy, we will seek to identify companies that have compelling growth potential and a combination of the following characteristics. We will use these criteria and guidelines in evaluating business combination opportunities, but we may decide to pursue and consummate an initial business combination with a target business that does not meet the following criteria and guidelines. We intend to pursue target businesses that we believe possess, among others:
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significant market share in leading growth segments;
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financial scale required to stand as an independent public company;
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sustained historical growth over multiple years within major markets;
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established management teams who have experience running businesses at scale and that we believe are ready to enter the public markets; and
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clear current financial metrics that can drive valuation and support value expansion in the public markets.
Any evaluation relating to the merits of a particular initial business combination target may be based on these general criteria and guidelines as well as other considerations, factors and criteria that our management team may deem relevant in its discretion.
Additional Disclosures
Our Acquisition Process
We have not selected any business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target. Certain members of our management team are employed by either Anzu Partners or one of its affiliates. Anzu Partners is continuously made aware of potential business opportunities, one or more of which we may desire to pursue, for our initial business combination, but we have not (nor has anyone on our behalf) contacted, or had any discussions, formal or otherwise with, any prospective target business with respect to a business combination transaction with us.
All of our officers and certain of our directors have fiduciary and contractual duties to either Anzu Partners and to certain companies in which it has invested or to certain other entities. These entities may compete with us for acquisition opportunities. While the risk is partially mitigated as a result of Anzu Partners’ venture funds seeking targets of different enterprise sizes than us, if these entities decide to pursue any such opportunity, we may be precluded from pursuing such opportunities. Subject to his or her fiduciary duties under applicable law, none of the members of our management team who are also employed by our sponsor or its affiliates have any obligation to present us with any opportunity for a potential business combination of which they become aware. Our sponsor and directors and officers are also not prohibited from sponsoring, investing or otherwise becoming involved with, any other blank check companies, including in connection with their initial business combinations, prior to us completing our initial business combination. Our management team, in their capacities as directors, officers or employees of our sponsor or its affiliates or in their other endeavors, may choose to present potential business combinations to the related entities described above, current or future entities affiliated with or managed by our sponsor, or third parties, before they present such opportunities to us, subject to his or her fiduciary duties under applicable law and any other applicable fiduciary duties. Our amended and restated certificate of incorporation 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 the company and it is an opportunity that we are able to complete on a reasonable basis. In addition, Messrs. Wulfsohn, Joy and Ganz are subject to certain non-compete agreements or other obligations with respect to Ashland. For more information, see the section entitled “Management—Conflicts of Interest.”
Our directors and officers presently have, and any of them in the future may have, additional, fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present a business combination opportunity to such entity. Accordingly, if any of our directors or officers becomes aware of a business combination opportunity that is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, he or she may need to honor these fiduciary or contractual obligations to present such business combination opportunity to such entity, subject to his or her fiduciary duties under applicable law. Our directors and officers are also not required to commit any specified amount of time to our affairs, and, accordingly, will have conflicts of interest in allocating management time among various business activities, including identifying potential business combinations and monitoring the related due diligence. See “Risk Factors—Certain of our directors and officers are now,
and all of them may in the future become, affiliated with entities engaged in business activities similar to those intended to be conducted by us and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should be presented.”
We do not believe, however, that the fiduciary duties or contractual obligations of our directors or officers will materially adversely affect our ability to identify and pursue business combination opportunities or complete our initial business combination.
You should not rely on the historical record of our founders’ and management’s performance as indicative of our future performance. See “Risk Factors—Past performance by our management team and their respective affiliates may not be indicative of future performance of an investment in the company.”
Initial Business Combination
Nasdaq rules require that our initial business combination must be with one or more operating businesses or assets with a fair market value equal to at least 80% of the net assets held in the trust account (net of amounts disbursed to management for working capital purposes, if permitted, and excluding the amount of any deferred underwriting discount held in trust). We refer to this as the 80% of net assets test. If our board of directors is not able independently to determine the fair market value of the target business or businesses, we may obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions with respect to the satisfaction of such criteria. Although we may purchase multiple businesses in related industries in connection with our initial business combination, we do not currently intend to purchase multiple businesses in unrelated industries in conjunction with our initial business combination, although there is no assurance that will be the case.
We anticipate structuring our initial business combination so that the post-transaction company in which our public stockholders own shares will own or acquire 100% of the issued and outstanding equity interests or assets of the target business or businesses. We may, however, structure our initial business combination such that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management team or stockholders or for other reasons, but we will only complete such business combination if the post-transaction company owns or acquires 50% or more of the issued and outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended (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 our initial business combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in our initial business combination transaction. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the issued and outstanding capital stock, shares or other equity securities of a target, or issue a substantial number of new shares to third-parties in connection with financing our initial business combination. In this case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our stockholders immediately prior to our initial business combination could own less than a majority of our issued and outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% of net assets test. If our initial business combination involves more than one target business, the 80% of net assets test will be based on the aggregate value of all of the target businesses. Notwithstanding the foregoing, if we are not then listed on Nasdaq for whatever reason, we would no longer be required to meet the foregoing 80% of net assets test.
Prior to the effectiveness of the registration statement of which this prospectus forms a part, we will file a Registration Statement on Form 8-A with the SEC to voluntarily register our securities under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). As a result, we will be subject to the rules and regulations promulgated under the Exchange Act. We have no current intention of filing a Form 15 to suspend our reporting or other obligations under the Exchange Act prior or subsequent to the consummation of our initial business combination.
Corporate Information
We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the 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.
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 the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our shares of common stock that is held by non-affiliates exceeds $700 million as of the end of that year’s second fiscal quarter, and (2) the date on which we have issued more than $1.00 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 Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our shares of common stock held by non-affiliates exceeds $250 million as of the end of that year’s second fiscal quarter, or (2) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our shares of common stock held by non-affiliates exceeds $700 million as of the end of that year’s second fiscal quarter.
We are a Delaware corporation incorporated on December 28, 2020. Our executive offices are located at 12610 Race Track Road, Suite 250 Tampa, FL 33626 and our telephone number is (202) 742-5870. Upon completion of this offering, our corporate website address will be www.AnzuSPAC.com. Our website and the information contained on, or that can be accessed through, the website is not deemed to be incorporated by reference in, and is not considered part of, this prospectus or the registration statement of which this prospectus is a part. You should not rely on any such information in making your decision whether to invest in our securities.
We are a newly incorporated company that has conducted no operations and has generated no revenues. Until we complete our initial business combination, we will have no operations and will generate no operating revenues. In making your decision whether to invest in our securities, you should take into account not only the background of our management team, but also the special risks we face as a blank check company. This offering is not being conducted in compliance with Rule 419 promulgated under the Securities Act. Accordingly, you will not be entitled to protections normally afforded to investors in Rule 419 blank check offerings. For additional information concerning how Rule 419 blank check offerings differ from this offering, please see “Proposed Business—Comparison of This Offering to Those of Blank Check Companies Subject to Rule 419.” You should carefully consider these and the other risks set forth in the section entitled “Risk Factors” included elsewhere in this prospectus.
Sourcing of Potential Business Combination Targets
We believe our management team’s significant 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 around the world. This network has grown through the activities of our management team sourcing, acquiring, financing and selling 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.
We believe this network provides our management team with a robust and consistent flow of acquisition opportunities which were proprietary or where a limited group of investors were invited to participate in the sale process. We believe that the network of contacts and relationships of our management team will provide us with important sources of acquisition opportunities. In addition, we anticipate that target business candidates will be brought to our attention from various unaffiliated sources, including investment market participants, private equity funds and large business enterprises seeking to divest non- core assets or divisions.
We are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor, directors or officers, or making the acquisition through a joint venture or other form of shared ownership with our sponsor, directors or officers. In the event we seek to complete an initial business combination with a target that is affiliated with our sponsor, directors or officers, we, or a committee of independent and disinterested directors, would obtain an opinion from an independent investment banking firm or another valuation or appraisal firm that regularly renders fairness opinions on the type of target business we are seeking to acquire that such an initial business combination is fair to our company from a financial point of view. We are not required to obtain such an opinion in any other context.
As more fully discussed in “Management—Conflicts of Interest,” if any of our directors or officers becomes aware of a business combination opportunity that falls within the line of business of any entity to which he or she has pre-existing fiduciary or contractual obligations, including Anzu Partners, he or she may be required to present such business combination opportunity to such entity prior to presenting such business combination opportunity to us. Our directors and officers currently have fiduciary duties or contractual obligations that may take priority over their duties to us.
Mail addressed to the Company and received at its registered office will be forwarded unopened to the forwarding address supplied by the Company to be dealt with. None of the Company or its directors, officers, advisors or service providers (including the organization which provides registered office services in the State of Delaware) will bear any responsibility for any delay howsoever caused with regards to mail reaching the forwarding address.
Status as a Public Company
We believe our structure will make us an attractive business combination partner to target businesses. As an existing public company, we offer target businesses an alternative to the traditional initial public offering through a merger, share exchange, asset acquisition, stock purchase, reorganization or similar business combination. In this situation, the owners of the target business would exchange their equity securities, shares or shares of stock in the target business for our shares or for a combination of our shares 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 certain and cost effective method to becoming a public company than the typical initial public offering. In a typical initial public offering, there are additional expenses incurred in marketing, road show and public reporting efforts that may not be present to the same extent in connection with a business combination with us.
Furthermore, once a proposed business combination is completed, the target business will have effectively become public, whereas an initial public offering is always subject to the underwriters’ ability to complete the offering, as well as general market conditions, which could delay or prevent the offering from occurring. Once public, we believe the target business would then have greater access to capital and an additional means of providing management incentives consistent with stockholders’ interests. It can offer further benefits by augmenting a company’s profile among potential new customers and vendors and aid in attracting talented employees.
We are an “emerging growth company,” as defined in the JOBS Act. We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our shares of common stock that is held by non-affiliates exceeds $700 million as of the end of that year’s second fiscal quarter, and (2) the date on which we have issued more than $1.00 billion in non-convertible debt securities during the prior three-year period.
Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our shares of common stock held by non-affiliates exceeds $250 million as of the end of that year’s second fiscal quarter, or (2) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our shares of common stock held by non-affiliates exceeds $700 million as of the end of that year’s second fiscal quarter.
Financial Position
With funds available for a business combination initially in the amount of $339,750,000 assuming no redemptions and after payment of $12,250,000 of deferred underwriting fees (or $390,412,500 assuming no redemptions and after payment of up to $14,087,500 of deferred underwriting fees if the underwriters’ over- allotment option is exercised in full), in each case, after estimated offering expenses of $2,000,000 (and prior to any post-IPO working capital expenses), we offer a target business a variety of options such as creating a liquidity event for its owners, providing capital for the potential growth and expansion of its operations or strengthening its balance sheet by reducing its debt ratio. Because we are able to complete our initial business combination using our cash, debt or equity securities, or a combination of the foregoing, we have the flexibility to use the most efficient combination that will allow us to tailor the consideration to be paid to the target business to fit its needs and desires. However, we have not taken any steps to secure third- party financing and there can be no assurance it will be available to us.
Effecting Our Initial Business Combination
We are not presently engaged in, and we will not engage in, any operations for an indefinite period of time following this offering. We intend to effectuate our initial business combination using cash from the proceeds of this offering and the sale of the private placement warrants, our shares, debt or a combination of these as the consideration to be paid in our initial business combination. 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, 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 the redemptions of our public shares, we may apply the balance of the cash released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations of the post-transaction company, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working capital.
We have not selected any business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target.
We may seek to raise additional funds through a private offering of debt or equity securities in connection with the completion of our initial business combination, and we may effectuate our initial business combination using the proceeds of such offering rather than using the amounts held in the trust account.
In the case of an initial business combination funded with assets other than the trust account assets, our tender offer documents or proxy materials disclosing the business combination would disclose
the terms of the financing and, only if required by law or we decide to do so for business or other reasons, we would seek stockholder approval of such financing. There are no prohibitions on our ability to raise funds privately or through loans in connection with our initial business combination. At this time, we are not a party to any arrangement or understanding with any third party with respect to raising any additional funds through the sale of securities or otherwise.
Selection of a target business and structuring of our initial business combination
Nasdaq rules require that our initial business combination must be with one or more operating businesses or assets with a fair market value equal to at least 80% of the net assets held in the trust account (net of amounts disbursed to management for working capital purposes, if permitted, and excluding the amount of any deferred underwriting discount held in trust). We refer to this as the 80% of net assets test. The fair market value of the target or targets 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 or value of comparable businesses. If our board of directors is not able independently to determine the fair market value of the target business or businesses, we may obtain an opinion from an independent investment banking firm, or another independent entity that commonly renders valuation opinions, with respect to the satisfaction of such criteria. Although we may purchase multiple businesses in related industries in connection with our initial business combination, we do not currently intend to purchase multiple businesses in unrelated industries in conjunction with our initial business combination, although there is no assurance that will be the case. 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 solely with another blank check company or a similar company with nominal operations.
In any case, we will only complete an initial business combination if the post-transaction company owns or acquires 50% or more of the issued and outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for it not to be required to register as an investment company under the Investment Company Act. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% of net assets test. There is no basis for investors in this offering 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 a prospective target business, we expect to conduct a thorough due diligence review which may encompass, among other things, meetings with incumbent management and employees, document reviews, inspection of facilities, as well as a review of financial, operational, legal and other information, which will be made available to us.
The time required to select and evaluate a target business and to structure and complete our initial business combination, and the costs associated with this process, are not currently ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation of a prospective target business with which our initial business combination is not ultimately completed will result in our incurring losses and will reduce the funds we can use to complete another business combination.
Lack of business diversification
For an indefinite period of time after the completion of our initial business combination, the prospects for our success may depend entirely on the future performance of a single business. Unlike other entities that have the resources to complete business combinations with multiple entities in one or several industries, it is probable that we will not have the resources to diversify our operations and mitigate the risks of being in a single line of business.
By completing our initial business combination with only a single entity our lack of diversification may subject us to numerous economic, competitive and regulatory risks. Further, we would not be able to diversify our operations or benefit from the possible spreading of risks or offsetting of losses, unlike other entities which may have the resources to complete several business combinations in different industries or different areas of a single industry.
Accordingly, the prospects for our success may be:
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solely dependent upon the performance of a single business, property or asset; or
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dependent upon the development or market acceptance of a single or limited number of products, processes or services.
This lack of diversification may subject us to numerous economic, competitive and regulatory risks, any or all of which may have a substantial adverse impact upon the particular industry in which we may operate subsequent to our initial business combination.
Limited ability to evaluate the target’s management team
Although we intend to closely scrutinize the management of a prospective target business when evaluating the desirability of effecting our initial business combination with that business, our assessment of the target business’s management may not prove to be correct. In addition, the future management may not have the necessary skills, qualifications or abilities to manage a public company. Furthermore, the future role of members of our management team, if any, in the target business cannot presently be stated with any certainty. 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 cannot assure you that any of our key personnel will remain in senior management or advisory positions with the combined company. The determination as to whether any of our key personnel will remain with the combined company will be made at the time of our initial business combination.
Following our initial business combination, we may seek to recruit additional managers to supplement the incumbent management of the target business. We cannot assure you that we will have the ability to recruit additional managers, or that additional managers will have the requisite skills, knowledge or experience necessary to enhance the incumbent management.
Stockholders may not have the ability to approve our initial business combination
We may conduct redemptions without a stockholder vote pursuant to the tender offer rules of the SEC. However, we will seek stockholder approval if it is required by applicable law or stock exchange rule, or we may decide to seek stockholder approval for business or other reasons. Presented in the table below is a graphic explanation of the types of initial business combinations we may consider and whether stockholder approval is currently required under Delaware law for each such transaction.
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Type of Transaction
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Whether
Stockholder
Approval is
Required
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Purchase of assets
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No
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Purchase of stock of target not involving a merger with the company
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No
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Merger of target into a subsidiary of the company
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No
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Merger of the company with a target
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Yes
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Under Nasdaq’s listing rules, stockholder approval would be required for our initial business combination if, for example:
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we issue (other than in a public offering for cash) shares of common stock that will either (a) be equal to or in excess of 20% of the number of shares of our Class A common stock then issued and outstanding (other than in a public offering);
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any of our directors, officers or substantial security holders (as defined by the rules of Nasdaq) has a 5% or greater interest, directly or indirectly, in the target business or assets to be acquired and if the number of shares of common stock to be issued, or if the number of shares of common stock into which the securities may be convertible or exercisable, exceeds either (a) 1% of the number of shares of common stock or 1% of the voting power outstanding before the issuance in the case of any of our directors and officers or (b) 5% of the number of shares of common stock or 5% of the voting power issued and outstanding before the issuance in the case of any substantial security holders; or
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the issuance or potential issuance of shares of common stock will result in our undergoing a change of control.
The decision as to whether we will seek stockholder approval of a proposed business combination in those instances in which stockholder approval is not required by law will be made by us, solely in our discretion, and will be based on business and legal reasons, which include a variety of factors, including, but not limited to:
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the timing of the transaction, including in the event we determine stockholder approval would require additional time and there is either not enough time to seek stockholder approval or doing so would place the company at a disadvantage in the transaction or result in other additional burdens on the company;
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the expected cost of holding a stockholder vote;
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the risk that the stockholders would fail to approve the proposed business combination;
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other time and budget constraints of the company; and
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additional legal complexities of a proposed business combination that would be time-consuming and burdensome to present to stockholders.
Permitted purchases and other transactions with respect to our securities
In the event we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, directors, officers, advisors or any of their respective affiliates may purchase public shares or warrants in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination. There is no limit on the number of securities such persons may purchase. Additionally, at any time at or prior to our initial business combination, subject to applicable securities laws (including with respect to material nonpublic information), our sponsor, directors, officers, advisors or any of their respective affiliates may enter into transactions with investors and others to provide them with incentives to acquire public shares, vote their public shares in favor of our initial business combination or not redeem their public shares. However, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds held in the trust account will be used to purchase public shares or warrants in such transactions. Such persons will be subject to restrictions in making any such purchases when they are in possession of any material non-public information or if such purchases are prohibited by Regulation M under the Exchange Act. Such a purchase may include a contractual acknowledgement that such stockholder, although still the record holder of our shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. We will adopt an insider trading policy which will require insiders to (1) refrain from purchasing securities during certain blackout periods and when they are in possession of any material non-public information and (2) clear certain trades prior to execution. We cannot currently determine whether our insiders will make such purchases pursuant to a Rule 10b5-1 plan, as it will be dependent upon several factors, including but not limited to, the timing and size of such purchases. Depending on such circumstances, our insiders may either make such purchases pursuant to a Rule 10b5-1 plan or determine that such a plan is not necessary.
In the event that our sponsor, directors, officers, advisors or any of their respective affiliates purchase shares in privately negotiated transactions from public stockholders who have already elected to exercise their redemption rights or submitted a proxy to vote against our initial business combination, such selling stockholders would be required to revoke their prior elections to redeem their shares and any proxy to vote against our initial business combination. We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will be required to comply with such rules.
The purpose of such transaction could be to (1) vote in favor of our initial business combination and thereby increase the likelihood of obtaining stockholder approval of our initial business combination, (2) reduce the number of public warrants outstanding or vote such warrants on any matters submitted to the warrant holders for approval in connection with our initial business combination or (3) satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met. This may result in the completion of our initial business combination that may not otherwise have been possible.
In addition, if such purchases are made, the public “float” of our securities and the number of beneficial holders of our securities may be reduced, possibly making it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.
Our sponsor, directors, officers, advisors and/or any of their respective affiliates anticipate that they may identify the stockholders with whom our sponsor, directors, officers, advisors or any of their respective affiliates may pursue privately negotiated transactions by either the stockholders contacting us directly or by our receipt of redemption requests submitted by stockholders (in the case of public shares) following our mailing of tender offer or proxy materials in connection with our initial business combination. To the extent that our sponsor, directors, officers, advisors or any of their respective affiliates enter into private transactions, they would identify and contact only potential selling or redeeming stockholders who have expressed their election to redeem their shares for a pro rata share of the trust account or vote against our initial business combination. Such persons would select the stockholders from whom to acquire shares based on the number of shares available, the negotiated price per share and such other factors as any such person may deem relevant at the time of purchase. The price per share paid in any such transaction may be different than the amount per share a public stockholder would receive if it elected to redeem its shares in connection with our initial business combination. Our sponsor, directors, officers, advisors or any of their respective affiliates will be restricted from purchasing shares if such purchases do not comply with Regulation M under the Exchange Act and the other federal securities laws.
Any purchases by our sponsor, directors, officers and/or any of their respective affiliates who are affiliated purchasers under Rule 10b-18 under the Exchange Act will be restricted unless such purchases are made in compliance with Rule 10b-18, which is a safe harbor from liability for manipulation under Section 9(a)(2) and Rule 10b-5 of the Exchange Act. Rule 10b-18 has certain technical requirements that must be complied with in order for the safe harbor to be available to the purchaser. Our sponsor, directors, officers and/or any of their respective affiliates will be restricted from making purchases of shares of common stock if the purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act.
Redemption rights for public stockholders upon completion of our initial business combination
We will provide our public stockholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of the initial business combination, including interest (which interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares, subject to the limitations described herein. At the completion of our initial business combination, we will be required to purchase any shares of common stock properly delivered for redemption and not withdrawn. The amount in the trust account is initially anticipated to be $10.00 per public share. The per-share amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions
we will pay to the underwriters. The redemption rights will include the requirement that a beneficial holder must identify itself in order to validly redeem its shares. There will be no redemption rights upon the completion of our initial business combination with respect to our warrants. Our initial stockholders, directors and officers have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares and public shares held by them in connection with the completion of our initial business combination.
Manner of Conducting Redemptions
We will provide our public stockholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination either (1) in connection with a stockholder meeting called to approve the business combination or (2) by means of a tender offer. The decision as to whether we will seek stockholder approval of a proposed business combination or conduct a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would require us to seek stockholder approval under applicable law or stock exchange listing requirement. Asset acquisitions and stock purchases would not typically require stockholder approval while direct mergers with our company where we do not survive and any transactions where we issue more than 20% of our issued and outstanding shares of common stock or seek to amend our amended and restated certificate of incorporation would typically require stockholder approval. We intend to conduct redemptions without a stockholder vote pursuant to the tender offer rules of the SEC unless stockholder approval is required by applicable law or stock exchange listing requirement or we choose to seek stockholder approval for business or other reasons.
If a stockholder vote is not required and we do not decide to hold a stockholder vote for business or other reasons, we will, pursuant to our amended and restated certificate of incorporation:
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conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers; and
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file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies.
Upon the public announcement of our initial business combination, if we elect to conduct redemptions pursuant to the tender offer rules, we and our sponsor will terminate any plan established in accordance with Rule 10b5-1 to purchase our shares of common stock in the open market, in order to comply with Rule 14 e-5 under the Exchange Act.
In the event we conduct redemptions pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a) under the Exchange Act, and we will not be permitted to complete our initial business combination until the expiration of the tender offer period. In addition, the tender offer will be conditioned on public stockholders not tendering more than a specified number of public shares, which number will be based on the requirement that we may not redeem public shares in an amount that would cause our net tangible assets to be less than $5,000,001 following such redemptions, or any greater net tangible asset or cash requirement that may be contained in the agreement relating to our initial business combination. If public stockholders tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete such initial business combination.
If, however, stockholder approval of the transaction is required by applicable law or stock exchange listing requirement, or we decide to obtain stockholder approval for business or other reasons, we will, pursuant to our amended and restated certificate of incorporation:
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conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules; and
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file proxy materials with the SEC.
We expect that a final proxy statement would be mailed to public stockholders at least 10 days prior to the stockholder vote. However, we expect that a draft proxy statement would be made available to such stockholders well in advance of such time, providing additional notice of redemption if we conduct redemptions in conjunction with a proxy solicitation. Although we are not required to do so, we currently intend to comply with the substantive and procedural requirements of Regulation 14A in connection with any stockholder vote even if we are not able to maintain our Nasdaq listing or Exchange Act registration.
In the event that we seek stockholder approval of our initial business combination, we will distribute proxy materials and, in connection therewith, provide our public stockholders with the redemption rights described above upon completion of the initial business combination.
If we seek stockholder approval, unless otherwise required by applicable law, regulation or stock exchange rules, we will complete our initial business combination only if a majority of the shares of our common stock voted are voted in favor of our initial business combination. A quorum for such meeting will consist of the holders present in person or by proxy of shares of outstanding capital stock of the company representing a majority of the voting power of all outstanding shares of capital stock of the company entitled to vote at such meeting. Shares held by our initial stockholders, officers and directors will be included in determining the presence of a quorum and have agreed to vote any founder shares and any public shares held by them in favor of our initial business combination. These quorum and voting thresholds and agreements, may make it more likely that we will consummate our initial business combination. Each public stockholder may elect to redeem its public shares without voting, and if they do vote, irrespective of whether they vote for or against the proposed transaction. In addition, our sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares and any public shares held by them in connection with the completion of a business combination.
Our amended and restated certificate of incorporation provides that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 following such redemptions. Redemptions of our public shares may also be subject to a higher net tangible asset test or cash requirement pursuant to an agreement relating to our initial business combination. For example, the proposed business combination may require: (1) cash consideration to be paid to the target or its owners; (2) cash to be transferred to the target for working capital or other general corporate purposes; or (3) the retention of cash to satisfy other conditions in accordance with the terms of the proposed business combination. In the event the aggregate cash consideration we would be required to pay for all public shares that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares, and all shares of common stock submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business combination.
Limitation on redemption upon completion of our initial business combination if we seek stockholder approval
Notwithstanding the foregoing redemption rights, if we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to Excess Shares, without our prior consent. We believe this restriction will discourage stockholders from accumulating large blocks of shares, and subsequent attempts by such holders to use their ability to exercise their redemption rights against a proposed business combination as a means to force us or our sponsor or its affiliates to purchase their shares at a significant premium to the then-current market price or on other undesirable terms. Absent this provision, a public stockholder holding more than an aggregate of 15% of the shares sold in this offering could threaten to exercise its redemption rights if such holder’s shares are not purchased by us or our sponsor or its affiliates at a premium to the then-current market price or on other undesirable terms. By limiting our stockholders’ ability to redeem no more than 15% of the shares sold in this offering, we believe we will limit the ability of a small group of stockholders to unreasonably attempt to block our ability to complete
our initial business combination, particularly in connection with a business combination with a target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. However, we would not be restricting our stockholders’ ability to vote all of their shares (including Excess Shares) for or against our initial business combination.
Tendering stock certificates in connection with a tender offer or redemption rights
We may require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to either tender their certificates to our transfer agent prior to the date set forth in the tender offer documents or proxy materials mailed to such holders, or up to two business days prior to the scheduled vote on the proposal to approve the business combination in the event we distribute proxy materials, or to deliver their shares to the transfer agent electronically using The Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, rather than simply voting against the initial business combination. The tender offer or proxy materials, as applicable, that we will furnish to holders of our public shares in connection with our initial business combination will indicate whether we are requiring public stockholders to satisfy such delivery requirements, which will include the requirement that a beneficial holder must identify itself in order to validly redeem its shares. Accordingly, a public stockholder would have from the time we send out our tender offer materials until the close of the tender offer period, or up to two business days prior to the scheduled vote on the business combination if we distribute proxy materials, as applicable, to tender its shares if it wishes to seek to exercise its redemption rights. Pursuant to the tender offer rules, the tender offer period will be not less than 20 business days and, in the case of a stockholder vote, a final proxy statement would be mailed to public stockholders at least 10 days prior to the stockholder vote. However, we expect that a draft proxy statement would be made available to such stockholders well in advance of such time, providing additional notice of redemption if we conduct redemptions in conjunction with a proxy solicitation. Given the relatively short exercise period, it is advisable for stockholders to use electronic delivery of their public shares.
There is a nominal cost associated with the above-referenced tendering process and the act of certificating the shares or delivering them through the DWAC System. The transfer agent will typically charge the tendering broker a fee of approximately $80.00 and it would be up to the broker whether or not to pass this cost on to the redeeming holder. However, this fee would be incurred regardless of whether or not we require holders seeking to exercise redemption rights to tender their shares. The need to deliver shares is a requirement of exercising redemption rights regardless of the timing of when such delivery must be effectuated.
In order to perfect redemption rights in connection with their business combinations, some blank check companies would distribute proxy materials for the stockholders’ vote on an initial business combination, and a holder could simply vote against a proposed business combination and check a box on the proxy card indicating such holder was seeking to exercise his or her redemption rights. After the business combination was approved, the company would contact such stockholder to arrange for him or her to deliver his or her certificate to verify ownership. As a result, the stockholder then had an “option window” after the completion of the business combination during which he or she could monitor the price of the company’s shares in the market. If the price rose above the redemption price, he or she could sell his or her shares in the open market before actually delivering his or her shares to the company for cancellation. As a result, the redemption rights, to which stockholders were aware they needed to commit before the stockholder meeting, would become “option” rights surviving past the completion of the business combination until the redeeming holder delivered its certificate. The requirement for physical or electronic delivery prior to the meeting ensures that a redeeming holder’s election to redeem is irrevocable once the business combination is approved.
Any request to redeem such shares, once made, may be withdrawn at any time up to the date set forth in the tender offer materials or two business days prior to the scheduled date of the stockholder meeting set forth in our proxy materials, as applicable (unless we elect to allow additional withdrawal rights). Furthermore, if a holder of a public share delivered its certificate in connection with an election of redemption rights and subsequently decides prior to the applicable date not to elect to exercise such rights, such holder may simply request that the transfer agent return the certificate (physically or electronically). It is anticipated that the funds to be distributed to holders of our public shares electing to redeem their shares will be distributed promptly after the completion of our initial business combination.
If our initial business combination is not approved or completed for any reason, then our public stockholders who elected to exercise their redemption rights would not be entitled to redeem their shares for the applicable pro rata share of the trust account. In such case, we will promptly return any certificates delivered by public holders who elected to redeem their shares.
If our initial proposed business combination is not completed, we may continue to try to complete a business combination with a different target until 24 months from the closing of this offering or during any Extension Period.
Redemption of public shares and liquidation if no initial business combination
Our sponsor, directors and officers have agreed that we will have only 24 months from the closing of this offering to complete our initial business combination. If we have not completed our initial business combination within such 24-month period or during any Extension Period, we will: (1) cease all operations except for the purpose of winding up; (2) as promptly as reasonably possible but not more than 10 business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (less up to $100,000 of interest to pay dissolution expenses and which interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any); and (3) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to complete our initial business combination within the 24-month time period or during any Extension Period.
Our initial stockholders have entered into a letter agreement with us, pursuant to which they have waived their rights to liquidating distributions from the trust account with respect to their founder shares if we fail to complete our initial business combination within 24 months from the closing of this offering or during any Extension Period. However, if our initial stockholders acquire public shares, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to complete our initial business combination within the allotted 24-month time period.
Our sponsor, directors and officers have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity, unless we provide our public stockholders with the opportunity to redeem their shares of our Class A common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (which interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares. However, we may not redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 following such redemptions.
We expect that all costs and expenses associated with implementing our plan of dissolution, as well as payments to any creditors, will be funded from amounts remaining out of the $2,000,000 of proceeds held outside the trust account, although we cannot assure you that there will be sufficient funds for such purpose. However, if those funds are not sufficient to cover the costs and expenses associated with implementing our plan of dissolution, to the extent that there is any interest accrued in the trust account not required to pay taxes, we may request the trustee to release to us an additional amount of up to $100,000 of such accrued interest to pay those costs and expenses.
If we were to expend all of the net proceeds of this offering and the sale of the private placement warrants, other than the proceeds deposited in the trust account, and without taking into account interest, if any, earned on the trust account, the per-share redemption amount received by stockholders upon our dissolution would be approximately $10.00. The proceeds deposited in the trust account could, however, become subject to the claims of our creditors which would have higher priority than the claims of our public
stockholders. We cannot assure you that the actual per-share redemption amount received by stockholders will not be substantially less than $10.00. While we intend to pay such amounts, if any, we cannot assure you that we will have funds sufficient to pay or provide for all creditors’ claims.
Although we will seek to have all vendors, service providers (other than our independent registered public accounting firm), prospective target businesses and other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public stockholders, there is no guarantee that they will execute such agreements or even if they execute such agreements that they would be prevented from bringing claims against the trust account including but not limited to fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain an advantage with respect to a claim against our assets, including the funds held in the trust account. If any third party refuses to execute an agreement waiving such claims to the monies held in the trust account, our management will perform an analysis of the alternatives available to it and will enter into an agreement with a third party that has not executed a waiver only if management believes that such third party’s engagement would be significantly more beneficial to us than any alternative. Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third-party consultant whose particular expertise or skills are believed by management to be superior to those of other consultants that would agree to execute a waiver or in cases where we are unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason. Upon redemption of our public shares, if we have not completed our initial business combination within the required time period, or upon the exercise of a redemption right in connection with our initial business combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought against us within the 10 years following redemption. Our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (other than our independent auditors) for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below (1) $10.00 per public share or (2) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account, due to reductions in value of the trust assets, in each case net of the amount of interest which may be withdrawn to pay taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the trust account and except as to any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. In the event that an executed waiver is deemed to be unenforceable against a third party, then our sponsor will not be responsible to the extent of any liability for such third-party claims. We have not independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are securities of our company and, therefore, our sponsor may not be able to satisfy those obligations. None of our other officers will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.
In the event that the proceeds in the trust account are reduced below (1) $10.00 per public share or (2) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account, due to reductions in value of the trust assets, in each case net of the amount of interest which may be withdrawn to pay taxes, and our sponsor asserts that it is unable to satisfy its indemnification obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment may choose not to do so in any particular instance. Accordingly, we cannot assure you that due to claims of creditors the actual value of the per-share redemption price will not be substantially less than $10.00 per share.
We will seek to reduce the possibility that our sponsor will have to indemnify the trust account due to claims of creditors by endeavoring to have all vendors, service providers (other than our independent registered public accounting firm), prospective target businesses and other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to monies held in the
trust account. Our sponsor will also not be liable as to any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. We will have access to up to $2,000,000 from the proceeds of this offering and the sale of the private placement warrants, with which to pay any such potential claims (including costs and expenses incurred in connection with our liquidation, currently estimated to be no more than approximately $100,000). In the event that we liquidate and it is subsequently determined that the reserve for claims and liabilities is insufficient, stockholders who received funds from our trust account could be liable for claims made by creditors. In the event that our offering expenses exceed our estimate of $2,000,000, we may fund such excess with funds from the funds not to be held in the trust account. In such case, the amount of funds we intend to be held outside the trust account would decrease by a corresponding amount. Conversely, in the event that the offering expenses are less than our estimate of $2,000,000, the amount of funds we intend to be held outside the trust account would increase by a corresponding amount.
Under the DGCL, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. The pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination within 24 months of the closing of this offering may be considered a liquidating distribution under Delaware law. If the corporation complies with certain procedures set forth in Section 280 of the DGCL intended to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during which any third-party claims can be brought against the corporation, a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution.
Furthermore, if the pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination within 24 months of the closing of this offering, is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful, then pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidating distribution. If we are unable to complete our initial business combination within 24 months of the closing of this offering, we will: (1) cease all operations except for the purpose of winding up; (2) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (net of permitted withdrawals and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law; and (3) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. Accordingly, it is our intention to redeem our public shares as soon as reasonably possible following our 24th month and, therefore, we do not intend to comply with those procedures. As such, our stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of our stockholders may extend well beyond the third anniversary of such date.
Because we will not be complying with Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that will provide for our payment of all existing and pending claims or claims that may be potentially brought against us within the subsequent ten years. However, because we are a blank check company, rather than an operating company, and our operations will be limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment bankers, etc.) or prospective target businesses. As described above, pursuant to the obligation contained in our underwriting agreement, we will seek to have all vendors, service providers (other than our independent registered public accounting firm), prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account.
As a result of this obligation, the claims that could be made against us are significantly limited and the likelihood that any claim that would result in any liability extending to the trust account is remote.
Further, our sponsor may be liable only to the extent necessary to ensure that the amounts in the trust account are not reduced below: (1) $10.00 per public share; or (2) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account, if less than $10.00 per share due to reductions in value of the trust assets, in each case net of permitted withdrawals and will not be liable as to any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act.
If we file a winding-up or bankruptcy petition or an involuntary winding-up or bankruptcy petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable insolvency law, and may be included in our insolvency estate and subject to the claims of third parties with priority over the claims of our stockholders. To the extent any insolvency claims deplete the trust account, we cannot assure you we will be able to return $10.00 per share to our public stockholders. Additionally, if we file a winding-up or bankruptcy petition or an involuntary winding-up or bankruptcy petition is filed against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or insolvency laws as a voidable performance. As a result, a bankruptcy court could seek to recover some or all amounts received by our stockholders. Furthermore, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or may have acted in bad faith, and thereby exposing itself and our company to claims of punitive damages, by paying public stockholders from the trust account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons.
Our public stockholders will be entitled to receive funds from the trust account only upon the earliest to occur of: (1) our completion of an initial business combination, and then only in connection with those shares of our Class A common stock that such stockholder properly elected to redeem, subject to the limitations described herein; (2) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity; and (3) the redemption of our public shares if we have not completed an initial business combination within 24 months from the closing of this offering, subject to applicable law. In no other circumstances will a stockholder have any right or interest of any kind to or in the trust account. Holders of warrants will not have any right to the proceeds held in the trust account with respect to the warrants.
Amended and Restated Certificate of Incorporation
Our amended and restated certificate of incorporation contains certain requirements and restrictions relating to this offering that will apply to us until the consummation of our initial business combination. Our amended and restated certificate of incorporation contain a provision which provides that, if we seek to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity, we will provide public stockholders with the opportunity to redeem their public shares in connection with any such amendment. Specifically, our amended and restated Certificate of Incorporation provides, among other things, that:
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prior to the consummation of our initial business combination, we shall either: (1) seek stockholder approval of our initial business combination at a meeting called for such purpose at which stockholders may seek to redeem their shares, regardless of whether they vote for or against, or abstain from voting on, the proposed business combination, into their pro rata share of the aggregate amount on deposit in the trust account as of two business days prior to the consummation of our initial business combination, including interest (net of permitted withdrawals); or (2) provide our public stockholders with the opportunity to tender their shares
to us by means of a tender offer (and thereby avoid the need for a stockholder vote) for an amount equal to their pro rata share of the aggregate amount on deposit in the trust account as of two business days prior to the consummation of our initial business combination, including interest (net of permitted withdrawals), in each case subject to the limitations described herein;
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we will consummate our initial business combination only if we have net tangible assets of at least $5,000,001 upon such consummation and, solely if we seek stockholder approval, a majority of the outstanding shares of common stock voted are voted in favor of our initial business combination at a duly held stockholders meeting;
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if our initial business combination is not consummated within 24 months from the closing of this offering, then our existence will terminate and we will distribute all amounts in the trust account; and
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prior to our initial business combination, we may not issue additional shares of common stock that would entitle the holders thereof to (1) receive funds from the trust account or (2) vote as a class with our public shares on any initial business combination.
These provisions cannot be amended without the approval of holders of at least two-thirds of our shares of common stock who attend and vote in a stockholder meeting. In the event we seek stockholder approval in connection with our initial business combination, our amended and restated certificate of incorporation provides that we may consummate our initial business combination only if approved by a majority of the shares of common stock voted by our stockholders at a duly held stockholder meeting.
Additionally, our amended and restated certificate of incorporation provides that, prior to our initial business combination, only holders of our founder shares will have the right to vote on the appointment of directors and that holders of a majority of our founder shares may remove a member of the board of directors for any reason. These provisions of our amended and restated certificate of incorporation may only be amended by a majority of at least 90% of our shares of common stock attending and voting in a stockholder meeting. With respect to any other matter submitted to a vote of our stockholders, including any vote in connection with our initial business combination, except as required by applicable law or stock exchange rule, holders of our founder shares and holders of our public shares will vote together as a single class, with each share entitling the holder to one vote.
Comparison of redemption or purchase prices in connection with our initial business combination and if we fail to complete our initial business combination.
The following table compares the redemptions and other permitted purchases of public shares that may take place in connection with the completion of our initial business combination and if we have not completed our initial business combination within 24 months from the closing of this offering or during any Extension Period.
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Redemptions in
Connection with our
Initial Business
Combination
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Other Permitted
Purchases of Public
Shares by our Affiliates
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Redemptions if we fail to
Complete an Initial
Business Combination
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Calculation of
redemption price
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Redemptions at the time of our initial business combination may be made pursuant to a tender offer or in connection with a stockholder vote. The redemption price will be the same whether we conduct redemptions pursuant to a tender offer or in connection with a stockholder vote. In either
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If we seek stockholder approval of our initial business combination, our sponsor, directors, officers, advisors or any of their respective affiliates may purchase public shares or warrants in privately negotiated transactions or in the open market either prior to or following the
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If we have not completed our initial business combination within 24 months from the closing of this offering or during any Extension Period, we will redeem all public shares at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust
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Redemptions in
Connection with our
Initial Business
Combination
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Other Permitted
Purchases of Public
Shares by our Affiliates
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Redemptions if we fail to
Complete an Initial
Business Combination
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case, our public stockholders may redeem their public shares for cash equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of the initial business combination (which is initially anticipated to be $10.00 per share), including interest (which interest shall be net of taxes payable), divided by the number of then- issued and outstanding public shares, subject to the limitation that no redemptions will take place if all of the redemptions would cause our net tangible assets to be less than $5,000,001 following such redemptions, and any limitations (including, but not limited to, cash requirements) agreed to in connection with the negotiation of terms of a proposed business combination.
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completion of our initial business combination. Such purchases will be restricted except to the extent such purchases are able to be made in compliance with Rule 10b-18, which is a safe harbor from liability for manipulation under Section 9(a)(2) and Rule 10b-5 of the Exchange Act. None of the funds in the trust account will be used to purchase shares in such transactions.
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account (which is initially anticipated to be $10.00 per share), including interest (less up to $100,000 of interest to pay dissolution expenses and which interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares.
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Impact to remaining
stockholders
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The redemptions in connection with our initial business combination will reduce the book value per share for our remaining stockholders, who will bear the burden of the deferred underwriting commissions and interest withdrawn in order to pay taxes (to the extent not paid from amounts accrued as interest on the funds held in the trust account).
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If the permitted purchases described above are made, there will be no impact to our remaining stockholders because the purchase price would not be paid by us.
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The redemption of our public shares if we fail to complete our initial business combination will reduce the book value per share for the shares held by our initial stockholders, who will be our only remaining stockholders after such redemptions.
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Comparison of This Offering to Those of Blank Check Companies Subject to Rule 419
The following table compares the terms of this offering to the terms of an offering by a blank check company subject to the provisions of Rule 419. This comparison assumes that the gross proceeds, underwriting commissions and underwriting expenses of our offering would be identical to those of an offering undertaken by a company subject to Rule 419, and that the underwriters will not exercise their over- allotment option. None of the provisions of Rule 419 apply to our offering.
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Terms of our Offering
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Terms Under a
Rule 419 Offering
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Escrow of offering proceeds
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The rules of Nasdaq provide that at least 90% of the gross proceeds from this offering and the sale of the private placement warrants be deposited in a trust account. $350,000,000 of the net proceeds of this offering and the sale of the private placement warrants will be deposited into a U.S.-based trust account at Bank of America, N.A, with American Stock Transfer & Trust Company acting as trustee.
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Approximately $297,675,000 of the offering proceeds, representing the gross proceeds of this offering less allowable underwriting commissions, expenses and company deductions under Rule 419, would be required to be deposited into either an escrow account with an insured depositary institution or in a separate bank account established by a broker-dealer in which the broker-dealer acts as trustee for persons having the beneficial interests in the account.
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Investment of net proceeds
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$350,000,000 of the net offering proceeds and the sale of the private placement warrants held in trust will be invested only in U.S. government treasury bills with a maturity of 185 days or less or in money market funds investing solely in U.S. Treasuries and meeting certain conditions under Rule 2a-7 under the Investment Company Act.
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Proceeds could be invested only in specified securities such as a money market fund meeting conditions of the Investment Company Act or in securities that are direct obligations of, or obligations guaranteed as to principal or interest by, the United States.
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Receipt of interest on escrowed funds
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Interest on proceeds from the trust account to be paid to stockholders is reduced by (1) any taxes paid or payable and (2) in the event of our liquidation for failure to complete our initial business combination within the allotted time, up to $100,000 of net interest that may be released to us should we have no or insufficient working capital to fund the costs and expenses of our dissolution and liquidation.
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Interest on funds in escrow account would be held for the sole benefit of investors, unless and only after the funds held in escrow were released to us in connection with our completion of a business combination.
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Terms of our Offering
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Terms Under a
Rule 419 Offering
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Limitation on fair value or net assets of target business
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Nasdaq rules require that our initial business combination must be with one or more operating businesses or assets with a fair market value equal to at least 80% of the net assets held in the trust account (net of amounts disbursed to management for working capital purposes, if permitted, and excluding the amount of any deferred underwriting discount held in trust).
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The fair value or net assets of a target business must represent at least 80% of the maximum offering proceeds
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Trading of securities issued
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The units will begin trading on or promptly after the date of this prospectus. The shares of our Class A common stock and warrants constituting the units will begin separate trading on the 52nd day following the date of this prospectus (or, if such date is not a business day, the following business day) unless the representatives inform us of their decision to allow earlier separate trading, subject to our having filed the Current Report on Form 8-K described below and having issued a press release announcing when such separate trading will begin. We will file the Current Report on Form 8-K promptly after the closing of this offering. If the underwriters’ over-allotment option is exercised following the initial filing of such Current Report on Form 8-K, a second or amended Current Report on Form 8-K will be filed to provide updated financial information to reflect the exercise of the underwriters’ over-allotment option.
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No trading of the units or the underlying shares of common stock and warrants would be permitted until the completion of a business combination. During this period, the securities would be held in the escrow or trust account.
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Terms of our Offering
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Terms Under a
Rule 419 Offering
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Exercise of the warrants
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The warrants cannot be exercised until the later of 30 days after the completion of our initial business combination and 12 months from the closing of this offering.
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The warrants could be exercised prior to the completion of a business combination, but securities received and cash paid in connection with the exercise would be deposited in the escrow or trust account.
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Election to remain an investor
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We will provide our public stockholders with the opportunity to redeem their public shares for cash equal to their pro rata share of the aggregate amount then on deposit in the trust account as of two business days prior to the consummation of our initial business combination, including interest, net of permitted withdrawals, upon the completion of our initial business combination, subject to the limitations described herein. We may not be required by applicable law or stock exchange rules to hold a stockholder vote. If we are not required by applicable law or stock exchange rules and do not otherwise decide to hold a stockholder vote, we will, pursuant to our amended and restated certificate of incorporation, conduct the redemptions pursuant to the tender offer rules of the SEC and file tender offer documents with the SEC which will contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under the SEC’s proxy rules. If, however, we hold a stockholder vote, we will, like many blank check companies, offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. Pursuant to the tender offer rules, the tender offer period will be not less than 20 business days and, in the case of a stockholder vote, a final proxy statement would be mailed to public stockholders at least 10 days prior to the stockholder vote. However, we expect that a draft proxy statement would be made available to such stockholders well in advance of such time, providing additional notice of
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A prospectus containing information pertaining to the business combination required by the SEC would be sent to each investor. Each investor would be given the opportunity to notify the company in writing, within a period of no less than 20 business days and no more than 45 business days from the effective date of a post-effective amendment to the company’s registration statement, to decide if he, she or it elects to remain a stockholder of the company or require the return of his, her or its investment. If the company has not received the notification by the end of the 45th business day, funds and interest or dividends, if any, held in the trust or escrow account are automatically returned to the stockholder. Unless a sufficient number of investors elect to remain investors, all funds on deposit in the escrow account must be returned to all of the investors and none of the securities are issued.
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Terms of our Offering
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Terms Under a
Rule 419 Offering
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redemption if we conduct redemptions in conjunction with a proxy solicitation. If we seek stockholder approval, we will complete our initial business combination only if a majority of the shares of common stock voted are voted in favor of our initial business combination. A quorum for such meeting will consist of the holders present in person or by proxy of shares of outstanding capital stock of the company representing a majority of the voting power of all outstanding shares of capital stock of the company entitled to vote at such meeting. Additionally, each public stockholder may elect to redeem its public shares without voting and, if they do vote, irrespective of whether they vote for or against the proposed transaction.
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Business combination deadline
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If we are unable to complete an initial business combination within 24 months from the closing of this offering, we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to fund our working capital requirements (subject to an annual limit of $250,000) (less taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of
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If an acquisition has not been completed within 18 months after the effective date of the company’s registration statement, funds held in the trust or escrow account are returned to investors.
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Terms of our Offering
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Terms Under a
Rule 419 Offering
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directors, liquidate and dissolve, subject in each case to our obligations under Delaware law to provide for claims of creditors and in all cases subject to the requirements of other applicable law.
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Release of funds
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Except with respect to interest earned on the funds held in the trust account that may be released to us to pay our taxes, if any, the funds held in the trust account will not be released from the trust account until the earliest of: (1) our completion of an initial business combination; (2) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity; and (3) the redemption of our public shares if we have not completed an initial business combination within 24 months from the closing of this offering, subject to applicable law.
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The proceeds held in the escrow account are not released until the earlier of the completion of a business combination or the failure to effect a business combination within the allotted time.
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Terms of our Offering
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Terms Under a
Rule 419 Offering
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Limitation on redemption rights of stockholders holding more than 15% of the shares sold in this offering if we hold a stockholder vote
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If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect Excess Shares (more than an aggregate of 15% of the shares sold in this offering), without our prior consent. Our public stockholders’ inability to redeem Excess Shares will reduce their influence over our ability to complete our initial business combination and they could suffer a material loss on their investment in us if they sell Excess Shares in open market transactions.
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Most blank check companies provide no restrictions on the ability of stockholders to redeem shares based on the number of shares held by such stockholders in connection with an initial business combination.
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Tendering stock certificates in connection with a tender offer or redemption rights
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We may require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to either tender their certificates to our transfer agent prior to the date set forth in the tender offer documents or proxy materials mailed to such holders, or up to two business days prior to the scheduled vote on the proposal to approve our initial business combination in the event we distribute proxy materials, or to deliver their shares to the transfer agent electronically using The Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, at the holder’s option. The tender offer or proxy materials, as applicable, that we will furnish to holders of our public shares in connection with our initial business combination will indicate whether we are requiring public stockholders to satisfy such delivery requirements. Accordingly, a public stockholder
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In order to perfect redemption rights in connection with their business combinations, holders could vote against a proposed business combination and check a box on the proxy card indicating such holders were seeking to exercise their redemption rights. After the business combination was approved, the company would contact such stockholders to arrange for them to deliver their certificate to verify ownership.
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Terms of our Offering
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Terms Under a
Rule 419 Offering
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would have from the time we send out our tender offer materials until the close of the tender offer period, or up to two business days prior to the scheduled vote on the business combination if we distribute proxy materials, as applicable, to tender its shares if it wishes to seek to exercise its redemption rights.
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Competition
We expect to encounter intense competition from other entities having a business objective similar to ours, including private investors (which may be individuals or investment partnerships), other blank check companies and other entities, domestic and international, competing for the types of businesses we intend to acquire. Many of these individuals and entities are well established and have extensive experience in identifying and effecting, directly or indirectly, acquisitions of companies operating in or providing services to various industries. Many of these competitors possess greater technical, human and other resources or more industry knowledge than we do and our financial resources will be relatively limited when contrasted with those of many of these competitors. While we believe there are numerous target businesses we could potentially acquire with the net proceeds of this offering and the sale of the private placement warrants, our ability to compete with respect to the acquisition of certain target businesses that are sizable will be limited by our available financial resources. This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses. Furthermore, in the event we seek stockholder approval of our initial business combination and we are obligated to pay cash for shares of our Class A common stock, it will potentially reduce the resources available to us for our initial business combination. Any of these obligations may place us at a competitive disadvantage in successfully negotiating a business combination. If we have not completed our initial business combination within the required time period, our public stockholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless.
Conflicts of Interest
All of our officers and certain of our directors have fiduciary and contractual duties to Anzu Partners and to certain companies in which it has invested or to certain other entities. These entities may compete with us for acquisition opportunities. While the risk is partially mitigated due to Anzu’s venture funds and the Company seeking targets of quite different enterprise sizes, if these entities decide to pursue any such opportunity, we may be precluded from pursuing such opportunities. Subject to his or her fiduciary duties under applicable law, none of the members of our management team who are also employed by our sponsor or its affiliates have any obligation to present us with any opportunity for a potential business combination of which they become aware. Our sponsor and directors and officers are also not prohibited from sponsoring, investing or otherwise becoming involved with, any other blank check companies, including in connection with their initial business combinations, prior to us completing our initial business combination. Our management team, in their capacities as directors, officers or employees of our sponsor or its affiliates or in their other endeavors, may choose to present potential business combinations to the related entities described above, current or future entities affiliated with or managed by our sponsor, or third parties, before they present such opportunities to us, subject to his or her fiduciary duties under applicable law and any other applicable fiduciary duties. Our amended and restated certificate of incorporation 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 the company and it is an opportunity that we are able to complete on a reasonable basis. In addition, Messrs. Wulfsohn, Joy and Ganz are subject to certain non-compete agreements or other obligations with respect to Ashland. For more information, see the section entitled “Management—Conflicts of Interest.”
Our directors and officers presently have, and any of them in the future may have, additional, fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present a business combination opportunity to such entity. Accordingly, if any of our directors or officers becomes aware of a business combination opportunity that is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, he or she may need to honor these fiduciary or contractual obligations to present such business combination opportunity to such entity, subject to his or her fiduciary duties under applicable law. See “Risk Factors—Certain of our directors and officers are now, and all of them may in the future become, affiliated with entities engaged in business activities similar to those intended to be conducted by us and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should be presented.”
We do not believe, however, that the fiduciary duties or contractual obligations of our directors or officers will materially adversely affect our ability to identify and pursue business combination opportunities or complete our initial business combination.
Indemnity
Our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (other than our independent auditors) for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below (1) $10.00 per public share or (2) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the trust account and except as to any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, our sponsor will not be responsible to the extent of any liability for such third-party claims. We have not independently verified whether our sponsor has sufficient funds to satisfy their indemnity obligations and believe that our sponsor’s only assets are securities of our company and, therefore, our sponsor may not be able to satisfy those obligations. We have not asked our sponsor to reserve for such obligations.
Facilities
We currently maintain our executive offices at 12610 Race Track Road, Suite 250 Tampa, FL 33626, and we have access to offices at 1399 New York Avenue NW, Suite 601, Washington DC 20005. The cost for this space is included in the $40,520.83 per month fee that we will pay an affiliate of our sponsor for office space, administrative and support services. In addition, we may have officers that do not work from our designated facilities due to telecommuting. We consider our current office space adequate for our current operations.
Employees
We currently have three officers, including Messrs. Haring-Smith, Ganz and Joy, and do not intend to have any full-time employees prior to the completion of our initial business combination. 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. Although Mr. Joy will not be an employee of our company, he will devote substantially all of his time to our affairs until we have completed our initial business combination. The amount of time that any such person 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.
Periodic Reporting and Financial Information
We will register our units, shares of our Class A common stock and warrants under the Exchange Act and have reporting obligations, including the requirement that we file annual, quarterly and current reports with the SEC. In accordance with the requirements of the Exchange Act, our annual reports will contain financial statements audited and reported on by our independent registered public auditors.
We will provide stockholders with audited financial statements of the prospective target business as part of the tender offer materials or proxy solicitation materials sent to stockholders to assist them in assessing the target business. These financial statements may be required to be prepared in accordance with, or be reconciled to, U.S. GAAP or IFRS, depending on the circumstances and the historical financial statements may be required to be audited in accordance with PCAOB standards. These financial statement requirements may limit the pool of potential target businesses we may acquire because some targets may be unable to provide such financial statements in time for us to disclose such financial statements in accordance with federal proxy rules and complete our initial business combination within the prescribed time frame. While this may limit the pool of potential business combination candidates, we do not believe that this limitation will be material.
We will be required to evaluate our internal control procedures for the fiscal year ending December 31, 2022 as required by the Sarbanes-Oxley Act. Only in the event we are deemed to be a large accelerated filer or an accelerated filer, and no longer qualify as an emerging growth company, will we be required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting. A target business may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of their internal controls. The development of the internal controls of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition.
Prior to the effectiveness of the registration statement of which this prospectus forms a part, we will file a Registration Statement on Form 8-A with the SEC to voluntarily register our securities under Section 12 of the Exchange Act. As a result, we will be subject to the rules and regulations promulgated under the Exchange Act. We have no current intention of filing a Form 15 to suspend our reporting or other obligations under the Exchange Act prior or subsequent to the consummation of our initial business combination.
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.
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 the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our shares of common stock that is held by non-affiliates exceeds $700 million as of the end of that year’s second fiscal quarter, and (2) the date on which we have issued more than $1.00 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 Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our shares of common stock held by non-affiliates exceeds $250 million as of the end of that year’s second fiscal quarter, or (2) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our shares of common stock held by non-affiliates exceeds $700 million as of the end of that year’s second fiscal quarter.
Legal Proceedings
There is no material litigation, arbitration or governmental proceeding currently pending against us or any members of our management team in their capacity as such, and we and the members of our management team have not been subject to any such proceeding in the 12 months preceding the date of this prospectus.
MANAGEMENT
Directors, Director Nominees and Officers
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Name
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Age
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Title
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William Wulfsohn
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58 |
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Chairman of the Board of Directors
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Dr. Whitney Haring-Smith
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36 |
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Chief Executive Officer & Director
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John W. Joy
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56 |
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Chief Financial Officer
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Peter J. Ganz
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58 |
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General Counsel & Corporate Secretary
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Teresa A. Harris
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55 |
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Director Nominee
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Priya Cherian Huskins
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48 |
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Director Nominee
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Susan J. Kantor
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65 |
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Director Nominee
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Our directors, director nominees and officers are as follows:
William Wulfsohn
Mr. Wulfsohn serves as the Chairman of our Board of Directors. He served as the Chief Executive Officer and Chairman of Ashland from 2015 to 2019, where he led Ashland’s transition to a pure-play specialty chemicals company and oversaw multiple spinouts and divestitures. This included the successful $5.3 billion separation of Valvoline, where Mr. Wulfsohn served as the founding chairman for the first year. Prior to Ashland, he was the President and Chief Executive Officer of Carpenter Technology Corporation from 2010-2014. Mr. Wulfsohn currently serves as a board director for Avient, formerly known as PolyOne. He was also previously a consultant with McKinsey & Co. and senior executive with PPG, Honeywell, and Rohm and Haas. Mr. Wulfsohn received his bachelor’s degree from the University of Michigan in Chemical Engineering and his master of business administration from Harvard Business School.
Dr. Whitney Haring-Smith
Dr. Haring-Smith serves as our Chief Executive Officer and a member of the Board of Directors. He has served as a co-founding managing partner at Anzu Partners since March 2015, where he has led the IPO-crossover investment into Ai-Media, a global provider of technology-enabled live and recorded captioning, transcription and translation services and led the mezzanine financing for Pivotal Systems Corporation, a gas flow monitoring provider and control technology platform for the global semiconductor industry. Dr. Haring-Smith serves on the board of multiple private technology companies, including Adaptive Surface Technologies since August 2020, Volatiq since July 2020, Sofregen Medical since August 2019 and Slyce Acquisition since November 2016. He previously served on the board of MultiMechanics, Inc. from January 2019 to November 2019, Axsun Technologies, Inc. from November 2016 to January 2019 and Lightship Works, Inc. from May 2015 to May 2020. In addition, he led the acquisition of Axsun Technologies Inc., the Koninklijke Philips N.V. spin-off, returning approximately eight times investors’ invested capital, and MultiMechanics, which was acquired by Siemens in 2019. He was formerly a BCG Principal from January 2011 to March 2015 in San Francisco, Hong Kong, Nigeria and United Kingdom, where he led transformations for multi-billion-dollar business units of large publicly-traded companies. Dr. Haring-Smith received his bachelor’s degree and master’s degree from Yale University in Political Science and his doctorate from Oxford University as a Rhodes Scholar.
John W. Joy
Mr. Joy serves as our Chief Financial Officer. He served as Vice President of Corporate Development from 2008 to 2020 and Vice President of Financial Planning and Analysis from 2004 to 2008 at Ashland, where his significant transaction experience included: IPO / spin-off of Valvoline ($5.3 billion transaction value); acquisition of International Specialty Products ($3.2 billion transaction value) and Hercules ($3.4 billion transaction value); sale of Ashland Water Technologies ($1.8 billion transaction value), composites business and butanediol facility in Marl, Germany ($1 billion transaction value) and distribution business ($1 billion transaction value). Prior to Ashland, he was a director at PepsiCo from 1992 to 2004, where he led financial planning and analysis for a $9 billion division. Mr. Joy received his bachelor’s degree
from Colgate University in Mathematical Economics and his master of management from Kellogg Graduate School of Management at Northwestern University.
Peter J. Ganz
Mr. Ganz serves as our General Counsel & Corporate Secretary. He served as Senior Vice President, General Counsel and Secretary and Chief Compliance Officer at Ashland from June 2011 to January 2021, where he was a member of the executive committee and was responsible for managing Ashland’s legal and corporate governance matters, as well as overseeing Ashland’s ethics and compliance, government relations, risk and insurance and real estate functions. Prior to Ashland, he was Executive Vice President, General Counsel and Secretary at Foster Wheeler from September 2005 to January 2010, a $5 billion publicly traded company, and General Counsel and Secretary at G-I Holdings (formerly GAF Corporation), a $3.5 billion group of related companies. Mr. Ganz received his bachelor’s degree from Duke University and his juris doctorate from Harvard Law School.
Teresa A. Harris
Ms. Harris will serve as an independent director upon the completion of this offering. She is a finance, strategy and business development executive with experience in industrial technology software. She has served on the board of directors of Altair since 2016, including during its IPO process and listing on the NASDAQ in 2017. Altair is currently a $4.35 billion publicly traded software technology company focused on data analytics, product development, and high-performance computing. She is Chair of the compensation committee and a member of the audit and M&A committees. Ms. Harris is also on the board of USA Climbing, Landmark West and a private technology company, Bungie, which created the Halo and Destiny video game franchises. She was formerly the senior-most U.S. executive for strategy finance and M&A for Vivendi from 2001 to 2014, the $30 billion European media company, where she was a lead negotiator of a $5.8 billion transaction with NBC Universal. She began her career as an investment banker with JP Morgan. Ms. Harris received her bachelor’s degree from Stanford University in Economics and her master of business administration from Yale School of Management in Finance.
Priya Cherian Huskins
Ms. Huskins will serve as an independent director upon the completion of this offering. Ms. Huskins is an executive advisor for public companies and fast-growing private companies on risk mitigation. She is currently a partner and senior vice president at Woodruff Sawyer, where she has been focused on Director & Officer (D&O) insurance since 2003. In addition to serving on the board of Woodruff Sawyer, Ms. Huskins also serves on the board of Realty Income Corporation, an S&P 500 public company, where she serves on the Corporate Governance and Nominating Committee and is the Chair of the Compensation Committee. She also serves on the board of NMI Holdings, Inc. and is an advisory board member of the Stanford Rock Center for Corporate Governance. She is a former senior associate at Wilson Sonsini Goodrich & Rosati (WSGR), a prominent law firm, where she advised companies on M&A and corporate law transactions. Ms. Huskins received her bachelor’s degree from Harvard College and her juris doctorate from the University of Chicago Law School.
Susan J. Kantor
Ms. Kantor will serve as an independent director upon the completion of this offering. Ms. Kantor has experience leading international finance, tax, treasury, risk, compliance and technology enablement for global services organizations. She was a National Advisory Partner for PwC from 2011 to 2016, a CFO & Treasurer for PRTM from 1997 to 2011, and a former CFO at Monitor Group from 1995 to 1997. During her time at PRTM, she completed several successful M&A transactions in the U.S. and abroad, including the sale of PRTM to PwC. Ms. Kantor previously served as an executive with Parexel, a clinical research organization, and the Boston Consulting Group. Ms. Kantor is currently on the board of Teknor Apex, a billion dollar privately-held material science company, the board of Guest Services, a hospitality company, the board of Point Pleasant Resort and Audit Committee chair for the International Council on Clean Transportation (ICCT). Ms. Kantor previously served as a board director for Lionbridge Technologies
from 2016 to 2017 when it was a $550 million publicly held company. She received her bachelor’s degree from Grove City College in Accounting and Business Administration and her CPA in MA.
Number, Terms of Office and Appointment of Directors and Officers
Upon the effectiveness of the registration statement of which this prospectus forms a part, we expect that our board of directors will consist of five members. Prior to our initial business combination, holders of our founder shares will have the right to appoint all of our directors and remove members of the board of directors for any reason, and holders of our public shares will not have the right to vote on the appointment of directors during such time. These provisions of our amended and restated certificate of incorporation may only be amended by a majority of at least 90% of our shares of common stock attending and voting in a stockholder meeting. Each of our directors will hold office for a two-year term. Subject to any other special rights applicable to the stockholders, any vacancies on our board of directors may be filled by the affirmative vote of a majority of the directors present and voting at the meeting of our board of directors or by a majority of the holders of our shares of common stock (or, prior to our initial business combination, holders of our founder shares).
Our officers are appointed by the board of directors and serve at the discretion of the board of directors, rather than for specific terms of office. Our board of directors is authorized to appoint persons to the offices set forth in our amended and restated certificate of incorporation as it deems appropriate. Our amended and restated certificate of incorporation provides that our officers may consist of a Chairman, a Chief Executive Officer, a President, a Chief Operating Officer, a Chief Financial Officer, Vice Presidents, a Secretary, Assistant Secretaries, a Treasurer and such other offices as may be determined by the board of directors.
Director Independence
Nasdaq listing standards require that a majority of our board of directors be independent. An “independent director” is defined generally as a person that, in the opinion of the company’s board of directors, has no material relationship with the listed company (either directly or as a partner, stockholder or officer of an organization that has a relationship with the company). Upon the effectiveness of the registration statement of which this prospectus forms a part, we expect to have three “independent directors” as defined in the Nasdaq listing standards and applicable SEC rules prior to completion of this offering. Our board of directors has determined that each of Teresa A. Harris, Priya Cherian Huskins and Susan J. Kantor is an independent director under applicable SEC and Nasdaq listing standards.
Our independent directors will have regularly scheduled meetings at which only independent directors are present.
Officer and Director Compensation
None of our directors or officers have received any cash compensation for services rendered to us. Commencing on the date that our securities are first listed on Nasdaq through the earlier of consummation of our initial business combination and our liquidation, we will pay an affiliate of our sponsor a total of $40,520.83 per month for office space, administrative and support services. Our sponsor, directors and officers, or any of their respective affiliates, will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Our audit committee will review on a quarterly basis all payments that were made by us to our sponsor, directors, officers or our or any of their respective affiliates. In February 2021, our sponsor transferred 25,000 founder shares to each of Teresa A. Harris, Priya Cherian Huskins and Susan J. Kantor , our independent director nominees.
After the completion of our initial business combination, directors or members of our management team who remain with us may be paid consulting, management or other compensation from the combined company. All compensation will be fully disclosed to stockholders, to the extent then known, in the tender offer materials or proxy solicitation materials furnished to our stockholders in connection with a proposed business combination. It is unlikely the amount of such compensation will be known at the time, because the directors of the post-combination business will be responsible for determining executive officer and
director compensation. Any compensation to be paid to our officers after the completion of our initial business combination will be determined by a compensation committee constituted solely by independent directors.
We are not party to any agreements with our directors and officers that provide for benefits upon termination of employment. The existence or terms of any such employment or consulting arrangements may influence our management’s motivation in identifying or selecting a target business, and we do not believe that the ability of our management to remain with us after the consummation of our initial business combination should be a determining factor in our decision to proceed with any potential business combination.
Committees of the Board of Directors
Upon the effective date of the registration statement of which this prospectus forms a part, our board of directors will have three standing committees: an audit committee; a compensation committee; and a nominating and corporate governance committee. Subject to phase-in rules, the rules of Nasdaq and Rule 10A-3 of the Exchange Act require that the audit committee of a listed company be comprised solely of independent directors, and the rules of Nasdaq require that the compensation committee and the nominating and corporate governance committee of a listed company be comprised solely of independent directors. Each committee will operate under a charter that will be approved by our board of directors and will have the composition and responsibilities described below. The charter of each committee will be available on our website following the closing of this offering.
Audit Committee
Upon the effectiveness of the registration statement of which this prospectus forms a part, we will establish an audit committee of the board of directors. The members of our audit committee will be Teresa A. Harris, Priya Cherian Huskins and Susan J. Kantor. Susan J. Kantor will serve as chair of the audit committee.
Each member of the audit committee is financially literate and our board of directors has determined that Susan J. Kantor qualifies as an “audit committee financial expert” as defined in applicable SEC rules and has accounting or related financial management expertise.
We will adopt an audit committee charter, which will detail the purpose and principal functions of the audit committee, including:
•
assisting board oversight of (1) the integrity of our financial statements, (2) our compliance with legal and regulatory requirements, (3) our independent auditor’s qualifications and independence, and (4) the performance of our internal audit function and independent auditors;
•
the appointment, compensation, retention, replacement, and oversight of the work of the independent auditors and any other independent registered public accounting firm engaged by us;
•
pre-approving all audit and non-audit services to be provided by the independent auditors or any other registered public accounting firm engaged by us, and establishing pre-approval policies and procedures;
•
reviewing and discussing with the independent auditors all relationships the auditors have with us in order to evaluate their continued independence;
•
setting clear hiring policies for employees or former employees of the independent auditors;
•
setting clear policies for audit partner rotation in compliance with applicable laws and regulations;
•
obtaining and reviewing a report, at least annually, from the independent auditors describing (1) the independent auditor’s internal quality-control procedures and (2) any material issues raised by the most recent internal quality-control review, or peer review, of the audit firm, or by any inquiry or investigation by governmental or professional authorities, within the preceding
five years respecting one or more independent audits carried out by the firm and any steps taken to deal with such issues;
•
meeting to review and discuss our annual audited financial statements and quarterly financial statements with management and the independent auditor, including reviewing our specific disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations”;
•
reviewing and approving any related party transaction required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC prior to us entering into such transaction; and
•
reviewing with management, the independent auditors, and our legal advisors, as appropriate, any legal, regulatory or compliance matters, including any correspondence with regulators or government agencies and any employee complaints or published reports that raise material issues regarding our financial statements or accounting policies and any significant changes in accounting standards or rules promulgated by the Financial Accounting Standards Board, the SEC or other regulatory authorities.
Compensation Committee
Upon the effectiveness of the registration statement of which this prospectus forms a part, we will establish a compensation committee of the board of directors. The members of our compensation committee will be Teresa A. Harris, Priya Cherian Huskins and Susan J. Kantor. Teresa A. Harris will serve as chair of the compensation committee. We will adopt a compensation committee charter, which will detail the purpose and responsibility of the compensation committee, including:
•
reviewing and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Officer’s compensation, evaluating our Chief Executive Officer’s performance in light of such goals and objectives and determining and approving the remuneration (if any) of our Chief Executive Officer based on such evaluation;
•
reviewing and making recommendations to our board of directors with respect to the compensation, and any incentive-compensation and equity-based plans that are subject to board approval of all of our other officers;
•
reviewing our executive compensation policies and plans;
•
implementing and administering our incentive compensation equity-based remuneration plans;
•
assisting management in complying with our proxy statement and annual report disclosure requirements;
•
approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our officers and employees;
•
producing a report on executive compensation to be included in our annual proxy statement; and
•
reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors.
The charter will also provide that the compensation committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, independent legal counsel or other adviser and will be directly responsible for the appointment, compensation and oversight of the work of any such adviser. However, before engaging or receiving advice from a compensation consultant, external legal counsel or any other adviser, the compensation committee will consider the independence of each such adviser, including the factors required by Nasdaq and the SEC.
Nominating and Corporate Governance Committee
Upon the effectiveness of the registration statement of which this prospectus forms a part, we will establish a nominating and corporate governance committee of the board of directors. The members of our
nominating and corporate governance committee will be Teresa A. Harris, Priya Cherian Huskins and Susan J. Kantor. Priya Cherian Huskins will serve as chair of the nominating and corporate governance committee. We will adopt a nominating and corporate governance committee charter, which will detail the purpose and responsibilities of the nominating and corporate governance committee, including:
•
identifying, screening and reviewing individuals qualified to serve as directors, consistent with criteria approved by the board of directors, and recommending to the board of directors candidates for nomination for appointment at the annual stockholder meeting or to fill vacancies on the board of directors;
•
developing and recommending to the board of directors and overseeing implementation of our corporate governance policies;
•
coordinating and overseeing the annual self-evaluation of the board of directors, its committees, individual directors and management in the governance of the company; and
•
reviewing on a regular basis our overall corporate governance and recommending improvements as and when necessary.
The charter will also provide that the nominating and corporate governance committee may, in its sole discretion, retain or obtain the advice of, and terminate, any search firm to be used to identify director candidates, and will be directly responsible for approving the search firm’s fees and other retention terms.
We have not formally established any specific, minimum qualifications that must be met or skills that are necessary for directors to possess. In general, in identifying and evaluating nominees for director, the board of directors considers educational background, diversity of professional experience, knowledge of our business, integrity, professional reputation, independence, wisdom, and the ability to represent the best interests of our stockholders. Prior to our initial business combination, holders of our public shares will not have the right to recommend director candidates for nomination to our board of directors.
Code of Ethics
Prior to the closing of this offering, we will adopt a code of business conduct and ethics (our “Code of Ethics”) applicable to our directors, officers and employees. We will file a copy of our form of our Code of Ethics as an exhibit to the registration statement of which this prospectus forms a part. You will be able to review this document by accessing our public filings at the SEC’s website at www.sec.gov. In addition, a copy of our Code of Ethics will be provided without charge upon request from us. We intend to disclose any amendments to or waivers of certain provisions of our Code of Ethics in a Current Report on Form 8-K. See “Where You Can Find Additional Information.”
Conflicts of Interest
Our management team is responsible for the management of our affairs. As described above and below, 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, including Anzu Partners, pursuant to which such officer or director is or will be required to present a business combination opportunity to such entities. 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. In addition to the above, directors also owe a duty of care, which is not fiduciary in nature. This duty has been defined as a requirement to act as a reasonably diligent person having both the general knowledge, skill and experience that may reasonably be expected of a person carrying out the same functions as are carried out by that director in relation to the company and the general knowledge, skill and experience which that director has.
As set out above, directors have a duty not to put themselves in a position of conflict and this includes a duty not to engage in self-dealing, or to otherwise benefit as a result of their position. However, in some instances what would otherwise be a breach of this duty can be forgiven and/or authorized in advance
by the stockholders; provided that there is full disclosure by the directors. This can be done by way of permission granted in the amended and restated certificate of incorporation or alternatively by stockholder approval at stockholder meetings.
All of our officers and certain of our directors have fiduciary and contractual duties to Anzu Partners and to certain companies in which it has invested or to certain other entities. While the risk is partially mitigated as a result of Anzu Partners’ venture funds seeking targets of different enterprise sizes than us, if these entities decide to pursue any such opportunity, we may be precluded from pursuing such opportunities. None of the members of our management team who are also employed by our sponsor or its affiliates have any obligation to present us with any opportunity for a potential business combination of which they become aware, subject to his or her fiduciary duties under applicable law. Our sponsor and directors and officers are also not prohibited from sponsoring, investing or otherwise becoming involved with, any other blank check companies, including in connection with their initial business combinations, prior to us completing our initial business combination. Our management team, in their capacities as directors, officers or employees of our sponsor or its affiliates or in their other endeavors, may choose to present potential business combinations to the related entities described above, current or future entities affiliated with or managed by our sponsor, or third parties, before they present such opportunities to us, subject to his or her fiduciary duties under applicable law and any other applicable fiduciary duties. In addition, Messrs. Wulfsohn, Joy and Ganz are subject certain non-compete agreements or other obligations with respect to Ashland.
Our directors and officers presently have, and any of them in the future may have, additional, fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present a business combination opportunity to such entity. Accordingly, if any of our directors or officers becomes aware of a business combination opportunity that is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, he or she may need to honor these fiduciary or contractual obligations to present such business combination opportunity to such entity, subject to his or her fiduciary duties under applicable law. Our amended and restated certificate of incorporation 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 the company and it is an opportunity that we are able to complete on a reasonable basis. Our directors and officers are also not required to commit any specified amount of time to our affairs, and, accordingly, will have conflicts of interest in allocating management time among various business activities, including identifying potential business combinations and monitoring the related due diligence. See “Risk Factors — Certain of our directors and officers are now, and all of them may in the future become, affiliated with entities engaged in business activities similar to those intended to be conducted by us and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should be presented.”
We do not believe, however, that the fiduciary duties or contractual obligations of our directors or officers will materially adversely affect our ability to identify and pursue business combination opportunities or complete our initial business combination. You should not rely on the historical record of our founders’ and management’s performance as indicative of our future performance. See “Risk Factors — Past performance by our management team and their respective affiliates may not be indicative of future performance of an investment in the company.”
Potential investors should also be aware of the following potential conflicts of interest:
•
None of our directors or officers is required to commit his or her full time to our affairs and, accordingly, may have conflicts of interest in allocating his or her time among various business activities.
•
In the course of their other business activities, our directors and officers may become aware of investment and business opportunities that may be appropriate for presentation to us as well as the other entities with which they are affiliated. Our management may have conflicts of interest in determining to which entity a particular business opportunity should be presented. For a complete description of our management’s other affiliations, see “— Directors, Director Nominees and Officers.”
•
Our initial stockholders, directors and officers have agreed to waive their redemption rights with respect to any founder shares and public shares held by them in connection with the consummation of our initial business combination. Additionally, our initial stockholders have agreed to waive their redemption rights with respect to their founder shares if we fail to consummate our initial business combination within 24 months after the closing of this offering or during any Extension Period. However, if our initial stockholders (or any of our directors, officers or affiliates) acquire public shares, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to consummate our initial business combination within the prescribed time frame. If we do not complete our initial business combination within such applicable time period, the proceeds of the sale of the private placement warrants held in the trust account will be used to fund the redemption of our public shares, and the private placement warrants will expire worthless. With certain limited exceptions, the founder shares will not be transferable, assignable or salable by our initial stockholders until the earlier of: (1) one year after the completion of our initial business combination; and (2) subsequent to our initial business combination (x) if the last reported sale price of shares of our Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, rights issuances, consolidations, reorganizations, recapitalizations and other similar transactions) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination or (y) the date on which we complete a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of our public stockholders having the right to exchange their shares of common stock for cash, securities or other property. With certain limited exceptions, the private placement warrants and the shares of common stock underlying such warrants, will not be transferable, assignable or salable by our sponsor until 30 days after the completion of our initial business combination. Since our sponsor and directors and officers may directly or indirectly own shares of common stock and warrants following this offering, our directors and officers 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.
•
Our directors and officers may negotiate employment or consulting agreements with a target business in connection with a particular business combination. These agreements may provide for them to receive compensation following our initial business combination and as a result, may cause them to have conflicts of interest in determining whether to proceed with a particular business combination.
•
Our directors and officers may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such directors and officers was included by a target business as a condition to any agreement with respect to our initial business combination.
The conflicts described above may not be resolved in our favor.
Accordingly, as a result of multiple business affiliations, our directors and officers have similar legal obligations relating to presenting business opportunities meeting the above-listed criteria to multiple entities. Below is a table summarizing the entities to which our directors, officers and director nominees currently have fiduciary duties or contractual obligations:
|
Individual
|
|
|
Entity
|
|
|
Entity’s Business
|
|
|
Affiliation
|
|
|
William Wulfsohn
|
|
|
Avient
|
|
|
Specialty chemicals
|
|
|
Board Member; Compensation Committee Member; Audit Committee Member
|
|
|
Dr. Whitney Haring-Smith
|
|
|
Anzu Partners
|
|
|
Investment firm
|
|
|
Co-founder & Managing Partner
|
|
| |
|
|
Adaptive Surface Technologies
|
|
|
Industrial technology
|
|
|
Board Member
|
|
|
Individual
|
|
|
Entity
|
|
|
Entity’s Business
|
|
|
Affiliation
|
|
| |
|
|
Voltaiq
|
|
|
Software solutions
|
|
|
Board Member
|
|
| |
|
|
Sofregen Medical
|
|
|
Biomaterials
|
|
|
Board Chair
|
|
| |
|
|
Slyce Acquisition
|
|
|
Information technology services
|
|
|
Board Chair
|
|
|
John W. Joy
|
|
|
Anzu Partners
|
|
|
Investment firm
|
|
|
Employee
|
|
|
Peter J. Ganz
|
|
|
Holocaust & Humanity Center
|
|
|
Non-profit
|
|
|
Executive Committee
|
|
| |
|
|
Innovators Legal
|
|
|
Law firm
|
|
|
Of Counsel
|
|
| |
|
|
Ashland
|
|
|
Specialty chemicals
|
|
|
Consultant
|
|
|
Teresa A. Harris
|
|
|
Altair Engineering, Inc.
|
|
|
Software technology
|
|
|
Board Member, Audit Committee Member, Compensation Committee Chair, M&A Committee Member
|
|
| |
|
|
Bungie, Inc.
|
|
|
Video game development
|
|
|
Board Member, Audit Committee Chair, Compensation Committee Member
|
|
| |
|
|
USA Climbing
|
|
|
Sports non-profit
|
|
|
Board Member
|
|
| |
|
|
Landmark West
|
|
|
Historical building restoration non-profit
|
|
|
Board Director, Audit Committee Member
|
|
|
Priya Cherian Huskins
|
|
|
Woodruff Sawyer
|
|
|
Insurance
|
|
|
Employee, Compensation Committee Chair, Nominating and Corporate Governance Committee Member, Technology Risk Committee Member
|
|
| |
|
|
Realty Income Corporation
|
|
|
REIT
|
|
|
Compensation Committee Chair, Nominating and Corporate Governance Committee Member
|
|
| |
|
|
Stanford Rock Center for Corporate Governance
|
|
|
Academia
|
|
|
Advisory Member
|
|
| |
|
|
NMI Holdings, Inc.
|
|
|
Insurance
|
|
|
Board Member
|
|
|
Susan J. Kantor
|
|
|
Teknor Apex
|
|
|
Specialty chemicals
|
|
|
Board Member
|
|
| |
|
|
Guest Services
|
|
|
Hospitality
|
|
|
Board Member, Audit Committee Member
|
|
| |
|
|
Lionbridge Technologies
|
|
|
Translation services
|
|
|
Board Member, Audit Committee Member
|
|
| |
|
|
International Council on Clean Transportation
|
|
|
Non-profit
|
|
|
Board Member, Audit Committee Chair
|
|
| |
|
|
Point Pleasant Resort
|
|
|
Travel and leisure
|
|
|
Board Member, Treasurer
|
|
(1)
Includes Anzu Partners and certain of its funds and other affiliated companies.
Accordingly, if any of the above directors or officers become aware of a business combination opportunity which is suitable for any of the above entities to which he or she has then-current fiduciary or
contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such business combination opportunity to such entity, and only present it to us if such entity rejects the opportunity, subject to his or her fiduciary duties under applicable law. Our amended and restated certificate of incorporation will provide that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of the company and it is an opportunity that we are able to complete on a reasonable basis. We do not believe, however, that any of the foregoing fiduciary duties or contractual obligations will materially adversely affect our ability to identify and pursue business combination opportunities or complete our initial business combination.
We are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor, directors or officers. In the event we seek to complete our initial business combination with such a company, we, or a committee of independent and disinterested directors, would obtain an opinion from an independent investment banking firm or another valuation or appraisal firm that regularly renders fairness opinions on the type of target business we are seeking to acquire that such an initial business combination is fair to our company from a financial point of view.
In addition, our sponsor or any of its affiliates may make additional investments in the company in connection with the initial business combination, although our sponsor and its affiliates have no obligation or current intention to do so. If our sponsor or any of its affiliates elects to make additional investments, such proposed investments could influence our sponsor’s motivation to complete an initial business combination.
In the event that we submit our initial business combination to our public stockholders for a vote, our initial stockholders, directors and officers have agreed, pursuant to the terms of a letter agreement entered into with us, to vote any founder shares (and their permitted transferees will agree) and public shares held by them in favor of our initial business combination.
Limitation on Liability and Indemnification of Directors and Officers
Our amended and restated certificate of incorporation will provide that our officers and directors will be indemnified by us to the fullest extent authorized by Delaware law, as it now exists or may in the future be amended. In addition, our amended and restated certificate of incorporation will provide that our directors will not be personally liable for monetary damages to us or stockholders for breaches of their fiduciary duty as directors, except to the extent such exemption from liability or limitation thereof is not permitted by the DGCL.
We will enter into agreements with our officers and directors to provide contractual indemnification in addition to the indemnification provided for in our amended and restated certificate of incorporation. Our bylaws also permit us to maintain insurance on behalf of any officer, director or employee for any liability arising out of his or her actions, regardless of whether Delaware law would permit such indemnification. We will obtain a policy of directors’ and officers’ liability insurance that insures our officers and directors against the cost of defense, settlement or payment of a judgment in some circumstances and insures us against our obligations to indemnify our officers and directors.
These provisions may discourage stockholders from bringing a lawsuit against our directors for breach of their fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative litigation against directors and officers, even though such an action, if successful, might otherwise benefit us and our stockholders. Furthermore, a stockholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage awards against officers and directors pursuant to these indemnification provisions.
We believe that these provisions, the insurance and the indemnity agreements are necessary to attract and retain talented and experienced officers and directors.
In connection with this registration statement, we have undertaken that insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, we have been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
PRINCIPAL STOCKHOLDERS
The following table sets forth information regarding the beneficial ownership of our shares of common stock as of the date of this prospectus, and as adjusted to reflect the sale of shares of our Class A common stock included in the units offered by this prospectus, and assuming no purchase of units in this offering, by:
•
each person known by us to be the beneficial owner of more than 5% of our issued and outstanding shares of common stock;
•
each of our directors, officers and director nominees; and
•
all our directors, officers and director nominees as a group.
Unless otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all shares of common stock beneficially owned by them. The following table does not reflect record or beneficial ownership of the private placement warrants as these warrants are not exercisable within 60 days of the date of this prospectus.
The post-offering ownership percentage column below assumes that the underwriters do not exercise their over-allotment option, that our sponsor forfeits 1,312,500 founder shares, and that there are 43,750,000 shares of common stock issued and outstanding after this offering.
| |
|
|
Number of Shares
Beneficially
Owned(2)
|
|
|
Before
Offering
|
|
|
Approximate
Percentage
of Issued and
Outstanding
Shares of common
stock
|
|
| |
|
|
After
Offering(2)
|
|
|
Name and Address of Beneficial Owner(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Anzu SPAC GP I LLC (our sponsor)(3)
|
|
|
|
|
9,987,500 |
|
|
|
|
|
98.9% |
|
|
|
|
|
19.8% |
|
|
|
Dr. Whitney Haring-Smith
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
William Wulfsohn
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
John W. Joy
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
Peter J. Ganz
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
Teresa A. Harris
|
|
|
|
|
25,000 |
|
|
|
|
|
* |
|
|
|
|
|
* |
|
|
|
Priya Cherian Huskins
|
|
|
|
|
25,000 |
|
|
|
|
|
* |
|
|
|
|
|
* |
|
|
|
Susan J. Kantor
|
|
|
|
|
25,000 |
|
|
|
|
|
* |
|
|
|
|
|
* |
|
|
|
All directors, officers and director nominees as a group
(seven individuals)
|
|
|
|
|
75,000 |
|
|
|
|
|
1% |
|
|
|
|
|
* |
|
|
*
Less than one percent.
(1)
Unless otherwise noted, the business address of each of the following entities or individuals is c/o Anzu Special Acquisition Corp I, 12610 Race Track Road, Suite 250 Tampa, FL 33626.
(2)
Interests shown consist solely of founder shares, classified as shares of our Class B common stock. Such shares will convert into shares of our Class A common stock on a one-for-one basis, subject to adjustment, as described in the section entitled “Description of Securities.”
(3)
Anzu SPAC GP I LLC, our sponsor, is the record holder of the shares of our Class B common stock reported herein. Whitney Haring-Smith, David Seldin and David Michael share voting and investment control over shares held by our sponsor by virtue of their shared control of our sponsor.
Immediately after this offering, our initial stockholders will beneficially own 20.0% of the then issued and outstanding shares of common stock (assuming our initial stockholders do not purchase any units in this offering) and will have the right to elect all of our directors prior to our initial business
combination as a result of holding all of the founder shares. Holders of our public shares will not have the right to appoint any directors to our board of directors prior to our initial business combination. In addition, because of their ownership block, our initial stockholders may be able to effectively influence the outcome of all other matters requiring approval by our stockholders, including amendments to our amended and restated certificate of incorporation and approval of significant corporate transactions. If we increase or decrease the size of this offering, we will effect a capitalization or share repurchase or redemption or other appropriate mechanism, as applicable, with respect to our founder shares immediately prior to the consummation of this offering in such amount as to maintain the number of founder shares at 20% of our issued and shares of common stock upon the consummation of this offering.
Our sponsor has committed, pursuant to a written agreement, to purchase an aggregate of 11,000,000 (or 12,050,000 warrants if the underwriters’ over-allotment option is exercised in full) private placement warrants at a price of $1.00 per warrant ($11,000,000 in the aggregate or $12,050,000 in the aggregate if the underwriters’ over-allotment option is exercised in full) in a private placement that will occur simultaneously with the closing of this offering. Each private placement warrant entitles the holder to purchase one share of our Class A common stock at a price of $11.50 per share, subject to adjustment as provided herein. If we do not complete our initial business combination within 24 months from the closing of this offering or during any Extension Period, the proceeds of the sale of the private placement warrants held in the trust account will be used to fund the redemption of our public shares, and the private placement warrants will expire worthless. The private placement warrants are identical to the warrants sold as part of the units in this offering except that, so long as they are held by our sponsor or its permitted transferees: (1) they will not be redeemable by us (except as described below under “Description of Securities—Redeemable Warrants—Public Stockholders’ Warrants—Redemption of warrants when the price per share of our Class A common stock equals or exceeds $10.00”); (2) they (including the shares of our Class A common stock issuable upon exercise of these warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by our sponsor until 30 days after the completion of our initial business combination, as described below; (3) they may be exercised by the holders on a cashless basis; and (4) they (including the shares of common stock issuable upon exercise of these warrants) are entitled to registration rights, as described below.
Our sponsor and our directors and officers are deemed to be our “promoters” as such term is defined under the federal securities laws. See “Certain Relationships and Related Party Transactions” for additional information regarding our relationships with our promoters.
Transfers of Founder Shares and Private Placement Warrants
The founder shares, private placement warrants and any shares of our Class A common stock issued upon conversion or exercise thereof are each subject to transfer restrictions pursuant to lock-up provisions in the letter agreement with us to be entered into by our initial stockholders, directors and officers. Those lock-up provisions provide that such securities are not transferable or salable (1) in the case of the founder shares, until the earlier of: (A) one year after the completion of our initial business combination; and (B) subsequent to our initial business combination (x) if the last reported sale price of shares of our Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, rights issuances, consolidations, reorganizations, recapitalizations and other similar transactions) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination or (y) the date on which we complete a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of our public stockholders having the right to exchange their shares of common stock for cash, securities or other property, and (2) in the case of the private placement warrants and the respective shares of our Class A common stock underlying such warrants, until 30 days after the completion of our initial business combination, except in each case (a) to our directors or officers, any affiliates or family members of any of our directors or officers, any members of our sponsor, or any affiliates of our sponsor, (b) in the case of an individual, by gift to a member of the individual’s immediate family or to a trust, the beneficiary of which is a member of the individual’s immediate family or an affiliate of such person, or to a charitable organization; (c) in the case of an individual, by virtue of laws of descent and distribution upon death of the individual; (d) in the case of an individual, pursuant to a qualified domestic relations order; (e) by private sales or transfers made in connection with the consummation of a business combination at prices no greater than the price at which the securities were originally
purchased; (f) in the event of our liquidation prior to our completion of our initial business combination; (g) in the case of an entity, by virtue of the laws of its jurisdiction or its organizational documents or operating agreement; or (h) in the event of our completion of a liquidation, merger, share exchange, reorganization or other similar transaction which results in all of our stockholders having the right to exchange their shares of our Class A common stock for cash, securities or other property subsequent to our completion of our initial business combination; provided, however, that in the case of clauses (a) through (e) these permitted transferees must enter into a written agreement agreeing to be bound by these transfer restrictions.
Registration Rights
The holders of the founder shares, private placement warrants and any warrants that may be issued on conversion of working capital loans (and any shares of our Class A common stock issuable upon the exercise of the private placement warrants or warrants issued upon conversion of the working capital loans and upon conversion of the founder shares) will be entitled to registration rights pursuant to a registration rights agreement to be signed prior to or on the effective date of this offering requiring us to register such securities for resale (in the case of the founder shares, only after conversion to shares of our Class A common stock). The holders of these securities will be entitled to make up to three demands, excluding short form registration demands, that we register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to our completion of our initial business combination and rights to require us to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that we will not be required to effect or permit any registration or cause any registration statement to become effective until termination of the applicable lock-up period as described under “Principal Stockholders—Transfers of Founder Shares and Private Placement Warrants.” We will bear the expenses incurred in connection with the filing of any such registration statements.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
On December 30, 2020, our sponsor purchased 7,187,500 founder shares for an aggregate purchase price of $25,000, or approximately $0.004 per share. On February 19, 2021, we effected a stock dividend of 2,875,000 shares of Class B Common Stock to our sponsor, resulting in our initial stockholders holding an aggregate of 10,062,500 founder shares. In February 2021, our sponsor transferred 25,000 founder shares to each of Teresa A. Harris, Priya Cherian Huskins and Susan J. Kantor, our independent director nominees. Our initial stockholders will collectively own 20% of our issued and outstanding shares after this offering (assuming they do not purchase any units in this offering). If we increase or decrease the size of this offering, we will effect a capitalization or share repurchase or redemption or other appropriate mechanism, as applicable, with respect to our founder shares immediately prior to the consummation of this offering in such amount as to maintain the number of founder shares at 20% of our issued and shares of common stock upon the consummation of this offering. Up to 1,312,500 founder shares are subject to forfeiture by our sponsor depending on the extent to which the underwriters’ over-allotment option is exercised.
Our sponsor has committed, pursuant to a written agreement, to purchase an aggregate of 11,000,000 (or 12,050,000 warrants if the underwriters’ over-allotment option is exercised in full) private placement warrants for a purchase price of $1.00 per warrant ($11,000,000 in the aggregate or $12,050,000 in the aggregate if the underwriters’ over-allotment option is exercised in full) in a private placement that will occur simultaneously with the closing of this offering. Each private placement warrant may be exercised for one share of our Class A common stock at a price of $11.50 per share, subject to adjustment as provided herein. The private placement warrants (including the shares of our Class A common stock issuable upon exercise of the private placement warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by it until 30 days after the completion of our initial business combination.
As more fully discussed in “Management—Conflicts of Interest,” if any of our directors or officers becomes aware of a business combination opportunity that falls within the line of business of any entity to which he or she has then-current fiduciary or contractual obligations, he or she may be required to present such business combination opportunity to such entity prior to presenting such business combination opportunity to us. Our directors and officers currently have certain relevant fiduciary duties or contractual obligations that may take priority over their duties to us.
We will enter into an Administrative Services Agreement with an affiliate of our sponsor, pursuant to which we will pay a total of $40,520.83 per month for office space, administrative and support services to such affiliate. Upon completion of our initial business combination or our liquidation, we will cease paying these monthly fees. Accordingly, in the event the consummation of our initial business combination takes the maximum 24 months, an affiliate of our sponsor will be paid a total of $972,500 ($40,520.83 per month) for office space, administrative and support services and will be entitled to be reimbursed for any out-of-pocket expenses.
Our sponsor, directors and officers, or any of their respective affiliates, will be reimbursed for any out- of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Our audit committee will review on a quarterly basis all payments that were made to our sponsor, directors, officers or our or any of their respective affiliates and will determine which expenses and the amount of expenses that will be reimbursed. There is no cap or ceiling on the reimbursement of out-of-pocket expenses incurred by such persons in connection with activities on our behalf.
Our sponsor has agreed to loan us up to $300,000 under an unsecured promissory note to be used for a portion of the expenses of this offering. As of December 31, 2020, we had borrowed no amount under the $300,000 promissory note with our sponsor. These loans are non-interest bearing, unsecured and are due at the earlier of March 31, 2022 and the closing of this offering. These loans will be repaid upon completion of this offering out of the $2,000,000 of offering proceeds that has been allocated for the payment of offering expenses (other than underwriting commissions) not held in the trust account. The value of our sponsor’s interest in this loan transaction corresponds to the principal amount outstanding under any such loan.
In addition, in order to fund working capital deficiencies or finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate of our sponsor or certain of our
directors and officers may, but are not obligated to, loan us funds as may be required. If we complete our initial business combination, we may repay such loaned amounts out of the proceeds of the trust account released to us. Otherwise, such loans may be repaid only out of funds held outside the trust account. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used to repay such loaned amounts. Up to $1,500,000 of such loans may be convertible into warrants at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the private placement warrants issued to our sponsor. The terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans. We do not expect to seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver of any and all rights to seek access to funds in our trust account.
After our initial business combination, members of our management team who remain with us may be paid consulting, management or other fees from the combined company with any and all amounts being fully disclosed to our stockholders, to the extent then known, in the tender offer or proxy solicitation materials, as applicable, furnished to our stockholders. It is unlikely the amount of such compensation will be known at the time of distribution of such tender offer materials or at the time of a stockholder meeting held to consider our initial business combination, as applicable, as it will be up to the directors of the post- combination business to determine executive officer and director compensation.
We have entered into a registration rights agreement with respect to the founder shares, private placement warrants and warrants issued upon conversion of working capital loans (if any), which is described under the heading “Principal Stockholders—Registration Rights.”
Related Party Policy
We have not yet adopted a formal policy for the review, approval or ratification of related party transactions. Accordingly, the transactions discussed above were not reviewed, approved or ratified in accordance with any such policy.
Prior to the closing of this offering, we will adopt our Code of Business Conduct and Ethics, or our Code of Ethics, requiring us to avoid, wherever possible, all conflicts of interests, except under guidelines or resolutions approved by our board of directors (or the appropriate committee of our board of directors) or as disclosed in our public filings with the SEC. Under our Code of Ethics, conflict of interest situations will include any financial transaction, arrangement or relationship (including any indebtedness or guarantee of indebtedness) involving the company.
In addition, our audit committee, pursuant to a written charter that we will adopt prior to the consummation of this offering, will be responsible for reviewing and approving related party transactions to the extent that we enter into such transactions. An affirmative vote of a majority of the members of the audit committee present at a meeting at which a quorum is present will be required in order to approve a related party transaction. A majority of the members of the entire audit committee will constitute a quorum. Without a meeting, the unanimous written consent of all of the members of the audit committee will be required to approve a related party transaction. Our audit committee will review on a quarterly basis all payments that were made by us to our sponsor, directors or officers, or our or any of their respective affiliates.
These procedures are intended to determine whether any such related party transaction impairs the independence of a director or presents a conflict of interest on the part of a director, employee or officer.
To further minimize conflicts of interest, we have agreed not to consummate an initial business combination with an entity that is affiliated with any of our sponsor, directors or officers unless we, or a committee of independent and disinterested directors, have obtained an opinion from an independent investment banking firm or another valuation or appraisal firm that regularly renders fairness opinions on the type of target business we are seeking to acquire that our initial business combination is fair to our company from a financial point of view. Furthermore, there will be no finder’s fees, reimbursements or cash payments made by us to our sponsor, directors or officers, or our or any of their respective affiliates, for services rendered to us prior to or in connection with the completion of our initial business combination, other than the following payments, none of which will be made from the proceeds of this offering and the
sale of the private placement warrants held in the trust account prior to the completion of our initial business combination:
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repayment of an aggregate of up to $300,000 in loans made to us by our sponsor to cover offering- related and organizational expenses;
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payment to an affiliate of our sponsor of a total of $40,520.83 per month for office space, administrative and support services;
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reimbursement for any out-of-pocket expenses related to identifying, investigating and completing an initial business combination; and
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repayment of loans which may be made by our sponsor or an affiliate of our sponsor or certain of our directors and officers to fund working capital deficiencies or finance transaction costs in connection with an intended initial business combination, the terms of which have not been determined nor have any written agreements been executed with respect thereto. Up to $1,500,000 of such loans may be convertible into warrants, at a price of $1.00 per warrant at the option of the lender.
The above payments may be funded using the net proceeds of this offering and the sale of the private placement warrants not held in the trust account or, upon completion of the initial business combination, from any amounts remaining from the proceeds of the trust account released to us in connection therewith.
DESCRIPTION OF SECURITIES
We are a Delaware corporation and our affairs will be governed by our amended and restated certificate of incorporation, the Delaware General Corporation Law, or DGCL, and applicable stock exchange rules. Pursuant to our amended and restated certificate of incorporation which will be adopted upon the consummation of this offering, we will be authorized to issue 400,000,000 shares of our Class A common stock, $0.0001 par value each, 40,000,000 shares of our Class B common stock, $0.0001 par value each, and 1,000,000 undesignated shares of preferred stock, $0.0001 par value each. The following description summarizes the material terms of our shares as set out more particularly in our amended and restated certificate of incorporation. Because it is only a summary, it may not contain all the information that is important to you.
Units
Each unit has an offering price of $10.00 and consists of one share of our Class A common stock and one-third of one redeemable warrant. Each whole warrant entitles the holder thereof to purchase one share of our Class A common stock at a price of $11.50 per share, subject to adjustment as described in this prospectus. Pursuant to the warrant agreement, a warrant holder may exercise its warrants only for a whole number of the company’s shares of our Class A common stock. This means only a whole warrant may be exercised at any given time by a warrant holder.
The shares of our Class A common stock and warrants constituting the units will begin separate trading on the 52nd day following the date of this prospectus (or, if such date is not a business day, the following business day) unless the representatives inform us of their decision to allow earlier separate trading, subject to our having filed the Current Report on Form 8-K described below and having issued a press release announcing when such separate trading will begin. Once the shares of our Class A common stock and warrants commence separate trading, holders will have the option to continue to hold units or separate their units into the component securities. Holders will need to have their brokers contact our transfer agent in order to separate the units into shares of our Class A common stock and warrants. Additionally, the units will automatically separate into their component parts and will not be traded after completion of our initial business combination. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. Accordingly, unless you purchase at least three units, you will not be able to receive or trade a whole warrant.
In no event will the shares of our Class A common stock and warrants be traded separately until we have filed with the SEC a Current Report on Form 8-K which includes an audited balance sheet of the company reflecting our receipt of the gross proceeds at the closing of this offering. We will file the Current Report on Form 8-K promptly after the closing of this offering which will include this audited balance sheet. If the underwriters’ over-allotment option is exercised following the initial filing of such Current Report on Form 8-K, a second or amended Current Report on Form 8-K will be filed to provide updated financial information to reflect the exercise of the underwriters’ over-allotment option.
Common Stock
Upon the closing of this offering, 43,750,000 shares of our common stock will be outstanding (assuming no exercise of the underwriters’ option to purchase additional units and the corresponding forfeiture of 1,312,500 founder shares by our sponsor), including:
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35,000,000 shares of our Class A common stock underlying the units being offered in this offering; and
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8,750,000 shares of our Class B common stock held by our initial stockholders.
If we increase or decrease the size of this offering, we will effect a stock dividend or share contribution back to capital or other appropriate mechanism, as applicable, with respect to shares of our Class B common stock immediately prior to the consummation of this offering in such amount as to maintain the ownership of founder shares by our initial stockholders prior to this offering at 20% of our issued and outstanding shares of our common stock upon the consummation of this offering.
Common stockholders of record are entitled to one vote for each share held on all matters to be voted on by stockholders. Holders of shares of our Class B common stock will have the right to elect all of our directors prior to the consummation of our initial business combination. On any other matter submitted to a vote of our stockholders, holders of shares of our Class B common stock and holders of shares of our Class A common stock will vote together as a single class, except as required by applicable law or stock exchange rule. These provisions of our amended and restated certificate of incorporation may only be amended if approved by a majority of at least 90% of our common stock voting at a stockholder meeting. Unless specified in our amended and restated certificate of incorporation or bylaws, or as required by applicable law or stock exchange rules, the affirmative vote of a majority of our shares of common stock that are voted is required to approve any such matter voted on by our stockholders (other than the election of directors). Directors will be divided into three classes, each of which will generally serve for a term of three years with only one class elected in each year. There is no cumulative voting with respect to the election of directors. Our stockholders are entitled to receive ratable dividends when, as and if declared by the board of directors out of funds legally available therefor.
Because our amended and restated certificate of incorporation will authorize the issuance of up to 400,000,000 shares of our Class A common stock, if we were to enter into a business combination, we may (depending on the terms of such a business combination) be required to increase the number of shares of common stock which we are authorized to issue at the same time as our stockholders vote on the business combination to the extent we seek stockholder approval in connection with our initial business combination.
In accordance with Nasdaq corporate governance requirements, we are not required to hold an annual meeting until not later than one year after our first fiscal year end following our listing on Nasdaq. Under Section 211(b) of the DGCL, we are, however, required to hold an annual meeting of stockholders for the purposes of electing directors in accordance with our bylaws unless such election is made by written consent in lieu of such a meeting. We may not hold an annual meeting of stockholders to elect new directors prior to the consummation of our initial business combination, and thus we may not be in compliance with Section 211(b) of the DGCL, which requires an annual meeting. Therefore, if our stockholders want us to hold an annual meeting prior to the consummation of our initial business combination, they may attempt to force us to hold one by submitting an application to the Delaware Court of Chancery in accordance with Section 211(c) of the DGCL.
We will provide our public stockholders with the opportunity to redeem all or a portion of their shares upon the completion of our initial business combination at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account as of two business days prior to the consummation of our initial business combination, including interest (net of permitted withdrawals), divided by the number of then outstanding public shares, subject to the limitations described herein. The amount in the trust account is initially anticipated to be $10.00 per public share. The per share amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions we will pay to the underwriters. The redemption right will include the requirement that any beneficial owner on whose behalf a redemption right is being exercised must identify itself in order to validly redeem its shares. Each public stockholder may elect to redeem its public shares without voting, and if they do vote, irrespective of whether they vote for or against the proposed transaction. Our sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares and any public shares held by them in connection with the completion of our initial business combination. Permitted transferees of our sponsor, officers or directors will be subject to the same obligations. Unlike many blank check companies that hold stockholder votes and conduct proxy solicitations in conjunction with their initial business combinations and provide for related redemptions of public shares for cash upon completion of such initial business combinations even when a vote is not required by applicable law or stock exchange listing requirements, if a stockholder vote is not required by applicable law or stock exchange listing requirements and we do not decide to hold a stockholder vote for business or other reasons, we will, pursuant to our amended and restated certificate of incorporation, conduct the redemptions pursuant to the tender offer rules of the SEC, and file tender offer documents with the SEC prior to completing our initial business combination. Our amended and restated certificate of incorporation will require these tender offer documents to contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under the SEC’s proxy rules. If, however, a stockholder approval of the transaction is required by
applicable law or stock exchange rules, or we decide to obtain stockholder approval for business or other reasons, we will, like many blank check companies, offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If we seek stockholder approval, unless a different vote is required by applicable law or stock exchange rules, we will complete our initial business combination only if a majority of the shares of common stock voted are voted in favor of our initial business combination. Unless otherwise required by applicable law or stock exchange rules, a quorum for such meeting will consist of the holders present in person or by proxy of shares of outstanding capital stock of the company representing a majority of the voting power of all outstanding shares of capital stock of the company entitled to vote at such meeting. However, the participation of our sponsor, officers, directors, advisors or any of their respective affiliates in privately-negotiated transactions (as described in this prospectus), if any, could result in the approval of our initial business combination even if a majority of our public stockholders vote, or indicate their intention to vote, against such business combination. For purposes of seeking approval of the majority of our outstanding shares of common stock, non-votes will have no effect on the approval of our initial business combination once a quorum is obtained. We intend to give approximately 30 days (but not less than 10 days nor more than 60 days) prior written notice of any such meeting, if required, at which a vote shall be taken to approve our initial business combination. These quorum and voting thresholds and agreements may make it more likely that we will consummate our initial business combination.
If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation will provide that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming more than an aggregate of 15% of the shares sold in this offering, without our prior consent, which we refer to as the “Excess Shares.” However, we would not be restricting our stockholders’ ability to vote all of their shares (including Excess Shares) for or against our initial business combination. Our stockholders’ inability to redeem the Excess Shares will reduce their influence over our ability to complete our initial business combination, and such stockholders could suffer a material loss in their investment if they sell such Excess Shares on the open market. Additionally, such stockholders will not receive redemption distributions with respect to the Excess Shares if we complete the business combination. And, as a result, such stockholders will continue to hold that number of shares exceeding 15% and, in order to dispose such shares would be required to sell their stock in open market transactions, potentially at a loss.
If we seek stockholder approval in connection with our initial business combination, our initial stockholders, officers and directors have (and their permitted transferees, as applicable, will agree) agreed to vote any founder shares and any public shares held by them in favor of our initial business combination. As a result, in addition to the founder shares, we would need 13,125,001, or 37.5% (assuming all issued and outstanding shares are voted and the option to purchase additional units is not exercised), or 2,187,501, or 6.25% (assuming only the minimum number of shares representing a quorum are voted and the over-allotment option is not exercised), of the 35,000,000 public shares sold in this offering to be voted in favor of our initial business combination in order to have such initial business combination approved. Additionally, each public stockholder may elect to redeem its public shares without voting, and if they do vote, irrespective of whether they vote for or against the proposed transaction.
Pursuant to our amended and restated certificate of incorporation, if we are unable to complete our initial business combination within 24 months of the closing of this offering, we will: (1) cease all operations except for the purpose of winding up; (2) as promptly as reasonably possible but no more than ten business days thereafter, subject to lawfully available funds therefor, redeem the public shares, at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (net of permitted withdrawals and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law; and (3) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. Our initial stockholders, officers and directors have entered into a letter agreement with us,
pursuant to which they have agreed to waive their rights to liquidating distributions from the trust account with respect to any founder shares held by them if we fail to complete our initial business combination within 24 months of the closing of this offering. However, if our sponsor or any of our officers or directors acquires public shares after this offering, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to complete our initial business combination within 24 months of the closing of this offering.
In the event of a liquidation, dissolution or winding up of the company after a business combination, our stockholders are entitled to share ratably in all assets remaining available for distribution to them after payment of liabilities and after provision is made for each class of stock, if any, having preference over the common stock. Our stockholders have no preemptive or other subscription rights. There are no sinking fund provisions applicable to the common stock, except that we will provide our stockholders with the opportunity to redeem their public shares for cash equal to their pro rata share of the aggregate amount on deposit in the trust account as of two business days prior to the consummation of our initial business combination, including interest (net of permitted withdrawals), upon the completion of our initial business combination, subject to the limitations described herein.
Founder Shares
The founder shares are designated as shares of our Class B common stock and are identical to the shares of our Class A common stock included in the units being sold in this offering, and holders of founder shares have the same stockholder rights as public stockholders, except that: (1) prior to our initial business combination, only holders of the founder shares have the right to vote on the appointment of directors and holders of a majority of our founder shares may remove a member of the board of directors for any reason; (2) the founder shares are subject to certain transfer restrictions, as described in more detail below; (3) our initial stockholders, directors and officers have entered into a letter agreement with us, pursuant to which they have agreed to waive: (i) their redemption rights with respect to any founder shares and public shares held by them, as applicable, in connection with the completion of our initial business combination; (ii) their redemption rights with respect to any founder shares and public shares held by them in connection with a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or during any Extension Period, or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity; and (iii) their rights to liquidating distributions from the trust account with respect to any founder shares they hold if we fail to complete our initial business combination within 24 months from the closing of this offering or during any Extension Period (although they will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete our initial business combination within the prescribed time frame); (4) the founder shares will automatically convert into shares of our Class A common stock at the time of our initial business combination, or earlier at the option of the holder, on a one-for-one basis, subject to adjustment pursuant to certain anti-dilution rights, as described in more detail below; and (5) the founder shares are entitled to registration rights. If we submit our initial business combination to our public stockholders for a vote, our initial stockholders have agreed (and their permitted transferees will agree), pursuant to the terms of a letter agreement entered into with us, to vote their founder shares and any public shares held by them purchased during or after this offering in favor of our initial business combination.
The founder shares will automatically convert into shares of our Class A common stock at the time of our initial business combination, or earlier at the option of the holder, on a one-for-one basis, subject to adjustment for stock splits, stock dividends, rights issuances, consolidations, reorganizations, recapitalizations and the like, and subject to further adjustment as provided herein. In the case that additional shares of our Class A common stock, or equity-linked securities, are issued or deemed issued in excess of the amounts issued in this offering and related to the closing of our initial business combination, the ratio at which the shares of our Class B common stock will convert into shares of our Class A common stock will be adjusted (unless the holders of a majority of the issued and outstanding shares of our Class B common stock agree to waive such anti-dilution adjustment with respect to any such issuance or deemed issuance) so that the number of shares of our Class A common stock issuable upon conversion of all shares of our Class B
common stock will equal, in the aggregate, on an as-converted basis, 20% of the sum of all shares of common stock issued and outstanding upon the completion of this offering plus all shares of our Class A common stock and equity-linked securities issued or deemed issued in connection with our initial business combination, excluding any shares or equity-linked securities issued, or to be issued, to any seller in our initial business combination. The term “equity-linked securities” refers to any debt or equity securities that are convertible, exercisable or exchangeable for shares of our Class A common stock issued in a financing transaction in connection with our initial business combination, including but not limited to a private placement of equity or debt securities.
With certain limited exceptions, the founder shares are not transferable, assignable or salable (except to our directors and officers and other persons or entities affiliated with our sponsor, each of whom will be subject to the same transfer restrictions) until the earlier of: (A) one year after the completion of our initial business combination; and (B) subsequent to our initial business combination (x) if the last reported sale price of shares of our Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, rights issuances, consolidations, reorganizations, recapitalizations and other similar transactions) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination or (y) the date on which we complete a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of our public stockholders having the right to exchange their shares of common stock for cash, securities or other property.
Preferred Stock
Our amended and restated certificate of incorporation authorize 1,000,000 shares of preferred stock and provide that shares of preferred stock may be issued from time to time in one or more series. Our board of directors will be authorized to fix the voting rights, if any, designations, powers, preferences, the relative, participating, optional or other special rights and any qualifications, limitations and restrictions thereof, applicable to the shares of each series. Our board of directors will be able to, without stockholder approval, issue shares of preferred stock with voting and other rights that could adversely affect the voting power and other rights of the holders of the shares of common stock and could have anti-takeover effects. The ability of our board of directors to issue shares of preferred stock without stockholder approval could have the effect of delaying, deferring or preventing a change of control of us or the removal of existing management. We have no shares of preferred stock issued and outstanding at the date hereof. Although we do not currently intend to issue any shares of preferred stock, we cannot assure you that we will not do so in the future. No shares of preferred stock are being issued or registered in this offering.
Redeemable Warrants
Public Stockholders’ Warrants
Each whole warrant entitles the registered holder to purchase one share of our Class A common stock at a price of $11.50 per share, subject to adjustment as discussed below, at any time commencing on the later of 30 days after the completion of our initial business combination and 12 months from the closing of this offering, except as described below. Pursuant to the warrant agreement, a warrant holder may exercise its warrants only for a whole number of shares of our Class A common stock. This means only a whole warrant may be exercised at a given time by a warrant holder. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. Accordingly, unless you purchase at least three units, you will not be able to receive or trade a whole warrant. The warrants will expire five years after the completion of our initial business combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.
We will not be obligated to deliver any shares of our Class A common stock pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act covering the issuance of the shares of our Class A common stock issuable upon exercise of the warrants is then effective and a prospectus relating thereto is current, subject to our satisfying our obligations described below with respect to registration, or a valid exemption from registration is available, including in connection with a cashless exercise permitted as a result of a notice of redemption described below under “Redemption of warrants when the price per share of our Class A common stock
equals or exceeds $10.00. “No warrant will be exercisable for cash or on a cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption is available. In the event that the conditions in the two immediately preceding sentences are not satisfied with respect to a warrant, the holder of such warrant will not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In the event that a registration statement is not effective for the exercised warrants, the purchaser of a unit containing such warrant will have paid the full purchase price for the unit solely for the share of our Class A common stock underlying such unit.
We are not registering the shares of our Class A common stock issuable upon exercise of the warrants at this time. However, we have agreed that as soon as practicable, but in no event later than 15 business days, after the closing of our initial business combination, we will use our commercially reasonable efforts to file with the SEC a registration statement covering the issuance, under the Securities Act, of the shares of our Class A common stock issuable upon exercise of the warrants, and we will use our commercially reasonable efforts to cause the same to become effective within 60 business days after the closing of our initial business combination and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the warrants in accordance with the provisions of the warrant agreement. If any such registration statement has not been declared effective by the 60th business day following the closing of the initial business combination, holders of the warrants will have the right, during the period beginning on the 61st business day after the closing of the initial business combination and ending upon such registration statement being declared effective by the SEC, and during any other period when the company fails to have maintained an effective registration statement covering the issuance of the Class A common stock issuable upon exercise of the warrants, to exercise such warrants on a “cashless basis.” Notwithstanding the above, if shares of our Class A common stock are, at the time of any exercise of a warrant, not listed on a national securities exchange such that they do not satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement, but will use our commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. In the case of a cashless exercise, each holder would pay the exercise price by surrendering the warrants for that number of shares of our Class A common stock equal to the lesser of (A) the quotient obtained by dividing (x) the product of the number of shares of our Class A common stock underlying the warrants, multiplied by the excess of the “fair market value” (defined below) less the exercise price of the warrants by (y) the fair market value and (B) 0.361 shares of our Class A common stock per warrant. The “fair market value” as used in the preceding sentence shall mean the volume weighted average price of the shares of our Class A common stock for the 10 trading days ending on the trading day prior to the date on which the notice of exercise is received by the warrant agent.
Redemption of warrants when the price per share of our Class A common stock equals or exceeds $18.00. Once the warrants become exercisable, we may redeem the outstanding warrants (except as described herein with respect to the private placement warrants):
•
in whole and not in part;
•
at a price of $0.01 per warrant;
•
upon not less than 30 days’ prior written notice of redemption to each warrant holder; and
•
if, and only if, the last reported sale price of the shares of our Class A common stock for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which we send the notice of redemption to the warrant holders (which we refer to as the “Reference Value”) equals or exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “—Anti-dilution Adjustments”).
We will not redeem the warrants as described above unless a registration statement under the Securities Act covering the issuance of the shares of our Class A common stock issuable upon exercise of the warrants is then effective and a current prospectus relating to those shares of our Class A common stock
is available throughout the 30-day redemption period. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws.
We have established the last of the redemption criterion discussed above to prevent a redemption call unless there is at the time of the call a significant premium to the warrant exercise price. If the foregoing conditions are satisfied and we issue a notice of redemption of the warrants, each warrant holder will be entitled to exercise his, her or its warrant prior to the scheduled redemption date. However, the price of the shares of our Class A common stock may fall below the $18.00 redemption trigger price (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “—Anti-dilution Adjustments”) as well as the $11.50 (for whole shares) warrant exercise price after the redemption notice is issued.
Redemption of warrants when the price per share of our Class A common stock equals or exceeds $10.00. Once the warrants become exercisable, we may redeem the outstanding warrants:
•
in whole and not in part;
•
at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares determined by reference to the table below, based on the redemption date and the “fair market value” of shares of our Class A common stock (as defined below) except as otherwise described below;
•
if, and only if, the Reference Value (as defined above under “—Redemption of warrants when the price per share of our Class A common stock equals or exceeds $18.00”) equals or exceeds $10.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “—Anti-dilution Adjustments”); and
•
if the Reference Value is less than $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “—Anti-dilution Adjustments”), the private placement warrants must also be concurrently called for redemption on the same terms as the outstanding public warrants, as described above.
During the period beginning on the date the notice of redemption is given, holders may elect to exercise their warrants on a cashless basis. The numbers in the table below represent the number of shares of our Class A common stock that a warrant holder will receive upon such cashless exercise in connection with a redemption by us pursuant to this redemption feature, based on the “fair market value” of shares of our Class A common stock on the corresponding redemption date (assuming holders elect to exercise their warrants and such warrants are not redeemed for $0.10 per warrant), determined for these purposes based on volume weighted average price of shares of our Class A common stock during the 10 trading days immediately following the date on which the notice of redemption is sent to the holders of warrants, and the number of months that the corresponding redemption date precedes the expiration date of the warrants, each as set forth in the table below. We will provide our warrant holders with the final fair market value no later than one business day after the 10-trading day period described above ends.
Pursuant to the warrant agreement, references above to shares of our Class A common stock shall include a security other than shares of our Class A common stock into which the shares of our Class A common stock have been converted or exchanged for in the event we are not the surviving company in our initial business combination. The numbers in the table below will not be adjusted when determining the number of shares of our Class A common stock to be issued upon exercise of the warrants if we are not the surviving entity following our initial business combination.
The share prices set forth in the column headings of the table below will be adjusted as of any date on which the number of shares issuable upon exercise of a warrant or the exercise price of a warrant is adjusted as set forth under the heading “—Anti-dilution Adjustments” below. If the number of shares issuable upon exercise of a warrant is adjusted, the adjusted share prices in the column headings will equal the share prices immediately prior to such adjustment, multiplied by a fraction, the numerator of which is the
number of shares deliverable upon exercise of a warrant immediately prior to such adjustment and the denominator of which is the number of shares deliverable upon exercise of a warrant as so adjusted. The number of shares in the table below shall be adjusted in the same manner and at the same time as the number of shares issuable upon exercise of a warrant. If the exercise price of a warrant is adjusted, (a) in the case of an adjustment pursuant to the fifth paragraph under the heading “—Anti-dilution Adjustments” below, the adjusted share prices in the column headings will equal the unadjusted share price multiplied by a fraction, the numerator of which is the higher of the Market Value and the Newly Issued Price as set forth under the heading “—Anti-dilution Adjustments” and the denominator of which is $10.00 and (b) in the case of an adjustment pursuant to the second paragraph under the heading “—Anti-dilution Adjustments” below, the adjusted share prices in the column headings will equal the unadjusted share price less the decrease in the exercise price of a warrant pursuant to such exercise price adjustment.
|
Redemption Date (period to expiration of
warrants)
|
|
|
Fair Market Value of Shares of our Class A Common Stock
|
|
| |
≤10.00
|
|
|
11.00
|
|
|
12.00
|
|
|
13.00
|
|
|
14.00
|
|
|
15.00
|
|
|
16.00
|
|
|
17.00
|
|
|
≥18.00
|
|
|
60 months
|
|
|
|
|
0.261 |
|
|
|
|
|
0.281 |
|
|
|
|
|
0.297 |
|
|
|
|
|
0.311 |
|
|
|
|
|
0.324 |
|
|
|
|
|
0.337 |
|
|
|
|
|
0.348 |
|
|
|
|
|
0.358 |
|
|
|
|
|
0.361 |
|
|
|
57 months
|
|
|
|
|
0.257 |
|
|
|
|
|
0.277 |
|
|
|
|
|
0.294 |
|
|
|
|
|
0.310 |
|
|
|
|
|
0.324 |
|
|
|
|
|
0.337 |
|
|
|
|
|
0.348 |
|
|
|
|
|
0.358 |
|
|
|
|
|
0.361 |
|
|
|
54 months
|
|
|
|
|
0.252 |
|
|
|
|
|
0.272 |
|
|
|
|
|
0.291 |
|
|
|
|
|
0.307 |
|
|
|
|
|
0.322 |
|
|
|
|
|
0.335 |
|
|
|
|
|
0.347 |
|
|
|
|
|
0.357 |
|
|
|
|
|
0.361 |
|
|
|
51 months
|
|
|
|
|
0.246 |
|
|
|
|
|
0.268 |
|
|
|
|
|
0.287 |
|
|
|
|
|
0.304 |
|
|
|
|
|
0.320 |
|
|
|
|
|
0.333 |
|
|
|
|
|
0.346 |
|
|
|
|
|
0.357 |
|
|
|
|
|
0.361 |
|
|
|
48 months
|
|
|
|
|
0.241 |
|
|
|
|
|
0.263 |
|
|
|
|
|
0.283 |
|
|
|
|
|
0.301 |
|
|
|
|
|
0.317 |
|
|
|
|
|
0.332 |
|
|
|
|
|
0.344 |
|
|
|
|
|
0.356 |
|
|
|
|
|
0.361 |
|
|
|
45 months
|
|
|
|
|
0.235 |
|
|
|
|
|
0.258 |
|
|
|
|
|
0.279 |
|
|
|
|
|
0.298 |
|
|
|
|
|
0.315 |
|
|
|
|
|
0.330 |
|
|
|
|
|
0.343 |
|
|
|
|
|
0.356 |
|
|
|
|
|
0.361 |
|
|
|
42 months
|
|
|
|
|
0.228 |
|
|
|
|
|
0.252 |
|
|
|
|
|
0.274 |
|
|
|
|
|
0.294 |
|
|
|
|
|
0.312 |
|
|
|
|
|
0.328 |
|
|
|
|
|
0.342 |
|
|
|
|
|
0.355 |
|
|
|
|
|
0.361 |
|
|
|
39 months
|
|
|
|
|
0.221 |
|
|
|
|
|
0.246 |
|
|
|
|
|
0.269 |
|
|
|
|
|
0.290 |
|
|
|
|
|
0.309 |
|
|
|
|
|
0.325 |
|
|
|
|
|
0.340 |
|
|
|
|
|
0.354 |
|
|
|
|
|
0.361 |
|
|
|
36 months
|
|
|
|
|
0.213 |
|
|
|
|
|
0.239 |
|
|
|
|
|
0.263 |
|
|
|
|
|
0.285 |
|
|
|
|
|
0.305 |
|
|
|
|
|
0.323 |
|
|
|
|
|
0.339 |
|
|
|
|
|
0.353 |
|
|
|
|
|
0.361 |
|
|
|
33 months
|
|
|
|
|
0.205 |
|
|
|
|
|
0.232 |
|
|
|
|
|
0.257 |
|
|
|
|
|
0.280 |
|
|
|
|
|
0.301 |
|
|
|
|
|
0.320 |
|
|
|
|
|
0.337 |
|
|
|
|
|
0.352 |
|
|
|
|
|
0.361 |
|
|
|
30 months
|
|
|
|
|
0.196 |
|
|
|
|
|
0.224 |
|
|
|
|
|
0.250 |
|
|
|
|
|
0.274 |
|
|
|
|
|
0.297 |
|
|
|
|
|
0.316 |
|
|
|
|
|
0.335 |
|
|
|
|
|
0.351 |
|
|
|
|
|
0.361 |
|
|
|
27 months
|
|
|
|
|
0.185 |
|
|
|
|
|
0.214 |
|
|
|
|
|
0.242 |
|
|
|
|
|
0.268 |
|
|
|
|
|
0.291 |
|
|
|
|
|
0.313 |
|
|
|
|
|
0.332 |
|
|
|
|
|
0.350 |
|
|
|
|
|
0.361 |
|
|
|
24 months
|
|
|
|
|
0.173 |
|
|
|
|
|
0.204 |
|
|
|
|
|
0.233 |
|
|
|
|
|
0.260 |
|
|
|
|
|
0.285 |
|
|
|
|
|
0.308 |
|
|
|
|
|
0.329 |
|
|
|
|
|
0.348 |
|
|
|
|
|
0.361 |
|
|
|
21 months
|
|
|
|
|
0.161 |
|
|
|
|
|
0.193 |
|
|
|
|
|
0.223 |
|
|
|
|
|
0.252 |
|
|
|
|
|
0.279 |
|
|
|
|
|
0.304 |
|
|
|
|
|
0.326 |
|
|
|
|
|
0.347 |
|
|
|
|
|
0.361 |
|
|
|
18 months
|
|
|
|
|
0.146 |
|
|
|
|
|
0.179 |
|
|
|
|
|
0.211 |
|
|
|
|
|
0.242 |
|
|
|
|
|
0.271 |
|
|
|
|
|
0.298 |
|
|
|
|
|
0.322 |
|
|
|
|
|
0.345 |
|
|
|
|
|
0.361 |
|
|
|
15 months
|
|
|
|
|
0.130 |
|
|
|
|
|
0.164 |
|
|
|
|
|
0.197 |
|
|
|
|
|
0.230 |
|
|
|
|
|
0.262 |
|
|
|
|
|
0.291 |
|
|
|
|
|
0.317 |
|
|
|
|
|
0.342 |
|
|
|
|
|
0.361 |
|
|
|
12 months
|
|
|
|
|
0.111 |
|
|
|
|
|
0.146 |
|
|
|
|
|
0.181 |
|
|
|
|
|
0.216 |
|
|
|
|
|
0.250 |
|
|
|
|
|
0.282 |
|
|
|
|
|
0.312 |
|
|
|
|
|
0.339 |
|
|
|
|
|
0.361 |
|
|
|
9 months
|
|
|
|
|
0.090 |
|
|
|
|
|
0.125 |
|
|
|
|
|
0.162 |
|
|
|
|
|
0.199 |
|
|
|
|
|
0.237 |
|
|
|
|
|
0.272 |
|
|
|
|
|
0.305 |
|
|
|
|
|
0.336 |
|
|
|
|
|
0.361 |
|
|
|
6 months
|
|
|
|
|
0.065 |
|
|
|
|
|
0.099 |
|
|
|
|
|
0.137 |
|
|
|
|
|
0.178 |
|
|
|
|
|
0.219 |
|
|
|
|
|
0.259 |
|
|
|
|
|
0.296 |
|
|
|
|
|
0.331 |
|
|
|
|
|
0.361 |
|
|
|
3 months
|
|
|
|
|
0.034 |
|
|
|
|
|
0.065 |
|
|
|
|
|
0.104 |
|
|
|
|
|
0.150 |
|
|
|
|
|
0.197 |
|
|
|
|
|
0.243 |
|
|
|
|
|
0.286 |
|
|
|
|
|
0.326 |
|
|
|
|
|
0.361 |
|
|
|
0 months
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
0.042 |
|
|
|
|
|
0.115 |
|
|
|
|
|
0.179 |
|
|
|
|
|
0.233 |
|
|
|
|
|
0.281 |
|
|
|
|
|
0.323 |
|
|
|
|
|
0.361 |
|
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The exact fair market value and redemption date may not be set forth in the table above, in which case, if the fair market value is between two values in the table or the redemption date is between two redemption dates in the table, the number of shares of our Class A common stock to be issued for each warrant exercised will be determined by a straight-line interpolation between the number of shares set forth for the higher and lower fair market values and the earlier and later redemption dates, as applicable, based on a 365 or 366-day year, as applicable. For example, if the volume weighted average price of shares of our Class A common stock during the 10 trading days immediately following the date on which the notice of redemption is sent to the holders of the warrants is $11.00 per share, and at such time there are 57 months until the expiration of the warrants, holders may choose to, in connection with this redemption feature, exercise their warrants for 0.277 shares of our Class A common stock for each whole warrant. For an example where the exact fair market value and redemption date are not as set forth in the table above, if the volume weighted average price of shares of our Class A common stock during the 10 trading days immediately following the date on which the notice of redemption is sent to the holders of the warrants is $13.50 per share, and at such time there are 38 months until the expiration of the warrants, holders may choose to, in connection with this redemption feature, exercise their warrants for 0.298 shares of our Class A
common stock for each whole warrant. In no event will the warrants be exercisable in connection with this redemption feature for more than 0.361 shares of our Class A common stock per warrant (subject to adjustment). Finally, as reflected in the table above, if the warrants are out of the money and about to expire, they cannot be exercised on a cashless basis in connection with a redemption by us pursuant to this redemption feature, since they will not be exercisable for any shares of our Class A common stock.
This redemption feature differs from the typical warrant redemption features used in some other blank check offerings, which typically only provide for a redemption of warrants for cash (other than the private placement warrants) when the trading price for the shares of our Class A common stock exceeds $18.00 per share for a specified period of time. This redemption feature is structured to allow for all of the outstanding warrants to be redeemed when the shares of our Class A common stock are trading at or above $10.00 per share, which may be at a time when the trading price of shares of our Class A common stock is below the exercise price of the warrants. We have established this redemption feature to provide us with the flexibility to redeem the warrants without the warrants having to reach the $18.00 per share threshold set forth above under “—Redemption of warrants when the price per share of our Class A common stock equals or exceeds $18.00.” Holders choosing to exercise their warrants in connection with a redemption pursuant to this feature will, in effect, receive a number of shares for their warrants based on an option pricing model with a fixed volatility input as of the date of this prospectus. This redemption right provides us with an additional mechanism by which to redeem all of the outstanding warrants, and therefore have certainty as to our capital structure as the warrants would no longer be outstanding and would have been exercised or redeemed. We will be required to pay the applicable redemption price to warrant holders if we choose to exercise this redemption right and it will allow us to quickly proceed with a redemption of the warrants if we determine it is in our best interest to do so. As such, we would redeem the warrants in this manner when we believe it is in our best interest to update our capital structure to remove the warrants and pay the redemption price to the warrant holders.
As stated above, we can redeem the warrants when the shares of our Class A common stock are trading at a price starting at $10.00, which is below the exercise price of $11.50, because it will provide certainty with respect to our capital structure and cash position while providing warrant holders with the opportunity to exercise their warrants on a cashless basis for the applicable number of shares. If we choose to redeem the warrants when the shares of our Class A common stock are trading at a price below the exercise price of the warrants, this could result in the warrant holders receiving fewer shares of our Class A common stock than they would have received if they had chosen to wait to exercise their warrants for shares of our Class A common stock if and when such shares of our Class A common stock were trading at a price higher than the exercise price of $11.50.
No fractional shares of our Class A common stock will be issued upon exercise. If, upon exercise, a holder would be entitled to receive a fractional interest in a share, we will round down to the nearest whole number of the number of shares of our Class A common stock to be issued to the holder. If, at the time of redemption, the warrants are exercisable for a security other than the shares of our Class A common stock pursuant to the warrant agreement (for instance, if we are not the surviving company in our initial business combination), the warrants may be exercised for such security. At such time as the warrants become exercisable for a security other than the shares of our Class A common stock, the Company (or surviving company) will use its commercially reasonable efforts to register under the Securities Act the security issuable upon the exercise of the warrants.
Redemption procedures. A holder of a warrant may notify us in writing in the event it elects to be subject to a requirement that such holder will not have the right to exercise such warrant, to the extent that after giving effect to such exercise, such person (together with such person’s affiliates), to the warrant agent’s actual knowledge, would beneficially own in excess of 9.8% (or such other amount as a holder may specify) of the shares of our Class A common stock issued and outstanding immediately after giving effect to such exercise.
Anti-dilution Adjustments. If the number of issued and outstanding shares of our Class A common stock is increased by a capitalization or stock dividend payable in shares of our Class A common stock, or by a split-up of shares of our Class A common stock or other similar event, then, on the effective date of such capitalization or stock dividend, split-up or similar event, the number of shares of our Class A common stock issuable on exercise of each warrant will be increased in proportion to such increase
in the issued and outstanding shares of our Class A common stock. A rights offering to holders of shares of our Class A common stock entitling holders to purchase shares of our Class A common stock at a price less than the “historical fair market value” (as defined below) will be deemed a stock dividend of a number of shares of our Class A common stock equal to the product of (1) the number of shares of our Class A common stock actually sold in such rights offering (or issuable under any other equity securities sold in such rights offering that are convertible into or exercisable for shares of our Class A common stock) and (2) one minus the quotient of (x) the price per share of our Class A common stock paid in such rights offering and (y) the historical fair market value. For these purposes, (1) if the rights offering is for securities convertible into or exercisable for shares of our Class A common stock, in determining the price payable for shares of our Class A common stock, there will be taken into account any consideration received for such rights, as well as any additional amount payable upon exercise or conversion and (2) “historical fair market value” means the volume weighted average price of shares of our Class A common stock during the 10 trading day period ending on the trading day prior to the first date on which the shares of our Class A common stock trade on the applicable exchange or in the applicable market, regular way, without the right to receive such rights.
In addition, if we, at any time while the warrants are outstanding and unexpired, pay to all or substantially all of the holders of shares of our Class A common stock a dividend or make a distribution in cash, securities or other assets to the holders of shares of our Class A common stock on account of such shares of our Class A common stock (or other securities into which the warrants are convertible), other than (a) as described above, (b) any cash dividends or cash distributions which, when combined on a per share basis with all other cash dividends and cash distributions paid on the shares of our Class A common stock during the 365-day period ending on the date of declaration of such dividend or distribution does not exceed $0.50 (as adjusted for stock splits, stock dividends, rights issuances, consolidations, reorganizations, recapitalizations and other similar transactions) but only with respect to the amount of the aggregate cash dividends or cash distributions equal to or less than $0.50 per share, (c) to satisfy the redemption rights of the holders of shares of our Class A common stock in connection with a proposed initial business combination, (d) to satisfy the redemption rights of the holders of shares of our Class A common stock in connection with a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity, or (e) in connection with the redemption of our public shares upon our failure to complete our initial business combination, then the warrant exercise price will be decreased, effective immediately after the effective date of such event, by the amount of cash and/or the fair market value of any securities or other assets paid on each share of our Class A common stock in respect of such event.
If the number of issued and outstanding shares of our Class A common stock is decreased by a consolidation, combination, reverse stock split or reclassification of shares of our Class A common stock or other similar event, then, on the effective date of such consolidation, combination, reverse stock split, reclassification or similar event, the number of shares of our Class A common stock issuable on exercise of each warrant will be decreased in proportion to such decrease in issued and outstanding shares of our Class A common stock.
Whenever the number of shares of our Class A common stock purchasable upon the exercise of the warrants is adjusted, as described above, the warrant exercise price will be adjusted by multiplying the warrant exercise price immediately prior to such adjustment by a fraction (x) the numerator of which will be the number of shares of our Class A common stock purchasable upon the exercise of the warrants immediately prior to such adjustment and (y) the denominator of which will be the number of shares of our Class A common stock so purchasable immediately thereafter.
In addition, if (x) we issue additional shares of common stock or equity-linked securities for capital raising purposes in connection with the closing of our initial business combination at an issue price or effective issue price of less than $9.20 per share of common stock (with such issue price or effective issue price to be determined in good faith by our board of directors and, in the case of any such issuance to our sponsor or its affiliates, without taking into account any founder shares held by our sponsor or such affiliates,
as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of our initial business combination on the date of the completion of our initial business combination (net of redemptions), and (z) the volume weighted average trading price of shares of our Class A common stock during the 20 trading day period starting on the trading day prior to the day on which we consummate our initial business combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, the $18.00 per share redemption trigger price described above under “—Redemption of warrants when the price per share of our Class A common stock equals or exceeds $18.00” and “—Redemption of warrants when the price per share of our Class A common stock equals or exceeds $10.00” will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price, and the $10.00 per share redemption trigger price described above under “—Redemption of warrants when the price per share of our Class A common stock equals or exceeds $10.00” will be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price.
In case of any reclassification or reorganization of the issued and outstanding shares of our Class A common stock (other than those described above or that solely affects the par value of such shares of our Class A common stock), or in the case of a merger or consolidation of us with or into another corporation (other than a merger or consolidation in which we are the continuing corporation and that does not result in any reclassification or reorganization of our issued and outstanding shares of our Class A common stock), or in the case of any sale or conveyance to another corporation or entity of the assets or other property of us as an entirety or substantially as an entirety in connection with which we are dissolved, the holders of the warrants will thereafter have the right to purchase and receive, upon the basis and upon the terms and conditions specified in the warrants and in lieu of shares of our Class A common stock immediately theretofore purchasable and receivable upon the exercise of the rights represented thereby, the kind and amount of shares, stock or other equity securities or property (including cash) receivable upon such reclassification, reorganization, merger or consolidation, or upon a dissolution following any such sale or transfer, that the holder of the warrants would have received if such holder had exercised their warrants immediately prior to such event. However, if such holders were entitled to exercise a right of election as to the kind or amount of securities, cash or other assets receivable upon such merger or consolidation, then the kind and amount of securities, cash or other assets for which each warrant will become exercisable will be deemed to be the weighted average of the kind and amount received per share by such holders in such merger or consolidation that affirmatively make such election, and if a tender, exchange or redemption offer has been made to and accepted by such holders (other than a tender, exchange or redemption offer made by the company in connection with redemption rights held by stockholders of the company as provided for in the company’s amended and restated certificate of incorporation or as a result of the redemption of shares of our Class A common stock by the company if a proposed initial business combination is presented to the stockholders of the company for approval) under circumstances in which, upon completion of such tender or exchange offer, the maker thereof, together with members of any group (within the meaning of Rule 13d-5 (b)(1) under the Exchange Act) of which such maker is a part, and together with any affiliate or associate of such maker (within the meaning of Rule 12b-2 under the Exchange Act) and any members of any such group of which any such affiliate or associate is a part, own beneficially (within the meaning of Rule 13d-3 under the Exchange Act) more than 50% of the issued and outstanding shares of our Class A common stock, the holder of a warrant will be entitled to receive the highest amount of cash, securities or other property to which such holder would actually have been entitled as a stockholder if such warrant holder had exercised the warrant prior to the expiration of such tender or exchange offer, accepted such offer and all of the shares of our Class A common stock held by such holder had been purchased pursuant to such tender or exchange offer, subject to adjustment (from and after the consummation of such tender or exchange offer) as nearly equivalent as possible to the adjustments provided for in the warrant agreement. Additionally, if less than 70% of the consideration receivable by the holders of shares of our Class A common stock in such a transaction is payable in the form of shares of common stock in the successor entity that is listed for trading on a national securities exchange or is quoted in an established over-the-counter market, or is to be so listed for trading or quoted immediately following such event, and if the registered holder of the warrant properly exercises the warrant within 30 days following public disclosure of such transaction, the warrant exercise price will be reduced as specified in the warrant agreement based on the per share consideration minus Black-Scholes Warrant Value (as defined in the warrant agreement) of the warrant.
The warrants will be issued in registered form under a warrant agreement between American Stock Transfer & Trust Company, as warrant agent, and us. You should review a copy of the warrant agreement, which will be filed as an exhibit to the registration statement of which this prospectus is a part, for a complete description of the terms and conditions applicable to the warrants. The warrant agreement provides that (a) the terms of the warrants may be amended without the consent of any holder for the purpose of (i) curing any ambiguity or correct any mistake, including to conform the provisions of the warrant agreement to the description of the terms of the warrants and the warrant agreement set forth in this prospectus, or defective provision or (ii) adding or changing any provisions with respect to matters or questions arising under the warrant agreement as the parties to the warrant agreement may deem necessary or desirable and that the parties deem to not adversely affect the rights of the registered holders of the warrants and (b) all other modifications or amendments require the vote or written consent of at least 65% of the then outstanding public warrants and, solely with respect to any amendment to the terms of the private placement warrants or any provision of the warrant agreement with respect to the private placement warrants, at least 65% of the then outstanding private placement warrants.
The warrant holders do not have the rights or privileges of holders of shares of common stock and any voting rights until they exercise their warrants and receive shares of our Class A common stock. After the issuance of shares of our Class A common stock upon exercise of the warrants, each holder will be entitled to one vote for each share held of record on all matters to be voted on by stockholders.
No fractional warrants will be issued upon separation of the units and only whole warrants will trade.
We have agreed that, subject to applicable law, any action, proceeding or claim against us arising out of or relating in any way to the warrant agreement will be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and we irrevocably submit to such jurisdiction, which jurisdiction will be the exclusive forum for any such action, proceeding or claim. See “Risk Factors—Our warrant agreement will designate the courts of the State of New York or the United States District Court for the Southern District of New York as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by holders of our warrants, which could limit the ability of warrant holders to obtain a favorable judicial forum for disputes with our company.” This provision applies to claims under the Securities Act but does not apply to claims under the Exchange Act or any claim for which the federal district courts of the United States of America are the sole and exclusive forum.
Private Placement Warrants
The private placement warrants (including the shares of our Class A common stock issuable upon exercise of the private placement warrants) will not be transferable, assignable or salable until 30 days after the completion of our initial business combination (except, among other limited exceptions as described under “Principal Stockholders—Transfers of Founder Shares and Private Placement Warrants,” to our directors and officers and other persons or entities affiliated with our sponsor) and they will not be redeemable by us (except as described above under “—Public Stockholders’ Warrants—Redemption of warrants when the price per share of our Class A common stock equals or exceeds $10.00”) so long as they are held by our sponsor or its permitted transferees. Our sponsor, or its permitted transferees, has the option to exercise the private placement warrants on a cashless basis and have certain registration rights described herein. Otherwise, the private placement warrants have terms and provisions that are identical to those of the warrants being sold as part of the units in this offering. If the private placement warrants are held by holders other than our sponsor or its permitted transferees, the private placement warrants will be redeemable by us in all redemption scenarios and exercisable by the holders on the same basis as the warrants included in the units being sold in this offering.
Except as described under “—Public Stockholders’ Warrants—Redemption of warrants when the price per share of our Class A common stock equals or exceeds $10.00,” if holders of the private placement warrants elect to exercise them on a cashless basis, they would pay the exercise price by surrendering his, her or its warrants for that number of shares of our Class A common stock equal to the quotient obtained by dividing (x) the product of the number of shares of our Class A common stock underlying the warrants, multiplied by the excess of the “historical fair market value” (defined below) less the exercise price of the warrants by (y) the historical fair market value. For these purposes, the “historical fair market value” shall
mean the average last reported sale price of the shares of our Class A common stock for the 10 trading days ending on the third trading day prior to the date on which the notice of warrant exercise is sent to the warrant agent. The reason that we have agreed that these warrants will be exercisable on a cashless basis so long as they are held by our sponsor and its permitted transferees is because it is not known at this time whether they will be affiliated with us following a business combination. If they remain affiliated with us, their ability to sell our securities in the open market will be significantly limited. We expect to have policies in place that restrict insiders from selling our securities except during specific periods of time. Even during such periods of time when insiders will be permitted to sell our securities, an insider cannot trade in our securities if he or she is in possession of material non-public information. Accordingly, unlike public stockholders who could exercise their warrants and sell the shares of our Class A common stock received upon such exercise freely in the open market in order to recoup the cost of such exercise, the insiders could be significantly restricted from selling such securities. As a result, we believe that allowing the holders to exercise such warrants on a cashless basis is appropriate.
In order to fund working capital deficiencies or finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate of our sponsor or certain of our officers and directors may loan us funds as may be required, although they are under no obligation to advance funds or invest in us. Up to $1,500,000 of such loans may be convertible into warrants of the post business combination entity at a price of $1.00 per warrant at the option of the lender. Such warrants would be identical to the private placement warrants.
Dividends
We have not paid any cash dividends on our shares of common stock to date and do not intend to pay cash dividends prior to the completion of our initial business combination. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of our initial business combination. The payment of any cash dividends subsequent to our initial business combination will be within the discretion of our board of directors at such time. On February 19, 2021, we effected a stock dividend of 2,875,000 shares of Class B Common Stock to our sponsor, resulting in our initial stockholders holding an aggregate of 10,062,500 founder shares. In addition, our board of directors is not currently contemplating and does not anticipate declaring any stock dividends in the foreseeable future, except if we increase the size of this offering, in which case we will effect a capitalization or other appropriate mechanism immediately prior to the consummation of this offering in such amount as to maintain the number of founder shares at 20% of our issued and outstanding shares of common stock upon the consummation of this offering. Further, if we incur any indebtedness in connection with our initial business combination, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith.
Our Transfer Agent and Warrant Agent
The transfer agent for our shares of common stock and warrant agent for our warrants is American Stock Transfer & Trust Company. We have agreed to indemnify American Stock Transfer & Trust Company in its roles as transfer agent and warrant agent, its agents and each of its stockholders, directors, officers and employees against all liabilities, including judgments, costs and reasonable counsel fees that may arise out of acts performed or omitted for its activities in that capacity, except for any liability due to any gross negligence, willful misconduct or bad faith of the indemnified person or entity.
Our Amended and Restated Certificate of incorporation
Our amended and restated certificate of incorporation contain certain requirements and restrictions relating to this offering that will apply to us until the completion of our initial business combination. These provisions (other than amendments relating to the appointment of directors, which require the approval of a majority of at least 90% of our common stock voting in a stockholder meeting) cannot be amended without the approval of the holders of at least 65% of our common stock.
Our initial stockholders, who collectively will beneficially own 20% of our shares of common stock upon the closing of this offering (assuming they do not purchase any units in this offering), may participate in any vote to amend our amended and restated certificate of incorporation and will have the discretion
to vote in any manner they choose. Specifically, our amended and restated certificate of incorporation provides, among other things, that:
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if we have not completed our initial business combination within 24 months from the closing of this offering, we will: (1) cease all operations except for the purpose of winding up; (2) as promptly as reasonably possible but not more than 10 business days thereafter, redeem 100% of the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (less up to $100,000 of interest to pay dissolution expenses and which interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any); and (3) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law;
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prior to our initial business combination, we may not issue additional shares of common stock that would entitle the holders thereof to (1) receive funds from the trust account or (2) vote as a class with our public shares on any initial business combination;
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although we do not intend to enter into a business combination with a target business that is affiliated with our sponsor, our directors or our officers, we are not prohibited from doing so. In the event we enter into such a transaction, we, or a committee of independent and disinterested directors, will obtain an opinion from an independent investment banking firm or another valuation or appraisal firm that regularly renders fairness opinions on the type of target business we are seeking to acquire that such a business combination is fair to our company from a financial point of view;
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if a stockholder vote on our initial business combination is not required by law and we do not decide to hold a stockholder vote for business or other reasons, we will offer to redeem our public shares pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, and will file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about our initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act;
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as long as our securities are listed on Nasdaq, our initial business combination must be with one or more operating businesses or assets with a fair market value equal to at least 80% of the net assets held in trust (net of amounts disbursed to management for working capital purposes and excluding the amount of any deferred underwriting discount held in trust);
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if our stockholders approve an amendment to our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity, we will provide our public stockholders with the opportunity to redeem all or a portion of their shares of common stock upon such approval at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (which interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares; and
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we will not effectuate our initial business combination solely with another blank check company or a similar company with nominal operations.
In addition, our amended and restated certificate of incorporation provides that under no circumstances will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 following such redemptions.
Certain Anti-Takeover Provisions of Delaware Law and our Amended and Restated Certificate of Incorporation and Bylaws
We have elected to be exempt from the restrictions imposed under Section 203 of the DGCL. However, our certificate of incorporation will contain similar provisions providing that we may not engage in certain “business combinations” with any “interested stockholder” for a three-year period following the time that such stockholder becomes an interested stockholder unless:
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prior to such time, our board of directors approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder;
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upon consummation of the transaction which resulted in the stockholder becoming an “interested stockholder,” the interested stockholder owned at least 85% of our voting stock outstanding at the time the transaction commenced (excluding certain shares); or
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on or subsequent to such time, the business combination is approved by the Board and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least two-thirds of the outstanding voting stock not owned by the interested stockholder.
Generally, a “business combination” includes a merger, asset or stock sale to the interested stockholder. Subject to certain exceptions, an “interested stockholder” is a person who, together with that person’s affiliates and associates, owns, or within the previous three years owned, 15% or more of our voting stock.
Under some circumstances, this provision will make it more difficult for a person who is an interested stockholder to effect various business combinations with us for a three-year period.
Our certificate of incorporation will provide that our sponsor and its various affiliates, successors and transferees will not be deemed to be “interested stockholders” regardless of the percentage of our voting stock owned by them, and accordingly will not be subject to this provision.
Our authorized but unissued common stock and preferred stock are available for future issuances without stockholder approval and could be utilized for a variety of corporate purposes, including future offerings to raise additional capital, acquisitions and employee benefit plans. The existence of authorized but unissued and unreserved common stock and preferred stock could render more difficult or discourage an attempt to obtain control of us by means of a proxy contest, tender offer, merger or otherwise.
Exclusive Forum For Certain Lawsuits
Our amended and restated certificate of incorporation will require, to the fullest extent permitted by law, that (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee to us or our stockholders, (iii) any action asserting a claim against us, our directors, officers or employees arising pursuant to any provision of the DGCL or our amended and restated certificate of incorporation or bylaws, or (iv) any action asserting a claim against us, our directors, officers or employees governed by the internal affairs doctrine may be brought only in the Court of Chancery in the State of Delaware, except any action (A) as to which the Court of Chancery of the State of Delaware determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), (B) which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, (C) for which the Court of Chancery does not have subject matter jurisdiction, or (D) arising under the Securities Act, as to which the Court of Chancery and the federal district court for the District of Delaware shall have concurrent jurisdiction. If an action is brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process on such stockholder’s counsel. Although we believe this provision benefits us by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies, a court may determine that this provision is unenforceable, and to the extent it is enforceable, the provision may have the effect of discouraging lawsuits against our directors and officers, although our stockholders will not be deemed to have waived our compliance with federal securities laws and the rules and regulations thereunder.
Our amended and restated certificate of incorporation will provide that the exclusive forum provision will be applicable to the fullest extent permitted by applicable law. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. As a result, the exclusive forum provision will not apply to suits brought to enforce any duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. As noted above, our amended and restated certificate of incorporation will provide that the Court of Chancery and the federal district court for the District of Delaware shall have concurrent jurisdiction over any action arising under the Securities Act. Accordingly, there is uncertainty as to whether a court would enforce such provision, and our stockholders will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder.
Special Meeting of Stockholders
Our bylaws provide that special meetings of our stockholders may be called only by a majority vote of our board of directors, by our chief executive officer or by our chairman, if any.
Securities Eligible for Future Sale
Immediately after this offering we will have 43,750,000 (or 50,312,500 if the underwriters’ over- allotment option is exercised in full) shares of common stock issued and outstanding. Of these shares, the 35,000,000 shares of our Class A common stock (or 40,250,000 shares if the underwriters’ over-allotment option is exercised in full) sold in this offering will be freely tradable without restriction or further registration under the Securities Act, except for any shares purchased by one of our affiliates within the meaning of Rule 144 under the Securities Act. All of the remaining 8,750,000 (or 10,062,500 if the underwriters’ over-allotment option is exercised in full) founder shares and all 11,000,000 (or 12,050,000 warrants if the underwriters’ over-allotment option is exercised in full) private placement warrants are restricted securities under Rule 144, in that they were issued in private transactions not involving a public offering, and are subject to transfer restrictions as set forth elsewhere in this prospectus.
Rule 144
Pursuant to Rule 144, a person who has beneficially owned restricted shares of common stock or warrants for at least six months would be entitled to sell their securities provided that (1) such person is not deemed to have been one of our affiliates at the time of, or at any time during the three months preceding, a sale and (2) we are subject to the Exchange Act periodic reporting requirements for at least three months before the sale and have filed all required reports under Section 13 or 15(d) of the Exchange Act during the 12 months (or such shorter period as we were required to file reports) preceding the sale.
Persons who have beneficially owned restricted shares of common stock or warrants for at least six months but who are our affiliates at the time of, or at any time during the three months preceding, a sale, would be subject to additional restrictions, by which such person would be entitled to sell within any three- month period only a number of securities that does not exceed the greater of:
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1% of the total number of shares of common stock then issued and outstanding, which will equal 437,500 shares immediately after this offering (or 503,125 if the underwriters exercise their over- allotment option in full); or
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the average weekly reported trading volume of the shares of common stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale.
Sales by our affiliates under Rule 144 are also limited by manner of sale provisions and notice requirements and to the availability of current public information about us.
Restrictions on the Use of Rule 144 by Shell Companies or Former Shell Companies
Rule 144 is not available for the resale of securities initially issued by shell companies (other than business combination related shell companies) or issuers that have been at any time previously a shell
company. However, Rule 144 also includes an important exception to this prohibition if the following conditions are met:
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the issuer of the securities that was formerly a shell company has ceased to be a shell company;
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the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act;
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the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Current Reports on Form 8-K; and
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at least one year has elapsed from the time that the issuer filed current Form 10 type information with the SEC reflecting its status as an entity that is not a shell company.
As a result, our initial stockholders will be able to sell their founder shares and our sponsor will be able to sell its private placement warrants, pursuant to Rule 144 without registration, one year after we have completed our initial business combination.
Registration Rights
The holders of the founder shares, private placement warrants and any warrants that may be issued on conversion of working capital loans (and any shares of our Class A common stock issuable upon the exercise of the private placement warrants or warrants issued upon conversion of the working capital loans and upon conversion of the founder shares) will be entitled to registration rights pursuant to a registration rights agreement to be signed prior to or on the effective date of this offering requiring us to register such securities for resale (in the case of the founder shares, only after conversion to shares of our Class A common stock). The holders of these securities will be entitled to make up to three demands, excluding short form registration demands, that we register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to our completion of our initial business combination and rights to require us to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that we will not be required to effect or permit any registration or cause any registration statement filed under the Securities Act to become effective until termination of the applicable lock-up period as described under “Principal Stockholders—Transfers of Founder Shares and Private Placement Warrants.” We will bear the expenses incurred in connection with the filing of any such registration statements.
Listing of Securities
We intend to apply to list our units, shares of our Class A common stock and warrants on Nasdaq under the symbols “ANZU”, “ANZU.U” and “ANZUWS”, respectively. We expect that our units will be listed on Nasdaq promptly on or after the effective date of the registration statement of which this prospectus forms a part. Following the date the shares of our Class A common stock and warrants are eligible to trade separately, we anticipate that the shares of our Class A common stock and warrants will be listed separately and as a unit on Nasdaq. We cannot guarantee that our securities will be approved for listing on Nasdaq.
UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following is a discussion of the material U.S. federal income tax considerations of the acquisition, ownership and disposition of our units, our Class A common stock and our warrants, which we refer to collectively as our securities. Because the components of a unit (consisting of one share of our Class A common stock and of one-third of one redeemable warrant) are separable at the option of the holder, the holder of a unit should be treated, for U.S. federal income tax purposes, as the owner of the underlying Class A common stock and one-third of one warrant components of the unit, as the case may be. As a result, the discussion below with respect to actual holders of Class A common stock and warrants should also apply to holders of units (as the deemed owners of the underlying Class A common stock and warrants that comprise the units).
This discussion applies only to securities that are held as a capital asset within the meaning of Section 1221 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”) (generally, property held for investment) and is applicable only to holders who purchased units in this offering, and assumes any distributions made (or deemed made) on our Class A common stock will be paid in U.S. dollars. This discussion does not address all the U.S. federal income tax considerations that may be relevant to holders in light of their individual circumstances (including consequences under the alternative minimum tax, the Medicare tax on net investment income, and consequences under Section 451(b) of the Code) and does not address any U.S. federal non-income tax (such as the estate or gift tax), state, local, non-U.S. or other tax laws. This discussion also does not address all aspects of U.S. federal income taxation that may be relevant to holders that are subject to special rules, including (but not limited to):
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financial institutions, insurance companies, mutual funds, real estate investment trusts, and regulated investment companies;
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investors in pass-through entities (such as partnerships, S corporations and disregarded entities for U.S. federal income tax purposes);
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tax-exempt organizations;
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brokers or dealers in securities or currencies;
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traders in securities that elect to use a mark-to-market method of accounting;
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persons that hold common stock as part of a straddle, hedge, integrated transaction, constructive sale or conversion transaction, or those that purchased or sell their common stock as part of a wash sale;
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certain expatriates, former citizens of, or long-term residents of the United States, or persons that have a functional currency other than the U.S. dollar;
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persons that own (or are treated as owning) 5% or more of our common stock;
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persons who hold or receive our common stock as compensation, through a tax-qualified retirement plan or through the exercise of a warrant or conversion rights under convertible instruments;
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persons who hold shares of common stock that may constitute “qualified small business stock” under Section 1202 of the Code or as “Section 1244 stock” for purposes of Section 1244 of the Code; and persons who acquired common stock in a transaction subject to the gain rollover provisions of Section 1045 of the Code.
For purposes of this summary, a “U.S. Holder” is a beneficial holder of securities who or that is (i) an individual who is a U.S. citizen or resident of the United States as determined for U.S. federal income tax purposes; (ii) a corporation or other entity treated as a corporation for U.S. federal income tax purposes created in, or organized under the law of, the United States or any state or political subdivision thereof; (iii) an estate the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source; or (iv) a trust (A) the administration of which is subject to the primary supervision of a U.S. court and which has one or more U.S. persons (within the meaning of the Code) who have the authority to control all substantial decisions of the trust or (B) that has in effect a valid election under applicable Treasury regulations to be treated as a U.S. person.
For purposes of this summary, a “Non-U.S. Holder” is a beneficial holder of securities who or that is neither a U.S. Holder nor a partnership for U.S. federal income tax purposes.
If you are an entity or arrangement treated as a partnership for U.S. federal income tax purposes, the U.S. federal income tax treatment of your partners or other owners will depend on the status of the partners (or other owners) and your activities. If you are a partner (or other owners) of a partnership or other pass- through entity that acquires our securities, you are urged to consult your own tax advisor regarding the tax consequences of acquiring, owning and disposing of our securities.
This discussion is based on the Code, applicable U.S. Treasury Regulations thereunder, published administrative rulings and court decisions, all as currently in effect as of the date hereof, and all of which are subject to change, possibly with retroactive effect. Any such change could affect the continuing validity of this discussion. We have not requested, and will not request, a ruling from the U.S. Internal Revenue Service (the “IRS”) with respect to any of the U.S. federal income tax consequences described below, and as a result there can be no assurance that the IRS will not disagree with or challenge any of the conclusions we have reached and describe herein. This discussion does not address any aspect of state, local or non-U.S. taxation, or any U.S. federal taxes other than income taxes (such as gift and estate taxes).
THE FOLLOWING DISCUSSION DOES NOT PURPORT TO BE A COMPLETE ANALYSIS OR DISCUSSION OF ALL OF THE POTENTIAL TAX CONSEQUENCES OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF OUR SECURITIES. ALL HOLDERS OF OUR SECURITIES SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE SPECIFIC TAX CONSEQUENCES TO THEM OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF OUR SECURITIES, INCLUDING TAX RETURN REPORTING REQUIREMENTS AND THE APPLICABILITY AND EFFECT OF ANY STATE, LOCAL, NON-U.S. AND OTHER TAX LAWS IN LIGHT OF THEIR PARTICULAR CIRCUMSTANCES.
Personal Holding Company Status
We could be subject to a second level of U.S. federal income tax on a portion of our income if we are determined to be a personal holding company (“PHC”), for U.S. federal income tax purposes. A U.S. corporation will generally be classified as a PHC for U.S. federal income tax purposes in a given taxable year if (i) at any time during the last half of such taxable year, five or fewer individuals (without regard to their citizenship or residency and including as individuals for this purpose certain entities such as certain tax-exempt organizations, pension funds and charitable trusts) own or are deemed to own (pursuant to certain constructive ownership rules), directly or indirectly, more than 50% of the stock of the corporation by value and (ii) at least 60% of the corporation’s adjusted ordinary gross income, as determined for U.S. federal income tax purposes, for such taxable year consists of PHC income (which includes, among other things, dividends, interest, certain royalties, annuities and, under certain circumstances, rents).
Depending on the date and size of our initial business combination, it is possible that at least 60% of our adjusted ordinary gross income may consist of PHC income as discussed above. In addition, depending on the concentration of our stock in the hands of individuals, including the members of our sponsor and certain tax-exempt organizations, pension funds and charitable trusts, it is possible that more than 50% of our stock may be owned or deemed owned (pursuant to the constructive ownership rules) by five or fewer such persons during the last half of a taxable year. Thus, no assurance can be given that we will not become a PHC following this offering or in the future. If we are or were to become a PHC in a given taxable year, we would be subject to an additional PHC tax, currently 20%, on our undistributed PHC income, which generally includes our taxable income, subject to certain adjustments.
General Treatment and Characterization of the Units
No statutory, administrative or judicial authority directly addresses the treatment of the units or instruments with terms substantially the same as the units for U.S. federal income tax purposes and, therefore, their treatment is not entirely clear. The acquisition of a unit should be treated for U.S. federal income tax purposes as the acquisition of one share of our Class A common stock and one-third of one redeemable warrant to acquire one share of our Class A common stock. We intend to treat the acquisition of a unit in this manner and, by purchasing a unit, you agree to adopt such treatment for tax purposes. Each
holder of a unit must allocate the purchase price paid by such holder for such unit between the one share of Class A common stock and the one-third of one redeemable warrant based on their respective relative fair market values at the time of issuance. Under U.S. federal income tax law, each investor must make his or her own determination of such value based on all the facts and circumstances. Therefore, we strongly urge each investor to consult his or her own tax adviser regarding the determination of value for these purposes. The price allocated to each share of Class A common stock and the one-third of one redeemable warrant should be the stockholder’s tax basis in such share or one-third of one redeemable warrant, as the case may be. Any disposition of a unit should be treated for U.S. federal income tax purposes as a disposition of the share of Class A common stock and the one-third of one redeemable warrant constituting the unit, and the amount realized on the disposition should be allocated between the Class A common stock and the one-third of one warrant based on their respective relative fair market values at the time of disposition (as determined by each such unit holder based on all the facts and circumstances). The separation of shares of Class A common stock and warrants constituting units should not be a taxable event for U.S. federal income tax purposes.
The foregoing treatment of the units, shares of Class A common stock and warrants and a holder’s purchase price allocation are not binding on the IRS or the courts. Because there is no authority that directly addresses instruments that are similar to the units, no assurance can be given that the IRS or the courts will agree with the characterization described above or the discussion below. Accordingly, each prospective investor is urged to consult its tax advisor regarding the tax consequences of an investment in a unit (including alternative characterizations of a unit). The following discussion assumes that the characterization of the units described above is respected for U.S. federal income tax purposes.
U.S. Holders
Taxation of Distributions
If we pay distributions in cash or other property (other than certain distributions of our stock or rights to acquire our stock) to U.S. Holders of shares of our Class A common stock, such distributions will generally constitute dividends for U.S. federal income tax purposes to the extent paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Distributions in excess of current and accumulated earnings and profits will constitute a return of capital that will be applied against and reduce (but not below zero) the U.S. Holder’s adjusted tax basis in our Class A common stock. Any remaining excess will be treated as gain realized on the sale or other disposition of the Class A common stock and will be treated as described under “U.S. Holders—Sale, Exchange or Other Taxable Disposition of Class A Common Stock” below.
Dividends we pay to a U.S. Holder that is a taxable corporation will generally qualify for the dividends received deduction if the requisite holding period is satisfied. With certain exceptions (including, but not limited to, dividends treated as investment income for purposes of investment interest deduction limitations), and provided certain holding period requirements are met, dividends we pay to a non-corporate U.S. Holder will generally constitute “qualified dividends” that will be subject to tax at the applicable tax rate for long-term capital gains. It is unclear whether the redemption rights with respect to the Class A common stock described in this prospectus may prevent a U.S. Holder from satisfying the applicable holding period requirements with respect to the dividends received deduction or the preferential tax rate on qualified dividend income, as the case may be. If the holding period requirements are not satisfied, then a corporation may not be able to qualify for the dividends received deduction and would have taxable income equal to the entire dividend amount, and non-corporate U.S. Holders may be subject to tax on such dividend at regular ordinary income tax rates instead of the preferential rate that applies to qualified dividends.
Sale, Exchange or Other Taxable Disposition of Class A Common Stock and Warrants
A U.S. Holder will generally recognize gain or loss on the sale, exchange or other taxable disposition of our Class A common stock or warrants which, in general, would include a redemption of Class A common stock or warrants that is treated as a sale of such securities as described below (including as a result of our dissolution and liquidation if we do not complete an initial business combination within the required time
period). Any such gain or loss will be capital gain or loss in an amount equal to the difference between the amount realized and the U.S. Holder’s adjusted tax basis in the Class A common stock or warrants.
Any such capital gain or loss will generally be long term capital gain or loss if the U.S. Holder’s holding period for such Class A common stock and warrants exceeds one year. It is unclear, however, whether the redemption rights with respect to the Class A common stock described in this prospectus may suspend the running of the applicable holding period for this purpose. Long term capital gains recognized by non-corporate U.S. Holders may be taxed at reduced rates. The deductibility of capital losses is subject to limitations.
Generally, the amount realized by a U.S. Holder is the sum of the amount of cash and the fair market value of any property received in such disposition (or, if the Class A common stock or warrants are held as part of units at the time of the disposition, the portion of the amount realized on such disposition that is allocated to the Class A common stock or warrants based upon the then fair market values of the Class A common stock and the warrants included in the units). A U.S. Holder’s adjusted tax basis in its Class A common stock or warrants generally will equal the U.S. Holder’s acquisition cost (that is, as discussed above, the portion of the purchase price of a unit allocated to a share of Class A common stock or one-third of one warrant or, as discussed below, the U.S. Holder’s initial basis for Class A common stock received upon exercise of warrants) less, in the case of a share of Class A common stock, any prior distributions treated as a return of capital.
Redemption of Class A Common Stock
In the event that a U.S. Holder’s Class A common stock is redeemed pursuant to the redemption provisions described in this prospectus under the section of this prospectus entitled “Description of Securities—Common Stock” or if we purchase a U.S. Holder’s Class A common stock in an open market transaction, the treatment of the transaction for U.S. federal income tax purposes will depend on whether the redemption or purchase by us qualifies as sale of the Class A common stock under Section 302 of the Code. If the redemption or purchase by us qualifies as a sale of common stock, the U.S. Holder will be treated as described under “U.S. Holders—Sale, Exchange or Other Taxable Disposition of Class A Common Stock and Warrants” above. If the redemption or purchase by us does not qualify as a sale of common stock, the U.S. Holder will be treated as receiving a corporate distribution with the tax consequences described above under “U.S. Holders—Taxation of Distributions.” Whether a redemption or purchase by us qualifies for sale treatment will depend largely on the total number of shares of our stock treated as held by the U.S. Holder (including any stock constructively owned by the U.S. Holder as a result of owning warrants) relative to all of our shares outstanding both before and after the redemption or purchase by us. A redemption or purchase by us of Class A common stock will generally be treated as a sale of the Class A common stock (rather than as a distribution) if the redemption or purchase by us (i) is “substantially disproportionate” with respect to the U.S. Holder, (ii) results in a “complete termination” of the U.S. Holder’s interest in us or (iii) is “not essentially equivalent to a dividend” with respect to the U.S. Holder. These tests are explained more fully below.
In determining whether any of the foregoing tests are satisfied, a U.S. Holder takes into account not only stock actually owned by the U.S. Holder, but also shares of our stock that are constructively owned by it. A U.S. Holder may constructively own, in addition to stock owned directly, stock owned by certain related individuals and entities in which the U.S. Holder has an interest or that have an interest in such U.S. Holder, as well as any stock the U.S. Holder has a right to acquire by exercise of an option, which would generally include Class A common stock which could be acquired pursuant to the exercise of the warrants. A redemption or purchase by us of a U.S. Holder’s stock will meet the “substantially disproportionate test” with respect to the U.S. Holder if the percentage of our outstanding voting stock actually and constructively owned by the U.S. Holder immediately following such redemption or purchase of outstanding voting stock is, among other requirements, less than 80% of the percentage of our outstanding voting stock actually and constructively owned by the U.S. Holder immediately before such redemption or purchase. Prior to our initial business combination, the Class A common stock may not be treated as voting stock for this purpose and, consequently, this substantially disproportionate test may not be applicable. There will be a “complete termination” of a U.S. Holder’s interest if either (i) all of the shares of our stock actually and constructively owned by the U.S. Holder are redeemed or purchased by us or (ii) all of the shares of our stock actually
owned by the U.S. Holder are redeemed or purchased by us and the U.S. Holder is eligible to waive, and effectively waives in accordance with specific rules, the attribution of stock owned by certain family members and the U.S. Holder does not constructively own any other stock (including any stock constructively owned by the U.S. Holder as a result of owning warrants). The redemption or purchase by us of the Class A common stock will not be essentially equivalent to a dividend if a U.S. Holder’s conversion results in a “meaningful reduction” of the U.S. Holder’s proportionate interest in us. Whether the redemption or purchase by us will result in a meaningful reduction in a U.S. Holder’s proportionate interest in us will depend on the particular facts and circumstances. However, the IRS has indicated in a published ruling that even a small reduction in the proportionate interest of a small minority stockholder in a publicly held corporation who exercises no control over corporate affairs may constitute such a “meaningful reduction.” Each U.S. Holder should consult with its own tax advisor as to the tax consequences of a redemption or purchase by us.
If none of the foregoing tests is satisfied, the redemption or purchase by us will be treated as a distribution taxed as described above under “U.S. Holders—Taxation of Distributions.” After the application of those rules, any remaining tax basis of the U.S. Holder in the redeemed or purchased Class A common stock should be added to the U.S. Holder’s adjusted tax basis in its remaining stock, or, if it has none, to the U.S. Holder’s adjusted tax basis in its warrants or possibly in other stock constructively owned by it.
Exercise, Lapse or Redemption of a Warrant
Except as discussed below with respect to the cashless exercise of a warrant, a U.S. Holder will generally not recognize gain or loss on the acquisition of our Class A common stock upon exercise of a warrant for cash. The U.S. Holder’s tax basis in the share of our Class A common stock received upon exercise of the warrant will generally equal the sum of the U.S. Holder’s initial investment in the warrant (i.e., the portion of the U.S. Holder’s purchase price for a unit that is allocated to the warrant, as described above under “General Treatment and Characterization of the Units”) and the exercise price of such warrant. It is unclear whether a U.S. Holder’s holding period for the Class A common stock received upon exercise of the warrant will begin on the date of exercise of the warrant or the day following the date of exercise of the warrant; however, in either case, the holding period will not include the period during which the U.S. Holder held the warrant. If a warrant is allowed to lapse unexercised, a U.S. holder will generally recognize a capital loss equal to such holder’s tax basis in the warrant. The deductibility of capital losses is subject to certain limitations.
The tax consequences of a cashless exercise of a warrant are not clear under current tax law. A cashless exercise may be nontaxable, either because the exercise is not a gain realization event or because the exercise is treated as a recapitalization for U.S. federal income tax purposes. In either nontaxable situation, a U.S. Holder’s tax basis in the Class A common stock received would generally equal the holder’s tax basis in the warrant exercised therefor. If the cashless exercise were treated as not being a gain realization event, it is unclear whether a U.S. Holder’s holding period in the Class A common stock would be treated as commencing on the date following the date of exercise (or possibly on the date of exercise) of the warrant; in either case, the holding period would not include the period during which the U.S. Holder held the warrant. If, however, the cashless exercise were treated as a recapitalization, the holding period of the Class A common stock would include the holding period of the warrant.
It is also possible that a cashless exercise could be treated in part as a taxable exchange in which gain or loss would be recognized. In such event, a U.S. Holder would recognize gain or loss with respect to the portion of the exercised warrants treated as surrendered to pay the exercise price for the total number of warrants to be exercised (the “surrendered warrants”). The U.S. Holder would recognize capital gain or loss in an amount equal to the difference between the fair market value of the surrendered warrants and the U.S. Holder’s tax basis in such warrants. In this case, a U.S. Holder’s tax basis in the Class A common stock received would equal the sum of the U.S. Holder’s initial tax basis in the warrants exercised (i.e., the portion of the U.S. Holder’s purchase price for the units that is allocated to the warrants, as described above under “General Treatment and Characterization of the Units”) (except for any such tax basis allocable to the surrendered warrants) and the exercise price of the exercised warrants. It is unclear whether a U.S. Holder’s holding period for the Class A common stock would commence on the date of exercise of the warrant or on the date following the date of exercise of the warrant; in either case, the holding period would not include the period during which the U.S. Holder held the warrant.
Due to the absence of authority on the U.S. federal income tax treatment of a cashless exercise, including when a U.S. Holder’s holding period would commence with respect to the Class A common stock received, there can be no assurance which, if any, of the alternative tax consequences and holding periods described above would be adopted by the IRS or a court of law. Accordingly, each U.S. Holder should consult their own tax advisor regarding the tax consequences of a cashless exercise.
If we give notice of an intention to redeem warrants for $0.10 as described in the section of this prospectus entitled “Description of Securities—Redeemable Warrants—Public Stockholders’ Warrants,” and a U.S. Holder exercises its warrant on a cashless basis and receives the amount of Class A common stock as determined by reference to the table set forth thereunder, we intend to treat such exercise as a redemption of warrants for Class A common stock for U.S. federal income tax purposes. Such redemption of warrants for Class A common stock should be treated as a “recapitalization” for U.S. federal income tax purposes. Accordingly, a U.S. Holder should not recognize any gain or loss on the redemption of warrants for shares of the Class A common stock. A U.S. Holder’s aggregate tax basis in the shares of Class A common stock received in the redemption should equal the U.S. Holder’s aggregate tax basis in the warrants redeemed and the holding period for the shares of Class A common stock received in redemption of the warrants should include the U.S. Holder’s holding period for the surrendered warrants. However, there is some uncertainty regarding this tax treatment and it is possible such a redemption could be treated in part as a taxable exchange in which gain or loss would be recognized in a manner similar to that discussed above for a cashless exercise of warrants or otherwise characterized. Accordingly, each U.S. Holder is urged to consult its tax advisor regarding the tax consequences of a redemption of warrants for shares of Class A common stock.
If we redeem warrants for cash pursuant to the redemption provisions described in the section of this prospectus entitled “Description of Securities—Redeemable Warrants—Public Stockholders’ Warrants” or if we purchase warrants in an open market transaction, such redemption or purchase generally will be treated as a taxable disposition to the U.S. Holder, taxed as described above under “Sale, Exchange or Other Taxable Disposition of Class A Common Stock and Warrants.”
Possible Constructive Distributions
The terms of each warrant provide for an adjustment to the number of shares of Class A common stock for which the warrant may be exercised or to the exercise price of the warrant in certain events, as discussed in the section of this prospectus entitled “Description of Securities—Redeemable Warrants—Public Stockholders’ Warrants—Anti-dilution Adjustments.” An adjustment which has the effect of preventing dilution is generally not a taxable event. The U.S. Holders of the warrants would, however, be treated as receiving a constructive distribution from us if, for example, the adjustment increases such U.S. Holders’ proportionate interest in our assets or earnings and profits (e.g., through an increase in the number of shares of Class A common stock that would be obtained upon exercise or through a decrease in the exercise price of the warrant) as a result of a distribution of cash or other property to the holders of shares of our Class A common stock, or as a result of the issuance of a stock dividend to holders of shares of our common stock, in each case which is taxable to the holders of such shares as a distribution. Such constructive distribution to a U.S. Holder of warrants would be treated as if such U.S. Holders had received a cash distribution from us equal to the fair market value of such increased interest (taxed as described above under “U.S. Holders—Taxation of Distributions”). For certain informational reporting purposes, we are required to determine the date and amount of any such constructive distributions. Proposed Treasury regulations, which we may rely on prior to the issuance of final regulations, specify how the date and amount of constructive distributions are determined.
Information Reporting and Backup Withholding
Information reporting requirements may apply to dividends paid to a U.S. Holder and to the proceeds of the sale or other disposition of our units, shares of Class A common stock and warrants, unless the U.S. Holder is an exempt recipient. Backup withholding may apply to such payments if the U.S. Holder fails to provide a taxpayer identification number, a certification of exempt status or has been notified by the IRS that it is subject to backup withholding (and such notification has not been withdrawn).
Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules will be allowed as a refund or a credit against a U.S. Holder’s U.S. federal income tax liability provided the required information is timely furnished to the IRS.
Non-U.S. Holders
Taxation of Distributions
In general, any distributions (including constructive distributions, such as described under “Non-U.S. Holders—Possible Constructive Distributions” below) we make to a Non-U.S. Holder of shares of our Class A common stock, to the extent paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles), will constitute dividends for U.S. federal income tax purposes. Provided such dividends are not effectively connected with the Non-U.S. Holder’s conduct of a trade or business within the United States (and are not attributable to a U.S. permanent establishment under an applicable treaty), we will be required to withhold tax from the gross amount of the dividend at a rate of 30%, unless such Non-U.S. Holder is eligible for a reduced rate of withholding tax under an applicable income tax treaty and provides proper certification of its eligibility for such reduced rate (usually on an IRS Form W-8BEN or W-8BEN-E, as applicable). In the case of any constructive dividend, it is possible that this tax would be withheld from any amount owed to a Non-U.S. Holder by the applicable withholding agent, including cash distributions on other property or sale proceeds from warrants or other property subsequently paid or credited to such holder. Any distribution not constituting a dividend will be treated first as reducing (but not below zero) the Non-U.S. Holder’s adjusted tax basis in its shares of our Class A common stock and, to the extent such distribution exceeds the Non-U.S. Holder’s adjusted tax basis, as gain realized from the sale or other disposition of the Class A common stock, which will be treated as described under “Non-U.S. Holders—Sale, Exchange or Other Taxable Disposition of Class A Common Stock and Warrants” below. In addition, if we determine that we are likely to be classified as a “U.S. real property holding corporation” (see “Non-U.S. Holders—Sale, Exchange or Other Taxable Disposition of Class A Common Stock and Warrants” below), we will withhold 15% of any distribution that exceeds our current and accumulated earnings and profits, including a distribution in redemption of our Class A common stock. See also “U.S. Holders—Possible Constructive Distributions” for potential U.S. federal tax consequences with respect to constructive distributions.
Dividends that we pay to a Non-U.S. Holder that are effectively connected with such Non-U.S. Holder’s conduct of a trade or business within the United States (or if a tax treaty applies, are attributable to a U.S. permanent establishment or fixed base maintained by the Non-U.S. Holder) will generally not be subject to U.S. withholding tax, provided such Non-U.S. Holder complies with certain certification and disclosure requirements (usually by providing an IRS Form W-8ECI). Instead, such dividends will generally be subject to U.S. federal income tax, net of certain deductions, at the same rates applicable to U.S. Holders, unless an applicable income tax treaty provides otherwise. A Non-U.S. corporation receiving dividends that are effectively connected income may also be subject to a “branch profits tax” at a rate of 30% (or a lower rate as may be specified by an applicable income tax treaty).
Exercise, Lapse or Redemption of a Warrant
The U.S. federal income tax treatment of a Non-U.S. Holder’s exercise of a warrant, or the lapse of a warrant held by a Non-U.S. Holder, will generally correspond to the U.S. federal income tax treatment of the exercise or lapse of a warrant by a U.S. Holder, as described above under “U.S. Holders — Exercise, Lapse or Redemption of a Warrant” above, although to the extent a cashless exercise results in a taxable exchange, the consequences would be similar to those described below in “Non-U.S. Holders — Sale, Exchange or Other Taxable Disposition of Class A Common Stock and Warrants.”
The U.S. federal income tax treatment for a Non-U.S. Holder of a redemption of warrants for Class A common stock described in the section of this prospectus entitled “Description of Securities — Redeemable Warrants — Public Stockholders’ Warrants” will correspond to the U.S. federal income tax treatment for a U.S. Holder of a redemption of warrants for Class A common stock, as described above in “U.S. Holders — Exercise, Lapse or Redemption of a Warrant.”
The U.S. federal income tax treatment for a Non-U.S. Holder of a redemption of warrants for cash described in the section of this prospectus entitled “Description of Securities — Redeemable Warrants — Public Stockholders’ Warrants” (or if we purchase warrants in an open market transaction) would be similar to that described below in “Non-U.S. Holders — Sale, Exchange or Other Taxable Disposition of Class A Common Stock and Warrants.”
Sale, Exchange or Other Taxable Disposition of Class A Common Stock and Warrants
A Non-U.S. Holder will generally not be subject to U.S. federal income or withholding tax in respect of gain recognized on a sale, exchange or other taxable disposition of our Class A common stock (including a dissolution and liquidation in the event we do not complete an initial business combination within 24 months from the closing of this offering) or warrants (including an expiration or redemption of our warrants), in each case without regard to whether such securities were held as part of a unit, unless:
•
the gain is effectively connected with the conduct of a trade or business by the Non-U.S. Holder within the United States (and, under certain income tax treaties, is attributable to a United States permanent establishment or fixed base maintained by the Non-U.S. Holder);
•
the Non-U.S. Holder is an individual present in the United States for 183 days or more in the taxable year of disposition and certain other conditions are met; or
•
we are or have been a “United States real property holding corporation” for U.S. federal income tax purposes at any time during the shorter of the five-year period ending on the date of disposition or the period that the Non-U.S. Holder held our Class A common stock, and, in the case where shares of our Class A common stock are regularly traded on an established securities market, the Non-U.S. Holder has owned, directly or constructively, more than 5% of our Class A common stock at any time within the shorter of the five-year period preceding the disposition or such Non-U.S. Holder’s holding period for the shares of our Class A common stock. There can be no assurance that our Class A common stock will be treated as regularly traded on an established securities market for this purpose. These rules may be modified for Non-U.S. Holders of warrants. If we are or have been a “United States real property holding corporation” and you own warrants, you are urged to consult your own tax advisor regarding the application of these rules.
Unless an applicable treaty provides otherwise, gain described in the first bullet point above will be subject to tax at generally applicable U.S. federal income tax rates as if the Non-U.S. Holder were a U.S. resident. Any gains described in the first bullet point above of a Non-U.S. Holder that is a foreign corporation may also be subject to an additional “branch profits tax” at a 30% rate (or lower applicable treaty rate). Gain described in the second bullet point above will generally be subject to a 30% U.S. federal income tax. Non-U.S. Holders are urged to consult their tax advisors regarding possible eligibility for benefits under income tax treaties.
If the third bullet point above applies to a Non-U.S. Holder, gain recognized by such holder on the sale, exchange or other disposition of our Class A common stock or warrants will be subject to tax at generally applicable U.S. federal income tax rates. In addition, a buyer of our Class A common stock or warrants from such holder may be required to withhold U.S. federal income tax at a rate of 15% of the amount realized upon such disposition. We cannot determine whether we will be a United States real property holding corporation in the future until we complete an initial business combination. We will be classified as a United States real property holding corporation if the fair market value of our “United States real property interests” equals or exceeds 50 percent of the sum of the fair market value of our worldwide real property interests plus our other assets used or held for use in a trade or business, as determined for U.S. federal income tax purposes.
Redemption of Class A Common Stock
The characterization for U.S. federal income tax purposes of the redemption of a Non-U.S. Holder’s Class A common stock pursuant to the redemption provisions described in the section of this prospectus entitled “Description of Securities—Common Stock” will generally correspond to the U.S. federal income tax characterization of such a redemption of a U.S. Holder’s Class A common stock, as described
under “U.S. Holders—Redemption of Class A Common Stock” above, and the consequences of the redemption to the Non-U.S. Holder will be as described above under “Non-U.S. Holders—Taxation of Distributions” and “Non-U.S. Holders—Sale, Exchange or Other Taxable Disposition of Class A Common Stock and Warrants,” as applicable.
Possible Constructive Distributions
The terms of each warrant provide for an adjustment to the number of shares of Class A common stock for which the warrant may be exercised or to the exercise price of the warrant in certain events, as discussed in the section of this prospectus entitled “Description of Securities—Redeemable Warrants—Anti-dilution Adjustments.” An adjustment which has the effect of preventing dilution is generally not a taxable event. Non-U.S. Holders of the warrants would, however, be treated as receiving a constructive distribution from us if, for example, the adjustment increases such Non-U.S. Holders’ proportionate interest in our assets or earnings and profits (e.g., through an increase in the number of shares of Class A common stock that would be obtained upon exercise or through a decrease in the exercise prices of the warrant) as a result of a distribution of cash or other property to the holders of shares of our Class A common stock, or as a result of the issuance of a stock dividend to holders of shares of our common stock, in each case which is taxable to the holders of such shares as a distribution. Such constructive distribution to a Non-U.S. Holder of warrants would be treated as described above under “Non-U.S. Holders—Taxation of Distributions” and would be subject to U.S. federal income tax withholding under that section in the same manner as if such Non-U.S. Holders had received a cash distribution from us equal to the fair market value of such increased interest. For certain informational reporting purposes, we are required to determine the date and amount of any such constructive distributions. Proposed Treasury regulations, which we may rely on prior to the issuance of final regulations, specify how the date and amount of constructive distributions are determined.
Information Reporting and Backup Withholding
Information returns will be filed with the IRS in connection with payments of dividends and the proceeds from a sale or other disposition of our units, shares of Class A common stock and warrants. A Non-U.S. Holder may have to comply with certification procedures to establish that it is not a United States person (by providing certification of its foreign status, under penalties of perjury, on a duly executed applicable IRS Form W-8 or by otherwise establishing an exemption) in order to avoid information reporting and backup withholding requirements. The certification procedures required to claim a reduced rate of withholding under a treaty will generally satisfy the certification requirements necessary to avoid the backup withholding as well.
Backup withholding is not an additional tax. The amount of any backup withholding from a payment to a Non-U.S. Holder will be allowed as a credit against such holder’s U.S. federal income tax liability and may entitle such holder to a refund, provided that the required information is timely furnished to the IRS.
FATCA Withholding
Sections 1471 through 1474 of the Code and the U.S. Treasury Regulations and administrative guidance promulgated thereunder (commonly referred to as the “Foreign Account Tax Compliance Act” or “FATCA”) generally impose withholding of 30% on payments of dividends (including constructive dividends) in respect of our securities and, subject to the proposed regulations discussed below, on proceeds from sales or other disposition of our securities paid to “foreign financial institutions” (which is broadly defined for this purpose and includes investment vehicles) and certain other non-U.S. entities unless various U.S. information reporting and due diligence requirements (relating to ownership by U.S. persons of interests in or accounts with those entities) have been satisfied or an exemption applies (typically certified as to by the delivery of a properly completed IRS Form W-8BEN-E). If FATCA withholding is imposed, a beneficial owner that is not a foreign financial institution may be entitled to a refund of any amounts withheld by filing a U.S. federal income tax return (which may entail significant administrative burden). Foreign financial institutions located in jurisdictions that have an intergovernmental agreement with the United States governing FATCA may be subject to different rules. Similarly, dividends and, subject to the proposed regulations discussed below, proceeds from sales or other disposition in respect of our securities held by an
investor that is a non-financial non-U.S. entity that does not qualify under certain exceptions will be subject to withholding at a rate of 30%, unless such entity either (i) certifies to us or the applicable withholding agent that such entity does not have any “substantial United States owners” or (ii) provides certain information regarding the entity’s “substantial United States owners,” which will in turn be provided to the U.S. Department of Treasury. The U.S. Department of the Treasury has proposed regulations which eliminate the federal withholding tax of 30% applicable to the gross proceeds of a sale or other disposition of our securities, and which state that taxpayers may rely on the proposed regulations until final regulations are issued. Prospective investors should consult their tax advisors regarding the possible implications of FATCA on their investment in our securities.
UNDERWRITING
BofA Securities, Inc. and Barclays Capital Inc. are acting as representatives for each of the underwriters named below. Subject to the terms and conditions set forth in an underwriting agreement among us and the underwriters, we have agreed to sell to the underwriters, and each of the underwriters has agreed, severally and not jointly, to purchase from us, the number of units set forth opposite its name below.
|
Underwriter
|
|
|
Number of Units
|
|
|
BofA Securities, Inc.
|
|
|
|
|
|
Barclays Capital Inc.
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
35,000,000 |
|
|
Subject to the terms and conditions set forth in the underwriting agreement, the underwriters have agreed, severally and not jointly, to purchase all of the units sold under the underwriting agreement if any of these units are purchased. If an underwriter defaults, the underwriting agreement provides that the purchase commitments of the non-defaulting underwriters may be increased or the underwriting agreement may be terminated.
We have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act, or to contribute to payments the underwriters may be required to make in respect of those liabilities.
The underwriters are offering the units, subject to prior sale, when, as and if issued to and accepted by them, subject to approval of legal matters by their counsel, including the validity of the units, and other conditions contained in the underwriting agreement, such as the receipt by the underwriters of officer’s certificates and legal opinions. The underwriters reserve the right to withdraw, cancel or modify offers to the public and to reject orders in whole or in part.
Commissions and Discounts
The representative has advised us that the underwriters propose initially to offer the units to the public at the public offering price set forth on the cover page of this prospectus and to dealers at that price less a concession not in excess of $ per unit. After the initial offering, the public offering price, concession or any other term of the offering may be changed.
The following table shows the underwriting discounts and commissions that we are to pay to the underwriters in connection with this offering. These amounts are shown assuming both no exercise and full exercise of the underwriters’ over-allotment option $0.35 per unit, or $12,250,000 (or $14,087,500 if the over-allotment option is exercised in full), of deferred underwriting commissions will be paid to the underwriters upon the completion of our initial business combination.
| |
|
|
Per Unit(1)
|
|
|
Without Option(1)
|
|
|
With Option(1)
|
|
|
Public offering price
|
|
|
|
$ |
10.00 |
|
|
|
|
$ |
350,000,000 |
|
|
|
|
$ |
402,500,000 |
|
|
|
Underwriting discount and commissions
|
|
|
|
$ |
0.55 |
|
|
|
|
$ |
19,250,000 |
|
|
|
|
$ |
22,137,500 |
|
|
|
Proceeds, before expenses, to Anzu Special Acquisition
Corp I
|
|
|
|
$ |
9.45 |
|
|
|
|
$ |
330,750,000 |
|
|
|
|
$ |
380,362,500 |
|
|
(1)
Includes $0.35 per unit, or $12,250,000 (or $14,087,500 if the over-allotment option is exercised in full) in the aggregate, payable to the underwriters for deferred underwriting commissions to be placed in a trust account located in the United States as described herein. The deferred commissions will be released to the underwriters only on completion of an initial business combination, in an amount equal to $0.35 multiplied by the number of shares of Class A common stock sold as part of the units in this offering, as described in this prospectus.
The expenses of the offering, not including the underwriting discount, are estimated at $2,000,000 and are payable by us. We have agreed to reimburse the underwriters for up to $25,000 of FINRA-related fees and expenses of the underwriters’ legal counsel.
Option to Purchase Additional Units
We have granted an option to the underwriters, exercisable for 45 days after the date of this prospectus, to purchase up to 5,250,000 additional units at the public offering price, less the underwriting discount. If the underwriters exercise this option, each will be obligated, subject to conditions contained in the underwriting agreement, to purchase a number of additional units proportionate to that underwriters’ initial amount reflected in the above table.
No Sales of Similar Securities
We, our sponsor and our officers and directors have agreed that we will not offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, without the prior written consent of BofA Securities, Inc. and Barclays Capital Inc. for a period of 180 days after the date of this prospectus, any units, warrants, shares of Class A common stock or any other securities convertible into, or exercisable, or exchangeable for, shares of Class A common stock; provided, however, that we may (1) issue and sell the private placement warrants; (2) issue and sell the additional units to cover our underwriters’ over-allotment option (if any); (3) register with the SEC pursuant to an agreement to be entered into concurrently with the issuance and sale of the securities in this offering, the resale of the private placement warrants and the shares of Class A common stock issuable upon exercise of the warrants and the founder shares; and (4) issue securities in connection with our initial business combination. However, the foregoing shall not apply to the forfeiture of any founder shares pursuant to their terms or any transfer of founder shares to any current or future independent director of the Company (as long as such current or future independent director is subject to the terms of the letter agreement, filed herewith, at the time of such transfer; and as long as, to the extent any Section 16 reporting obligation is triggered as a result of such transfer, any related Section 16 filing includes a practical explanation as to the nature of the transfer). BofA Securities, Inc. and Barclays Capital Inc. in their sole discretion may release any of the securities subject to these lock-up agreements at any time without notice.
Our initial stockholders have agreed not to transfer, assign or sell any of their founder shares and any shares of Class A common stock issued upon conversion thereof until the earlier to occur of (A) one year after the completion of our initial business combination; or (B) subsequent to our initial business combination, (x) if the last reported sale price of the shares of Class A common stock equals or exceeds $12.00 per share (as adjusted for share sub-divisions, capitalization of shares, share dividends, rights issuances, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, or (y) the date following the completion of our initial business combination on which we complete a liquidation, merger, amalgamation, stock exchange, reorganization or other similar transaction that results in all of our public stockholders having the right to exchange their shares of Class A common stock for cash, securities or other property (except with respect to permitted transferees as described herein under “Principal Stockholders—Transfers of Founder Shares and Private Placement Warrants”). Any permitted transferees would be subject to the same restrictions and other agreements of our initial stockholders with respect to any founder shares.
The private placement warrants (including the shares of Class A common stock issuable upon exercise of the private placement warrants) will not be transferable, assignable or salable until 30 days after the completion of our initial business combination (except with respect to permitted transferees as described herein under “Principal Stockholders—Transfers of Founder Shares and Private Placement Warrants”).
Nasdaq Capital Market Listing
We expect the units to be approved for listing on the Nasdaq Capital Market, subject to notice of issuance, under the symbol “ANZU.U” and, once the shares of Class A common stock and warrants begin separate trading, to have our shares of Class A common stock and warrants listed on the Nasdaq Capital Market under the symbols “ANZU” and “ANZUWS,” respectively.
Before this offering, there has been no public market for our securities. The initial public offering price was determined through negotiations between us and the representative. In addition to prevailing market conditions, the factors to be considered in determining the initial public offering price are:
•
the history and prospects of companies whose principal business is the acquisition of other companies,
•
prior offerings of those companies,
•
our management,
•
our capital structure, and
•
currently prevailing general conditions in equity securities markets, including current market valuations of publicly traded companies considered comparable to our company.
An active trading market for our securities may not develop. It is also possible that after the offering our securities will not trade in the public market at or above the initial public offering price.
The underwriters do not expect to sell more than 5% of the units in the aggregate to accounts over which they exercise discretionary authority.
If we do not complete our initial business combination within 24 months from the closing of this offering, the trustee and the underwriters have agreed that: (1) they will forfeit any rights or claims to their deferred underwriting discounts and commissions, including any accrued interest thereon, then in the trust account; and (2) the deferred underwriters’ discounts and commissions will be distributed on a pro rata basis, together with any accrued interest thereon (which interest shall be net of taxes payable) to the public stockholders.
Price Stabilization, Short Positions and Penalty Bids
Until the distribution of the units is completed, SEC rules may limit underwriters and selling group members from bidding for and purchasing our securities. However, the representative may engage in transactions that stabilize the price of the units, such as bids or purchases to peg, fix or maintain that price.
In connection with the offering, the underwriters may purchase and sell our units in the open market. These transactions may include short sales, purchases on the open market to cover positions created by short sales and stabilizing transactions. Short sales involve the sale by the underwriters of a greater number of units than they are required to purchase in the offering. “Covered” short sales are sales made in an amount not greater than the underwriters’ option to purchase additional units described above. The underwriters may close out any covered short position by either exercising their option to purchase additional units or purchasing units in the open market. In determining the source of units to close out the covered short position, the underwriters will consider, among other things, the price of units available for purchase in the open market as compared to the price at which they may purchase units through the option granted to them. “Naked” short sales are sales in excess of such option. The underwriters must close out any naked short position by purchasing units in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the units in the open market after pricing that could adversely affect investors who purchase in the offering. Stabilizing transactions consist of various bids for or purchases of units made by the underwriters in the open market prior to the completion of the offering.
The underwriters may also impose a penalty bid. This occurs when a particular underwriter repays to the underwriters a portion of the underwriting discount received by it because the representatives have repurchased units sold by or for the account of such underwriter in stabilizing or short covering transactions.
Similar to other purchase transactions, the underwriters’ purchases to cover the syndicate short sales may have the effect of raising or maintaining the market price of the units or preventing or retarding a decline in the market price of the units. As a result, the price of the units may be higher than the price that might otherwise exist in the open market. The underwriters may conduct these transactions on the Nasdaq Capital Market, in the over-the-counter market or otherwise.
Neither we nor any of the underwriters make any representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the price of the units. In addition, neither we nor any of the underwriters make any representation that the representatives will engage in these transactions or that these transactions, once commenced, will not be discontinued without notice.
Electronic Distribution
In connection with the offering, certain of the underwriters or securities dealers may distribute prospectuses by electronic means, such as e-mail.
Other Relationships
We are not under any contractual obligation to engage any of the underwriters to provide any services for us after this offering, but we may do so at our discretion. However, any of the underwriters may introduce us to potential target businesses or assist us in raising additional capital in the future, including by acting as a placement agent in a private offering or underwriting or arranging debt financing. If any of the underwriters provide services to us after this offering, we may pay such underwriter fair and reasonable fees that would be determined at that time in an arm’s length negotiation; provided that no agreement will be entered into with any of the underwriters and no fees for such services will be paid to any of the underwriters prior to the date that is 90 days from the date of this prospectus, unless FINRA determines that such payment would not be deemed underwriters’ compensation in connection with this offering, and we may pay the underwriters of this offering or any entity with which they are affiliated, a finder’s fee or other compensation for services rendered to us in connection with the completion of a business combination. Any fees we may pay the underwriters or their affiliates for services rendered to us after this offering may be contingent on the completion of a business combination and may be paid in other than cash. The underwriters or their affiliates that provide these services to us may have a potential conflict of interest given that the underwriters are entitled to the deferred portion of their underwriting compensation for this offering only if an initial business combination is completed within the specified timeframe.
Some of the underwriters and their affiliates have engaged in, and may in the future engage in, investment banking and other commercial dealings in the ordinary course of business with us or our affiliates. They have received, or may in the future receive, customary fees and commissions for these transactions.
In addition, in the ordinary course of their business activities, the underwriters and their affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers. Such investments and securities activities may involve securities and/or instruments of ours or our affiliates. The underwriters and their affiliates may also make investment recommendations and/or publish or express independent research views in respect of such securities or financial instruments and may hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments.
The expenses of the offering, not including the underwriting discount, are estimated at and are payable by us. We have agreed to reimburse the underwriters for up to $25,000 of FINRA-related fees and expenses of the underwriters’ legal counsel.
European Economic Area and the United Kingdom
In relation to each member state of the European Economic Area which is a party to the agreement relating to the European Economic Area and the United Kingdom, each referred to as a Relevant State, with effect from and including the date on which the Prospectus Regulation enters into effect in that Relevant State, an offer to the public of any securities which are the subject of the offering contemplated by this prospectus may not be made in that Relevant State, except that an offer to the public in that Relevant State of any securities may be made at any time under the following exemptions under the Prospectus Regulation:
A.
to any legal entity which is a “qualified investor” as defined in the Prospectus Regulation;
B.
to fewer than 150 natural or legal persons (other than qualified investors as defined in the
Prospectus Regulation) per Relevant State, subject to obtaining the prior consent of the underwriters for any such offer; or
C.
in any other circumstances falling within Article 1(4) of the Prospectus Regulation,
provided that no such offer of securities shall require us or any of the underwriters to publish a prospectus pursuant to Article 3 of the Prospectus Regulation or supplement a prospectus pursuant to Article 23 of the Prospectus Regulation.
For the purposes of this provision, the expression an “offer to the public” in relation to any securities in any Relevant State means the communication in any form and by any means of sufficient information on the terms of the offer and any securities to be offered so as to enable an investor to decide to purchase any securities and the expression “Prospectus Regulation” means Regulation (EU) 2017/1129 and includes any relevant delegated regulations.
This prospectus has been prepared on the basis that any offer of common shares in any EEA Member State or the United Kingdom will be made pursuant to an exemption under the Prospectus Regulation from the requirement to publish a prospectus for offers of securities. Accordingly any person making or intending to make an offer in an EEA Member State or the United Kingdom of securities which are the subject of the offering contemplated in this prospectus may only do so in circumstances in which no obligation arises for us or any of the underwriters to publish a prospectus pursuant to Article 3 of the Prospectus Regulation in relation to such offer. Neither we nor the underwriters have authorized, nor do they authorize, the making of any offer of common shares in circumstances in which an obligation arises for us or the underwriters to publish a prospectus for such offer.
United Kingdom
This prospectus is only being distributed to, and is only directed at, persons in the United Kingdom that are “qualified investors” within the meaning of Article 2(1)(e) of the Prospectus Directive that are also (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended, referred to herein as the Order, and/or (ii) high net worth entities falling within Article 49(2)(a) to (d) of the Order and other persons to whom it may lawfully be communicated. Each such person is referred to herein as a Relevant Person.
This prospectus and its contents are confidential and should not be distributed, published or reproduced (in whole or in part) or disclosed by recipients to any other persons in the United Kingdom. Any person in the United Kingdom that is not a Relevant Person should not act or rely on this document or any of its contents.
Notice to Prospective Investors in Switzerland
The units may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange (“SIX”) or on any other stock exchange or regulated trading facility in Switzerland. This document has been prepared without regard to the disclosure standards for issuance prospectuses under art. 652a or art. 1156 of the Swiss Code of Obligations or the disclosure standards for listing prospectuses under art. 27 ff. of the SIX Listing Rules or the listing rules of any other stock exchange or regulated trading facility in Switzerland. Neither this document nor any other offering or marketing material relating to the units or the offering may be publicly distributed or otherwise made publicly available in Switzerland.
Neither this document nor any other offering or marketing material relating to the offering, the Company, the units have been or will be filed with or approved by any Swiss regulatory authority. In particular, this document will not be filed with, and the offer of units will not be supervised by, the Swiss Financial Market Supervisory Authority FINMA (FINMA), and the offer of units has not been and will not be authorized under the Swiss Federal Act on Collective Investment Schemes (“CISA”). The investor protection afforded to acquirers of interests in collective investment schemes under the CISA does not extend to acquirers of units.
Notice to Prospective Investors in the Dubai International Financial Centre
This prospectus relates to an Exempt Offer in accordance with the Offered Securities Rules of the Dubai Financial Services Authority (“DFSA”). This prospectus is intended for distribution only to persons of a type specified in the Offered Securities Rules of the DFSA. It must not be delivered to, or relied on by, any other person. The DFSA has no responsibility for reviewing or verifying any documents in connection with Exempt Offers. The DFSA has not approved this prospectus nor taken steps to verify the information set forth herein and has no responsibility for the prospectus. The securities to which this prospectus relates may be illiquid and/or subject to restrictions on their resale. Prospective purchasers of the units offered should conduct their own due diligence on the units. If you do not understand the contents of this prospectus you should consult an authorized financial advisor.
Notice to Prospective Investors in Australia
No placement document, prospectus, product disclosure statement or other disclosure document has been lodged with the Australian Securities and Investments Commission (“ASIC”), in relation to the offering. This prospectus does not constitute a prospectus, product disclosure statement or other disclosure document under the Corporations Act 2001 (the “Corporations Act”), and does not purport to include the information required for a prospectus, product disclosure statement or other disclosure document under the Corporations Act.
Any offer in Australia of the units may only be made to persons (the “Exempt Investors”) who are “sophisticated investors” (within the meaning of section 708(8) of the Corporations Act), “professional investors” (within the meaning of section 708(11) of the Corporations Act) or otherwise pursuant to one or more exemptions contained in section 708 of the Corporations Act so that it is lawful to offer the units without disclosure to investors under Chapter 6D of the Corporations Act.
The units applied for by Exempt Investors in Australia must not be offered for sale in Australia in the period of 12 months after the date of allotment under the offering, except in circumstances where disclosure to investors under Chapter 6D of the Corporations Act would not be required pursuant to an exemption under section 708 of the Corporations Act or otherwise or where the offer is pursuant to a disclosure document which complies with Chapter 6D of the Corporations Act. Any person acquiring units must observe such Australian on-sale restrictions.
This prospectus contains general information only and does not take account of the investment objectives, financial situation or particular needs of any particular person. It does not contain any securities recommendations or financial product advice. Before making an investment decision, investors need to consider whether the information in this prospectus is appropriate to their needs, objectives and circumstances, and, if necessary, seek expert advice on those matters.
Notice to Prospective Investors in Hong Kong
The securities have not been offered or sold and will not be offered or sold in Hong Kong, by means of any document, other than (a) to “professional investors” as defined in the Securities and Futures Ordinance (Cap. 571) of Hong Kong and any rules made under that Ordinance; or (b) in other circumstances which do not result in the document being a “prospectus” as defined in the Companies Ordinance (Cap. 32) of Hong Kong or which do not constitute an offer to the public within the meaning of that Ordinance. No advertisement, invitation or document relating to the securities has been or may be issued or has been or may be in the possession of any person for the purposes of issue, whether in Hong Kong or elsewhere, which is directed at, or the contents of which are likely to be accessed or read by, the public of Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to securities which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” as defined in the Securities and Futures Ordinance and any rules made under that Ordinance.
Notice to Prospective Investors in Japan
The securities have not been and will not be registered under the Financial Instruments and Exchange Law of Japan (Law No. 25 of 1948, as amended) and, accordingly, will not be offered or sold,
directly or indirectly, in Japan, or for the benefit of any Japanese Person or to others for re-offering or resale, directly or indirectly, in Japan or to any Japanese Person, except in compliance with all applicable laws, regulations and ministerial guidelines promulgated by relevant Japanese governmental or regulatory authorities in effect at the relevant time. For the purposes of this paragraph, “Japanese Person” shall mean any person resident in Japan, including any corporation or other entity organized under the laws of Japan.
Notice to Prospective Investors in Singapore
This prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, the securities were not offered or sold or caused to be made the subject of an invitation for subscription or purchase and will not be offered or sold or caused to be made the subject of an invitation for subscription or purchase, and this prospectus or any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the securities, has not been circulated or distributed, nor will it be circulated or distributed, whether directly or indirectly, to any person in Singapore other than (i) to an institutional investor (as defined in Section 4A of the Securities and Futures Act (Chapter 289) of Singapore, as modified or amended from time to time (the “SFA”)) pursuant to Section 274 of the SFA, (ii) to a relevant person (as defined in Section 275(2) of the SFA) pursuant to Section 275(1) of the SFA, or any person pursuant to Section 275(1A) of the SFA, and in accordance with the conditions specified in Section 275 of the SFA, or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.
Where the securities are subscribed or purchased under Section 275 of the SFA by a relevant person which is:
(a)
a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or
(b)
a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an accredited investor,
securities or securities-based derivatives contracts (each term as defined in Section 2(1) of the SFA) of that corporation or the beneficiaries’ rights and interest (howsoever described) in that trust shall not be transferred within six months after that corporation or that trust has acquired the securities pursuant to an offer made under Section 275 of the SFA except:
(c)
to an institutional investor or to a relevant person, or to any person arising from an offer referred to in Section 275(1A) or Section 276(4)(i)(B) of the SFA;
(d)
where no consideration is or will be given for the transfer;
(e)
where the transfer is by operation of law; or
(f)
as specified in Section 276(7) of the SFA.
Notice to Prospective Investors in the Cayman Islands
No invitation, whether directly or indirectly, may be made to the public in the Cayman Islands to subscribe for our securities.
Notice to Prospective Investors in Canada
The securities may be sold only to purchasers purchasing, or deemed to be purchasing, as principal that are accredited investors, as defined in National Instrument 45-106 Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and are permitted clients, as defined in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations. Any resale of the securities must be made in accordance with an exemption from, or in a transaction not subject to, the prospectus requirements of applicable securities laws.
Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if this prospectus (including any amendment thereto) contains a
misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser’s province or territory. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser’s province or territory for particulars of these rights or consult with a legal advisor.
Pursuant to section 3A.3 (or, in the case of securities issued or guaranteed by the government of a non-Canadian jurisdiction, section 3A.4) of National Instrument 33-105 Underwriting Conflicts (NI 33-105), the underwriters are not required to comply with the disclosure requirements of NI 33-105 regarding underwriter conflicts of interest in connection with this offering.
LEGAL MATTERS
Morrison & Foerster LLP is acting as counsel in connection with the registration of our securities under the Securities Act, and as such, will pass upon the validity of the securities offered in this prospectus with respect to units and warrants. In connection with this offering, Davis Polk & Wardwell LLP is acting as counsel to the underwriters.
EXPERTS
The financial statements of Anzu Special Acquisition Corp I as of December 31, 2020, and for the period from December 28, 2020 (inception) through December 31, 2020, appearing in this prospectus have been audited by WithumSmith+Brown, PC, independent registered public accounting firm, as set forth in their report thereon, appearing elsewhere in this prospectus, and are included in reliance on such report given on the authority of such firm as experts in auditing and accounting.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the securities we are offering by this prospectus. This prospectus does not contain all of the information included in the registration statement. For further information about us and our securities, you should refer to the registration statement and the exhibits and schedules filed with the registration statement. Whenever we make reference in this prospectus to any of our contracts, agreements or other documents, the references are materially complete but may not include a description of all aspects of such contracts, agreements or other documents, and you should refer to the exhibits attached to the registration statement for copies of the actual contract, agreement or other document.
Upon completion of this offering, we will be subject to the information requirements of the Exchange Act and will file annual, quarterly and current event reports, proxy statements and other information with the SEC. You can read our SEC filings, including the registration statement, over the Internet at the SEC’s website at www.sec.gov.
ANZU SPECIAL ACQUISITION CORP I
INDEX TO FINANCIAL STATEMENTS
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F-2 |
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F-3 |
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F-4 |
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F-5 |
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F-6 |
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F-7
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Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of
Anzu Special Acquisition Corp I
Opinion on the Financial Statements
We have audited the accompanying balance sheet of Anzu Special Acquisition Corp I (the “Company”) as of December 31, 2020, the related statements of operations, changes in stockholder’s equity and cash flows for the period from December 28, 2020 (inception) through December 31, 2020, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020, and the results of its operations and its cash flows for the period from December 28, 2020 (inception) through December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (the “PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
/s/ WithumSmith+Brown, PC
We have served as the Company’s auditor since 2021.
New York, New York
February 19, 2021
ANZU SPECIAL ACQUISITION CORP I
BALANCE SHEET
DECEMBER 31, 2020
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Assets
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Cash on hand
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$ |
25,000 |
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Deferred offering costs
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94,992 |
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Total Assets
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$ |
119,992 |
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Liabilities and Stockholder’s Equity
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Current liabilities:
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Accrued offering costs and expenses
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$ |
95,693 |
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Total current liabilities
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95,693 |
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Commitments and Contingencies
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Stockholder’s Equity:
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Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding
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— |
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Class A common stock, $0.0001 par value; 400,000,000 shares authorized; none issued and outstanding
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— |
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Class B common stock, $0.0001 par value; 40,000,000 shares authorized; 10,062,500 shares issued and outstanding(1)
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1,006 |
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Additional paid-in capital
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23,994 |
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Accumulated deficit
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(701) |
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Total Stockholder’s equity
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24,299 |
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Total Liabilities and Stockholder’s Equity
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$ |
119,992 |
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(1)
This number includes up to 1,312,500 shares of Class B common stock subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters (see Note 5). On February 19, 2021, the Company effected a stock dividend of 2,875,000 shares of Class B Common Stock to the Sponsor, resulting in 10,062,500 shares of Class B common stock being issued and outstanding. All shares and associated amounts have been retroactively restated to reflect the stock dividend.
The accompanying notes are an integral part of these financial statements
ANZU SPECIAL ACQUISITION CORP I
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM DECEMBER 28, 2020 (INCEPTION) THROUGH DECEMBER 31, 2020
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Formation cost
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$ |
701 |
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Net loss
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$ |
(701) |
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Basic and diluted weighted average shares outstanding(1)
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8,750,000 |
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Basic and diluted net loss per common share
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$ |
(0.00) |
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(1)
This number excludes an aggregate of up to 1,312,500 shares of Class B common stock subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters (see Note 5). On February 19, 2021, the Company effected a stock dividend of 2,875,000 shares of Class B Common Stock to the Sponsor, resulting in 10,062,500 shares of Class B common stock being issued and outstanding. All shares and associated amounts have been retroactively restated to reflect the stock dividend.
The accompanying notes are an integral part of these financial statements
ANZU SPECIAL ACQUISITION CORP I
STATEMENT OF CHANGES IN STOCKHOLDER’S EQUITY
FOR THE PERIOD FROM DECEMBER 28, 2020 (INCEPTION) THROUGH DECEMBER 31, 2020
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Class B
common stock
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Additional
Paid-in
Capital
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Accumulated
Deficit
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Total
Stockholder’s
Equity
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Shares(1)
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Amount
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Balance as of December 28, 2020 (inception)
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— |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
— |
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Class B common stock issued to Sponsor
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10,062,500 |
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1,006 |
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23,994 |
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— |
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25,000 |
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Net loss
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— |
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— |
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— |
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(701) |
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(701) |
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Balance as of December 31, 2020
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10,062,500 |
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1,006 |
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$ |
23,994 |
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$ |
(701) |
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$ |
24,299 |
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(1)
This number includes up to 1,312,500 shares of Class B common stock subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters (see Note 5). On February 19, 2021, the Company effected a stock dividend of 2,875,000 shares of Class B Common Stock to the Sponsor, resulting in 10,062,500 shares of Class B common stock being issued and outstanding. All shares and associated amounts have been retroactively restated to reflect the stock dividend.
The accompanying notes are an integral part of these financial statements
ANZU SPECIAL ACQUISITION CORP I
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM DECEMBER 28, 2020 (INCEPTION) THROUGH DECEMBER 31, 2020
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Cash Flows from Operating Activities:
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Net loss
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$ |
(701) |
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Changes in current assets and liabilities:
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Accrued offering costs and operating expenses
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701 |
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Net cash used in operating activities
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— |
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Cash Flows from Financing Activities:
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Proceeds from sale of Class B common stock to Sponsor
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25,000 |
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Net cash provided by financing activities
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25,000 |
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Net change in cash
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25,000 |
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Cash, beginning of period
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— |
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Cash, end of the period
|
|
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$ |
25,000 |
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Supplemental disclosure of cash flow information:
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Deferred offering costs and expenses included in accrued offering costs and expenses
|
|
|
|
$ |
94,992 |
|
|
The accompanying notes are an integral part of these financial statements
ANZU SPECIAL ACQUISITION CORP I
NOTES TO FINANCIAL STATEMENTS
Note 1—Organization and Plan of Business Operations
Organization and General
Anzu Special Acquisition Corp I (the “Company”) was incorporated in Delaware on December 28, 2020. The Company is a blank check company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (a “Business Combination”). The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”) as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”).
As of December 31, 2020, the Company had not commenced any operations. All activity for the period from December 28, 2020 (inception) through December 31, 2020 relates to the Company’s formation and the proposed initial public offering (“Proposed Public Offering”) described below. The Company will not generate any operating revenues until after completion of a Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income from the proceeds derived from the Proposed Public Offering. The Company has selected December 31st as its year end.
Sponsor and Proposed Financing
The Company’s ability to commence operations and finance a Business Combination are contingent on obtaining adequate financial resources from the proposed public offering for 35,000,000 units (the “Units” and, with respect to the shares of Class A common stock included in the Units being offered, the “Public Shares”) at $10.00 per Unit (see Note 3) (or 40,250,000 Units if the underwriters’ over-allotment option is exercised in full) and a private placement for 11,000,000 warrants (or 12,050,000 warrants if the underwriters’ over-allotment option is exercised in full) (the “Private Placement Warrants”) to Anzu SPAC GP I LLC (the “Sponsor”) that will close simultaneously with the Proposed Public Offering (see Note 4). Upon the closing of the Proposed Public Offering and the private placement, $350,000,000 (or $402,500,000 if the underwriters’ over-allotment option is exercised in full—Note 3) will be held in the Trust Account (as defined below).
The Trust Account
Of the net proceeds from the Proposed Public Offering and the sale of the Private Placement Warrants, $350,000,000 (or $402,500,000 if the underwriters’ over-allotment option is exercised in full), including $12,250,000 (or up to $14,087,500 if the underwriters’ over-allotment option is exercised in full) of deferred underwriting commissions, will, upon the consummation of the Proposed Public Offering, be placed in a U.S.-based trust account (the “Trust Account”). The funds in the Trust Account will be invested only in U.S. government treasury bills with a maturity of 185 days or less or in money market funds investing solely in U.S. Treasuries and meeting certain conditions under Rule 2a-7 under the Investment Company Act of 1940, as amended. The Company will not be permitted to withdraw any of the principal or interest held in the Trust Account except for the withdrawal of interest to pay taxes, if any. The funds held in the Trust Account will not otherwise be released from the trust account until the earliest of: (1) the Company’s completion of a Business Combination; (2) the redemption of any Public Shares properly submitted in connection with a stockholder vote to amend the Company’s amended and restated certificate of incorporation (A) to modify the substance or timing of the Company’s obligation to allow redemption in connection with a Business Combination or to redeem 100% of the Company’s Public Shares if the Company does not complete a Business Combination within 24 months from the closing of the Proposed Public Offering or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity; and (3) the redemption of the Company’s Public Shares if the Company has not completed a Business Combination within 24 months from the closing of the Proposed Public Offering, subject to applicable law. Based on current interest rates, the Company expects that interest earned on the trust account will be sufficient to pay taxes.
Business Combination
The Company’s management has broad discretion with respect to the specific application of the net proceeds from the Proposed Public Offering, although substantially all of the net proceeds from the Proposed Public Offering are intended to be generally applied toward consummating a Business Combination with (or acquisition of) a Target Business. As used herein, “Target Business” means one or more target businesses that together have an aggregate fair market value equal to 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 the signing of a definitive agreement in connection with a Business Combination. Furthermore, there is no assurance that the Company will be able to successfully effect a Business Combination.
The Company will provide its public stockholders with the opportunity to redeem all or a portion of their public shares upon the completion of a Business Combination, either (i) in connection with a stockholder meeting called to approve such Business Combination or (ii) by means of a tender offer. The public stockholders will be entitled to redeem their shares for a pro rata portion of the amount held in the Trust Account, calculated as of two business days prior to the completion of a Business Combination, including any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations. The per-share amount to be distributed to the public stockholders who redeem their shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriters (as discussed in Note 6). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants. As a result, shares of common stock will be recorded at their redemption amount and classified as temporary equity upon the completion of the Proposed Public Offering, in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, “Distinguishing Liabilities from Equity.” The amount in the Trust Account is initially anticipated to be $10.00 per public share of common stock ($350,000,000 held in the Trust Account divided by 35,000,000 public shares of common stock).
The decision as to whether the Company will seek stockholder approval of a Business Combination or will allow stockholders to sell their shares in a tender offer will be made by the Company, in its sole discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would otherwise require the Company to seek stockholder approval unless a vote is required by law or stock exchange listing requirements. If the Company seeks stockholder approval, it will complete its Business Combination only if a majority of the shares of common stock voted are voted in favor of a Business Combination. However, in no event will the Company redeem its public shares of common stock in an amount that would cause its net tangible assets to be less than $5,000,001 upon consummation of a Business Combination. In such case, the Company would not proceed with the redemption of its public shares of common stock and the related Business Combination, and instead may search for an alternate Business Combination.
The Company will only have 24 months from the closing date of the Proposed Public Offering to complete its initial Business Combination. If the Company does not complete a Business Combination within such 24-month period (or such longer period as provided in an amendment to the Company’s amended and restated certificate of incorporation approved by our stockholders (an “Extension Period”)), it shall (i) cease all operations except for the purposes of winding up; (ii) as promptly as reasonably possible but not more than 10 business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (less up to $100,000 of interest to pay dissolution expenses and which interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining stockholders and its board of directors, liquidate and dissolve, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to complete our initial business combination within the 24-month time period or during any Extension Period. The initial stockholders have entered into a letter agreement with the Company, pursuant to which they have waived their rights to liquidating distributions from the Trust Account with respect to their Founder Shares (as defined in Note 5) if the Company fails to complete its initial
Business Combination within 24 months from the closing of the Proposed Public Offering or during any Extension Period. However, if the initial stockholders acquire public shares, they will be entitled to liquidating distributions from the Trust Account with respect to such public shares if the Company fails to complete its initial Business Combination within the allotted 24-month time frame.
In the event of such distribution, it is possible that the per share value of the residual assets remaining available for distribution (including Trust Account assets) will be less than $10.00 per public share initially held in the Trust Account.
The Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a third party (other than the Company’s independent registered public accounting firm) for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below (1) $10.00 per public share or (2) such lesser amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account, due to reductions in value of the trust assets, in each case net of the amount of interest which may be withdrawn to pay taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the trust account and except as to any claims under the Company’s indemnity of the underwriters of the Proposed Public Offering against certain liabilities, including liabilities under the Securities Act. In the event that an executed waiver is deemed to be unenforceable against a third party, then the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to have all third parties, including, but not limited to, all vendors, service providers (other than its independent registered public accounting firm), prospective target businesses and other entities with which the Company does business execute agreements with the Company waiving any right, title, interest or claims of any kind in or to any monies held in the Trust Account.
Liquidity and Capital Resources
At December 31, 2020, the Company had $25,000 in cash and working capital deficit of $(70,693). The Company has incurred and expects to continue to incur significant costs in pursuit of its financing and acquisition plans. The Company does not have sufficient liquidity to meet its anticipated obligations over the next year from the date of issuance of these financial statements. In connection with the Company’s assessment of going concern considerations in accordance with FASB’s Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that the Company has access to funds from the Sponsor that are sufficient to fund the working capital needs of the Company until the earlier of the consummation of the Proposed Public Offering, at which time the Company will have sufficient working capital, or one year from the issuance of these financial statements.
Note 2—Significant Accounting Policies
Basis of Presentation
The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the accounting and disclosure rules and regulations of the SEC.
Emerging Growth Company
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.
Cash and Cash Equivalents
The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of December 31, 2020.
Deferred Offering Costs
Deferred offering costs consist of underwriting, legal, accounting and other expenses incurred through the balance sheet date that are directly related to the Proposed Public Offering and that will be charged to stockholder’s equity upon the completion of the Proposed Public Offering. Should the Proposed Public Offering prove to be unsuccessful, these deferred costs, as well as additional expenses incurred, will be charged to operations.
Income Taxes
The Company accounts for income taxes under ASC 740, “Income Taxes” (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized. The deferred tax assets were deemed to be immaterial as of December 31, 2020.
ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2020. The Company is currently not aware of any issues under review
that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.
The provision for income taxes was deemed to be de minimis for the period from December 28, 2020 (inception) through December 31, 2020.
Net Loss Per Common Share
Net loss per common share is computed by dividing net loss by the weighted average number of common stock outstanding during the period, excluding common stock subject to forfeiture. Weighted average common shares were reduced for the effect of an aggregate of up to 1,312,500 shares of Class B common stock that are subject to forfeiture if the over-allotment option is not exercised in full or part by the underwriters (see Note 7). At December 31, 2020, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into common stock and then share in the earnings of the Company. As a result, diluted loss per common share is the same as basic loss per common share for the period presented.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times may exceed the Federal Depository Insurance Coverage of $250,000. The Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts.
Fair Value of Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying balance sheet, primarily due to their short-term nature.
Recently Issued Accounting Standards
Management does not believe that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying financial statements.
Note 3—Proposed Public Offering
Pursuant to the Proposed Public Offering, the Company will offer for sale up to 35,000,000 Units (or 40,250,000 Units if the underwriters’ over-allotment option is exercised in full) at a purchase price of $10.00 per Unit. Each Unit will consist of one share of Class A common stock and one-third of one redeemable warrant (“Public Warrant”). Each whole Public Warrant will entitle the holder to purchase one share of Class A common stock at an exercise price of $11.50 per whole share, subject to adjustment (see Note 7).
Note 4—Private Placement
The Sponsor has committed to purchase an aggregate of 11,000,000 Private Placement Warrants (or 12,050,000 Private Placement Warrants if the underwriters’ over-allotment option is exercised in full) at a price of $1.00 per Private Placement Warrant, for an aggregate price of approximately $11,000,000 (or approximately $12,050,000 if the over-allotment option is exercised in full), from the Company in a private placement that will occur simultaneously with the closing of the Proposed Public Offering. A portion of the proceeds from the sale of the Private Placement Warrants will be added to the net proceeds from the Proposed Public Offering held in the Trust Account. Each Private Placement Warrant is exercisable for one share of Class A common stock at a price of $11.50 per share, subject to adjustment (see Note 7). If the Company does not complete a Business Combination within 24 months of the closing of the Proposed Public Offering or any Extension Period, the proceeds from the sale of the Private Placement Warrants held in the Trust Account will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law) and the Private Placement Warrants will expire worthless.
Note 5—Related Party Transactions
Founder Shares
On December 30, 2020, the Sponsor purchased 7,187,500 Founder Shares for an aggregate purchase price of $25,000. On February 19, 2021, the Company effected a stock dividend of 2,875,000 shares of Class B Common Stock to the Sponsor, resulting in the Company’s initial stockholders holding an aggregate of up to 10,062,500 founder shares shares (see Note 8). The Founder Shares include an aggregate of up to 1,312,500 shares that are subject to forfeiture depending on the extent that the underwriters’ over-allotment option is exercised, so that the number of Founder Shares will equal 20% of the Company’s issued and outstanding common stock after the Proposed Public Offering.
The Sponsor has agreed, subject to limited exceptions, not to transfer, assign or sell any of its Class B common stock or Class A common stock received upon conversion thereof (together, “Founder Shares”) until the earlier of: (A) one year after the completion of a Business Combination; and (B) subsequent to a Business Combination (x) if the last reported sale price of the Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, rights issuances, consolidations, reorganizations, recapitalizations and other similar transactions) for any 20 trading days within any 30- trading day period commencing at least 150 days after a Business Combination or (y) the date on which the Company completes a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of the Company’s public stockholders having the right to exchange their shares of common stock for cash, securities or other property.
Promissory Note—Related Party
On December 30, 2020, the Company issued an unsecured promissory note to the Sponsor (the “Promissory Note”), pursuant to which the Company may borrow up to an aggregate principal amount of $300,000. The Promissory Note is non-interest bearing and payable on the earlier of (i) March 31, 2022 or (ii) the completion of the Proposed Public Offering. As of December 31, 2020, the Company had no borrowings under the Promissory Note.
Administrative Services Agreement
The Company will enter into an agreement pursuant to which it will pay an affiliate of the Sponsor up to $40,521 per month for office space, administrative and support services. Upon completion of a Business Combination or its liquidation, the Company will cease paying these monthly fees.
Related Party Loans
In order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). Such Working Capital Loans would be evidenced by promissory notes. The notes may be repaid upon completion of a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of notes may be converted upon completion of a Business Combination into warrants at a price of $1.00 per warrant. Such warrants would be identical to the Private Placement Warrants. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. As of December 31, 2020, the Company had no borrowings under the Working Capital Loans.
Note 6—Commitments and Contingencies
Registration Rights
The holders of the Founder Shares, Private Placement Warrants and any warrants that may be issued on conversion of Working Capital Loans (and any Class A common stock issuable upon the exercise of the Private Placement Warrants or warrants issued upon conversion of the Working Capital Loans and upon conversion of the Founder Shares) will be entitled to registration rights pursuant to a registration rights
agreement to be signed prior to or on the effective date of the Proposed Public Offering requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to the Company’s Class A common stock). The holders of these securities will be entitled to make up to three demands, excluding short form registration demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that the Company will not be required to effect or permit any registration or cause any registration statement to become effective until termination of the applicable lock-up period. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The Company will grant the underwriters a 45-day option to purchase up to 5,250,000 additional Units to cover over-allotments at the Proposed Public Offering price, less the underwriting discounts and commissions.
The underwriters will be entitled to a cash underwriting discount of $0.20 per Unit, or $7,000,000 in the aggregate (or $8,050,000 in the aggregate if the underwriters’ over-allotment option is exercised in full), payable upon the closing of the Proposed Public Offering. In addition, the underwriter will be entitled to a deferred fee of $0.35 per Unit, or $12,250,000 in the aggregate (or $14,087,500 in the aggregate if the underwriters’ over-allotment option is exercised in full). The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement.
Note 7—Stockholder’s Equity
Preferred Stock—The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per share. The Company’s board of directors will be authorized to fix the voting rights, if any, designations, powers, preferences, the relative, participating, optional or other special rights and any qualifications, limitations and restrictions thereof, applicable to the shares of each series. The board of directors will be able to, without stockholder approval, issue shares of preferred stock with voting and other rights that could adversely affect the voting power and other rights of the holders of the common stock and could have anti-takeover effects. At December 31, 2020, there were no shares of preferred stock issued or outstanding.
Class A Common Stock—The Company is authorized to issue 400,000,000 shares of Class A common stock with a par value of $0.0001 per share. Holders of Class A common stock are entitled to one vote for each share. At December 31, 2020, there were no shares of Class A common stock issued or outstanding.
Class B Common Stock—The Company is authorized to issue 40,000,000 shares of Class B common stock, with a par value of $0.0001 per share. Holders of the Class B, common stock are entitled to one vote for each share. At December 31, 2020, there were 7,187,500 shares of Class B common stock issued and outstanding. On February 19, 2021, the Company effected a stock dividend of 2,875,000 shares of Class B Common Stock to the Sponsor, resulting in the Company’s initial stockholders holding an aggregate of 10,062,500 founder shares (see Note 8), of which an aggregate of up to 1,312,500 shares are subject to forfeiture to the extent that the underwriters’ over-allotment option is not exercised in full or in part, so that the number of Class B common stock will equal 20% of the Company’s issued and outstanding common stock after the Proposed Public Offering.
Only holders of the Class B common stock will have the right to vote on the election of directors prior to a Business Combination. Holders of Class A common stock and holders of Class B common stock will vote together as a single class on all matters submitted to a vote of the Company’s stockholders except as otherwise required by law.
The Class B common stock will automatically convert into Class A common stock at the time of the completion of a Business Combination, or earlier at the option of the holder, on a one-for-one basis,
subject to adjustment. In the case that additional shares of Class A common stock, or equity-linked securities, are issued or deemed issued in excess of the amounts issued in the Proposed Public Offering and related to the closing of a Business Combination, the ratio at which Founder Shares will convert into Class A common stock will be adjusted (subject to waiver by holders of a majority of the Class B common stock) so that the number of shares of Class A common stock issuable upon conversion of all Founder Shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of the common stock issued and outstanding upon completion of the Proposed Public Offering plus the number of shares of Class A common stock and equity- linked securities issued or deemed issued in connection with a Business Combination, excluding any shares of Class A common stock or equity-linked securities issued, or to be issued, to any seller in a Business Combination.
Warrants—Public Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Public Warrants. The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination and (b) 12 months from the closing of the Proposed Public Offering. The Public Warrants will expire five years from the completion of a Business Combination or earlier upon redemption or liquidation.
If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of shares of Class A common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation. However except as described below, the warrants will not be adjusted for issuances of Class A common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of the warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution form the Company’s assets held outside the Trust Account with respect to such warrants. Accordingly, the warrants may expire worthless.
In addition, if (x) the Company issues additional shares of Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of the Company’s initial Business Combination at an issue price or effective issue price of less than $9.20 per share of common stock (with such issue price or effective issue price to be determined in good faith by our board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any founder shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of the Company’s initial Business Combination on the date of the completion of the Company’s initial Business Combination (net of redemptions), and (z) the volume weighted average trading price of shares of the Company’s Class A common stock during the 20 trading day period starting on the trading day prior to the day on which the Company consummate a Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, the $18.00 per share redemption trigger price described below under “Redemption of warrants when the price per share of the Company’s Class A common stock equals or exceeds $18.00” and “Redemption of warrants when the price per share of the Company’s Class A common stock equals or exceeds $10.00” will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price, and the $10.00 per share redemption trigger price described below under “Redemption of warrants when the price per share of the Company’s Class A common stock equals or exceeds $10.00” will be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price.
The Company will not be obligated to deliver any shares of Class A common stock pursuant to the exercise of a Public Warrant and will have no obligation to settle such Public Warrant exercise unless a registration statement under the Securities Act covering the issuance of the shares of Class A common stock issuable upon exercise of the Public Warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations with respect to registration or a valid exemption from registration is available. No Public Warrant will be exercisable for cash or on a cashless basis, and the Company
will not be obligated to issue any shares to holders seeking to exercise their Public Warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption from registration is available.
The Company has agreed that as soon as practicable, but in no event later than 15 business days, after the closing of a Business Combination, it will use its commercially reasonable efforts to file with the SEC a registration statement registering the issuance, under the Securities Act, of the Class A common stock issuable upon exercise of the Public Warrants. The Company will use its commercially reasonable efforts to cause the same to become effective within 60 business days after the closing of a Business Combination and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the Public Warrants in accordance with the provisions of the warrant agreement. Notwithstanding the above, if the Class A common stock is, at the time of any exercise of a Public Warrant, not listed on a national securities exchange such that they do not satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their Public Warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, the Company will not be required to file or maintain in effect a registration statement, but will use its commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.
Redemption of warrants when the price per Class A common stock equals or exceeds $18.00. Once the Public Warrants become exercisable, the Company may redeem the Public Warrants:
•
in whole and not in part;
•
at a price of $0.01 per Public Warrant;
•
upon not less than 30 days’ prior written notice of redemption to each warrant holder and
•
if, and only if, the last reported sale price of shares of the Class A common stock for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders (the “Reference Value”) equals or exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant).
Redemption of warrants when the price per Class A common stock equals or exceeds $10.00. Once the Public Warrants become exercisable, the Company may redeem the Public Warrants:
•
in whole and not in part;
•
at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares based on the redemption date and the “fair market value” of the Class A common stock;
•
if, and only if, the Reference Value equals or exceeds $10.00 per share (as adjusted); and
•
if the Reference Value is less than $18.00 per share (as adjusted), the Private Placement Warrants must also be concurrently called for redemption on the same terms as the outstanding Public Warrants.
If and when the Public Warrants become redeemable by the Company, the Company may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws.
The Private Placement Warrants will be identical to the Public Warrants underlying the Units being sold in the Proposed Public Offering, except that the Private Placement Warrants and the Class A common stock issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be exercisable on a cashless basis and be non-redeemable, except as described above, so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted
transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.
Note 8—Subsequent Events
The Company evaluated subsequent events and transactions that occurred after the audited balance sheet date through February 19, 2021 the date that the audited financial statements were issued. Based on this review, other than as described below, the Company did not identify any other subsequent events that would have required adjustment or disclosure in the financial statements.
On February 19, 2021, the Company effected a stock dividend of 2,875,000 shares of Class B Common Stock to the Sponsor, resulting in 10,062,500 shares of Class B common stock being issued and outstanding. All share and per-share amounts have been retroactively restated to reflect the share capitalization.
35,000,000 Units
Anzu Special Acquisition Corp I
PRELIMINARY PROSPECTUS
, 2021
| |
BofA Securities
|
|
|
Barclays
|
|
Until , 2021 (25 days after the date of this prospectus), all dealers that effect transactions in these securities whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.
PART II INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution.
The estimated expenses payable by us in connection with the offering described in this registration statement (other than the underwriting discount and commissions) will be as follows:
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Legal fees and expenses
|
|
|
|
$ |
300,000 |
|
|
| |
Accounting fees and expenses
|
|
|
|
$ |
40,000 |
|
|
| |
SEC expenses
|
|
|
|
$ |
43,913 |
|
|
| |
FINRA expenses
|
|
|
|
$ |
60,875 |
|
|
| |
Travel and road show
|
|
|
|
$ |
10,000 |
|
|
| |
Directors and officers insurance premiums
|
|
|
|
$ |
1,400,000 |
|
|
| |
Nasdaq listing and filing fees
|
|
|
|
$ |
75,000 |
|
|
| |
Printing and engraving expenses
|
|
|
|
$ |
37,000 |
|
|
| |
Miscellaneous expenses
|
|
|
|
$ |
33,212 |
|
|
| |
Total offering expenses
|
|
|
|
$ |
2,000,000 |
|
|
Item 14. Indemnification of Directors and Officers.
Our amended and restated certificate of incorporation will provide that all of our directors, officers, employees and agents shall be entitled to be indemnified by us to the fullest extent permitted by Section 145 of the Delaware General Corporation Law (“DGCL”). Section 145 of the Delaware General Corporation Law concerning indemnification of officers, directors, employees and agents is set forth below.
Section 145. Indemnification of officers, directors, employees and agents; insurance.
(a) A corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the person’s conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that the person’s conduct was unlawful.
(b) A corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys’ fees) actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.
(c) To the extent that a present or former director or officer of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in subsections (a) and (b) of this section, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this section (unless ordered by a court) shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the present or former director, officer, employee or agent is proper in the circumstances because the person has met the applicable standard of conduct set forth in subsections (a) and (b) of this section. Such determination shall be made, with respect to a person who is a director or officer at the time of such determination, (1) by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum, or (2) by a committee of such directors designated by majority vote of such directors, even though less than a quorum, or (3) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, or (4) by the stockholders.
(e) Expenses (including attorneys’ fees) incurred by an officer or director in defending any civil, criminal, administrative or investigative action, suit or proceeding may be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the corporation as authorized in this section. Such expenses (including attorneys’ fees) incurred by former officers and directors or other employees and agents may be so paid upon such terms and conditions, if any, as the corporation deems appropriate.
(f) The indemnification and advancement of expenses provided by, or granted pursuant to, the other subsections of this section shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such person’s official capacity and as to action in another capacity while holding such office. A right to indemnification or to advancement of expenses arising under a provision of the certificate of incorporation or a bylaw shall not be eliminated or impaired by an amendment to such provision after the occurrence of the act or omission that is the subject of the civil, criminal, administrative or investigative action, suit or proceeding for which indemnification or advancement of expenses is sought, unless the provision in effect at the time of such act or omission explicitly authorizes such elimination or impairment after such action or omission has occurred.
(g) A corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not the corporation would have the power to indemnify such person against such liability under this section.
(h) For purposes of this section, references to “the corporation” shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under this section with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued.
(i) For purposes of this section, references to “other enterprises” shall include employee benefit plans; references to “fines” shall include any excise taxes assessed on a person with respect to any employee benefit plan; and references to “serving at the request of the corporation” shall include any service as a director,
officer, employee or agent of the corporation which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the corporation” as referred to in this section.
(j) The indemnification and advancement of expenses provided by, or granted pursuant to, this section shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.
(k) The Court of Chancery is hereby vested with exclusive jurisdiction to hear and determine all actions for advancement of expenses or indemnification brought under this section or under any by law, agreement, vote of stockholders or disinterested directors, or otherwise. The Court of Chancery may summarily determine a corporation’s obligation to advance expenses (including attorneys’ fees).
In connection with this registration statement, we have undertaken that insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers, and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment of expenses incurred or paid by a director, officer or controlling person in a successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to the court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. See Item 17 “Undertakings”.
In accordance with Section 102(b)(7) of the DGCL, our amended and restated certificate of incorporation, will provide that no director shall be personally liable to us or any of our stockholders for monetary damages resulting from breaches of their fiduciary duty as directors, except to the extent such limitation on or exemption from liability is not permitted under the DGCL. The effect of this provision of our amended and restated certificate of incorporation is to eliminate our rights and those of our stockholders (through stockholders’ derivative suits on our behalf) to recover monetary damages against a director for breach of the fiduciary duty of care as a director, including breaches resulting from negligent or grossly negligent behavior, except, as restricted by Section 102(b)(7) of the DGCL. However, this provision does not limit or eliminate our rights or the rights of any stockholder to seek non-monetary relief, such as an injunction or rescission, in the event of a breach of a director’s duty of care.
Our amended and restated certificate of incorporation will also provide that we will, to the fullest extent authorized or permitted by applicable law, indemnify our current and former officers and directors, as well as those persons who, while directors or officers of our corporation, are or were serving as directors, officers, employees or agents of another entity, trust or other enterprise, including service with respect to an employee benefit plan, in connection with any threatened, pending or completed proceeding, whether civil, criminal, administrative or investigative, against all expense, liability and loss (including, without limitation, attorney’s fees, judgments, fines, ERISA excise taxes and penalties and amounts paid in settlement) reasonably incurred or suffered by any such person in connection with any such proceeding. Notwithstanding the foregoing, a person eligible for indemnification pursuant to our amended and restated certificate of incorporation will be indemnified by us in connection with a proceeding initiated by such person only if such proceeding was authorized by our board of directors, except for proceedings to enforce rights to indemnification.
(i) For purposes of this section, references to “other enterprises” shall include employee benefit plans; references to “fines” shall include any excise taxes assessed on a person with respect to any employee benefit plan; and references to “serving at the request of the corporation” shall include any service as a director, officer, employee or agent of the corporation which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest
of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the corporation” as referred to in this section.
(j) The indemnification and advancement of expenses provided by, or granted pursuant to, this section shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.
(k) The Court of Chancery is hereby vested with exclusive jurisdiction to hear and determine all actions for advancement of expenses or indemnification brought under this section or under any by law, agreement, vote of stockholders or disinterested directors, or otherwise. The Court of Chancery may summarily determine a corporation’s obligation to advance expenses (including attorneys’ fees).
In connection with this registration statement, we have undertaken that insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers, and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment of expenses incurred or paid by a director, officer or controlling person in a successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to the court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. See Item 17 “Undertakings”.
In accordance with Section 102(b)(7) of the DGCL, our amended and restated certificate of incorporation, will provide that no director shall be personally liable to us or any of our stockholders for monetary damages resulting from breaches of their fiduciary duty as directors, except to the extent such limitation on or exemption from liability is not permitted under the DGCL. The effect of this provision of our amended and restated certificate of incorporation is to eliminate our rights and those of our stockholders (through stockholders’ derivative suits on our behalf) to recover monetary damages against a director for breach of the fiduciary duty of care as a director, including breaches resulting from negligent or grossly negligent behavior, except, as restricted by Section 102(b)(7) of the DGCL. However, this provision does not limit or eliminate our rights or the rights of any stockholder to seek non-monetary relief, such as an injunction or rescission, in the event of a breach of a director’s duty of care.
Our amended and restated certificate of incorporation will also provide that we will, to the fullest extent authorized or permitted by applicable law, indemnify our current and former officers and directors, as well as those persons who, while directors or officers of our corporation, are or were serving as directors, officers, employees or agents of another entity, trust or other enterprise, including service with respect to an employee benefit plan, in connection with any threatened, pending or completed proceeding, whether civil, criminal, administrative or investigative, against all expense, liability and loss (including, without limitation, attorney’s fees, judgments, fines, ERISA excise taxes and penalties and amounts paid in settlement) reasonably incurred or suffered by any such person in connection with any such proceeding. Notwithstanding the foregoing, a person eligible for indemnification pursuant to our amended and restated certificate of incorporation will be indemnified by us in connection with a proceeding initiated by such person only if such proceeding was authorized by our board of directors, except for proceedings to enforce rights to indemnification.
Item 15. Recent Sales of Unregistered Securities.
On December 30, 2020, Anzu SPAC GP I LLC, our sponsor, subscribed for an aggregate of 7,187,500 founder shares, for an aggregate offering price of $25,000 at an average purchase price of approximately $0.004 per share. The number of founder shares issued was determined based on the expectation that the founder shares would represent 20% of the issued and outstanding shares of common stock upon completion of this offering. Such securities were issued in connection with our incorporation pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act. Our sponsor is an accredited investor for purposes of Rule 501 of Regulation D.
In addition, our sponsor has committed, pursuant to a written agreement, to purchase from us an aggregate of 11,000,000 (or 12,050,000 warrants if the underwriters’ over-allotment option is exercised in full) private placement warrants at $1.00 per warrant (for an aggregate purchase price of approximately $11,000,000 or approximately $12,050,000 in the aggregate if the underwriters’ over-allotment option is exercised in full). This purchase will take place on a private placement basis simultaneously with the completion of our initial public offering. This issuance will be made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.
No underwriting discounts or commissions were paid with respect to such sales.
Item 16. Exhibits and Financial Statement Schedules.
(a) Exhibits. The following exhibits are being filed herewith:
*
Previously filed
(b)
Financial Statements. See page F-1 for an index to the financial statements and schedules included in the registration statement.
Item 17. Undertakings.
(c)
The undersigned registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreements, certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.
(d)
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
(e)
The undersigned registrant hereby undertakes that:
(1)
For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.
(2)
For the purpose of determining any liability under the Securities Act of 1933, each post- effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3)
For the purpose of determining liability under the Securities Act of 1933 to any purchaser, if the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.
(4)
For the purpose of determining liability of a registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of an undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i)
Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
(ii)
Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by an undersigned registrant;
(iii)
The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and
(iv)
Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Washington, DC, on the 19th day of February, 2021.
ANZU SPECIAL ACQUISITION CORP I
By:
/s/ Dr. Whitney Haring-Smith
Name: Dr. Whitney Haring-Smith
Title: Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated.
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Name
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Position
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Date
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*
William Wulfsohn
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Chairman of the Board of Directors
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February 19, 2021
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/s/ Dr. Whitney Haring-Smith
Dr. Whitney Haring-Smith
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Chief Executive Officer
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February 19, 2021
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John W. Joy
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Chief Financial Officer
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February 19, 2021
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*By:
/s/ Dr. Whitney Haring-Smith
Dr. Whitney Haring-Smith
Attorney-in-fact
Exhibit 1.1
ANZU SPECIAL ACQUISITION CORP I
a Delaware corporation
35,000,000 Units
UNDERWRITING AGREEMENT
Date: [·], 2021
Anzu Special Acquisition Corp I
(a Delaware corporation)
35,000,000 Units
UNDERWRITING AGREEMENT
[•], 2021
BofA Securities, Inc.
Barclays Capital Inc.
as Representatives of the several
Underwriters
c/o BofA Securities, Inc.
One Bryant Park
New York, New York 10036
c/o Barclays Capital Inc.
745 7th Avenue
New York, NY 10019
Ladies and Gentlemen:
Anzu Special Acquisition
Corp I (the “Company”), confirms its agreement with BofA Securities, Inc. (“BofA”), Barclays Capital Inc.
(“Barclays”) and each of the other Underwriters named in Schedule A hereto (collectively, the “Underwriters,”
which term shall also include any underwriter substituted as hereinafter provided in Section 10 hereof), for whom BofA and
Barclays are acting as representatives (in such capacity, the “Representatives”), with respect to (i) the sale by the
Company and the purchase by the Underwriters, acting severally and not jointly, of the respective numbers of units of the Company.
Each unit (“Unit(s)”) consists of one share of Class A common stock, par value $0.0001 (“Class A Common Stock”)
and one-third of one redeemable warrant of the Company (“Warrant(s)”) set forth in Schedule A hereto and (ii) the
grant by the Company to the Underwriters, acting severally and not jointly, of the option described in Section 2(b) hereof
to purchase all or any part of 5,250,000 additional Units. The aforesaid 35,000,000 Units (the “Initial Securities”)
to be purchased by the Underwriters and all or any part of the 5,250,000 Units subject to the option described in Section 2(b)
hereof (the “Option Securities”) are herein called, collectively, the “Securities.”
The Company understands
that the Underwriters propose to make a public offering of the Securities as soon as the Representatives deem advisable after this
Agreement has been executed and delivered.
The Company has filed
with the Securities and Exchange Commission (the “Commission”) a registration statement on Form S-1 (No.
333-252861), including the related preliminary prospectus or prospectuses, covering the registration of the sale of the Securities
under the Securities Act of 1933, as amended (the “1933 Act”). Promptly after execution and delivery of this Agreement,
the Company will prepare and file a prospectus in accordance with the provisions of Rule 430A (“Rule 430A”) of the
rules and regulations of the Commission under the 1933 Act (the “1933 Act Regulations”) and Rule 424(b) (“Rule
424(b)”) of the 1933 Act Regulations. The information included in such prospectus that was omitted from such registration
statement at the time it became effective but that is deemed to be part of such registration statement at the time it became effective
pursuant to Rule 430A(b) is herein called the “Rule 430A Information.” Such registration statement, including the
amendments thereto, the exhibits thereto and any schedules thereto, at the time it became effective, and including the Rule 430A
Information, is herein called the “Registration Statement.” Any registration statement filed pursuant to Rule 462(b)
of the 1933 Act Regulations is herein called the “Rule 462(b) Registration Statement” and, after such filing, the
term “Registration Statement” shall include the Rule 462(b) Registration Statement. Each prospectus used prior to
the effectiveness of the Registration Statement, and each prospectus that omitted the Rule 430A Information that was used after
such effectiveness and prior to the execution and delivery of this Agreement is herein called a “preliminary prospectus.”
The final prospectus, in the form first furnished to the Underwriters for use in connection with the offering of the Securities,
is herein called the “Prospectus.” For purposes of this Agreement, all references to the Registration Statement, any
preliminary prospectus, the Prospectus or any amendment or supplement to any of the foregoing shall be deemed to include the copy
filed with the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval system or any successor system (“EDGAR”).
As used in this Agreement:
“Applicable
Time” means [·] P.M., New York City time, on [·],
2021.
“General
Disclosure Package” means the most recent preliminary prospectus that is distributed to investors prior to the Applicable
Time and the information included on Schedule B-1 hereto, all considered together.
“Testing-the-Waters
Communication” means any oral or written communication with potential investors undertaken in reliance on Section 5(d) of
the 1933 Act.
“Written
Testing-the-Waters Communication” means any Testing-the-Waters Communication that is a written communication within the meaning
of Rule 405 under the 1933 Act.
On December 28, 2020
the Company was initially formed as Anzu Special Acquisition Corp I, a Delaware corporation incorporated for the purpose of effecting
a merger, share exchange, share purchase, reorganization or similar business combination (“Business Combination”).
On the date hereof,
Anzu SPAC GP I LLC, a Delaware limited liability company (the “Sponsor”) has committed to purchase an aggregate of
11,000,000 private placement warrants (or up to 12,050,000 private placement warrants if the option to purchase Option Securities
as provided in Section 2 herein is exercised in full), each entitling such holder to purchase one share of Class A Common Stock
at an exercise price of $11.50 (the “Private Placement Warrants”) and the Company entered into a purchase agreement
with the Sponsor (the “Private Placement Warrants Purchase Agreement”) in substantially the form filed as Exhibit 10.6
to the Registration Statement.
In December 2020,
the Company issued 7,187,500 shares of Class B common stock (the “Founder Shares”) to the Sponsor for $25,000
pursuant to a Securities Subscription Agreement, dated as of December, 2020 (the “Subscription Agreement”) in
substantially the form filed as Exhibit 10.5 to the Registration Statement. On February 19, 2021, the Company approved a stock dividend resulting in an aggregate of 10,062,500 Founders Shares outstanding as of
the date hereof. Up to 1,312,500 Founder Shares are subject to forfeiture depending on the extent to which the Underwriter’s over-allotment
option is exercised. The Company has entered into a Registration
Rights Agreement, dated as of the date hereof, with the Sponsor, in substantially the form filed as Exhibit 10.4 to the
Registration Statement (the “Registration Rights Agreement”), pursuant to which the Company has granted certain
registration rights in respect of the Founder Shares and the Private Placement Warrants issuable upon conversion of the
Founder Shares.
The Company has entered
into an Investment Management Trust Agreement, effective as of the date hereof, with American Stock Transfer & Trust Company,
as trustee, in substantially the form filed as Exhibit 10.3 to the Registration Statement (the “Trust Agreement”),
pursuant to which the proceeds from the sale of the Private Placement Warrants and certain proceeds of the Offering and sale of
the Securities will be deposited and held in a trust account (the “Trust Account”) for the benefit of the Company and
the Underwriters.
The Company has entered into a Warrant Agreement,
effective as of the date hereof, with respect to the Warrants, the Private Placement Warrants and any warrants issued upon the
conversion of working capital loans by the Sponsor, the Company’s officers and directors, or their respective affiliates,
to the Company (the “Working Capital Warrants”) with American Stock Transfer & Trust Company, as warrant agent,
in substantially the form filed as Exhibit 4.4 to the Registration Statement (the “Warrant Agreement”), pursuant to
which American Stock Transfer & Trust Company will act as warrant agent in connection with the issuance, registration, transfer,
exchange, redemption, and exercise of the Warrants, the Private Placement Warrants and the Working Capital Warrants.
The Company has duly
executed and delivered a letter agreement, dated as of the date hereof, by and among the Company, the Sponsor and each of the Company’s
officers, directors and director nominees each in substantially the form filed as Exhibit 10.2 to the Registration Statement
(the “Insider Letter”).
SECTION 1. Representations
and Warranties.
(a) Representations
and Warranties by the Company. The Company represents and warrants to each Underwriter as of the date hereof, the Applicable
Time, the Closing Time (as defined below) and any Date of Delivery (as defined below), and agrees with each Underwriter, as follows:
(i) Registration
Statement and Prospectuses. Each of the Registration Statement and any amendment thereto has become effective under the 1933
Act. No stop order suspending the effectiveness of the Registration Statement or any post-effective amendment thereto has been
issued under the 1933 Act, no order preventing or suspending the use of any preliminary prospectus or the Prospectus has been
issued and no proceedings for any of those purposes have been instituted or are pending or, to the Company’s knowledge,
contemplated. The Company has complied with each request (if any) from the Commission for additional information.
Each of the
Registration Statement and any post-effective amendment thereto, at the time it became effective, the Applicable Time, the Closing
Time and any Date of Delivery complied and will comply in all material respects with the requirements of the 1933 Act and the 1933
Act Regulations. Each preliminary prospectus, the Prospectus and any amendment or supplement thereto, at the time each was filed
with the Commission, and, in each case, at the Applicable Time, the Closing Time and any Date of Delivery complied and will comply
in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations. Each preliminary prospectus delivered
to the Underwriters for use in connection with this offering and the Prospectus was or will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(ii) Accurate Disclosure. Neither the Registration Statement nor any amendment thereto, at its effective time, on the
date hereof, at the Closing Time or at any Date of Delivery, contained, contains or will contain an untrue statement of a material
fact or omitted, omits or will omit to state a material fact required to be stated therein or necessary to make the statements
therein not misleading. At the Applicable Time and any Date of Delivery, none of (A) the General Disclosure Package and (B) any
individual Written Testing-the-Waters Communication, when considered together with the General Disclosure Package, included, includes
or will include an untrue statement of a material fact or omitted, omits or will omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which they were made, not misleading. Neither the Prospectus
nor any amendment or supplement thereto, as of its issue date, at the time of any filing with the Commission pursuant to Rule
424(b), at the Closing Time or at any Date of Delivery, included, includes or will include an untrue statement of a material fact
or omitted, omits or will omit to state a material fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The representations and warranties in this subsection shall not apply
to statements in or omissions from the Registration Statement (or any amendment thereto), the General Disclosure Package or the
Prospectus (or any amendment or supplement thereto) made in reliance upon and in conformity with written information furnished
to the Company by any Underwriter through BofA expressly for use therein. For purposes of this Agreement, the only information
so furnished shall be the information in the first paragraph under the heading “Underwriting–Commissions and Discounts,”
the information in the second, third and fourth paragraphs under the heading “Underwriting–Price Stabilization, Short
Positions and Penalty Bids” and the information under the heading “Underwriting–Electronic Distribution”,
in each case contained in the Prospectus (collectively, the “Underwriter Information”).
(iii) Free
Writing Prospectuses. The Company has not, directly or indirectly, prepared, used or referred to any “Free Writing Prospectus”
(as defined in Rule 405 under the 1933 Act).
(iv) Testing-the-Waters
Materials. The Company (A) has not engaged in any Testing-the-Waters Communication other than Testing-the-Waters Communications
with the consent of the Representatives with entities that are qualified institutional buyers within the meaning of Rule 144A
under the 1933 Act or institutions that are accredited investors within the meaning of Rule 501 under the 1933 Act and (B) has
not authorized anyone other than the Representatives to engage in Testing-the-Waters Communications. The Company reconfirms that
the Representatives have been authorized to act on its behalf in undertaking Testing-the-Waters Communications. The Company has
not distributed any Written Testing-the-Waters Communications other than those listed on Schedule B-2 hereto.
(v) Company An Ineligible Issuer. At the time of filing the Registration Statement and any post-effective amendment thereto,
at the earliest time thereafter that the Company or another offering participant made a bona fide offer (within the meaning
of Rule 164(h)(2) of the 1933 Act Regulations) of the Securities and at the date hereof, the Company was and is an “ineligible
issuer,” as defined in Rule 405.
(vi) Emerging
Growth Company Status. From the time of the initial confidential submission of the Registration Statement to the Commission
(or, if earlier, the first date on which the Company engaged directly or through any Person authorized to act on its behalf in
any Testing-the-Waters Communication) through the date hereof, the Company has been and is an “emerging growth company,”
as defined in Section 2(a) of the 1933 Act (an “Emerging Growth Company”).
(vii) Independent
Accountants. Withum Smith+Brown, PC, who has certified the financial statements included in the Registration Statement, the
General Disclosure Package and the Prospectus, is an independent public accountant firm as required by the 1933 Act, the 1933
Act Regulations and the Public Company Accounting Oversight Board.
(viii) Financial
Statements. The financial statements in the Registration Statement, the General Disclosure Package and the Prospectus, together
with the related schedules and notes, present fairly the financial position of the Company at the dates indicated and the statement
of operations, stockholders’ equity and cash flows of the Company for the periods specified; said financial statements have
been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) applied on a consistent basis
throughout the periods involved. The supporting schedules, if any, present fairly in accordance with GAAP the information required
to be stated therein. The selected financial data and the summary financial information included in the Registration Statement,
the General Disclosure Package and the Prospectus present fairly the information shown therein and have been compiled on a basis
consistent with that of the audited financial statements included therein.
(ix) No Material Adverse Change in Business. Except as otherwise stated therein, since the respective dates as of which
information is given in the Registration Statement, the General Disclosure Package or the Prospectus, (A) there has been no
material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of
the Company, whether or not arising in the ordinary course of business (a “Material Adverse Effect”), (B) there
have been no transactions entered into by the Company, other than those in the ordinary course of business, which are material
with respect to the Company, and (C) there has been no dividend or distribution of any kind declared, paid or made by the Company
on any class of its capital stock.
(x) Good
Standing of the Company. The Company has been duly organized and is validly existing as an exempted company in good standing
under the laws of the State of Delaware and has corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Registration Statement, the General Disclosure Package and the Prospectus and to enter
into and perform its obligations under this Agreement, the Trust Agreement, the Warrant Agreement, the Subscription Agreement,
the Private Placement Warrants Purchase Agreement, the Registration Rights Agreement and the Insider Letter and to carry out the
transactions contemplated hereby and thereby; and the Company is duly qualified as a foreign corporation to transact business
and is in good standing in each other jurisdiction in which such qualification is required, whether by reason of the ownership
or leasing of property or the conduct of business, except where the failure so to qualify or to be in good standing would not
result in a Material Adverse Effect.
(xi) Subsidiaries.
The Company has no subsidiaries.
(xii) Filing of a Form 8-A. The Company has filed with the Commission a Form 8-A (file number [·])
providing for the registration under the Securities Exchange Act of 1934, as amended (the “1934 Act”), and the rules
and regulations of the Commission promulgated thereunder (collectively, the “1934 Act Regulations”) of certain of the
securities of the Company, which registration is currently effective on the date hereof.
(xiii) Capitalization.
The authorized, issued and outstanding shares of capital stock of the Company are as set forth in the Registration Statement,
the General Disclosure Package and the Prospectus in the column entitled “Actual” under the caption “Capitalization”
(except for subsequent issuances, if any, pursuant to this Agreement, pursuant to reservations, agreements or employee benefit
plans referred to in the Registration Statement, the General Disclosure Package and the Prospectus or pursuant to the exercise
of convertible securities or options referred to in the Registration Statement, the General Disclosure Package and the Prospectus).
The outstanding shares of capital stock of the Company have been duly authorized and validly issued and are fully paid and non-assessable.
None of the outstanding shares of capital stock of the Company were issued in violation of the preemptive or other similar rights
of any securityholder of the Company.
(xiv) Authorization and Description of Securities. The Securities to be purchased by the Underwriters from the Company
have been duly authorized for issuance and sale to the Underwriters pursuant to this Agreement and, when issued and delivered by
the Company pursuant to this Agreement against payment of the consideration set forth herein, will be validly issued and fully
paid and non-assessable; and the issuance of the Securities is not subject to the preemptive or other similar rights of any
securityholder of the Company. The shares of Class A Common Stock conform to all statements relating thereto contained in the Registration
Statement, the General Disclosure Package and the Prospectus and such description conforms to the rights set forth in the instruments
defining the same. No holder of Securities will be subject to personal liability by reason of being such a holder.
(xv) Authorization of the Private Placement Warrants. The Private Placement Warrants have been duly authorized by the
Company and, when issued and delivered in the manner set forth in the Private Placement Warrants Purchase Agreement against payment
therefor, will be duly issued and delivered and will constitute valid and binding obligations of the Company, enforceable against
the Company in accordance with their terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, or similar
laws affecting creditors’ rights generally from time to time in effect and by equitable principles of general applicability.
(xvi) Authorization
of the Founder Shares. The Founder Shares are duly authorized, validly issued, fully paid and non-assessable; and none of
such securities were issued in violation of the preemptive rights of any holders of any security of the Company or similar contractual
rights granted by the Company. The sales of the Founder Shares by the Company were based in part on the representations and warranties
of the purchasers of such Founder Shares, exempt from the registration requirements under the 1933 Act and any applicable state
securities and blue sky laws. The holders of the Founder Shares are not entitled to preemptive or other rights to subscribe for
the Securities; and, except as set forth in the Registration Statement, the General Disclosure Package and the Prospectus, no
options, warrants or other rights to purchase, agreements or other obligations to issue, or rights to convert any obligations
into or exchange any securities for, shares or other ownership interests in the Company are outstanding.
(xvii) Authorization
of the Shares of Class A Common Stock. The shares of Class A Common Stock included in the Units have been duly authorized
and, when issued and delivered against payment for the Securities by the Underwriters pursuant to this Agreement, will be validly
issued, fully paid and non-assessable.
(xviii) Authorization
of the Shares of Class A Common Stock Issuable Upon Exercise of the Private Placement Warrants. The shares of Class A Common
Stock issuable upon exercise of the Private Placement Warrants have been duly authorized and reserved for issuance upon exercise
thereof and, when issued and delivered against payment therefor pursuant to the Private Placement Warrants, as applicable, will
be validly issued, fully paid and non-assessable. The holders of such shares of Class A Common Stock will not be subject to personal
liability by reason of being such holders; such shares of Class A Common Stock will not be subject to any preemptive, right of
first refusal or other similar contractual rights granted by the Company; and all corporate action required to be taken for the
authorization, issuance and sale of such shares of Class A Common Stock (other than such execution (if applicable), countersignature
(if applicable) and delivery at the time of issuance) has been duly and validly taken.
(xix) Authorization
of Agreement. This Agreement has been duly authorized, executed and delivered by the Company.
(xx) The
Trust Agreement. The Trust Agreement has been duly authorized, executed and delivered by the Company, and is a valid and binding
agreement of the Company, enforceable against the Company, in accordance with its terms, except as the enforceability thereof
may be limited by bankruptcy, insolvency, or similar laws affecting creditors’ rights generally from time to time in effect
and by equitable principles of general applicability.
(xxi) The
Private Placement Warrants Purchase Agreement. The Private Placement Warrants Purchase Agreement has been duly authorized,
executed and delivered by the Company and the Sponsor, and is a valid and binding agreement of the Company and the Sponsor, enforceable
against the Company and the Sponsor in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy,
insolvency, or similar laws affecting creditors’ rights generally from time to time in effect and by equitable principles
of general applicability.
(xxii) The
Registration Rights Agreement. The Registration Rights Agreement has been duly authorized, executed and delivered by the Company
and is a valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency, or similar laws affecting creditors’ rights generally from
time to time in effect and by equitable principles of general applicability.
(xxiii) The
Insider Letter. The Insider Letter executed by the Company, the Sponsor and each executive officer, director and director
nominee of the Company, has been duly authorized, executed and delivered by the Company, the Sponsor and, to the knowledge of
the Company, each executive officer, director and director nominee of the Company, respectively, and is a valid and binding agreement
of the Company, the Sponsor and, to the knowledge of the Company, each such executive officer, director and director nominee,
respectively, enforceable against the Company, the Sponsor and, to the knowledge of the Company, each executive officer, director
and director nominee, respectively, in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy,
insolvency, or similar laws affecting creditors’ rights generally from time to time in effect and by equitable principles
of general applicability.
(xxiv) The
Subscription Agreement. The Subscription Agreement has been duly authorized, executed and delivered by the Company and the
Sponsor and is a valid and binding agreement of the Company and the Sponsor, enforceable against the Company and the Sponsor in
accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, or similar laws affecting
creditors’ rights generally from time to time in effect and by equitable principles of general applicability.
(xxv) The
Warrant Agreement. The Warrant Agreement has been duly authorized, executed and delivered by the Company and is a valid and
binding agreement of the Company, enforceable against the Company in accordance with its terms, except as the enforceability thereof
may be limited by bankruptcy, insolvency, or similar laws affecting creditors’ rights generally from time to time in effect
and by equitable principles of general applicability.
(xxvi) Compliance
with the Sarbanes-Oxley Act. The Company has taken all necessary actions to ensure that, upon the effectiveness of the Registration
Statement, the Company and the Company’s directors and officers will each be in compliance with all provisions of the Sarbanes-Oxley
Act of 2002 and all rules and regulations promulgated thereunder or implementing the provisions thereof (the “Sarbanes-Oxley
Act”) that are then in effect and with which the Company is required to comply as of the effectiveness of the Registration
Statement.
(xxvii) Communications
with Potential Business Combination Targets. Prior to the date hereof, neither the Company nor anyone on its behalf has, and
as of the Closing Time, neither the Company nor anyone on its behalf will have, selected any Business Combination target or initiated
any substantive discussions, directly or indirectly, with any Business Combination target.
(xxviii) Absence
of Violations, Defaults and Conflicts. The Company is not (A) in violation of its charter, by-laws or similar organizational
document, (B) in default in the performance or observance of any obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, deed of trust, loan or credit agreement, note, lease or other agreement or instrument to which
the Company is a party or by which it or any of them may be bound or to which any of the properties or assets of the Company is
subject (collectively, “Agreements and Instruments”), except for such defaults that would not, singly or in the aggregate,
result in a Material Adverse Effect, or (C) in violation of any law, statute, rule, regulation, judgment, order, writ or decree
of any arbitrator, court, governmental body, regulatory body, administrative agency or other authority, body or agency having
jurisdiction over the Company or any of its properties, assets or operations (each, a “Governmental Entity”), except
for such violations that would not, singly or in the aggregate, result in a Material Adverse Effect. The execution, delivery and
performance of this Agreement, the Trust Agreement, the Warrant Agreement, the Subscription Agreement, the Private Placement Warrants
Purchase Agreement, the Registration Rights Agreement and the Insider Letter and the consummation of the transactions contemplated
herein and therein and in the Registration Statement, the General Disclosure Package and the Prospectus (including the issuance
and sale of the Securities and the use of the proceeds from the sale of the Securities as described therein under the caption
“Use of Proceeds”) and compliance by the Company with its obligations hereunder have been duly authorized by all necessary
corporate action and do not and will not, whether with or without the giving of notice or passage of time or both, conflict with
or constitute a breach of, or default or Repayment Event (as defined below) under, or result in the creation or imposition of
any lien, charge or encumbrance upon any properties or assets of the Company pursuant to, the Agreements and Instruments (except
for such conflicts, breaches, defaults or Repayment Events or liens, charges or encumbrances that would not, singly or in the
aggregate, result in a Material Adverse Effect), nor will such action result in any violation of the provisions of the charter,
by-laws or similar organizational document of the Company or any law, statute, rule, regulation, judgment, order, writ or decree
of any Governmental Entity. As used herein, a “Repayment Event” means any event or condition which gives the holder
of any note, debenture or other evidence of indebtedness (or any person acting on such holder’s behalf) the right to require
the repurchase, redemption or repayment of all or a portion of such indebtedness by the Company.
(xxix) Absence
of Labor Dispute. No labor dispute with the employees of the Company exists or, to the knowledge of the Company, is imminent,
and the Company is not aware of any existing or imminent labor disturbance by the employees of any of its principal suppliers,
manufacturers, customers or contractors, which, in either case, would result in a Material Adverse Effect.
(xxx) Absence
of Proceedings. Except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, there
is no action, suit, proceeding, inquiry or investigation before or brought by any Governmental Entity now pending or, to the knowledge
of the Company, threatened, against or affecting the Company or any of its directors, officers or subsidiaries, which might result
in a Material Adverse Effect, or which might materially and adversely affect their respective properties or assets or the consummation
of the transactions contemplated in this Agreement, the Trust Agreement, the Warrant Agreement, the Subscription Agreement, the
Private Placement Warrants Purchase Agreement, the Registration Rights Agreement and the Insider Letter or the performance by
the Company of its obligations hereunder and thereunder; and the aggregate of all pending legal or governmental proceedings to
which the Company or any such subsidiary is a party or of which any of their respective properties or assets is the subject which
are not described in the Registration Statement, the General Disclosure Package and the Prospectus, including ordinary routine
litigation incidental to the business, could not result in a Material Adverse Effect.
(xxxi) Accuracy
of Exhibits and Disclosures. There are no contracts or documents which are required to be described in the Registration Statement,
the General Disclosure Package or the Prospectus or to be filed as exhibits to the Registration Statement which have not been
so described and filed as required; and the statements in the Registration Statement, the General Disclosure Package and the Prospectus
under the headings “Proposed Business—Comparison of This Offering to Those of Blank Check Companies Subject to Rule
419,” “Principal Stockholders,” “Certain Relationships and Related Party Transactions,” and “Description
of Securities,” insofar as such statements summarize legal matters, agreements, documents or proceedings discussed therein,
are accurate and fair summaries in all material respects of such legal matters, agreements, documents or proceedings. There are
no business relationships or related party transactions involving the Company or any other person required by the 1933 Act to
be described in the Registration Statement, the General Disclosure Package and the Prospectus that have not been described as
required.
(xxxii) Absence
of Further Requirements. No filing with, or authorization, approval, consent, license, order, registration, qualification
or decree of, any Governmental Entity is necessary or required for the performance by the Company of its obligations hereunder,
in connection with the offering, issuance or sale of the Securities hereunder or the consummation of the transactions contemplated
by this Agreement, except such as have been already obtained or as may be required under the 1933 Act, the 1933 Act Regulations,
the rules of the Nasdaq Capital Market, state securities laws or the rules of the Financial Industry Regulatory Authority, Inc.
(“FINRA”).
(xxxiii) Compliance
with FINRA Rules.
(xxxiii) Compliance
with FINRA Rules.
(a)
Except as described in the Registration Statement, the General Disclosure Package and the Prospectus, the Company has not
made any direct or indirect payments (in cash, securities or any other form of “underwriting compensation” as defined
in Rule 5110 of FINRA’s Conduct Rules): (i) to any person, as a finder’s fee, consulting fee or otherwise, in consideration
of such person raising capital for the Company or introducing to the Company persons who raised or provided capital to the Company;
(ii) to any person that has been accepted by FINRA as a member of FINRA (a “Member”); or (iii) to any person or entity
that has any direct or indirect affiliation or association with any Member, within the twelve (12) months prior to the effectiveness
date of the Registration Statement, other than payments to the Underwriters pursuant to this Agreement.
(b)
Except as described in the Registration Statement, the General Disclosure Package and the Prospectus, during the period
beginning 180 days prior to the initial filing of the Registration Statement and ending on the effectiveness date of the Registration
Statement, no Member and/or any person associated or affiliated with a Member has provided any investment banking, financial advisory
and/or consulting services to the Company.
(c)
Except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, to the Company’s
knowledge, no executive officer, director, or beneficial owner of 10% or more of the outstanding shares of any class of the Company’s
securities (whether debt or equity, registered or unregistered, regardless of the time acquired or the source from which derived)
(any such individual or entity, a “Company Affiliate”) is a “Participating Member” as defined in Rule 5110
of FINRA’s Conduct Rules (a “Participating Member”) or a person associated or affiliated with a Participating
Member.
(d)
Except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, to the Company’s
knowledge, no Company Affiliate is an owner of stock or other securities of any Participating Member (other than securities purchased
on the open market).
(e)
Except as described in the Registration Statement, the General Disclosure Package and the Prospectus, no proceeds from the
sale of the Securities (excluding underwriting compensation as disclosed in the Registration Statement, the General Disclosure
Package and the Prospectus) will be paid by the Company to any Member, or any persons associated or affiliated with a Member.
(f)
Except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, the Company has not
issued any warrants or other securities, or granted any options, directly or indirectly to anyone who is a potential underwriter
in this offering or, to the Company’s knowledge, a related person (as defined by FINRA rules) of such an underwriter within
the 180-day period prior to the initial filing date of the Registration Statement through the date of this Agreement.
(g)
Except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, to the Company’s
knowledge, no person to whom securities of the Company have been privately issued within the 180-day period prior to the initial
filing date of the Registration Statement through the date of this Agreement has any affiliation or association with any Participating
Member.
(h)
Except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, no Member intending
to participate in the Offering has a conflict of interest with the Company. For this purpose, a “conflict of interest”
means, if at the time of the Member’s participation in this offering, any of the following applies: (A) the securities are
to be issued by the Member; (B) the Company controls, is controlled by or is under common control with the Member or the Member’s
associated persons; (C) at least 5% of the net offering proceeds, not including underwriting compensation, are intended to be:
(i) used to reduce or retire the balance of a loan or credit facility extended by the Member, its affiliates and its associated
persons, in the aggregate; or (ii) otherwise directed to the Member, its affiliates and associated persons, in the aggregate; or
(D) as a result of this offering and any transactions contemplated at the time of this offering: (i) the Member will be an affiliate
of the Company; (ii) the Member will become publicly owned; or (iii) the Company will become a Member or form a broker-dealer subsidiary.
(xxxiv)
Compliance with Nasdaq Rules. There is and has been no failure on the part of the Company or, to the Company’s
knowledge, any of the Company’s officers or directors, in their capacities as such, to comply with (as and when applicable),
and immediately following the effectiveness date of the Registration Statement the Company will be in compliance with, NASDAQ Marketplace
Rules IM-5605. Further, there is and has been no failure on the part of the Company or, to the Company’s knowledge, any of
the Company’s officers or directors, in their capacities as such, to comply with (as and when applicable), and immediately
following the effectiveness date of the Registration Statement the Company will be in compliance with, the phase-in requirements
and all other provisions of the NASDAQ Stock Market LLC corporate governance requirements set forth in the NASDAQ Marketplace Rules.
(xxxv) Possession of Licenses and Permits. The Company possesses such permits, licenses, approvals, consents and other authorizations
(collectively, “Governmental Licenses”) issued by the appropriate Governmental Entities necessary to conduct the business
now operated by them, except where the failure so to possess would not, singly or in the aggregate, result in a Material Adverse
Effect. The Company is in compliance with the terms and conditions of all Governmental Licenses, except where the failure so to
comply would not, singly or in the aggregate, result in a Material Adverse Effect. All of the Governmental Licenses are valid and
in full force and effect, except when the invalidity of such Governmental Licenses or the failure of such Governmental Licenses
to be in full force and effect would not, singly or in the aggregate, result in a Material Adverse Effect. The Company has not
received any notice of proceedings relating to the revocation or modification of any Governmental Licenses which, singly or in
the aggregate, if the subject of an unfavorable decision, ruling or finding, would result in a Material Adverse Effect.
(xxxvi) Accounting
Controls and Disclosure Controls. To the extent required by Rule 13a-15 under the 1934 Act Regulations, the Company will
maintain effective “disclosure controls and procedures” (as defined under Rule 13-a15 under the 1934 Act
Regulations) and a system of internal accounting controls sufficient to provide reasonable assurances that (A) transactions
are executed in accordance with management’s general or specific authorization; (B) transactions are recorded as
necessary to permit preparation of financial statements in conformity with GAAP and to maintain accountability for assets;
(C) access to assets is permitted only in accordance with management’s general or specific authorization; and (D) the
recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is
taken with respect to any differences. Except as described in the Registration Statement, the General Disclosure Package and
the Prospectus, since the end of the Company’s most recent audited fiscal year, there has been (1) no material weakness
in the Company’s internal control over financial reporting (whether or not remediated) and (2) no change in the
Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially
affect, the Company’s internal control over financial reporting.
(xxxvii)
Payment of Taxes. Except as set forth or contemplated in the Registration Statement and the Prospectus, all tax returns
(including U.S. federal, state, local and non-U.S.) of the Company required by law to be filed by it through the date hereof have
been filed (except where the Company has requested extensions thereof) and all taxes shown by such returns or that have otherwise
been assessed, which are due and payable, have been paid, except (A) insofar as the failure to file such returns would not reasonably
be expected to result in a Material Adverse Effect, or (B) where such taxes, if any, are being contested in good faith and for
which adequate reserves have been established by the Company. The charges, accruals and reserves on the books of the Company in
respect of any income and corporation tax liability for any years not finally determined are adequate to meet any assessments or
re-assessments for additional income tax for such years not finally determined, except to the extent of any inadequacy that would
not result in a Material Adverse Effect.
(xxxviii)
Investment Company Act. The Company is not required, and upon the issuance and sale of the Securities as herein contemplated
and the application of the net proceeds therefrom as described in the Registration Statement, the General Disclosure Package and
the Prospectus will not be required, to register as an “investment company” under the Investment Company Act of 1940,
as amended.
(xxxix)
Absence of Manipulation. Neither the Company nor any affiliate of the Company has taken, nor will the Company or
any affiliate take, directly or indirectly, any action which is designed, or would be expected, to cause or result in, or which
constitutes, the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of
the Securities or to result in a violation of Regulation M under the 1934 Act.
(xl) Foreign Corrupt Practices Act. None of the Company or, to the knowledge of the Company, any director, officer, agent,
employee, affiliate or other person acting on behalf of the Company is aware of or has taken any action, directly or indirectly,
that would result in a violation by such persons of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations
thereunder (the “FCPA”), including, without limitation, making use of the mails or any means or instrumentality of
interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization of the payment of any money,
or other property, gift, promise to give, or authorization of the giving of anything of value to any “foreign official”
(as such term is defined in the FCPA) or any foreign political party or official thereof or any candidate for foreign political
office, in contravention of the FCPA and the Company and, to the knowledge of the Company, its affiliates have conducted their
businesses in compliance with the FCPA and have instituted and maintain policies and procedures designed to ensure, and which are
reasonably expected to continue to ensure, continued compliance therewith.
(xli) Money
Laundering Laws. The operations of the Company are and have been conducted at all times in compliance with applicable
financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as
amended, the money laundering statutes of all jurisdictions, the rules and regulations thereunder and any related or similar
rules, regulations or guidelines, issued, administered or enforced by any Governmental Entity (collectively, the “Money
Laundering Laws”); and no action, suit or proceeding by or before any Governmental Entity involving the Company with
respect to the Money Laundering Laws is pending or, to the best knowledge of the Company, threatened.
(xlii) OFAC.
None of the Company or, to the knowledge of the Company, any director, officer, agent, employee, affiliate or representative of
the Company is an individual or entity (“Person”) currently the subject or target of any sanctions administered or
enforced by the United States Government, including, without limitation, the U.S. Department of the Treasury’s Office of
Foreign Assets Control (“OFAC”), the United Nations Security Council (“UNSC”), the European Union, Her
Majesty’s Treasury (“HMT”), or other relevant sanctions authority (collectively, “Sanctions”), nor
is the Company located, organized or resident in a country or territory that is the subject of Sanctions; and the Company will
not directly or indirectly use the proceeds of the sale of the Securities, or lend, contribute or otherwise make available such
proceeds to any subsidiaries, joint venture partners or other Person, to fund any activities of or business with any Person, or
in any country or territory, that, at the time of such funding, is the subject of Sanctions or in any other manner that will result
in a violation by any Person (including any Person participating in the transaction, whether as underwriter, advisor, investor
or otherwise) of Sanctions.
(xliii) Lending
Relationship. Except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus,
the Company (i) does not have any material lending or other relationship with any bank or lending affiliate of any Underwriter
and (ii) does not intend to use any of the proceeds from the sale of the Securities to repay any outstanding debt owed to
any affiliate of any Underwriter.
(xliv) Unlawful Influence. The Company has not offered, or caused the Underwriters to offer, the Securities to any person
or entity with the intention of unlawfully influencing: (a) a customer or supplier of the Company or any affiliate of the Company
to alter the customer’s or supplier’s level or type of business with the Company or such affiliate or (b) a journalist
or publication to write or publish favorable information about the Company or any such affiliate.
(xlv) Questionnaires.
To the Company’s knowledge, all information contained in the questionnaires (the “Questionnaires”) completed
by the Sponsor and the Company’s executive officers, directors and director nominees and provided to the Underwriters is
true and correct in all material respects and the Company has not become aware of any information that would cause the information
disclosed in the Questionnaires completed by the Sponsor or the Company’s executive officers, directors and director nominees
to become inaccurate or incorrect in any material respect.
(xlvi) No Rating. The Company does not have any debt securities or preferred stock that are rated by any “nationally
recognized statistical rating organization” (as defined in Section 3(a)(62) of the 1934 Act).
(xlvii) Statistical
and Market-Related Data. Any statistical and market-related data included in the Registration Statement, the General Disclosure
Package or the Prospectus are based on or derived from sources that the Company believes, after reasonable inquiry, to be reliable
and accurate and, to the extent required, the Company has obtained the written consent to the use of such data from such sources.
(xlviii) Cybersecurity. (A)
To the Company’s knowledge, there has been no security breach or incident, unauthorized access or disclosure, or other
compromise of or relating to the Company or its subsidiaries information technology and computer systems, networks, hardware,
software, data and databases (including the data and information of their respective customers, employees, suppliers, vendors
and any third party data maintained, processed or stored by the Company, and any such data processed or stored by third
parties on behalf of the Company), equipment or technology (collectively, “IT Systems and Data”); (B) the
Company has not been notified of, and has no knowledge of any event or condition that could result in, any security breach or
incident, unauthorized access or disclosure or other compromise to their IT Systems and Data, except in each case that would
not reasonably be expected to have a Material Adverse Effect and (C) the Company has implemented appropriate controls,
policies, procedures, and technological safeguards to maintain and protect the integrity, continuous operation, redundancy
and security of their IT Systems and Data reasonably consistent with industry standards and practices, or as required by
applicable regulatory standards. The Company is presently in material compliance with all applicable laws or statutes and all
judgments, orders, rules and regulations of any court or arbitrator or governmental or regulatory authority, internal
policies and contractual obligations relating to the privacy and security of IT Systems and Data and to the protection of
such IT Systems and Data from unauthorized use, access, misappropriation or modification.
(xlix)
No Integration. Except as described in the Registration Statement, the General Disclosure Package and the Prospectus,
the Company has not sold, issued or distributed any securities during the six-month period preceding the date hereof, including
any sales pursuant to Rule 144A under, or Regulation D or S of, the 1933 Act. Neither the Company nor any of its affiliates has,
prior to the date hereof, made any offer or sale of any securities that are required to be “integrated” pursuant to
the 1933 Act with the offer and sale of the Securities pursuant to the Registration Statement.
(l)
“Penny Stock” Securities. Upon delivery and payment for the Units as of the Closing Time and any Date
of Delivery, the Company will not be subject to Rule 419 under the 1933 Act and none of the Company’s outstanding securities
will be deemed to be a “penny stock” as defined in Rule 3a51-1 under the 1934 Act.
(li)
Finder’s or Broker’s Fees. Except pursuant to this Agreement, the Company has not incurred any liability
for any finder’s or broker’s fee or agent’s commission in connection with the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby or by the Registration Statement.
(lii) Ownership
in Entities. The Company does not own an interest in any corporation, partnership, limited liability company, joint venture,
trust or other entity.
(b) Officer’s
Certificates. Any certificate signed by any officer of the Company or any of its subsidiaries delivered to the Representatives
or to counsel for the Underwriters shall be deemed a representation and warranty by the Company to each Underwriter as to the
matters covered thereby.
SECTION 2. Sale
and Delivery to Underwriters; Closing.
(a) Initial
Securities. On the basis of the representations and warranties herein contained and subject to the terms and conditions
herein set forth, the Company agrees to sell to each Underwriter, severally and not jointly, and each Underwriter, severally
and not jointly, agrees to purchase from the Company, at the price per share set forth in Schedule A, that number of Initial
Securities set forth in Schedule A opposite the name of such Underwriter, plus any additional number of Initial Securities
which such Underwriter may become obligated to purchase pursuant to the provisions of Section 10 hereof, subject, in each
case, to such adjustments among the Underwriters as BofA in its sole discretion shall make to eliminate any sales or
purchases of fractional shares.
(b)
Option Securities. In addition, on the basis of the representations and warranties herein contained and subject to
the terms and conditions herein set forth, the Company hereby grant(s) an option to the Underwriters, severally and not jointly,
to purchase up to an additional 3,750,000 Units, at the price per share set forth in Schedule A, less an amount per share equal
to any dividends or distributions declared by the Company and payable on the Initial Securities but not payable on the Option Securities.
The option hereby granted may be exercised for 45 days after the date hereof and may be exercised in whole or in part at any
time from time to time upon notice by the Representatives to the Company setting forth the number of Option Securities as to which
the several Underwriters are then exercising the option and the time and date of payment and delivery for such Option Securities.
Any such time and date of delivery (a “Date of Delivery”) shall be determined by the Representatives, but shall not
be later than seven full business days after the exercise of said option, nor in any event prior to the Closing Time. If the option
is exercised as to all or any portion of the Option Securities, each of the Underwriters, acting severally and not jointly, will
purchase that proportion of the total number of Option Securities then being purchased which the number of Initial Securities set
forth in Schedule A opposite the name of such Underwriter bears to the total number of Initial Securities, subject, in each case,
to such adjustments as BofA in its sole discretion shall make to eliminate any sales or purchases of fractional shares.
(c)
Payment. Payment of the Initial Securities shall be made at the offices of Davis Polk & Wardwell LLP, or at such
other place as shall be agreed upon by the Representatives and the Company, at 9:00 A.M. (New York City time) on the second
(third, if the pricing occurs after 4:30 P.M. (New York City time) on any given day) business day after the date hereof (unless
postponed in accordance with the provisions of Section 10), or such other time not later than ten business days after such
date as shall be agreed upon by the Representatives and the Company (such time and date of payment and delivery being herein called
“Closing Time”).
Payment for the Initial
Securities shall be made as follows: The net proceeds for the Initial Securities (including the Deferred Discount (as such term
is defined below)) shall be deposited in the Trust Account pursuant to the terms of the Trust Agreement along with such portion
of the gross proceeds of the sale of the Private Placement Warrants in order for the Trust Account to equal the product of the
number of Units sold and the public offering price per Unit as set forth on the cover of the Prospectus upon delivery to the Representatives
of the Initial Securities through the facilities of The Depository Trust Company (“DTC”) or, if the Representatives
have otherwise instructed, upon delivery to the Representatives of certificates (in form and substance satisfactory to the Representatives)
representing the Initial Securities, in each case for the account of the Underwriters. The Initial Securities shall be registered
in such name or names and in such authorized denominations as the Representatives may request in writing at least two business
days prior to the Closing Time. If delivery is not made through the facilities of DTC, the Company will permit the Representatives
to examine and package the Initial Securities for delivery, at least one business day prior to the Closing Time at a location in
New York City as the Representatives may designate. The Company shall not be obligated to sell or deliver the Initial Securities
except upon tender of payment by the Representatives for all the Initial Securities. At least one business day prior to the date
of the effectiveness of the Registration Statement, the Company shall deposit the net proceeds from the sale of the Private Placement
Warrants into the Trust Account as provided by the terms of the Private Placement Warrants Purchase Agreement.
Payment for the
Option Securities shall be made as follows: the purchase price set forth in Schedule A hereto (including any Deferred
Discount attributable to the Option Securities) shall be deposited in the Trust Account pursuant to the terms of the Trust
Agreement upon delivery to the Representatives of the Option Securities through the facilities of DTC or, if the
Representatives have otherwise instructed, upon delivery to the Representatives of certificates (in form and substance
satisfactory to the Representatives) representing the Option Securities for the account of the Underwriters. The Option
Securities shall be registered in such name or names and in such authorized denominations as the Representatives may request
in writing at least two business days prior to the Date of Delivery. If delivery is not made through the facilities of DTC,
the Company will permit the Representatives to examine and package the Option Securities for delivery, at least one business
day prior to the Date of Delivery. The Company shall not be obligated to sell or deliver the Option Securities except upon
tender of payment by the Representatives for all the Option Securities. At least one business day prior to the Option
Securities settlement date, the Company shall deposit the proceeds from the sale of the applicable Private Placement Warrants
into the Trust Account.
In addition to the
discount from the public offering price represented by the purchase price set forth in Schedule A hereto, the Company hereby agrees
to pay to the Underwriters a deferred discount of $0.35 per Unit (including both Initial Securities and Option Securities) purchased
hereunder (the “Deferred Discount”). The Underwriters hereby agree that if no Business Combination is consummated within
the time period provided in the Trust Agreement and the funds held under the Trust Agreement are distributed to the holders of
the shares of Class A Common Stock included in the Securities sold pursuant to this Agreement (the “Public Stockholders”),
(i) the Underwriters will forfeit any rights or claims to the Deferred Discount and (ii) the trustee under the Trust Agreement
is authorized to distribute the Deferred Discount to the Public Stockholders on a pro rata basis.
SECTION 3.
Covenants of the Company. The Company covenants with each Underwriter as follows:
(a)
Compliance with Securities Regulations and Commission Requests. The Company, subject to Section 3(b), will comply
with the requirements of Rule 430A, and will notify the Representatives immediately, and confirm the notice in writing, (i) when
any post-effective amendment to the Registration Statement shall become effective or any amendment or supplement to the Prospectus
shall have been filed, (ii) of the receipt of any comments from the Commission, (iii) of any request by the Commission
for any amendment to the Registration Statement or any amendment or supplement to the Prospectus or for additional information,
(iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or any
post-effective amendment or of any order preventing or suspending the use of any preliminary prospectus or the Prospectus, or of
the suspension of the qualification of the Securities for offering or sale in any jurisdiction, or of the initiation or threatening
of any proceedings for any of such purposes or of any examination pursuant to Section 8(d) or 8(e) of the 1933 Act concerning the
Registration Statement and (v) if the Company becomes the subject of a proceeding under Section 8A of the 1933 Act in connection
with the offering of the Securities. The Company will effect all filings required under Rule 424(b), in the manner and within the
time period required by Rule 424(b) (without reliance on Rule 424(b)(8)), and will take such steps as it deems necessary to ascertain
promptly whether the form of prospectus transmitted for filing under Rule 424(b) was received for filing by the Commission and,
in the event that it was not, it will promptly file such prospectus. The Company will make every reasonable effort to prevent the
issuance of any stop order, prevention or suspension and, if any such order is issued, to obtain the lifting thereof at the earliest
possible moment.
(b) Continued
Compliance with Securities Laws. The Company will comply with the 1933 Act and the 1933 Act Regulations so as to permit
the completion of the distribution of the Securities as contemplated in this Agreement and in the Registration Statement, the
General Disclosure Package and the Prospectus. If at any time when a prospectus relating to the Securities is (or, but for
the exception afforded by Rule 172 of the 1933 Act Regulations (“Rule 172”), would be) required by the 1933 Act
to be delivered in connection with sales of the Securities, any event shall occur or condition shall exist as a result of
which it is necessary, in the opinion of counsel for the Underwriters or for the Company, to (i) amend the Registration
Statement in order that the Registration Statement will not include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) amend or
supplement the General Disclosure Package or the Prospectus in order that the General Disclosure Package or the Prospectus,
as the case may be, will not include any untrue statement of a material fact or omit to state a material fact necessary in
order to make the statements therein not misleading in the light of the circumstances existing at the time it is delivered to
a purchaser or (iii) amend the Registration Statement or amend or supplement the General Disclosure Package or the
Prospectus, as the case may be, in order to comply with the requirements of the 1933 Act or the 1933 Act Regulations, the
Company will promptly (A) give the Representatives notice of such event, (B) prepare any amendment or supplement as may be
necessary to correct such statement or omission or to make the Registration Statement, the General Disclosure Package or the
Prospectus comply with such requirements and, a reasonable amount of time prior to any proposed filing or use, furnish the
Representatives with copies of any such amendment or supplement and (C) file with the Commission any such amendment or
supplement; provided that the Company shall not file or use any such amendment or supplement to which the Representatives or
counsel for the Underwriters shall object. The Company will furnish to the Underwriters such number of copies of such
amendment or supplement as the Underwriters may reasonably request. The Company has given the Representatives notice of any
filings made pursuant to the 1934 Act or 1934 Act Regulations within 48 hours prior to the Applicable Time; the Company will
give the Representatives notice of its intention to make any such filing from the Applicable Time to the Closing Time and
will furnish the Representatives with copies of any such documents a reasonable amount of time prior to such proposed filing,
as the case may be, and will not file or use any such document to which the Representatives or counsel for the Underwriters
shall reasonably object.
(c)
Delivery of Registration Statements. The Company has furnished or will deliver to the Representatives and counsel
for the Underwriters, without charge, signed copies of the Registration Statement as originally filed and each amendment thereto
(including exhibits filed therewith) and signed copies of all consents and certificates of experts, and will also deliver to the
Representatives, without charge, a conformed copy of the Registration Statement as originally filed and each amendment thereto
(without exhibits) for each of the Underwriters. The copies of the Registration Statement and each amendment thereto furnished
to the Underwriters will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR,
except to the extent permitted by Regulation S-T.
(d)
Delivery of Prospectuses. The Company has delivered to each Underwriter, without charge, as many copies of each preliminary
prospectus as such Underwriter reasonably requested, and the Company hereby consents to the use of such copies for purposes permitted
by the 1933 Act. The Company will furnish to each Underwriter, without charge, during the period when a prospectus relating to
the Securities is (or, but for the exception afforded by Rule 172, would be) required to be delivered under the 1933 Act, such
number of copies of the Prospectus (as amended or supplemented) as such Underwriter may reasonably request. The Prospectus and
any amendments or supplements thereto furnished to the Underwriters will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(e) Blue
Sky Qualifications. The Company will use its best efforts, in cooperation with the Underwriters, to qualify the
Securities for offering and sale under the applicable securities laws of such states and other jurisdictions (domestic or
foreign) as the Representatives may designate and to maintain such qualifications in effect so long as required to complete
the distribution of the Securities; provided, however, that the Company shall not be obligated to file any general consent to
service of process or to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it is not
so qualified or to subject itself to taxation in any jurisdiction in which it is not otherwise so subject.
(f)
Rule 158. The Company will timely file such reports pursuant to the 1934 Act as are necessary in order to make generally
available to its securityholders as soon as practicable an earnings statement for the purposes of, and to provide to the Underwriters
the benefits contemplated by, the last paragraph of Section 11(a) of the 1933 Act.
(g)
Use of Proceeds. The Company will use the net proceeds received by it from the sale of the Securities in the manner
specified in the Registration Statement, the General Disclosure Package and the Prospectus under “Use of Proceeds.”
(h)
Listing. The Company will use its best efforts to effect and maintain the listing of the Securities on the Nasdaq
Capital Market.
(i)
Restriction on Sale of Securities. During a period of 180 days from the date of the Prospectus, the Company will
not, without the prior written consent of the Representatives, (i) directly or indirectly, offer, pledge, sell, contract to sell,
sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase
or otherwise transfer or dispose of any shares of any Units, shares of Class A Common Stock, Private Placement Warrants or any
securities convertible into, or exercisable, or exchangeable for, shares of Class A Common Stock or file or confidentially submit
any registration statement under the 1933 Act with respect to any of the foregoing or (ii) enter into any swap or any other agreement
or any transaction that transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of the shares
of Class A Common Stock, whether any such swap or transaction described in clause (i) or (ii) above is to be settled by delivery
of shares of Class A Common Stock or other securities, in cash or otherwise. The foregoing sentence shall not apply to (A) the
Securities to be sold hereunder, (B) the issuance and sale of the Private Placement Warrants, (C) the issuance and sale of the
Option Securities on exercise of the option provided for in Section 2 hereof, (D) registration with the Commission pursuant to
the Registration Rights Agreement in accordance with the terms of the Registration Rights Agreement, the resale of the securities
covered thereby or (E) issuance of securities in connection with a Business Combination.
(j)
[Intentionally Omitted.]
(k)
Reporting Requirements. The Company, during the period when a Prospectus relating to the Securities is (or, but for
the exception afforded by Rule 172, would be) required to be delivered under the 1933 Act, will file all documents required to
be filed with the Commission pursuant to the 1934 Act within the time periods required by the 1934 Act and 1934 Act Regulations.
(l)
Free Writing Prospectuses. The Company agrees that it will not make any offer relating to the Securities that constitutes
or would constitute a Free Writing Prospectus or that would otherwise constitute a “free writing prospectus,” or a
portion thereof, required to be filed by the Company with the Commission or retained by the Company under Rule 433.
(m) Certification
Regarding Beneficial Owners. The Company will deliver to the Representatives, on the date of execution of this Agreement,
a properly completed and executed Certification Regarding Beneficial Owners of Legal Entity Customers, together with copies
of identifying documentation, and the Company undertakes to provide such additional supporting documentation as the
Representatives may reasonably request in connection with the verification of the foregoing certification.
(n)
Testing-the-Waters Materials. If at any time following the distribution of any Written Testing-the-Waters Communication
there occurred or occurs an event or development as a result of which such Written Testing-the-Waters Communication included or
would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances existing at that subsequent time, not misleading, the Company will promptly
notify the Representatives and will promptly amend or supplement, at its own expense, such Written Testing-the-Waters Communication
to eliminate or correct such untrue statement or omission.
(o)
Investment Company Act. The Company shall cause the proceeds of this offering and the sale of the Private Placement
Warrants to be held in the Trust Account to be invested only in United States government treasury bills with a maturity of 185
days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act as set forth
in the Trust Agreement and disclosed in the Registration Statement, the General Disclosure Package and the Prospectus. The Company
will otherwise conduct its business in a manner so that it will not become subject to the Investment Company Act. Furthermore,
once the Company consummates a Business Combination, it will not be required to register as an investment company under the Investment
Company Act.
(p)
Maintenance of Funds in the Trust Account. During the period prior to the Company’s initial Business Combination
or Liquidation (as defined below), the Company may instruct the trustee under the Trust Agreement to release from the Trust Account,
solely from interest income earned on the funds held in the Trust Account, the amounts necessary to pay taxes. Otherwise, all funds
held in the Trust Account (including any interest income earned on the amounts held in the Trust Account (which interest shall
be net of taxes payable)) will remain in the Trust Account until the earlier of the consummation of the Company’s initial
Business Combination or the Liquidation; provided, however, that in the event of the Liquidation, up to $100,000
of interest income may be released to the Company if the proceeds of the Offering held by the Company outside of the Trust Account
are not sufficient to cover the costs and expenses associated with implementing the Company’s plan of dissolution. For purposes
of this Agreement, “Liquidation” means the distributions of the Trust Account to the Public Stockholders in connection
with the redemption of Shares held by the Public Stockholders pursuant to the terms of the Company’s Amended and Restated
Certificate of Incorporation if the Company fails to consummate an initial Business Combination.
(q)
Maintaining Registration of Securities. For a period commencing on the effectiveness date of the Registration Statement
and ending five (5) years from the date of the consummation of the initial Business Combination or such earlier time at which the
Liquidation occurs or the Company is acquired (and is not the surviving entity) or completes a going private transaction after
the completion of a Business Combination (as applicable, the “Termination Date”), the Company will use its commercially
reasonable efforts to maintain the registration of the Units, shares of Class A Common Stock and Warrants under the provisions
of the 1934 Act. The Company will not deregister the Units, shares of Class A Common Stock or Warrants under the 1934 Act prior
to the Termination Date without the prior written consent of the Representatives.
(r) Agreement
Not to Issue Additional Securities. Prior to the consummation of an initial Business Combination or the Liquidation, the
Company shall not issue any shares of Class A Common Stock, Warrants or any options or other securities convertible into
shares of Class A Common Stock, or any preferred shares, in each case, that participate in any manner in the Trust Account or
that vote as a class with the shares of Class A Common Stock on a Business Combination.
(s)
Transfer and Warrant Agent. For a period commencing on the date hereof and ending on the Termination Date, the Company
shall retain a transfer and warrant agent.
(t)
No Business Combination with Affiliates. The Company will not consummate a Business Combination with any entity that
is affiliated with the Sponsor or any of the Company’s officers or directors unless it obtains an opinion from an independent
investment banking firm which is a member of FINRA, or from an independent accounting firm, that such Business Combination is fair
to the Company’s stockholders from a financial point of view. Other than as set forth in this subsection, the Company shall
not pay the Sponsor or its affiliates or any of the Company’s executive officers, directors or any of their respective affiliates
any fees or compensation for services rendered to the Company prior to, or in connection with, the consummation of a Business Combination;
provided, however, that such officers, directors and affiliates (i) may receive reimbursement for out-of-pocket expenses incurred
by them in connection with identifying, investigating, negotiating and completing a Business Combination; and (ii) may be repaid
loans as described in the Registration Statement.
(u) Consummation
of the Initial Business Combination. The Company, subject to any applicable provision of the Company’s Amended and
Restated Certificate of Incorporation, may consummate the initial Business Combination and conduct redemptions of shares of
Class A Common Stock for cash upon consummation of such Business Combination without a stockholder vote pursuant to Rule
13e-4 and Regulation 14E under the Exchange Act, including the filing of tender offer documents with the Commission. Such
tender offer documents will contain substantially the same financial and other information about the initial Business
Combination and the redemption rights as is required under the Commission’s proxy rules and will provide each
stockholder of the Company with the opportunity prior to the consummation of the initial Business Combination to redeem the
shares of Class A Common Stock held by such stockholder for an amount of cash equal to (A) the aggregate amount then on
deposit in the Trust Account, calculated as of two (2) business days prior to the consummation of the initial Business
Combination, representing (x) the proceeds held in the Trust Account from the offering and the sale of the Private
Placement Warrants and (y) any interest income earned on the funds held in the Trust Account (which interest shall be net of
taxes payable), divided by (B) the total number of shares of Class A Common Stock sold as part of the Units in this
offering (the “Public Shares”) then outstanding. If, however, the Company elects not to file such tender offer
documents, a stockholder vote is required by law or applicable stock exchange listing requirement in connection with the
initial Business Combination, or the Company decides to hold a stockholder vote for business or other reasons, the Company
will submit such Business Combination to the Company’s stockholders for their approval (“Business Combination
Vote”). With respect to the initial Business Combination Vote, if any, the Sponsor has agreed to vote all of its
Founder Shares and any other shares of Class A Common Stock they may acquire during or after this offering in favor of the
Company’s initial Business Combination. If the Company seeks stockholder approval of the initial Business Combination,
the Company will offer to each Public Stockholder holding shares of Class A Common Stock the right to have its shares
redeemed in conjunction with a proxy solicitation pursuant to the proxy rules of the Commission at a per share redemption
price (the “Redemption Price”) equal to (I) the aggregate amount then on deposit in the Trust Account as of two
(2) business days prior to the consummation of the initial Business Combination, representing (1) the proceeds held in the
Trust Account from the offering and the sale of the Private Placement Warrants and (2) any interest income earned on the
funds held in the Trust Account (which interest shall be net of any taxes payable), divided by (II) the total number of
Public Shares then outstanding. If the Company seeks stockholder approval of the initial Business Combination, the Company
may proceed with such Business Combination only if a majority of the outstanding shares of Common Stock voted by the
stockholders at a duly held stockholders meeting are voted to approve such Business Combination. If, after seeking and
receiving such stockholder approval, the Company elects to so proceed, it will redeem shares, at the Redemption Price, from
those Public Stockholders who validly and affirmatively requested such redemption. Only Public Stockholders holding shares of
Class A Common Stock who properly exercise their redemption rights, in accordance with the applicable tender offer or proxy
materials related to such Business Combination, shall be entitled to receive distributions from the Trust Account in
connection with an initial Business Combination, and the Company shall pay no distributions with respect to any other holders
of shares of common stock of the Company in connection therewith. In the event that the Company does not effect a Business
Combination by twenty-four (24) months from the closing of the Offering (or such later date as has been approved pursuant to
a valid amendment to the Company’s Amended and Restated Certificate of Incorporation), the Company will (i) cease
all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten (10)
business days thereafter, redeem 100% of the Public Shares, at a per-share price, payable in cash, equal to the aggregate
amount then on deposit in the Trust Account, including interest (which interest shall be net of taxes payable and less up to
$100,000 of such net interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which
redemption will completely extinguish Public Stockholders’ rights as stockholders (including the right to receive
further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible
following such redemption, subject to the approval of the Company’s remaining stockholders and the Company’s
board of directors, dissolve and liquidate, subject in the case of clauses (ii) and (iii) to the Company’s obligations
under Delaware law to provide for claims of creditors and in all cases, subject to the other requirements of applicable law.
Only Public Stockholders holding shares of Class A Common Stock included in the Securities shall be entitled to receive such
redemption amounts and the Company shall pay no such redemption amounts or any distributions in liquidation with respect to
any other shares common stock of the Company. The Company will not propose any amendment to its Amended and Restated
Certificate of Incorporation that would affect the substance or timing of the Company’s obligation to redeem 100% of
the outstanding Public Shares if the Company has not consummated a Business Combination within the time period required by
the Company’s Amended and Restated Certificate of Incorporation unless the Company offers to the Public Stockholders
the right to redeem in connection with such amendment.
(v)
Announcement of the Consummation of the Initial Business Combination. In the event that the Company desires or is
required by an applicable law or regulation to cause an announcement (“Business Combination Announcement”) to be placed
in The Wall Street Journal, The New York Times or any other news or media publication or outlet or to be made via a public filing
or submission with the Commission announcing the consummation of the Business Combination that indicates that the Underwriters
were the underwriters in the offering, the Company shall supply the Representatives with a draft of the Business Combination Announcement
and provide the Representatives with a reasonable advance opportunity to comment thereon, subject to the agreement of the Underwriters
to keep confidential such draft announcement in accordance with the Representatives’ standard policies regarding confidential
information.
(w) Payment
of Deferred Discount. Upon the consummation of the initial Business Combination, the Company will direct the trustee to pay
the Representatives, on behalf of the Underwriters, the Deferred Discount out of the proceeds of this offering held in the Trust
Account. The Underwriters shall have no claim to payment of any interest earned on the portion of the proceeds held in the Trust
Account representing the Deferred Discount. If the Company fails to consummate its initial Business Combination within twenty-four
(24) months from the closing of this offering (as the same may be extended), the Deferred Discount will not be paid to the Representatives
and will, instead, be included in the liquidation distribution of the proceeds held in the Trust Account made to the Public Stockholders.
In connection with any such Liquidation,
the Underwriters forfeit any rights or claims to the Deferred Discount.
(x)
Waiver of Interests to the Funds. Prior to the consummation of an initial Business Combination or the Liquidation,
the Company will seek to have all vendors, service providers (other than independent accountants), prospective target businesses,
lenders or other entities with which it does business enter into an agreement waiving any right, title, interest or claim of any
kind in or to any monies held in the Trust Account for the benefit of the Public Stockholders.
(y)
Emerging Growth Company Status. The Company will promptly notify the Representatives if the Company ceases to be
an Emerging Growth Company at any time prior to the later of (i) completion of the distribution of the Securities within the meaning
of the 1933 Act and (ii) completion of the 180-day restricted period referred to in Section 3(i).
(z)
Reservation of Unissued Securities of the Company. The Company will reserve and keep available that maximum number
of its authorized but unissued securities that are issuable upon exercise of any of the Warrants and Private Placement Warrants
outstanding from time to time and conversion of the Founder Shares.
(aa)
Cancellation of Founder Shares. Upon the earlier to occur of the expiration or termination of the Underwriters’
option to purchase Option Securities, the Company shall cancel or otherwise effect the forfeiture of Founder Shares from the Sponsor,
in an aggregate amount equal to the number of Founder Shares determined by multiplying (a) [·]
by (b) a fraction, (i) the numerator of which is 3,750,000 minus the number of shares of Class A Common Stock purchased by the
Underwriters upon the exercise of their option to purchase Option Securities, and (ii) the denominator of which is 3,750,000. For
the avoidance of doubt, if the Underwriters exercise their option to purchase Option Securities in full, the Company shall not
cancel or otherwise effect the forfeiture of the Founder Shares pursuant to this subsection.
(bb)
Audited Balance Sheet. The Company shall, on the date hereof, retain its independent registered public accounting
firm to audit the balance sheet of the Company as of the Closing Time (the “Audited Balance Sheet”) reflecting the
receipt by the Company of the proceeds of the Offering on the Closing Time. As soon as the Audited Balance Sheet becomes available,
the Company shall promptly, but not later than four (4) business days after the Closing Time, file a Current Report on Form 8-K
with the Commission, which Report shall contain the Company’s Audited Balance Sheet. Additionally, upon the Company’s
receipt of the proceeds from the exercise of all or any portion of the Option Securities, the Company shall promptly, but not later
than four (4) business days after the receipt of such proceeds, file a Current Report on Form 8-K with the Commission, which report
shall disclose the Company’s sale of the Option Securities and its receipt of the proceeds therefrom.
SECTION 4.
Payment of Expenses.
(a) Expenses.
The Company will pay or cause to be paid all expenses incident to the performance of its obligations under this Agreement,
including (i) the preparation, printing and filing of the Registration Statement (including financial statements and
exhibits) as originally filed and each amendment thereto, (ii) the preparation, printing and delivery to the
Underwriters of copies of each preliminary prospectus and the Prospectus and any amendments or supplements thereto and any
costs associated with electronic delivery of any of the foregoing by the Underwriters to investors, (iii) the preparation,
issuance and delivery of the certificates or security entitlements for the Securities to the Underwriters, including any
stock or other transfer taxes and any stamp or other duties payable upon the sale, issuance or delivery of the Securities to
the Underwriters, (iv) the fees and disbursements of the Company’s counsel, accountants and other advisors,
(v) the qualification of the Securities under securities laws in accordance with the provisions of Section 3(e)
hereof, including filing fees and the reasonable fees and disbursements of counsel for the Underwriters in connection
therewith and in connection with the preparation of the Blue Sky Survey and any supplement thereto, (vi) the fees and
expenses of any transfer agent or registrar for the Securities, (vii) the costs and expenses of the Company relating to
investor presentations on any “road show” undertaken in connection with the marketing of the Securities,
including without limitation, expenses associated with the production of road show slides and graphics, fees and expenses of
any consultants engaged in connection with the road show presentations, travel and lodging expenses of the representatives
and officers of the Company and any such consultants, and the cost of aircraft and other transportation chartered in
connection with the road show, (viii) the filing fees incident to, and the reasonable fees and disbursements of counsel to
the Underwriters in connection with, the review by FINRA of the terms of the sale of the Securities, it being understood that
payment of such reasonable fees and disbursements of counsel shall not exceed $25,000, (ix) the fees and expenses incurred in
connection with the listing of the Securities on the Nasdaq Capital Market and (x) the costs and expenses (including, without
limitation, any damages or other amounts payable in connection with legal or contractual liability) associated with the
reforming of any contracts for sale of the Securities made by the Underwriters caused by a breach of the representation
contained in the third sentence of Section 1(a)(ii). Except to the extent otherwise provided in this Section 4(a), the
Underwriters will pay any stock transfer or stamp taxes on resale of any of the Securities held by them.
(b)
Termination of Agreement. If this Agreement is terminated by the Representatives in accordance with the provisions
of Section 5, Section 9(a)(i) or (iii) or Section 10 hereof, the Company shall reimburse the Underwriters for all of
their out-of-pocket expenses, including the reasonable fees and disbursements of counsel for the Underwriters.
SECTION 5.
Conditions of Underwriters’ Obligations. The obligations of the several Underwriters hereunder are subject
to the accuracy of the representations and warranties of the Company contained herein or in certificates of any officer of the
Company or any of its subsidiaries delivered pursuant to the provisions hereof, to the performance by the Company of its covenants
and other obligations hereunder, and to the following further conditions:
(a)
Effectiveness of Registration Statement; Rule 430A Information. The Registration Statement, including any Rule 462(b)
Registration Statement, has become effective and, at the Closing Time, no stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment thereto has been issued under the 1933 Act, no order preventing or suspending the use
of any preliminary prospectus or the Prospectus has been issued and no proceedings for any of those purposes have been instituted
or are pending or, to the Company’s knowledge, contemplated; and the Company has complied with each request (if any) from
the Commission for additional information. A prospectus containing the Rule 430A Information shall have been filed with the Commission
in the manner and within the time frame required by Rule 424(b) without reliance on Rule 424(b)(8) or a post-effective amendment
providing such information shall have been filed with, and declared effective by, the Commission in accordance with the requirements
of Rule 430A.
(b)
Opinion of Counsel for Company. At the Closing Time, the Representatives shall have received the favorable opinion,
dated the Closing Time, of (i) Morrison & Foerster LLP, counsel for the Company, in form and substance satisfactory to counsel
for the Underwriters.
(c)
Opinion of Counsel for Underwriters. At the Closing Time, the Representatives shall have received the favorable
opinion, dated the Closing Time, of Davis Polk & Wardwell LLP, counsel for the Underwriters, in form and substance satisfactory
to the Representatives.
(d)
Officers’ Certificate. At the Closing Time, there shall not have been, since the date hereof or since the respective
dates as of which information is given in the Registration Statement, the General Disclosure Package or the Prospectus, any material
adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company,
whether or not arising in the ordinary course of business, and the Representatives shall have received a certificate of the Chief
Executive Officer or the President of the Company and of the chief financial or chief accounting officer of the Company, dated
the Closing Time, to the effect that (i) there has been no such material adverse change, (ii) the representations and warranties
of the Company in this Agreement are true and correct with the same force and effect as though expressly made at and as of the
Closing Time, (iii) the Company has complied with all agreements and satisfied all conditions on its part to be performed
or satisfied at or prior to the Closing Time, and (iv) no stop order suspending the effectiveness of the Registration Statement
under the 1933 Act has been issued, no order preventing or suspending the use of any preliminary prospectus or the Prospectus has
been issued and no proceedings for any of those purposes have been instituted or are pending or, to their knowledge, contemplated.
(e)
Accountant’s Comfort Letter. At the time of the execution of this Agreement, the Representatives shall have
received from Withum Smith + Brown, PC, a letter, dated such date, in form and substance satisfactory to the Representatives, together
with signed or reproduced copies of such letter for each of the other Underwriters containing statements and information of the
type ordinarily included in accountants’ “comfort letters” to underwriters with respect to the financial statements
and certain financial information contained in the Registration Statement, the General Disclosure Package and the Prospectus.
(f) Bring-down
Comfort Letter. At the Closing Time, the Representatives shall have received from Withum Smith + Brown, PC, a letter, dated
as of the Closing Time, to the effect that they reaffirm the statements made in the letter furnished pursuant to subsection (e)
of this Section, except that the specified date referred to shall be a date not more than three business days prior to the Closing
Time.
(g)
Approval of Listing. At the Closing Time, the Securities shall have been approved for listing on the Nasdaq Capital
Market, subject only to official notice of issuance.
(h)
No Objection. FINRA has confirmed that it has not raised any objection with respect to the fairness and reasonableness
of the underwriting terms and arrangements relating to the offering of the Securities.
(i)
Transactional Documents. On or prior to the date hereof, the Company shall have delivered to the Representatives
executed copies of the Private Placement Warrants Purchase Agreement, the Trust Agreement, the Warrant Agreement, the Insider Letter
and the Registration Rights Agreement. The Private Placement Warrants Purchase Agreement, the Trust Agreement, the Warrant Agreement,
the Insider Letter and the Registration Rights Agreement shall be in full force and effect on each Date of Delivery. With regard
to the Insider Letter, if any additional persons shall become executive officers, directors or director nominees of the Company
prior to the end of the 180-day restricted period referred to in Section 3(i), the Company shall cause each such person, prior
to or contemporaneously with their appointment or election as an executive officer, director and director nominee to execute and
deliver to the Representatives the Insider Letter.
(j) Deposit
to the Trust Account. The Sponsor (at least one business day prior to the date of effectiveness of the Registration Statement)
shall have caused the purchase price for the Private Placement Warrants to be deposited into the Trust Account so that together
with the net proceeds for the Initial Securities (including the Deferred Discount), or with respect to the Initial Securities,
the net proceeds from the Option Securities (including the Deferred Discount), the Trust Account would equal the product of the
number of Units sold and the public offering price per Unit as set forth on the cover of the Prospectus. Notwithstanding the foregoing,
in no event will the Company take any action that would result in the Company receiving proceeds from the sale of the Private
Placement Warrants in excess of the sum of: (i) the amount required to satisfy the obligation in the immediately preceding sentence;
(ii) the amount of the discount from the public offering price represented by the purchase price set forth in Schedule A of this
Agreement and (iii) the amount of money to be held by the Company outside of the Trust Account, as disclosed in the Registration
Statement, the General Disclosure Package and the Prospectus.
(k)
Conditions to Purchase of Option Securities. In the event that the Underwriters exercise their option provided in
Section 2(b) hereof to purchase all or any portion of the Option Securities, the representations and warranties of the Company
contained herein and the statements in any certificates furnished by the Company and any of its subsidiaries hereunder shall be
true and correct as of each Date of Delivery and, at the relevant Date of Delivery, the Representatives shall have received:
(i) Officers’
Certificate. A certificate, dated such Date of Delivery, of the President or a Vice President of the Company and of the chief
financial or chief accounting officer of the Company confirming that the certificate delivered at the Closing Time pursuant to
Section 5(d) hereof remains true and correct as of such Date of Delivery.
(ii) Opinion
of Counsel for Company. If requested by the Representatives, the favorable opinion of (i) Morrison & Foerster LLP, counsel
for the Company, in form and substance satisfactory to counsel for the Underwriters, dated such Date of Delivery, relating to the
Option Securities to be purchased on such Date of Delivery and otherwise to the same effect as the opinion required by Section 5(b)
hereof.
(iii) Opinion
of Counsel for Underwriters. If requested by the Representatives, the favorable opinion of Davis Polk & Wardwell LLP, counsel
for the Underwriters, dated such Date of Delivery, relating to the Option Securities to be purchased on such Date of Delivery and
otherwise to the same effect as the opinion required by Section 5(c) hereof.
(v) Bring-down
Comfort Letter. If requested by the Representatives, a letter from Withum Smith + Brown, PC, in form and substance satisfactory
to the Representatives and dated such Date of Delivery, substantially in the same form and substance as the letter furnished to
the Representatives pursuant to Section 5(e) hereof, except that the “specified date” in the letter furnished pursuant
to this paragraph shall be a date not more than three business days prior to such Date of Delivery.
(l)
Additional Documents. At the Closing Time and at each Date of Delivery (if any) counsel for the Underwriters shall
have been furnished with such documents and opinions as they may require for the purpose of enabling them to pass upon the issuance
and sale of the Securities as herein contemplated, or in order to evidence the accuracy of any of the representations or warranties,
or the fulfillment of any of the conditions, herein contained; and all proceedings taken by the Company in connection with the
issuance and sale of the Securities as herein contemplated shall be satisfactory in form and substance to the Representatives and
counsel for the Underwriters.
(m)
Termination of Agreement. If any condition specified in this Section shall not have been fulfilled when and as required
to be fulfilled, this Agreement, or, in the case of any condition to the purchase of Option Securities on a Date of Delivery which
is after the Closing Time, the obligations of the several Underwriters to purchase the relevant Option Securities, may be terminated
by the Representatives by notice to the Company at any time at or prior to Closing Time or such Date of Delivery, as the case
may be, and such termination shall be without liability of any party to any other party except as provided in Section 4 and except
that Sections 1, 6, 7, 8, 14, 15, 16 and 17 shall survive any such termination and remain in full force and effect.
SECTION 6.
Indemnification.
(a) Indemnification
of Underwriters. The Company agrees to indemnify and hold harmless each Underwriter, its affiliates (as such term is defined
in Rule 501(b) under the 1933 Act (each, an “Affiliate”)), its selling agents and each person, if any, who controls
any Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against
any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), including the Rule 430A
Information, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make
the statements therein not misleading or arising out of any untrue statement or alleged untrue statement of a material fact included
(A) in any preliminary prospectus, any Written Testing-the-Waters Communication, the General Disclosure Package or the Prospectus
(or any amendment or supplement thereto), or (B) in any materials or information provided to investors by, or with the approval
of, the Company in connection with the marketing of the offering of the Securities (“Marketing Materials”), including
any road show or investor presentations made to investors by the Company (whether in person or electronically), or the omission
or alleged omission in any preliminary prospectus, any Written Testing-the-Waters Communication, Prospectus or in any Marketing
Materials of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they
were made, not misleading;
(ii) against
any and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement
of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission; provided that (subject
to Section 6(d) below) any such settlement is effected with the written consent of the Company;
(iii) against
any and all expense whatsoever, as incurred (including the fees and disbursements of counsel chosen by BofA), reasonably incurred
in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency
or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged
untrue statement or omission, to the extent that any such expense is not paid under (i) or (ii) above;
provided, however,
that this indemnity agreement shall not apply to any loss, liability, claim, damage or expense to the extent arising out of
any untrue statement or omission or alleged untrue statement or omission made in the Registration Statement (or any amendment
thereto), including the Rule 430A Information, the General Disclosure Package or the Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with the Underwriter Information.
(b) Indemnification
of Company, Directors and Officers. Each Underwriter severally agrees to indemnify and hold harmless the Company, its directors,
each of its officers who signed the Registration Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act, against any and all loss, liability, claim, damage and expense described
in the indemnity contained in subsection (a) of this Section, as incurred, but only with respect to untrue statements or omissions,
or alleged untrue statements or omissions, made in the Registration Statement (or any amendment thereto), including the Rule 430A
Information, the General Disclosure Package or the Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with the Underwriter Information.
(c) Actions
against Parties; Notification. Each indemnified party shall give notice as promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve such indemnifying party from any liability hereunder to the extent it is not materially prejudiced as a
result thereof and in any event shall not relieve it from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above, counsel to the indemnified parties shall be selected
by BofA, and, in the case of parties indemnified pursuant to Section 6(b) above, counsel to the indemnified parties shall be selected
by the Company. An indemnifying party may participate at its own expense in the defense of any such action; provided, however,
that counsel to the indemnifying party shall not (except with the consent of the indemnified party) also be counsel to the indemnified
party. In no event shall the indemnifying parties be liable for fees and expenses of more than one counsel (in addition to any
local counsel) separate from their own counsel for all indemnified parties in connection with any one action or separate but similar
or related actions in the same jurisdiction arising out of the same general allegations or circumstances. No indemnifying party
shall, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment
with respect to any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened,
or any claim whatsoever in respect of which indemnification or contribution could be sought under this Section 6 or Section 7 hereof
(whether or not the indemnified parties are actual or potential parties thereto), unless such settlement, compromise or consent
(i) includes an unconditional release of each indemnified party from all liability arising out of such litigation, investigation,
proceeding or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or
on behalf of any indemnified party.
(d) Settlement
without Consent if Failure to Reimburse. If at any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 6(a)(ii) effected without its written consent if (i) such settlement is entered
into more than 45 days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall have
received notice of the terms of such settlement at least 30 days prior to such settlement being entered into and (iii) such indemnifying
party shall not have reimbursed such indemnified party in accordance with such request prior to the date of such settlement.
SECTION 7. Contribution.
If the indemnification provided for in Section 6 hereof is for any reason unavailable to or insufficient to hold harmless
an indemnified party in respect of any losses, liabilities, claims, damages or expenses referred to therein, then each indemnifying
party shall contribute to the aggregate amount of such losses, liabilities, claims, damages and expenses incurred by such indemnified
party, as incurred, (i) in such proportion as is appropriate to reflect the relative benefits received by the Company, on the
one hand, and the Underwriters, on the other hand, from the offering of the Securities pursuant to this Agreement or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only
the relative benefits referred to in clause (i) above but also the relative fault of the Company, on the one hand, and of the
Underwriters, on the other hand, in connection with the statements or omissions which resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable considerations.
The relative benefits
received by the Company, on the one hand, and the Underwriters, on the other hand, in connection with the offering of the Securities
pursuant to this Agreement shall be deemed to be in the same respective proportions as the total net proceeds from the offering
of the Securities pursuant to this Agreement (before deducting expenses) received by the Company, on the one hand, and the total
underwriting discount received by the Underwriters, on the other hand, in each case as set forth on the cover of the Prospectus,
bear to the aggregate initial public offering price of the Securities as set forth on the cover of the Prospectus.
The relative fault
of the Company, on the one hand, and the Underwriters, on the other hand, shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact
relates to information supplied by the Company or by the Underwriters and the parties’ relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
The Company and the
Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does
not take account of the equitable considerations referred to above in this Section 7. The aggregate amount of losses, liabilities,
claims, damages and expenses incurred by an indemnified party and referred to above in this Section 7 shall be deemed to include
any legal or other expenses reasonably incurred by such indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever
based upon any such untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the
provisions of this Section 7, no Underwriter shall be required to contribute any amount in excess of the underwriting commissions
received by such Underwriter in connection with the Shares underwritten by it and distributed to the public.
No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this
Section 7, each person, if any, who controls an Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act and each Underwriter’s Affiliates and selling agents shall have the same rights to contribution as such Underwriter,
and each director of the Company, each officer of the Company who signed the Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights
to contribution as the Company. The Underwriters’ respective obligations to contribute pursuant to this Section 7 are several
in proportion to the number of Initial Securities set forth opposite their respective names in Schedule A hereto and not joint.
SECTION 8. Representations,
Warranties and Agreements to Survive. All representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company or any of its subsidiaries submitted pursuant hereto, shall remain operative and in
full force and effect regardless of (i) any investigation made by or on behalf of any Underwriter or its Affiliates or
selling agents, any person controlling any Underwriter, its officers or directors or any person controlling the Company and
(ii) delivery of and payment for the Securities.
SECTION 9.
Termination of Agreement.
(a)
Termination. The Representatives may terminate this Agreement, by notice to the Company, at any time at or prior
to the Closing Time (i) if there has been, in the judgment of the Representatives, since the time of execution of this Agreement
or since the respective dates as of which information is given in the Registration Statement, the General Disclosure Package or
the Prospectus, any material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business
prospects of the Company, whether or not arising in the ordinary course of business, or (ii) if there has occurred any material
adverse change in the financial markets in the United States or the international financial markets, any outbreak of hostilities
or escalation thereof or other calamity or crisis or any change or development involving a prospective change in national or international
political, financial or economic conditions, in each case the effect of which is such as to make it, in the judgment of the Representatives,
impracticable or inadvisable to proceed with the completion of the offering or to enforce contracts for the sale of the Securities,
or (iii) if trading in any securities of the Company has been suspended or materially limited by the Commission or the Nasdaq
Capital Market or (iv) if trading generally on the NYSE MKT or the New York Stock Exchange or in the Nasdaq Capital Market has
been suspended or materially limited, or minimum or maximum prices for trading have been fixed, or maximum ranges for prices have
been required, by any of said exchanges or by order of the Commission, FINRA or any other governmental authority, or (v) a
material disruption has occurred in commercial banking or securities settlement or clearance services in the United States or with
respect to Clearstream or Euroclear systems in Europe, or (vi) if a banking moratorium has been declared by either Federal or New
York authorities.
(b) Liabilities.
If this Agreement is terminated pursuant to this Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections 1, 6, 7, 8, 14, 15, 16 and 17 shall survive such
termination and remain in full force and effect.
SECTION 10.
Default by One or More of the Underwriters. If one or more of the Underwriters shall fail at the Closing Time or
a Date of Delivery to purchase the Securities which it or they are obligated to purchase under this Agreement (the “Defaulted
Securities”), the Representatives shall have the right, within 24 hours thereafter, to make arrangements for one or
more of the non-defaulting Underwriters, or any other underwriters, to purchase all, but not less than all, of the Defaulted
Securities in such amounts as may be agreed upon and upon the terms herein set forth; if, however, the Representatives shall not
have completed such arrangements within such 24-hour period, then:
(i)
if the number of Defaulted Securities does not exceed 10% of the number of Securities to be purchased on such date, each
of the non-defaulting Underwriters shall be obligated, severally and not jointly, to purchase the full amount thereof in the
proportions that their respective underwriting obligations hereunder bear to the underwriting obligations of all non-defaulting
Underwriters, or
(ii) if
the number of Defaulted Securities exceeds 10% of the number of Securities to be purchased on such date, this Agreement or,
with respect to any Date of Delivery which occurs after the Closing Time, the obligation of the Underwriters to purchase, and
the Company to sell, the Option Securities to be purchased and sold on such Date of Delivery shall terminate without
liability on the part of any non-defaulting Underwriter.
No action taken pursuant
to this Section shall relieve any defaulting Underwriter from liability in respect of its default.
In the event of any
such default which does not result in a termination of this Agreement or, in the case of a Date of Delivery which is after the
Closing Time, which does not result in a termination of the obligation of the Underwriters to purchase and the Company to sell
the relevant Option Securities, as the case may be, either the (i) Representatives or (ii) the Company shall have the right to
postpone Closing Time or the relevant Date of Delivery, as the case may be, for a period not exceeding seven days in order to effect
any required changes in the Registration Statement, the General Disclosure Package or the Prospectus or in any other documents
or arrangements. As used herein, the term “Underwriter” includes any person substituted for an Underwriter under this
Section 10.
SECTION 11.
Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly
given if mailed or transmitted by any standard form of telecommunication. Notices to the Underwriters shall be directed to BofA
at One Bryant Park, New York, New York 10036, attention of Syndicate Department (facsimile: (646) 855-3073), with a copy to ECM
Legal (facsimile: (212) 230-8730); notices to the Company shall be directed to it at Anzu Special Acquisition Corp I, 12610 Race
Track Road, Suite 250 Tampa, FL 33626, Attn: Whitney Haring-Smith, Co-Founder and Managing Partner, email: whs@anzupartners.com,
with a copy to the Company’s counsel at: Morrison & Foerster LLP, 2100 L Street, NW, Suite 900, Washington, DC 20037,
Attn: Justin Salon, Esq., email: JustinSalon@mofo.com, fax: (202) 785-7533.
SECTION 12.
No Advisory or Fiduciary Relationship. The Company acknowledges and agrees that (a) the purchase and sale of the
Securities pursuant to this Agreement, including the determination of the initial public offering price of the Securities and any
related discounts and commissions, is an arm’s-length commercial transaction between the Company, on the one hand, and the
several Underwriters, on the other hand, (b) in connection with the offering of the Securities and the process leading thereto,
each Underwriter is and has been acting solely as a principal and is not the agent or fiduciary of the Company, any of its subsidiaries
or their respective stockholders, creditors, employees or any other party, (c) no Underwriter has assumed or will assume an advisory
or fiduciary responsibility in favor of the Company with respect to the offering of the Securities or the process leading thereto
(irrespective of whether such Underwriter has advised or is currently advising the Company or any of its subsidiaries on other
matters) and no Underwriter has any obligation to the Company with respect to the offering of the Securities except the obligations
expressly set forth in this Agreement, (d) the Underwriters and their respective affiliates may be engaged in a broad range of
transactions that involve interests that differ from those of the Company and (e) the Underwriters have not provided any legal,
accounting, regulatory or tax advice with respect to the offering of the Securities and the Company has consulted its own respective
legal, accounting, regulatory and tax advisors to the extent it deemed appropriate.
SECTION 13.
Recognition of the U.S. Special Resolution Regimes.
(a)
In the event that any Underwriter that is a Covered Entity becomes subject to a proceeding under a U.S. Special Resolution
Regime, the transfer from such Underwriter of this Agreement, and any interest and obligation in or under this Agreement, will
be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Agreement,
and any such interest and obligation, were governed by the laws of the United States or a state of the United States.
(b)
In the event that any Underwriter that is a Covered Entity or a BHC Act Affiliate of such Underwriter becomes subject to
a proceeding under a U.S. Special Resolution Regime, Default Rights under this Agreement that may be exercised against such Underwriter
are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution
Regime if this Agreement were governed by the laws of the United States or a state of the United States.
For purposes of this
Section 13, a “BHC Act Affiliate” has the meaning assigned to the term “affiliate” in, and shall be interpreted
in accordance with, 12 U.S.C. § 1841(k). “Covered Entity” means any of the following: (i) a “covered entity”
as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b); (ii) a “covered bank” as
that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or (iii) a “covered FSI” as
that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b). “Default Right” has
the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1,
as applicable. “U.S. Special Resolution Regime” means each of (i) the Federal Deposit Insurance Act and the regulations
promulgated thereunder and (ii) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated
thereunder.
SECTION 14. Parties. This Agreement shall each inure to the benefit of and be binding upon the Underwriters and the Company
and their respective successors. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any
person, firm or corporation, other than the Underwriters and the Company and their respective successors and the controlling persons
and officers and directors referred to in Sections 6 and 7 and their heirs and legal representatives, any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provision herein contained. This Agreement and all conditions
and provisions hereof are intended to be for the sole and exclusive benefit of the Underwriters and the Company and their respective
successors, and said controlling persons and officers and directors and their heirs and legal representatives, and for the benefit
of no other person, firm or corporation. No purchaser of Securities from any Underwriter shall be deemed to be a successor by
reason merely of such purchase.
SECTION 15.
Trial by Jury. The Company (on its behalf and, to the extent permitted by applicable law, on behalf of its stockholders
and affiliates) and each of the Underwriters hereby irrevocably waives, to the fullest extent permitted by applicable law, any
and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated
hereby.
SECTION 16.
GOVERNING LAW. THIS AGREEMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS AGREEMENT SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ITS CHOICE OF LAW PROVISIONS.
SECTION 17. Consent
to Jurisdiction. Any legal suit, action or proceeding arising out of or based upon this Agreement or the transactions
contemplated hereby (“Related Proceedings”) shall be instituted in (i) the federal courts of the United
States of America located in the City and County of New York, Borough of Manhattan or (ii) the courts of the State of
New York located in the City and County of New York, Borough of Manhattan (collectively, the “Specified Courts”),
and each party irrevocably submits to the exclusive jurisdiction (except for proceedings instituted in regard to the
enforcement of a judgment of any such court (a “Related Judgment”), as to which such jurisdiction is
non-exclusive) of such courts in any such suit, action or proceeding. Service of any process, summons, notice or document by
mail to such party’s address set forth above shall be effective service of process for any suit, action or other
proceeding brought in any such court. The parties irrevocably and unconditionally waive any objection to the laying of venue
of any suit, action or other proceeding in the Specified Courts and irrevocably and unconditionally waive and agree not to
plead or claim in any such court that any such suit, action or other proceeding brought in any such court has been brought in
an inconvenient forum.
SECTION 18.
TIME. TIME SHALL BE OF THE ESSENCE OF THIS AGREEMENT. EXCEPT AS OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY
REFER TO NEW YORK CITY TIME.
SECTION 19.
Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same Agreement. Counterparts may be delivered via facsimile,
electronic mail (including any electronic signature covered by the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions
Act, the Electronic Signatures and Records Act or other applicable law) or other transmission method and any counterpart so delivered
shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
SECTION 20.
Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction hereof.
[Signature pages
follow]
If
the foregoing is in accordance with your understanding of our agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding agreement among the Underwriters and the Company
in accordance with its terms.
| | Very truly yours, |
| | |
| | ANZU SPECIAL ACQUISITION CORP I |
| | |
| By | |
| | | Title: |
| CONFIRMED AND ACCEPTED, |
|
| as of the date first above written: |
|
| |
|
| BOFA SECURITIES, INC. |
|
| |
|
| By: |
|
|
| |
Authorized Signatory |
|
| |
|
| BARCLAYS CAPITAL INC. |
|
| |
|
| By: |
|
|
| |
Authorized Signatory |
|
For itself and as Representatives of the other Underwriters
named in Schedule A hereto.
SCHEDULE A
The initial public offering price per unit for the Securities
shall be $10.00.
The purchase price per unit for the Securities
to be paid by the several Underwriters shall be $9.80, subject to adjustment in accordance with Section 2(b) for dividends or distributions
declared by the Company and payable on the Initial Securities but not payable on the Option Securities. The underwriting discounts
and commissions shall be $0.55 per unit, including $0.35 per unit in the aggregate payable to the Underwriters for deferred underwriting
commissions to be placed into the Trust Account and released to the Underwriters upon completion of the initial Business Combination
in accordance with the Trust Agreement.
| Name of Underwriter |
Number of
Initial Securities |
| |
|
| BofA Securities, Inc. |
[·] |
| Barclays Capital Inc. |
[·] |
| |
|
| |
|
| |
|
| |
|
| |
|
| Total |
[·] |
SCHEDULE B-1
Pricing Terms
| 1. | The Company is selling 35,000,000 Units. |
| 2. | The Company has granted an option to the Underwriters, severally and not jointly, to purchase up
to an additional 5,250,000 Units. |
| 3. | The initial public offering price per unit for the Securities
shall be $10.00. |
SCHEDULE B-2
Written Testing-the-Waters Communications: [Reference is made
to the materials used in the testing the waters presentation made to potential investors by the Company, to the extent such materials
are deemed to be a “written communication” within the meaning of Rule 405 under the Act.]
EXHIBIT 4.1
NUMBER UNITS U-
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP [•]
Anzu Special
Acquisition Corp I
UNITS CONSISTING OF ONE SHARE OF CLASS A COMMON STOCK AND ONE-
[•] OF ONE WARRANT TO PURCHASE ONE SHARE OF CLASS A COMMON STOCK
THIS CERTIFIES THAT is the owner of Units.
Each Unit (“Unit”) consists of one
(1) share of Class A common stock, par value $0.0001 per share (“Common Stock”), of Anzu Special Acquisition
Corp I, a Delaware corporation (the “Company”), and one-[•] (1/[•]) of one warrant (each whole warrant,
a “Warrant”). Each whole Warrant entitles the holder to purchase one (1) share (subject to adjustment)
of Common Stock for $11.50 per share (subject to adjustment). Each Warrant will become exercisable on the later of (i) thirty (30)
days after the Company’s completion of a merger, capital stock exchange, asset acquisition, stock purchase, reorganization
or other similar business combination with one or more businesses (each a “Business Combination”), or
(ii) twelve (12) months from the closing of the Company’s initial public offering, and will expire unless exercised before
5:00 p.m., New York City Time, on the date that is five (5) years after the date on which the Company completes its initial Business
Combination, or earlier upon redemption or liquidation (the “Expiration Date”). The Common Stock and
Warrants comprising the Units represented by this certificate are not transferable separately prior to [●] , 2021, unless
BofA Securities, Inc. and Barclays Capital Inc. elect to allow separate trading earlier, subject to the Company’s filing
of a Current Report on Form 8-K with the Securities and Exchange Commission containing an audited balance sheet reflecting the
Company’s receipt of the gross proceeds of the offering and issuing a press release announcing when separate trading will
begin. The terms of the Warrants are governed by a Warrant Agreement, dated as of [●] , 2021, between the Company and American
Stock Transfer & Trust Company, LLC, as Warrant Agent, and are subject to the terms and provisions contained therein, all of
which terms and provisions the holder of this certificate consents to by acceptance hereof. Copies of the Warrant Agreement are
on file at the office of the Warrant Agent at 6201 15th Avenue, Brooklyn, NY 11219, and are available to any Warrant
holder on written request and without cost.
This certificate is not valid unless countersigned by the Transfer
Agent and Registrar of the Company.
This certificate shall be governed by and construed in accordance
with the internal laws of the State of New York.
Witness the facsimile signature of its duly authorized officers.
ANZU SPECIAL ACQUISITION CORP I
The Company will furnish without charge to each unitholder who
so requests, a statement of the powers, designations, preferences and relative, participating, optional or other special rights
of each class of stock or series thereof of the Company and the qualifications, limitations, or restrictions of such preferences
and/or rights.
The following abbreviations, when used in the inscription on
the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations:
| TEN COM |
– |
as tenants in common |
|
UNIF GIFT MIN ACT |
– |
Custodian |
| |
|
|
|
|
|
|
| TEN ENT |
– |
as tenants by the entireties |
|
|
|
|
| |
|
|
|
|
|
(Cust) (Minor) |
| JT TEN |
– |
as joint tenants with right of survivorship and not as tenants in common |
|
|
|
under Uniform Gifts to Minors Act |
| |
|
|
|
|
|
(State) |
Additional abbreviations may also be used
though not in the above list.
For value received, _________ hereby sell, assign and transfer
unto ______
PLEASE INSERT SOCIAL SECURITY OR
OTHER
IDENTIFYING NUMBER OF ASSIGNEE
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS,
INCLUDING ZIP CODE, OF ASSIGNEE)
_______ Units represented by the within Certificate, and do
hereby irrevocably constitute and appoint
_______ Attorney to transfer the said Units on the books of
the within named Company with full power of substitution in the premises.
| Dated |
|
|
| |
|
Notice: The signature to this assignment must correspond with the name as written upon the face of the certificate in every particular, without alteration or enlargement or any change whatever. |
| Signature(s) Guaranteed: |
|
|
| THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15 (OR ANY SUCCESSOR RULE). |
|
|
In each case, as more fully described in the
Company’s final prospectus dated [●], 2021, the holder(s) of this certificate shall be entitled to receive a
pro-rata portion of certain funds held in the trust account established in connection with its initial public offering only
in the event that (i) the Company redeems the shares of Class A common stock sold in its initial public offering and
liquidates because it does not consummate an initial business combination by [●], 2023, (ii) the Company redeems the
shares of Class A common stock sold in its initial public offering in connection with a stockholder vote to amend the
Company’s second amended and restated certificate of incorporation to modify the substance or timing of the
Company’s obligation to redeem 100% of the Class A common stock if it does not consummate an initial business
combination by [●], 2023, or (iii) if the holder(s) seek(s) to redeem for cash his, her or its respective shares of
Class A common stock in connection with a tender offer (or proxy solicitation, solely in the event the Company seeks
stockholder approval of the proposed initial business combination) setting forth the details of a proposed initial business
combination. In no other circumstances shall the holder(s) have any right or interest of any kind in or to the trust
account.
EXHIBIT 4.4
WARRANT AGREEMENT
between
ANZU SPECIAL ACQUISITION CORP I
and
AMERICAN STOCK TRANSFER & TRUST COMPANY,
LLC
THIS WARRANT AGREEMENT
(this “Agreement”), dated as of [●], 2021, is by and between Anzu Special Acquisition Corp
I, a Delaware corporation (the “Company”), and American Stock Transfer & Trust Company, LLC, a New
York limited liability company, as warrant agent (the “Warrant Agent,” also referred to herein as the
“Transfer Agent”).
WHEREAS, on [●],
2021, the Company entered into that certain Sponsor Warrants Purchase Agreement with Anzu SPAC GP I LLC, a Delaware limited liability
company (the “Sponsor”), pursuant to which the Sponsor will purchase an aggregate of [●] warrants
(or up to [●] warrants if the Over-allotment Option (as defined below) in connection with the Company’s Offering (as
defined below) is exercised in full) simultaneously with the closing of the Offering (and the closing of the Over-allotment Option,
if applicable), bearing the legend set forth in Exhibit B hereto (the “Private Placement Warrants”)
at a purchase price of $1.00 per Private Placement Warrant. Each Private Placement Warrant entitles the holder thereof to purchase
one share of Common Stock (as defined below) at a price of $11.50 per share, subject to adjustment as described herein;
WHEREAS, in order to
finance the Company’s transaction costs in connection with an intended initial merger, share exchange, asset acquisition,
stock purchase, reorganization or similar business combination, involving the Company and one or more businesses (a “Business
Combination”), the Sponsor or an affiliate of the Sponsor or certain of the Company’s officers and directors
may, but are not obligated to, loan the Company funds as the Company may require, of which up to $1,500,000 of such loans may be
convertible into up to an additional 1,500,000 Private Placement Warrants at a price of $1.00 per Private Placement Warrant;
WHEREAS, the Company
is engaged in an initial public offering (the “Offering”) of units of the Company’s equity securities,
each such unit comprised of one share of Common Stock (as defined below) and one-[•] of one Public Warrant (as defined below)
(the “Units”) and, in connection therewith, has determined to issue and deliver up to [●] warrants
(including up to [●] warrants subject to the Over-allotment Option (as defined below)) to public investors in the Offering
(the “Public Warrants” and, together with the Private Placement Warrants, the “Warrants”).
Each whole Warrant entitles the holder thereof to purchase one share of Class A common stock of the Company, par value $0.0001
per share (“Common Stock”), for $11.50 per share, subject to adjustment as described herein. Only whole
Warrants are exercisable. A holder of the Public Warrants will not be able to exercise any fraction of a Warrant;
WHEREAS, the Company
has filed with the Securities and Exchange Commission (the “Commission”) registration statements on Form
S-1, File No. [●], including the prospectus contained therein (the “Prospectus”), for the registration,
under the Securities Act of 1933, as amended (the “Securities Act”), of the Units, the Public Warrants
and the Common Stock included in the Units;
WHEREAS, the Company
desires the Warrant Agent to act on behalf of the Company, and the Warrant Agent is willing to so act, in connection with the issuance,
registration, transfer, exchange, redemption and exercise of the Warrants;
WHEREAS, the Company
desires to provide for the form and provisions of the Warrants, the terms upon which they shall be issued and exercised, and the
respective rights, limitation of rights, and immunities of the Company, the Warrant Agent, and the holders of the Warrants; and
WHEREAS, all acts and
things have been done and performed which are necessary to make the Warrants, when executed on behalf of the Company and countersigned
by or on behalf of the Warrant Agent, as provided herein, the valid, binding and legal obligations of the Company, and to authorize
the execution and delivery of this Agreement.
NOW, THEREFORE, in
consideration of the mutual agreements herein contained, the parties hereto agree as follows:
1.
Appointment of Warrant Agent. The Company hereby appoints the Warrant Agent to act as agent for the Company for the
Warrants, and the Warrant Agent hereby accepts such appointment and agrees to perform the same in accordance with the terms and
conditions set forth in this Agreement.
2.
Warrants.
2.1
Form of Warrant. Each Warrant shall be issued in registered form only.
2.2
Effect of Countersignature. If a physical certificate is issued, unless and until countersigned by the Warrant Agent
pursuant to this Agreement, a Warrant shall be invalid and of no effect and may not be exercised by the holder thereof.
2.3
Registration.
2.3.1
Warrant Register. The Warrant Agent shall maintain books (the “Warrant Register”), for
the registration of original issuance and the registration of transfer of the Warrants. Upon the initial issuance of the Warrants,
the Warrant Agent shall issue and register the Warrants in the names of the respective holders thereof in such denominations and
otherwise in accordance with instructions delivered to the Warrant Agent by the Company. Ownership of beneficial interests in the
Public Warrants shall be shown on, and the transfer of such ownership shall be effected through, records maintained by institutions
that have accounts with The Depository Trust Company (the “Depositary”) (such institution, with respect
to a Warrant in its account, a “Participant”).
If the Depositary subsequently
ceases to make its book-entry settlement system available for the Public Warrants, the Company may instruct the Warrant Agent regarding
making other arrangements for book-entry settlement. In the event that the Public Warrants are not eligible for, or it is no longer
necessary to have the Public Warrants available in, book-entry form, the Warrant Agent shall provide written instructions to the
Depositary to deliver to the Warrant Agent for cancellation each book-entry Public Warrant, and the Company shall instruct the
Warrant Agent to deliver to the Depositary definitive certificates in physical form evidencing such Warrants, which shall be in
the form annexed hereto as Exhibit A.
Physical certificates,
if issued, shall be signed by, or bear the facsimile signature of, the Chairman of the Company’s Board of Directors (the
“Board”), Chief Executive Officer, President, Chief Financial Officer, Secretary or other principal officer
of the Company. In the event the person whose facsimile signature has been placed upon any Warrant shall have ceased to serve in
the capacity in which such person signed the Warrant before such Warrant is issued, it may be issued with the same effect as if
he or she had not ceased to be such at the date of issuance.
2.3.2
Registered Holder. Prior to due presentment for registration of transfer of any Warrant, the Company and the Warrant
Agent may deem and treat the person in whose name such Warrant is registered in the Warrant Register (the “Registered
Holder”) as the absolute owner of such Warrant and of each Warrant represented thereby (notwithstanding any notation
of ownership or other writing on any physical certificate made by anyone other than the Company or the Warrant Agent), for the
purpose of any exercise thereof, and for all other purposes, and neither the Company nor the Warrant Agent shall be affected by
any notice to the contrary.
2.4
Detachability of Warrants. The Common Stock and Public Warrants comprising the Units shall begin separate trading
on the 52nd day following the date of the Prospectus or, if such 52nd day is not on a day, other than a Saturday, Sunday or federal
holiday, on which banks in New York City are generally open for normal business (a “Business Day”), then
on the immediately succeeding Business Day following such date, or earlier (the “Detachment Date”) with
the consent of BofA Securities, Inc. and Barclays Capital Inc., but in no event shall the Common Stock and the Public Warrants
comprising the Units be separately traded until (A) the Company has filed a current report on Form 8-K with the Commission containing
an audited balance sheet reflecting the receipt by the Company of the gross proceeds of the Offering, including the proceeds received
by the Company from the exercise by the underwriter of its right to purchase additional Units in the Offering (the “Over-allotment
Option”), if the Over-allotment Option is exercised prior to the filing of the Form 8-K, and (B) if the Detachment
Date is earlier than the 52nd day following the date of the Prospectus, the Company issues a press release announcing
when such separate trading shall begin.
2.5
No Fractional Warrants Other Than as Part of the Units. The Company shall not issue fractional Warrants other than
as part of the Units, each of which is comprised of one share of Common Stock and one-[•] of one Public Warrant. If, upon the
detachment of Public Warrants from the Units or otherwise, a holder of Warrants would be entitled to receive a fractional Warrant,
the Company shall round down to the nearest whole number the number of Warrants to be issued to such holder.
2.6
Private Placement Warrants. The Private Placement Warrants shall be identical to the Public Warrants, except that
so long as they are held by the Sponsor or any of its Permitted Transferees (as defined below) the Private Placement Warrants:
(i) may be exercised for cash or on a “cashless basis,” pursuant to subsection 3.3.1(c) hereof, (ii) including
the shares of Common Stock issuable upon exercise of the Private Placement Warrants, may not be transferred, assigned or sold until
thirty (30) days after the completion by the Company of an initial Business Combination, (iii) shall only be redeemable by the
Company pursuant to Section 6.2 if the Reference Value (as defined below) is less than $18.00 per share (subject to adjustment
in accordance with Section 4 hereof) and (iv) shall not be redeemable by the Company pursuant to Section 6.1 hereof;
provided, however, that in the case of (ii), the Private Placement Warrants and any shares of Common Stock held by
the Sponsor or any of its Permitted Transferees and issued upon exercise of the Private Placement Warrants may be transferred by
the holders thereof:
(a)
to the Company’s officers or directors, any affiliates or family members of any of the Company’s officers or
directors, any members of the Sponsor, or any affiliates of the Sponsor;
(b)
in the case of an individual, by gift to a member of the individual’s immediate family or to a trust, the beneficiary
of which is a member of the individual’s immediate family, an affiliate of such person or to a charitable organization;
(c)
in the case of an individual, by virtue of the laws of descent and distribution upon death of the individual;
(d)
in the case of an individual, pursuant to a qualified domestic relations order;
(e)
by private sales or transfers made in connection with the consummation of the Company’s initial Business Combination
at prices no greater than the price at which the securities were originally purchased;
(f)
in the event of the Company’s liquidation prior to the completion of the Company’s initial Business Combination;
or
(g)
in the case of an entity, by virtue of the laws of its jurisdiction or its organizational documents or operating agreement;
or
(h)
in the event of the Company’s completion of a liquidation, merger, share exchange, reorganization or other similar
transaction 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 subsequent to the completion of the Company’s initial Business Combination;
provided, however, that in
the case of clauses (a) through (e), these permitted transferees (the “Permitted Transferees”) must enter
into a written agreement agreeing to be bound by these transfer restrictions.
3.
Terms and Exercise of Warrants.
3.1 Warrant
Price. Each Warrant shall entitle the Registered Holder thereof, subject to the provisions of such Warrant and of this
Agreement, to purchase from the Company the number of shares of Common Stock stated therein, at the price of $11.50 per
share, subject to the adjustments provided in Section 4 hereof and in the last sentence of this Section 3.1.
The term “Warrant Price” as used in this Agreement shall mean the price per share (including in cash or by
payment of Warrants pursuant to a “cashless exercise,” to the extent permitted hereunder) at which shares of
Common Stock may be purchased at the time a Warrant is exercised. The Company in its sole discretion may lower the Warrant
Price at any time prior to the Expiration Date (as defined below) for a period of not less than twenty (20) Business Days
(unless otherwise required by the Commission, any national securities exchange on which the Warrants are listed or applicable
law); provided, that the Company shall provide at least three (3) Business Days prior written notice of such reduction
to Registered Holders of the Warrants and, provided further that any such reduction shall be identical among all of the
Warrants.
3.2
Duration of Warrants. A Warrant may be exercised only during the period (the “Exercise Period”)
commencing on the later of: (i) the date that is thirty (30) days after the first date on which the Company completes its initial
Business Combination, and (ii) the date that is twelve (12) months from the date of the closing of the Offering, and terminating
at 5:00 p.m., New York City time, on the earliest to occur of: (x) the date that is five (5) years after the date on which the
Company completes its initial Business Combination, (y) the liquidation of the Company if the Company fails to complete its initial
Business Combination, and (z) other than with respect to the Private Placement Warrants then held by the Sponsor or any Permitted
Transferees with respect to a redemption pursuant to Section 6.1 hereof or, if the Reference Value equals or exceeds $18.00
per share (subject to adjustment in compliance with Section 4 hereof), Section 6.2 hereof (each, an “Inapplicable
Redemption”), 5:00 p.m., New York City time, on the Redemption Date (as defined below) as provided in Section
6.3 hereof (the “Expiration Date”); provided, however, that the exercise of any Warrant
shall be subject to the satisfaction of any applicable conditions, as set forth in subsection 3.3.2 below, with respect
to an effective registration statement under the Securities Act or a valid exemption from registration being available. Except
with respect to the right to receive the Redemption Price (as defined below) (other than with respect to an Inapplicable Redemption),
each Warrant (other than a Private Placement Warrant then held by the Sponsor or any Permitted Transferees with respect to an Inapplicable
Redemption) not exercised on or before the Expiration Date shall become void, and all rights thereunder and all rights in respect
thereof under this Agreement shall cease at 5:00 p.m. New York City time, on the Expiration Date. The Company in its sole discretion
may extend the duration of the Warrants by delaying the Expiration Date; provided, that the Company shall provide at least
twenty (20) days prior written notice of any such extension to Registered Holders of the Warrants and, provided further that any
such extension shall be identical in duration among all the Warrants.
3.3
Exercise of Warrants.
3.3.1
Payment. Subject to the provisions of the Warrant and this Agreement, a Warrant, when countersigned by the Warrant
Agent, may be exercised by the Registered Holder thereof by surrendering it, at the office of the Warrant Agent, or at the office
of its successor as Warrant Agent with the subscription form, as set forth in the Warrant, duly executed, and by paying in full
the Warrant Price for each full share of Common Stock as to which the Warrant is exercised and any and all applicable taxes due
in connection with the exercise of the Warrant, the exchange of the Warrant for the shares of Common Stock and the issuance of
such shares of Common Stock, as follows:
(a)
in lawful money of the United States, in good certified check or wire payable to the Warrant Agent;
(b)
[Reserved];
(c)
with respect to any Private Placement Warrant, so long as such Private Placement Warrant is held by the Sponsor or a Permitted
Transferee, by surrendering the Warrants for that number of shares of Common Stock equal to (i) if in connection with a redemption
of Private Placement Warrants pursuant to Section 6.2 hereof, as provided in Section 6.2 hereof with respect to a
Make-Whole Exercise (as defined below) and (ii) in all other scenarios, the quotient obtained by dividing (x) the product of the
number of shares of Common Stock underlying the Warrants, multiplied by the excess of the “Sponsor Exercise Fair Market Value”
(as defined in this subsection 3.3.1(c)) less the Warrant Price by (y) the Sponsor Exercise Fair Market Value. Solely for
purposes of this subsection 3.3.1(c), the “Sponsor Fair Market Value” shall mean the average last reported sale
price of the shares of Common Stock for the ten (10) trading days ending on the third (3rd) trading day prior to the
date on which notice of exercise of the Private Placement Warrant is sent to the Warrant Agent;
(d)
as provided in Section 6.2 hereof with respect to a Make-Whole Exercise; or
(e)
as provided in Section 7.4 hereof.
3.3.2
Issuance of Shares of Common Stock on Exercise. As soon as practicable after the exercise of any Warrant and the
clearance of the funds in payment of the Warrant Price (if payment is pursuant to subsection 3.3.1(a)), the Company shall
issue to the Registered Holder of such Warrant a book-entry position or certificate, as applicable, for the number of full shares
of Common Stock to which he, she or it is entitled, registered in such name or names as may be directed by him, her or it, and
if such Warrant shall not have been exercised in full, a new book-entry position or countersigned Warrant, as applicable, for the
number of shares of Common Stock as to which such Warrant shall not have been exercised. Notwithstanding the foregoing, the Company
shall not be obligated to deliver any shares of Common Stock pursuant to the exercise of a Warrant and shall have no obligation
to settle such Warrant exercise unless a registration statement under the Securities Act with respect to the shares of Common Stock
underlying the Public Warrants is then effective and a prospectus relating thereto is current, subject to the Company’s satisfying
its obligations under Section 7.4 or unless a valid exemption from registration is available. No Warrant shall be exercisable
and the Company shall not be obligated to issue shares of Common Stock upon exercise of a Warrant unless the Common Stock issuable
upon such Warrant exercise has been registered, qualified or deemed to be exempt from registration or qualification under the securities
laws of the state of residence of the Registered Holder of the Warrants. Subject to Section 4.6, a Registered Holder of
Warrants may exercise its Warrants only for a whole number of shares of Common Stock. The Company may require holders of Public
Warrants to settle the Warrant on a “cashless basis” pursuant to Section 7.4. If, by reason of any exercise
of Warrants on a “cashless basis”, the holder of any Warrant would be entitled, upon the exercise of such Warrant,
to receive a fractional interest in a share of Common Stock, the Company shall round down to the nearest whole number, the number
of shares of Common Stock to be issued to such holder.
3.3.3
Valid Issuance. All shares of Common Stock issued upon the proper exercise of a Warrant in conformity with this
Agreement shall be validly issued, fully paid and non-assessable.
3.3.4
Date of Issuance. Each person in whose name any book-entry position or certificate, as applicable, for shares of
Common Stock is issued shall for all purposes be deemed to have become the holder of record of such shares of Common Stock on the
date on which the Warrant, or book-entry position representing such Warrant, was surrendered and payment of the Warrant Price was
made, irrespective of the date of delivery of such certificate in the case of a certificated Warrant, except that, if the date
of such surrender and payment is a date when the share transfer books of the Company or book-entry system of the Warrant Agent
are closed, such person shall be deemed to have become the holder of such shares of Common Stock at the close of business on the
next succeeding date on which the share transfer books or book-entry system are open.
3.3.5 Maximum
Percentage. A holder of a Warrant may notify the Company in writing in the event it elects to be subject to the
provisions contained in this subsection 3.3.5; however, no holder of a Warrant shall be subject to this subsection
3.3.5 unless he, she or it makes such election. If the election is made by a holder, the Warrant Agent shall not effect
the exercise of the holder’s Warrant, and such holder shall not have the right to exercise such Warrant, to the extent
that after giving effect to such exercise, such person (together with such person’s affiliates), to the Warrant
Agent’s actual knowledge, would beneficially own in excess of 9.8% (the “Maximum Percentage”)
of the shares of Common Stock outstanding immediately after giving effect to such exercise. For purposes of the foregoing
sentence, the aggregate number of shares of Common Stock beneficially owned by such person and its affiliates shall include
the number of shares of Common Stock issuable upon exercise of the Warrant with respect to which the determination of such
sentence is being made, but shall exclude shares of Common Stock that would be issuable upon (x) exercise of the remaining,
unexercised portion of the Warrant beneficially owned by such person and its affiliates and (y) exercise or conversion of the
unexercised or unconverted portion of any other securities of the Company beneficially owned by such person and its
affiliates (including, without limitation, any convertible notes or convertible preferred stock or warrants) subject to a
limitation on conversion or exercise analogous to the limitation contained herein. Except as set forth in the preceding
sentence, for purposes of this paragraph, beneficial ownership shall be calculated in accordance with Section 13(d) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”). For purposes of the Warrant, in
determining the number of outstanding shares of Common Stock, the holder may rely on the number of outstanding shares of
Common Stock as reflected in (1) the Company’s most recent annual report on Form 10-K, quarterly report on Form 10-Q,
current report on Form 8-K or other public filing with the Commission as the case may be, (2) a more recent public
announcement by the Company or (3) any other notice by the Company or the Transfer Agent setting forth the number of shares
of Common Stock outstanding. For any reason at any time, upon the written request of the holder of the Warrant, the Company
shall, within two (2) Business Days, confirm orally and in writing to such holder the number of shares of Common Stock then
outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the
conversion or exercise of equity securities of the Company by the holder and its affiliates since the date as of which such
number of outstanding shares of Common Stock was reported. By written notice to the Company, the holder of a Warrant may from
time to time increase or decrease the Maximum Percentage applicable to such holder to any other percentage specified in such
notice; provided, however, that any such increase shall not be effective until the sixty-first (61st) day after
such notice is delivered to the Company.
4.
Adjustments.
4.1
Stock Dividends.
4.1.1
Split-Ups. If after the date hereof, and subject to the provisions of Section 4.6 below, the number of
outstanding shares of Common Stock is increased by a stock dividend payable in shares of Common Stock, or by a split-up of shares
of Common Stock or other similar event, then, on the effective date of such stock dividend, split-up or similar event, the number
of shares of Common Stock issuable on exercise of each Warrant shall be increased in proportion to such increase in the outstanding
shares of Common Stock. A rights offering to holders of the Common Stock entitling holders to purchase shares of Common Stock at
a price less than the “Fair Market Value” (as defined below) shall be deemed a stock dividend of a number of shares
of Common Stock equal to the product of (i) the number of shares of Common Stock actually sold in such rights offering (or issuable
under any other equity securities sold in such rights offering that are convertible into or exercisable for the Common Stock) multiplied
by (ii) one (1) minus the quotient of (x) the price per share of Common Stock paid in such rights offering divided by (y) the Fair
Market Value. For purposes of this subsection 4.1.1, (i) if the rights offering is for securities convertible into or exercisable
for Common Stock, in determining the price payable for Common Stock, there shall be taken into account any consideration received
for such rights, as well as any additional amount payable upon exercise or conversion and (ii) “Fair Market Value”
means the volume weighted average price of the Common Stock as reported during the ten (10) trading day period ending on the trading
day prior to the first date on which the shares of Common Stock trade on the applicable exchange or in the applicable market, regular
way, without the right to receive such rights.
4.1.2 Extraordinary
Dividends. If the Company, at any time while the Warrants are outstanding and unexpired, shall pay a dividend or make a
distribution in cash, securities or other assets to the holders of the Common Stock on account of such shares of Common Stock
(or other shares of the Company’s capital stock into which the Warrants are convertible), other than (a) as described
in subsection 4.1.1 above, (b) Ordinary Cash Dividends (as defined below), (c) to satisfy the redemption rights of the
holders of the Common Stock in connection with a proposed initial Business Combination, (d) to satisfy the redemption rights
of the holders of Common Stock in connection with a stockholder vote to amend the Company’s amended and restated
certificate of incorporation to modify the substance or timing of the Company’s obligation to redeem 100% of Common
Stock if the Company does not complete the Business Combination within the time period required by the Company’s
amended and restated certificate of incorporation, as amended form time to time, or (e) in connection with the redemption of
public shares upon the failure of the Company to complete its initial Business Combination and any subsequent distribution of
its assets upon its liquidation (any such non-excluded event being referred to herein as an “Extraordinary
Dividend’), then the Warrant Price shall be decreased, effective immediately after the effective
date of such Extraordinary Dividend, by the amount of cash and/or the fair market value (as determined by the Board, in good
faith) of any securities or other assets paid on each share of Common Stock in respect of such Extraordinary Dividend. For
purposes of this subsection 4.1.2, “Ordinary Cash Dividends” means any cash dividend or cash
distribution which, when combined on a per share basis, with the per share amounts of all other cash dividends and cash
distributions paid on the Common Stock during the 365-day period ending on the date of declaration of such dividend or
distribution (as adjusted to appropriately reflect any of the events referred to in other subsections of this Section
4 and excluding cash dividends or cash distributions that resulted in an adjustment to the Warrant Price or to the number
of shares of Common Stock issuable on exercise of each Warrant) to the extent it does not exceed $0.50 (being 5% of the
offering price of the Units in the Offering).
4.2
Aggregation of Shares. If after the date hereof, and subject to the provisions of Section 4.6 hereof, the
number of outstanding shares of Common Stock is decreased by a consolidation, combination, reverse stock split or reclassification
of shares of Common Stock or other similar event, then, on the effective date of such consolidation, combination, reverse stock
split, reclassification or similar event, the number of shares of Common Stock issuable on exercise of each Warrant shall be decreased
in proportion to such decrease in outstanding shares of Common Stock.
4.3
Adjustments in Exercise Price. Whenever the number of shares of Common Stock purchasable upon the exercise of the
Warrants is adjusted, as provided in subsection 4.1.1 or Section 4.2 above, the Warrant Price shall be adjusted (to
the nearest cent) by multiplying such Warrant Price immediately prior to such adjustment by a fraction (x) the numerator of which
shall be the number of shares of Common Stock purchasable upon the exercise of the Warrants immediately prior to such adjustment,
and (y) the denominator of which shall be the number of shares of Common Stock so purchasable immediately thereafter.
4.4
Raising of the Capital in Connection with the Initial Business Combination. If (x) the Company issues additional
shares of Common Stock or equity-linked securities for capital raising purposes in connection with the closing of its initial Business
Combination at an issue price or effective issue price of less than $9.20 per share of Common Stock (with such issue price or effective
issue price to be determined in good faith by the Board and, in the case of any such issuance to the Sponsor or its affiliates,
without taking into account any shares of Class B Common Stock, par value $0.0001 per share, of the Company held by the Sponsor
or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate
gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the
funding of the Company’s initial Business Combination on the date of the completion of the Company’s initial Business
Combination (net of redemptions), and (z) the volume-weighted average per share trading price of Common Stock during the twenty
(20) trading day period starting on the trading day prior to the day on which the Company consummates its initial Business Combination
(such price, the “Market Value”) is below $9.20 per share, the Warrant Price shall be adjusted (to the
nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, the $18.00 per share redemption
trigger price described in Section 6.1 and Section 6.2 shall be adjusted (to the nearest cent) to be equal to 180%
of the higher of the Market Value and the Newly Issued Price and the $10.00 per share redemption trigger price described in Section
6.2 shall be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price.
4.5 Replacement
of Securities upon Reorganization, etc. In case of any reclassification or reorganization of the outstanding shares of Common
Stock (other than a change under subsections 4.1.1 or 4.1.2 or Section 4.2 hereof or that solely affects
the par value of such shares of Common Stock), or in the case of any merger or consolidation of the Company with or into
another corporation (other than a consolidation or merger in which the Company is the continuing corporation and that does
not result in any reclassification or reorganization of the outstanding shares of Common Stock), or in the case of any sale
or conveyance to another corporation or entity of the assets or other property of the Company as an entirety or substantially
as an entirety in connection with which the Company is dissolved, the holders of the Warrants shall thereafter have the right
to purchase and receive, upon the basis and upon the terms and conditions specified in the Warrants and in lieu of the shares
of Common Stock of the Company immediately theretofore purchasable and receivable upon the exercise of the rights represented
thereby, the kind and amount of shares of stock or other securities or property (including cash) receivable upon such
reclassification, reorganization, merger or consolidation, or upon a dissolution following any such sale or transfer, that
the holder of the Warrants would have received if such holder had exercised his, her or its Warrant(s) immediately prior to
such event (the “Alternative Issuance”); provided, however, that (i) if the holders
of the Common Stock were entitled to exercise a right of election as to the kind or amount of securities, cash or other
assets receivable upon such consolidation or merger, then the kind and amount of securities, cash or other assets
constituting the Alternative Issuance for which each Warrant shall become exercisable shall be deemed to be the weighted
average of the kind and amount received per share by the holders of the Common Stock in such consolidation or merger that
affirmatively make such election, and (ii) if a tender, exchange or redemption offer shall have been made to and accepted by
the holders of the Common Stock (other than a tender, exchange or redemption offer made by the Company in connection with
redemption rights held by stockholders of the Company as provided for in the Company’s amended and restated certificate
of incorporation or as a result of the repurchase of shares of Common Stock by the Company if a proposed initial Business
Combination is presented to the stockholders of the Company for approval) under circumstances in which, upon completion of
such tender or exchange offer, the maker thereof, together with members of any group (within the meaning of Rule 13d-5(b)(1)
under the Exchange Act (or any successor rule)) of which such maker is a part, and together with any affiliate or associate
of such maker (within the meaning of Rule 12b-2 under the Exchange Act (or any successor rule)) and any members of any such
group of which any such affiliate or associate is a part, own beneficially (within the meaning of Rule 13d-3 under the
Exchange Act (or any successor rule)) more than 50% of the outstanding shares of Common Stock, the holder of a Warrant shall
be entitled to receive as the Alternative Issuance, the highest amount of cash, securities or other property to which such
holder would actually have been entitled as a stockholder if such Warrant holder had exercised the Warrant prior to the
expiration of such tender or exchange offer, accepted such offer and all of the Common Stock held by such holder had been
purchased pursuant to such tender or exchange offer, subject to adjustments (from and after the consummation of such tender
or exchange offer) as nearly equivalent as possible to the adjustments provided for in this Section 4; provided, further,
that if less than 70% of the consideration receivable by the holders of the Common Stock in the applicable event is payable
in the form of common stock in the successor entity that is listed for trading on a national securities exchange or is quoted
in an established over-the-counter market, or is to be so listed for trading or quoted immediately following such event, and
if the Registered Holder properly exercises the Warrant within thirty (30) days following the public disclosure of the
consummation of such applicable event by the Company pursuant to a Current Report on Form 8-K filed with the Commission, the
Warrant Price shall be reduced by an amount (in dollars) equal to the difference of (i) the Warrant Price in effect prior to
such reduction minus (ii) (A) the Per Share Consideration (as defined below) (but in no event less than zero) minus (B) the
Black-Scholes Warrant Value (as defined below). The “Black-Scholes Warrant Value” means the value
of a Warrant immediately prior to the consummation of the applicable event based on the Black-Scholes Warrant Model for a
Capped American Call on Bloomberg Financial Markets (“Bloomberg”). For purposes of calculating such
amount, (1) Section 6 of this Agreement shall be taken into account, (2) the price of each share of Common Stock shall
be the volume weighted average price of the Common Stock as reported during the ten (10) trading day period ending on the
trading day prior to the effective date of the applicable event, (3) the assumed volatility shall be the 90 day volatility
obtained from the HVT function on Bloomberg determined as of the trading day immediately prior to the day of the announcement
of the applicable event, and (4) the assumed risk-free interest rate shall correspond to the U.S. Treasury rate for a period
equal to the remaining term of the Warrant. “Per Share Consideration” means (i) if the
consideration paid to holders of the Common Stock consists exclusively of cash, the amount of such cash per share of Common
Stock, and (ii) in all other cases, the volume weighted average price of the Common Stock as reported during the ten (10)
trading day period ending on the trading day prior to the effective date of the applicable event. If any reclassification or
reorganization also results in a change in shares of Common Stock covered by subsection 4.1.1, then such adjustment
shall be made pursuant to subsection 4.1.1 or Sections 4.2, 4.3 and this Section 4.4, as
applicable. The provisions of this Section 4.4 shall similarly apply to successive reclassifications, reorganizations,
mergers or consolidations, sales or other transfers. In no event will the Warrant Price be reduced to less than the par value
per share issuable upon exercise of the Warrant.
4.6
Notices of Changes in Warrant. Upon every adjustment of the Warrant Price or the number of shares of Common Stock
issuable upon exercise of a Warrant, the Company shall give written notice thereof to the Warrant Agent, which notice shall state
the Warrant Price resulting from such adjustment and the increase or decrease, if any, in the number of shares of Common Stock
purchasable at such price upon the exercise of a Warrant, setting forth in reasonable detail the method of calculation and the
facts upon which such calculation is based. Upon the occurrence of any event specified in Sections 4.1, 4.2, 4.3,
4.4 or 4.5, the Company shall give written notice of the occurrence of such event to each holder of a Warrant, at
the last address set forth for such holder in the Warrant Register, of the record date or the effective date of the event. Failure
to give such notice, or any defect therein, shall not affect the legality or validity of such event.
4.7
No Fractional Shares. Notwithstanding any provision contained in this Agreement to the contrary, the Company shall
not issue fractional shares of Common Stock upon the exercise of Warrants. If, by reason of any adjustment made pursuant to this
Section 4, the holder of any Warrant would be entitled, upon the exercise of such Warrant, to receive a fractional interest
in a share, the Company shall, upon such exercise, round down to the nearest whole number the number of shares of Common Stock
to be issued to such holder.
4.8 Form
of Warrant. The form of Warrant need not be changed because of any adjustment pursuant to this Section 4, and
Warrants issued after such adjustment may state the same Warrant Price and the same number of shares of Common Stock as is
stated in the Warrants initially issued pursuant to this Agreement; provided, however, that the Company may at
any time in its sole discretion make any change in the form of Warrant that the Company may deem appropriate and that does
not affect the substance thereof, and any Warrant thereafter issued or countersigned, whether in exchange or substitution for
an outstanding Warrant or otherwise, may be in the form as so changed.
4.9
Other Events. In case any event shall occur affecting the Company as to which none of the provisions of preceding
subsections of this Section 4 are strictly applicable, but which would require an adjustment to the terms of the Warrants
in order to (i) avoid an adverse impact on the Warrants and (ii) effectuate the intent and purpose of this Section 4, then,
in each such case, the Company shall appoint a firm of independent public accountants, investment banking or other appraisal firm
of recognized national standing, which shall give its opinion as to whether or not any adjustment to the rights represented by
the Warrants is necessary to effectuate the intent and purpose of this Section 4 and, if they determine that an adjustment
is necessary, the terms of such adjustment; provided, however, that under no circumstances shall the Warrants be
adjusted pursuant to this Section 4.9 as a result of any issuance of securities in connection with a Business Combination.
The Company shall adjust the terms of the Warrants in a manner that is consistent with any adjustment recommended in such opinion.
5.
Transfer and Exchange of Warrants.
5.1 Registration of Transfer. The Warrant Agent shall register the transfer, from time to time, of any outstanding Warrant
upon the Warrant Register, upon surrender of such Warrant for transfer, properly endorsed with signatures properly guaranteed and
accompanied by appropriate instructions for transfer. Upon any such transfer, a new Warrant representing an equal aggregate number
of Warrants shall be issued and the old Warrant shall be cancelled by the Warrant Agent. The Warrants so cancelled shall be delivered
by the Warrant Agent to the Company from time to time upon request.
5.2 Procedure
for Surrender of Warrants. Warrants may be surrendered to the Warrant Agent, together with a written request for exchange
or transfer, and thereupon the Warrant Agent shall issue in exchange therefor one or more new Warrants as requested by the Registered
Holder of the Warrants so surrendered, representing an equal aggregate number of Warrants; provided, however, that
in the event that a Warrant surrendered for transfer bears a restrictive legend (as in the case of the Private Placement Warrants),
the Warrant Agent shall not cancel such Warrant and issue new Warrants in exchange thereof until the Warrant Agent has received
an opinion of counsel for the Company stating that such transfer may be made and indicating whether the new Warrants must also
bear a restrictive legend.
5.3 Fractional
Warrants. The Warrant Agent shall not be required to effect any registration of transfer or exchange which shall result in
the issuance of a warrant certificate or book-entry position for a fraction of a warrant, except as part of the Units.
5.4 Service
Charges. No service charge shall be made for any exchange or registration of transfer of Warrants.
5.5 Warrant
Execution and Countersignature. The Warrant Agent is hereby authorized to countersign and to deliver, in accordance with
the terms of this Agreement, the Warrants required to be issued pursuant to the provisions of this Section 5, and the
Company, whenever required by the Warrant Agent, shall supply the Warrant Agent with Warrants duly executed on behalf of the
Company for such purpose.
5.6
Transfer of Warrants. Prior to the Detachment Date, the Public Warrants may be transferred or exchanged only together
with the Unit in which such Warrant is included, and only for the purpose of effecting, or in conjunction with, a transfer or exchange
of such Unit. Furthermore, each transfer of a Unit on the register relating to such Units shall operate also to transfer the Warrants
included in such Unit. Notwithstanding the foregoing, the provisions of this Section 5.6 shall have no effect on any transfer
of Warrants on and after the Detachment Date.
6.
Redemption.
6.1
Redemption of Warrants for Cash. Subject to Section 6.5 hereof, not less than all of the outstanding Warrants
may be redeemed, at the option of the Company, at any time during the Exercise Period, at the office of the Warrant Agent, upon
notice to the Registered Holders of the Warrants, as described in Section 6.3 below, at a Redemption Price of $0.01 per
Warrant, provided that (a) the Reference Value equals or exceeds $18.00 per share (subject to adjustment in compliance with
Section 4 hereof) and (b) there is an effective registration statement under the Securities Act covering the issuance of
the shares of Common Stock issuable upon exercise of the Warrants, and a current prospectus relating thereto, available throughout
the 30-day Redemption Period (as defined in Section 6.3 below).
6.2
Redemption of Warrants for Common Stock. Subject to Section 6.5 hereof, not less than all of the outstanding
Warrants may be redeemed, at the option of the Company, at any time during the Exercise Period, at the office of the Warrant Agent,
upon notice to the Registered Holders of the Warrants, as described in Section 6.3 below, at a Redemption Price of $0.10
per Warrant, provided that (i) the Reference Value equals or exceeds $10.00 per share (subject to adjustment in compliance
with Section 4 hereof) and (ii) if the Reference Value is less than $18.00 per share (subject to adjustment in compliance
with Section 4 hereof), the Private Placement Warrants are also concurrently called for redemption on the same terms as
the outstanding Public Warrants. During the 30-day Redemption Period in connection with a redemption pursuant to this Section 6.2,
Registered Holders of the Warrants may elect to exercise their Warrants on a “cashless basis” pursuant to subsection
3.3.1 and receive a number of shares of Common Stock determined by reference to the table below, based on the Redemption Date
(calculated for purposes of the table as the period to expiration of the Warrants) and the “Redemption Fair Market Value”
(as such term is defined in this Section 6.2) (a “Make-Whole Exercise”). Solely for purposes of
this Section 6.2, the “Redemption Fair Market Value” shall mean the volume weighted average price of the shares
of Common Stock for the ten (10) trading days immediately following the date on which notice of redemption pursuant to this Section
6.2 is sent to the Registered Holders. In connection with any redemption pursuant to this Section 6.2, the Company shall
provide the Registered Holders with the Redemption Fair Market Value no later than one (1) Business Day after the ten (10) trading
day period described above ends.
| |
Fair Market Value of Shares of Class A Common Stock | |
| Redemption Date (period to expiration of warrants) | |
| <10.00 | | |
| 11.00 | | |
| 12.00 | | |
| 13.00 | | |
| 14.00 | | |
| 15.00 | | |
| 16.00 | | |
| 17.00 | | |
| ≥18.00 | |
| 60 months | |
| 0.261 | | |
| 0.281 | | |
| 0.297 | | |
| 0.311 | | |
| 0.324 | | |
| 0.337 | | |
| 0.348 | | |
| 0.358 | | |
| 0.361 | |
| 57 months | |
| 0.257 | | |
| 0.277 | | |
| 0.294 | | |
| 0.310 | | |
| 0.324 | | |
| 0.337 | | |
| 0.348 | | |
| 0.358 | | |
| 0.361 | |
| 54 months | |
| 0.252 | | |
| 0.272 | | |
| 0.291 | | |
| 0.307 | | |
| 0.322 | | |
| 0.335 | | |
| 0.347 | | |
| 0.357 | | |
| 0.361 | |
| 51 months | |
| 0.246 | | |
| 0.268 | | |
| 0.287 | | |
| 0.304 | | |
| 0.320 | | |
| 0.333 | | |
| 0.346 | | |
| 0.357 | | |
| 0.361 | |
| 48 months | |
| 0.241 | | |
| 0.263 | | |
| 0.283 | | |
| 0.301 | | |
| 0.317 | | |
| 0.332 | | |
| 0.344 | | |
| 0.356 | | |
| 0.361 | |
| 45 months | |
| 0.235 | | |
| 0.258 | | |
| 0.279 | | |
| 0.298 | | |
| 0.315 | | |
| 0.330 | | |
| 0.343 | | |
| 0.356 | | |
| 0.361 | |
| 42 months | |
| 0.228 | | |
| 0.252 | | |
| 0.274 | | |
| 0.294 | | |
| 0.312 | | |
| 0.328 | | |
| 0.342 | | |
| 0.355 | | |
| 0.361 | |
| 39 months | |
| 0.221 | | |
| 0.246 | | |
| 0.269 | | |
| 0.290 | | |
| 0.309 | | |
| 0.325 | | |
| 0.340 | | |
| 0.354 | | |
| 0.361 | |
| 36 months | |
| 0.213 | | |
| 0.239 | | |
| 0.263 | | |
| 0.285 | | |
| 0.305 | | |
| 0.323 | | |
| 0.339 | | |
| 0.353 | | |
| 0.361 | |
| 33 months | |
| 0.205 | | |
| 0.232 | | |
| 0.257 | | |
| 0.280 | | |
| 0.301 | | |
| 0.320 | | |
| 0.337 | | |
| 0.352 | | |
| 0.361 | |
| 30 months | |
| 0.196 | | |
| 0.224 | | |
| 0.250 | | |
| 0.274 | | |
| 0.297 | | |
| 0.316 | | |
| 0.335 | | |
| 0.351 | | |
| 0.361 | |
| 27 months | |
| 0.185 | | |
| 0.214 | | |
| 0.242 | | |
| 0.268 | | |
| 0.291 | | |
| 0.313 | | |
| 0.332 | | |
| 0.350 | | |
| 0.361 | |
| 24 months | |
| 0.173 | | |
| 0.204 | | |
| 0.233 | | |
| 0.260 | | |
| 0.285 | | |
| 0.308 | | |
| 0.329 | | |
| 0.348 | | |
| 0.361 | |
| 21 months | |
| 0.161 | | |
| 0.193 | | |
| 0.223 | | |
| 0.252 | | |
| 0.279 | | |
| 0.304 | | |
| 0.326 | | |
| 0.347 | | |
| 0.361 | |
| 18 months | |
| 0.146 | | |
| 0.179 | | |
| 0.211 | | |
| 0.242 | | |
| 0.271 | | |
| 0.298 | | |
| 0.322 | | |
| 0.345 | | |
| 0.361 | |
| 15 months | |
| 0.130 | | |
| 0.164 | | |
| 0.197 | | |
| 0.230 | | |
| 0.262 | | |
| 0.291 | | |
| 0.317 | | |
| 0.342 | | |
| 0.361 | |
| 12 months | |
| 0.111 | | |
| 0.146 | | |
| 0.181 | | |
| 0.216 | | |
| 0.250 | | |
| 0.282 | | |
| 0.312 | | |
| 0.339 | | |
| 0.361 | |
| 9 months | |
| 0.090 | | |
| 0.125 | | |
| 0.162 | | |
| 0.199 | | |
| 0.237 | | |
| 0.272 | | |
| 0.305 | | |
| 0.336 | | |
| 0.361 | |
| 6 months | |
| 0.065 | | |
| 0.099 | | |
| 0.137 | | |
| 0.178 | | |
| 0.219 | | |
| 0.259 | | |
| 0.296 | | |
| 0.331 | | |
| 0.361 | |
| 3 months | |
| 0.034 | | |
| 0.065 | | |
| 0.104 | | |
| 0.150 | | |
| 0.197 | | |
| 0.243 | | |
| 0.286 | | |
| 0.326 | | |
| 0.361 | |
| 0 months | |
| — | | |
| — | | |
| 0.042 | | |
| 0.115 | | |
| 0.179 | | |
| 0.233 | | |
| 0.281 | | |
| 0.323 | | |
| 0.361 | |
The exact Redemption
Fair Market Value and Redemption Date may not be set forth in the table above, in which case, if the Redemption Fair Market Value
is between two values in the table or the Redemption Date is between two redemption dates in the table, the number of shares of
Common Stock to be issued for each Warrant exercised in a Make-Whole Exercise shall be determined by a straight-line interpolation
between the number of shares set forth for the higher and lower Redemption Fair Market Values and the earlier and later redemption
dates, as applicable, based on a 365- or 366-day year, as applicable.
The stock prices set
forth in the column headings of the table above shall be adjusted as of any date on which the number of shares issuable upon exercise
of a Warrant or the Exercise Price is adjusted pursuant to Section 4 hereof. If the number of shares issuable upon exercise
of a Warrant is adjusted pursuant to Section 4 hereof, the adjusted share prices in the column headings shall equal the
share prices immediately prior to such adjustment, multiplied by a fraction, the numerator of which is the number of shares deliverable
upon exercise of a Warrant immediately prior to such adjustment and the denominator of which is the number of shares deliverable
upon exercise of a Warrant as so adjusted. The number of shares in the table above shall be adjusted in the same manner and at
the same time as the number of shares issuable upon exercise of a Warrant. If the Exercise Price is adjusted, (a) in the case of
an adjustment pursuant to Section 4.4 hereof, the adjusted share prices in the column headings shall equal the share prices
immediately prior to such adjustment multiplied by a fraction, the numerator of which is the higher of the Market Value and the
Newly Issued Price and the denominator of which is $10.00 and (b) in the case of an adjustment pursuant to Section 4.1.2
hereof, the adjusted share prices in the column headings shall equal the share prices immediately prior to such adjustment less
the decrease in the Exercise Price pursuant to such Exercise Price adjustment. In no event shall the Warrants be exercisable in
connection with a Make-Whole Exercise for more than 0.361 Ordinary Shares per Warrant (subject to adjustment).
6.3 Date
Fixed for, and Notice of, Redemption; Redemption Price; Reference Value. In the event that the Company elects to redeem
the Warrants pursuant to Sections 6.1 or 6.2, the Company shall fix a date for the redemption (the
“Redemption Date”). Notice of redemption shall be mailed by first class mail, postage prepaid, by
the Company not less than thirty (30) days prior to the Redemption Date (period lasting from such time until the Redemption
Date, the “30-day Redemption Period”) to the Registered Holders of the Warrants to be redeemed at
their last addresses as they shall appear on the registration books. Any notice mailed in the manner herein provided shall be
conclusively presumed to have been duly given whether or not the Registered Holder received such notice. As used in this
Agreement, (a) “Redemption Price” shall mean the price per Warrant at which any Warrants are
redeemed pursuant to Sections 6.1 or 6.2 and (b) “Reference Value” shall mean the
last reported sales price of the Common Stock for any twenty (20) trading days within the thirty (30) trading-day period
ending on the third trading day prior to the date on which notice of the redemption is given.
6.4
Exercise After Notice of Redemption. The Warrants may be exercised, for cash (or, if in connection with a redemption
pursuant to Section 6.2 of this Agreement, on a “cashless basis” in accordance with such section) at any time
after notice of redemption shall have been given by the Company pursuant to Section 6.3 hereof and prior to the Redemption
Date. On and after the Redemption Date, the record holder of the Warrants shall have no further rights except to receive, upon
surrender of the Warrants, the Redemption Price.
6.5
Exclusion of Private Placement Warrants. The Company agrees that (a) the redemption rights provided in Section
6.1 hereof shall not apply to the Private Placement Warrants if at the time of the redemption such Private Placement Warrants
continue to be held by the Sponsor or its Permitted Transferees and (b) if the Reference Value equals or exceeds $18.00 per share
(subject to adjustment in compliance with Section 4 hereof), the redemption rights provided in Section 6.2 hereof
shall not apply to the Private Placement Warrants if at the time of the redemption such Private Placement Warrants continue to
be held by the Sponsor or its Permitted Transferees. However, once such Private Placement Warrants are transferred (other than
to Permitted Transferees in accordance with Section 2.6 hereof), the Company may redeem the Private Placement Warrants pursuant
to Section 6.1 or 6.2 hereof, provided that the criteria for redemption are met, including the opportunity of the
holder of such Private Placement Warrants to exercise the Private Placement Warrants prior to redemption pursuant to Section
6.4 hereof. Private Placement Warrants that are transferred to persons other than Permitted Transferees shall upon such transfer
cease to be Private Placement Warrants and shall become Public Warrants under this Agreement, including for purposes of Section
9.8 hereof.
7.
Other Provisions Relating to Rights of Holders of Warrants.
7.1
No Rights as Stockholder. A Warrant does not entitle the Registered Holder thereof to any of the rights of a stockholder
of the Company, including, without limitation, the right to receive dividends, or other distributions, exercise any preemptive
rights to vote or to consent or to receive notice as stockholders in respect of the meetings of stockholders or the election of
directors of the Company or any other matter.
7.2 Lost,
Stolen, Mutilated, or Destroyed Warrants. If any Warrant is lost, stolen, mutilated, or destroyed, the Company and the
Warrant Agent may on such terms as to indemnity or otherwise as they may in their discretion impose (which shall, in the case
of a mutilated Warrant, include the surrender thereof), issue a new Warrant of like denomination, tenor, and date as the
Warrant so lost, stolen, mutilated, or destroyed. Any such new Warrant shall constitute a substitute contractual obligation
of the Company, whether or not the allegedly lost, stolen, mutilated, or destroyed Warrant shall be at any time enforceable
by anyone.
7.3
Reservation of Common Stock. The Company shall at all times reserve and keep available a number of its authorized
but unissued shares of Common Stock that shall be sufficient to permit the exercise in full of all outstanding Warrants issued
pursuant to this Agreement.
7.4
Registration of Common Stock; Cashless Exercise at Company’s Option.
7.4.1
Registration of the Common Stock. The Company agrees that as soon as practicable, but in no event later than fifteen
(15) Business Days after the closing of its initial Business Combination, it shall use its commercially reasonable efforts to file
with the Commission a registration statement for the registration, under the Securities Act, of the issuance of the shares of Common
Stock issuable upon exercise of the Warrants. The Company shall use its commercially reasonable efforts to cause the same to become
effective within sixty (60) Business Days following the closing of its initial Business Combination and to maintain the effectiveness
of such registration statement, and a current prospectus relating thereto, until the expiration or redemption of the Warrants in
accordance with the provisions of this Agreement. If any such registration statement has not been declared effective by the sixtieth
(60th) Business Day following the closing of the Business Combination, holders of the Warrants shall have the right,
during the period beginning on the sixty-first (61st) Business Day after the closing of the Business Combination and
ending upon such registration statement being declared effective by the Commission, and during any other period when the Company
shall fail to have maintained an effective registration statement covering the issuance of shares of Common Stock issuable upon
exercise of the Warrants, to exercise such Warrants on a “cashless basis,” by exchanging the Warrants (in accordance
with Section 3(a)(9) of the Securities Act (or any successor rule) or another exemption) for that number of shares of Common Stock
equal to the lesser of (A) the quotient obtained by dividing (x) the product of the number of shares of Common Stock underlying
the Warrants, multiplied by the excess of the “Fair Market Value” (as defined below) less the Warrant Price by (y)
the Fair Market Value and (B) 0.361. Solely for purposes of this subsection 7.4.1, “Fair Market Value” shall
mean the volume-weighted average price of the Common Stock as reported during the ten (10) trading day period ending on the trading
day prior to the date that notice of exercise is received by the Warrant Agent from the holder of such Warrants or its securities
broker or intermediary. The date that notice of “cashless exercise” is received by the Warrant Agent shall be conclusively
determined by the Warrant Agent. In connection with the “cashless exercise” of a Public Warrant, the Company shall,
upon request, provide the Warrant Agent with an opinion of counsel for the Company (which shall be an outside law firm with securities
law experience) stating that (i) the exercise of the Warrants on a “cashless basis” in accordance with this subsection
7.4.1 is not required to be registered under the Securities Act and (ii) the shares of Common Stock issued upon such exercise
shall be freely tradable under United States federal securities laws by anyone who is not an affiliate (as such term is defined
in Rule 144 under the Securities Act) of the Company and, accordingly, shall not be required to bear a restrictive legend. Except
as provided in subsection 7.4.2, for the avoidance of doubt, unless and until all of the Warrants have been exercised or
have expired, the Company shall continue to be obligated to comply with its registration obligations under the first three sentences
of this subsection 7.4.1.
7.4.2
Cashless Exercise at Company’s Option. If the Common Stock is at the time of any exercise of a Public Warrant
not listed on a national securities exchange such that it does not satisfy the definition of a “covered security” under
Section 18(b)(1) of the Securities Act (or any successor rule), the Company may, at its option, (i) require holders of Public Warrants
who exercise Public Warrants to exercise such Public Warrants on a “cashless basis” in accordance with Section 3(a)(9)
of the Securities Act (or any successor rule) as described in subsection 7.4.1 and (ii) in the event the Company so elects,
the Company shall (x) not be required to file or maintain in effect a registration statement for the registration, under the Securities
Act, of the Common Stock issuable upon exercise of the Warrants, notwithstanding anything in this Agreement to the contrary, and
(y) use its commercially reasonable efforts to register or qualify for sale the Common Stock issuable upon exercise of the Public
Warrant under applicable blue sky laws to the extent an exemption is not available. Upon receipt of a notice of exercise for a
cashless exercise the Company will promptly calculate and transmit to the Warrant Agent the number of shares of Common Stock issuable
in connection with such cashless exercise and deliver a copy of the notice of exercise to the Warrant Agent, which shall issue
such number of shares of Common Stock in connection with such cashless exercise.
8.
Concerning the Warrant Agent and Other Matters.
8.1
Payment of Taxes. The Company shall from time to time promptly pay all taxes and charges that may be imposed upon
the Company or the Warrant Agent in respect of the issuance or delivery of shares of Common Stock upon the exercise of the Warrants,
but the Company shall not be obligated to pay any transfer taxes in respect of the Warrants or such shares of Common Stock.
8.2
Resignation, Consolidation, or Merger of Warrant Agent.
8.2.1 Appointment
of Successor Warrant Agent. The Warrant Agent, or any successor to it hereafter appointed, may resign its duties and be
discharged from all further duties and liabilities hereunder after giving sixty (60) days’ notice in writing to the
Company. If the office of the Warrant Agent becomes vacant by resignation or incapacity to act or otherwise, the Company
shall appoint in writing a successor Warrant Agent in place of the Warrant Agent. If the Company shall fail to make such
appointment within a period of thirty (30) days after it has been notified in writing of such resignation or incapacity by
the Warrant Agent or by the holder of a Warrant (who shall, with such notice, submit his Warrant for inspection by the
Company), then the holder of any Warrant may apply to the Supreme Court of the State of New York for the County of New York
for the appointment of a successor Warrant Agent at the Company’s cost. Any successor Warrant Agent, whether appointed
by the Company or by such court, shall be a corporation organized and existing under the laws of the State of New York, in
good standing and having its principal office in the Borough of Manhattan, City and State of New York, and authorized under
such laws to exercise corporate trust powers and subject to supervision or examination by federal or state authority. After
appointment, any successor Warrant Agent shall be vested with all the authority, powers, rights, immunities, duties, and
obligations of its predecessor Warrant Agent with like effect as if originally named as Warrant Agent hereunder, without any
further act or deed; but if for any reason it becomes necessary or appropriate, the predecessor Warrant Agent shall execute
and deliver, at the expense of the Company, an instrument transferring to such successor Warrant Agent all the authority,
powers, and rights of such predecessor Warrant Agent hereunder; and upon request of any successor Warrant Agent the Company
shall make, execute, acknowledge, and deliver any and all instruments in writing for more fully and effectually vesting in
and confirming to such successor Warrant Agent all such authority, powers, rights, immunities, duties, and obligations.
8.2.2
Notice of Successor Warrant Agent. In the event a successor Warrant Agent shall be appointed, the Company shall give
notice thereof to the predecessor Warrant Agent and the Transfer Agent for the Common Stock not later than the effective date of
any such appointment.
8.2.3
Merger or Consolidation of Warrant Agent. Any entity into which the Warrant Agent may be merged or with which it
may be consolidated or any entity resulting from any merger or consolidation to which the Warrant Agent shall be a party shall
be the successor Warrant Agent under this Agreement without any further act.
8.3
Fees and Expenses of Warrant Agent.
8.3.1
Remuneration. The Company agrees to pay the Warrant Agent reasonable remuneration for its services as such Warrant
Agent hereunder and shall, pursuant to its obligations under this Agreement, reimburse the Warrant Agent upon demand for all expenditures
that the Warrant Agent may reasonably incur in the execution of its duties hereunder.
8.3.2
Further Assurances. The Company agrees to perform, execute, acknowledge, and deliver or cause to be performed, executed,
acknowledged, and delivered all such further and other acts, instruments, and assurances as may reasonably be required by the Warrant
Agent for the carrying out or performing of the provisions of this Agreement.
8.4
Liability of Warrant Agent.
8.4.1
Reliance on Company Statement. Whenever in the performance of its duties under this Agreement, the Warrant Agent
shall deem it necessary or desirable that any fact or matter be proved or established by the Company prior to taking or suffering
any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed
to be conclusively proved and established by a statement signed by the Chief Executive Officer, President, Chief Financial Officer,
Secretary or Chairman of the Board of the Company and delivered to the Warrant Agent. The Warrant Agent may rely upon such statement
for any action taken or suffered in good faith by it pursuant to the provisions of this Agreement.
8.4.2
Indemnity. The Warrant Agent shall be liable hereunder only for its own gross negligence, willful misconduct, fraud
or bad faith. The Company agrees to indemnify the Warrant Agent and save it harmless against any and all liabilities, including
judgments, out-of-pocket costs and reasonable outside counsel fees, for anything done or omitted by the Warrant Agent in the execution
of this Agreement, except as a result of the Warrant Agent’s gross negligence, willful misconduct, fraud or bad faith.
8.4.3 Exclusions.
The Warrant Agent shall have no responsibility with respect to the validity of this Agreement or with respect to the validity
or execution of any Warrant (except its countersignature thereof). The Warrant Agent shall not be responsible for any breach
by the Company of any covenant or condition contained in this Agreement or in any Warrant. The Warrant Agent shall not be
responsible to make any adjustments required under the provisions of Section 4 hereof or responsible for the manner,
method, or amount of any such adjustment or the ascertaining of the existence of facts that would require any such
adjustment; nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or
reservation of any shares of Common Stock to be issued pursuant to this Agreement or any Warrant or as to whether any shares
of Common Stock shall, when issued, be valid and fully paid and non-assessable.
8.5
Acceptance of Agency. The Warrant Agent hereby accepts the agency established by this Agreement and agrees to perform
the same upon the terms and conditions herein set forth and among other things, shall account promptly to the Company with respect
to Warrants exercised and concurrently account for, and pay to the Company, all monies received by the Warrant Agent for the purchase
of shares of Common Stock through the exercise of the Warrants.
8.6
Waiver. The Warrant Agent has no right of set-off or any other right, title, interest or claim of any kind (“Claim”)
in, or to any distribution of, the Trust Account (as defined in that certain Investment Management Trust Agreement, dated as of
the date hereof, by and between the Company and the Warrant Agent as trustee thereunder) and hereby agrees not to seek recourse,
reimbursement, payment or satisfaction for any Claim against the Trust Account for any reason whatsoever. The Warrant Agent hereby
waives any and all Claims against the Trust Account and any and all rights to seek access to the Trust Account.
9.
Miscellaneous Provisions.
9.1
Successors. All the covenants and provisions of this Agreement by or for the benefit of the Company or the Warrant
Agent shall bind and inure to the benefit of their respective successors and assigns.
9.2
Notices. Any notice, statement or demand authorized by this Agreement to be given or made by the Warrant Agent or
by the holder of any Warrant to or on the Company shall be sufficiently given when so delivered if by hand or overnight delivery
or if sent by certified mail or private courier service within five (5) days after deposit of such notice, postage prepaid, addressed
(until another address is filed in writing by the Company with the Warrant Agent), as follows:
Anzu Special Acquisition Corp I
12610 Race Track Road, Suite 250
Tampa, FL 33626
Attention: [●]
Any notice, statement
or demand authorized by this Agreement to be given or made by the holder of any Warrant or by the Company to or on the Warrant
Agent shall be sufficiently given when so delivered if by hand or overnight delivery or if sent by certified mail or private courier
service within five (5) days after deposit of such notice, postage prepaid, addressed (until another address is filed in writing
by the Warrant Agent with the Company), as follows:
American Stock Transfer & Trust Company,
LLC
[Address]
Attention: [●]
9.3
Applicable Law and Exclusive Forum. The validity, interpretation, and performance of this Agreement and of the Warrants
shall be governed in all respects by the laws of the State of New York, without giving effect to conflicts of law principles that
would result in the application of the substantive laws of another jurisdiction. The Company hereby agrees that any action, proceeding
or claim against it arising out of or relating in any way to this Agreement shall be brought and enforced in the courts of the
State of New York or the United States District Court for the Southern District of New York, and irrevocably submits to such jurisdiction,
which jurisdiction shall be exclusive. Subject to applicable law, the Company hereby waives any objection to such exclusive jurisdiction
and that such courts represent an inconvenient forum. Notwithstanding the foregoing, the provisions of this paragraph will not
apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal district
courts of the United States of America are the sole and exclusive forum.
Any person or entity
purchasing or otherwise acquiring any interest in the Warrants shall be deemed to have notice of and to have consented to the forum
provisions in this Section 9.3. If any action, the subject matter of which is within the scope of the forum provisions above, is
filed in a court other than a court located within the State of New York or the United States District Court for the Southern District
of New York (a “foreign action”) in the name of any warrant holder, such warrant holder shall be deemed to have consented
to: (x) the personal jurisdiction of the state and federal courts located within the State of New York or the United States District
Court for the Southern District of New York in connection with any action brought in any such court to enforce the forum provisions
(an “enforcement action”), and (y) having service of process made upon such warrant holder in any such enforcement
action by service upon such warrant holder’s counsel in the foreign action as agent for such warrant holder.
9.4
Persons Having Rights under this Agreement. Nothing in this Agreement shall be construed to confer upon, or give
to, any person, corporation or other entity other than the parties hereto and the Registered Holders of the Warrants any right,
remedy, or claim under or by reason of this Agreement or of any covenant, condition, stipulation, promise, or agreement hereof.
All covenants, conditions, stipulations, promises, and agreements contained in this Agreement shall be for the sole and exclusive
benefit of the parties hereto and their successors and assigns and of the Registered Holders of the Warrants.
9.5
Examination of the Warrant Agreement. A copy of this Agreement shall be available at all reasonable times at the
office of the Warrant Agent in the Borough of Manhattan, City and State of New York, for inspection by the Registered Holder of
any Warrant. The Warrant Agent may require any such holder to submit such holder’s Warrant for inspection by it.
9.6
Counterparts. This Agreement may be executed in any number of original or facsimile counterparts and each of such
counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and
the same instrument.
9.7
Effect of Headings. The section headings herein are for convenience only and are not part of this Agreement and shall
not affect the interpretation thereof.
9.8 Amendments.
This Agreement may be amended by the parties hereto without the consent of any Registered Holder for the purpose of (i)
curing any ambiguity or correcting any mistake, including conforming the provisions hereof to the description of the terms of
the Warrants and this Agreement set forth in the Prospectus, or defective provision contained herein or (ii) adding or
changing any provisions with respect to matters or questions arising under this Agreement as the parties may deem necessary
or desirable and that the parties deem shall not adversely affect the rights of the Registered Holders under this Agreement.
All other modifications or amendments, including any modification or amendment to increase the Warrant Price or shorten the
Exercise Period and any amendment to the terms of only the Private Placement Warrants, shall require the vote or written
consent of the Registered Holders of at least 65% of the then outstanding Public Warrants; provided that any amendment
that solely affects the terms of the Private Placement Warrants or any provision of this Agreement solely with respect to the
Private Placement Warrants shall also require at least 65% of the-then outstanding Private Placement Warrants.
Notwithstanding the foregoing, the Company may lower the Warrant Price or extend the duration of the Exercise Period pursuant
to Sections 3.1 and 3.2, respectively, without the consent of the Registered Holders.
9.9
Severability. This Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision
hereof shall not affect the validity or enforceability of this Agreement or of any other term or provision hereof. Furthermore,
in lieu of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of
this Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible and be valid and enforceable.
Exhibit A Form of Warrant Certificate
Exhibit B Legend — Private Placement Warrants
IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be duly executed as of the date first above written.
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ANZU SPECIAL ACQUISITION CORP I |
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AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC, as Warrant Agent |
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By: |
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[Signature Page
to Warrant Agreement]
EXHIBIT A
Form of Warrant Certificate
[FACE]
Number
Warrants
THIS WARRANT SHALL BE VOID IF NOT EXERCISED
PRIOR TO
THE EXPIRATION OF THE EXERCISE PERIOD PROVIDED FOR
IN THE WARRANT AGREEMENT DESCRIBED BELOW
ANZU
SPECIAL ACQUISITION CORP I
Incorporated Under the Laws of the
State of Delaware
CUSIP [•]
Warrant Certificate
This Warrant
Certificate certifies that ___________, or registered assigns, is the registered holder of ___________ warrant(s) evidenced
hereby (the “Warrants” and each, a “Warrant”) to purchase shares of Class A
common stock, $0.0001 par value (“Common Stock”), of Anzu Special Acquisition Corp I, a Delaware corporation
(the “Company”). Each Warrant entitles the holder, upon exercise during the period set forth in the Warrant
Agreement referred to below, to receive from the Company that number of fully paid and non-assessable shares of Common Stock as
set forth below, at the exercise price (the “Exercise Price”) as determined pursuant to the Warrant Agreement,
payable in lawful money (or through “cashless exercise” as provided for in the Warrant Agreement) of
the United States of America upon surrender of this Warrant Certificate and payment of the Exercise Price at the office or agency
of the Warrant Agent referred to below, subject to the conditions set forth herein and in the Warrant Agreement. Defined terms
used in this Warrant Certificate but not defined herein shall have the meanings given to them in the Warrant Agreement.
Each Warrant is initially
exercisable for one fully paid and non-assessable share of Common Stock. No fractional shares of Common Stock will be issued upon
exercise of any Warrant. If, upon the exercise of Warrants, a holder would be entitled to receive a fractional interest in a share
of Common Stock, the Company will, upon exercise, round down to the nearest whole number the number of shares of Common Stock to
be issued to the Warrant holder. The number of shares of Common Stock issuable upon exercise of the Warrants is subject to adjustment
upon the occurrence of certain events set forth in the Warrant Agreement.
The initial Exercise
Price per share of Common Stock for any Warrant is equal to $11.50 per share. The Exercise Price is subject to adjustment upon
the occurrence of certain events set forth in the Warrant Agreement.
Subject to the conditions
set forth in the Warrant Agreement, the Warrants may be exercised only during the Exercise Period and to the extent not exercised
by the end of such Exercise Period, such Warrants shall become void. The Warrants may be redeemed, subject to certain conditions,
as set forth in the Warrant Agreement.
Reference is hereby
made to the further provisions of this Warrant Certificate set forth on the reverse hereof and such further provisions shall for
all purposes have the same effect as though fully set forth at this place.
This Warrant Certificate
shall not be valid unless countersigned by the Warrant Agent, as such term is used in the Warrant Agreement.
This Warrant Certificate
shall be governed by and construed in accordance with the internal laws of the State of New York, without regard to conflicts of
laws principles thereof.
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ANZU SPECIAL ACQUISITION CORP I |
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AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC, as Warrant Agent |
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Form of Warrant Certificate
[Reverse]
The Warrants evidenced
by this Warrant Certificate are part of a duly authorized issue of Warrants entitling the holder on exercise to receive shares
of Common Stock and are issued or to be issued pursuant to a Warrant Agreement dated as of [●], 2021 (the “Warrant
Agreement”), duly executed and delivered by the Company to American Stock Transfer & Trust Company, LLC, a New
York limited liability corporation, as warrant agent (the “Warrant Agent”), which Warrant Agreement is
hereby incorporated by reference in and made a part of this instrument and is hereby referred to for a description of the rights,
limitation of rights, obligations, duties and immunities thereunder of the Warrant Agent, the Company and the holders (the words
“holders” or “holder” meaning the Registered Holders or Registered Holder,
respectively) of the Warrants. A copy of the Warrant Agreement may be obtained by the holder hereof upon written request to the
Company. Defined terms used in this Warrant Certificate but not defined herein shall have the meanings given to them in the Warrant
Agreement.
Warrants may be exercised
at any time during the Exercise Period set forth in the Warrant Agreement. The holder of Warrants evidenced by this Warrant Certificate
may exercise them by surrendering this Warrant Certificate, with the form of election to purchase set forth hereon properly completed
and executed, together with payment of the Exercise Price as specified in the Warrant Agreement (or through “cashless exercise”
as provided for in the Warrant Agreement) at the principal corporate trust office of the Warrant Agent. In the event that upon
any exercise of Warrants evidenced hereby the number of Warrants exercised shall be less than the total number of Warrants evidenced
hereby, there shall be issued to the holder hereof or his, her or its assignee, a new Warrant Certificate evidencing the number
of Warrants not exercised.
Notwithstanding anything
else in this Warrant Certificate or the Warrant Agreement, no Warrant may be exercised unless at the time of exercise (i) a registration
statement covering the issuance of the shares of Common Stock to be issued upon exercise is effective under the Securities Act
and (ii) a prospectus thereunder relating to the shares of Common Stock is current, except through “cashless exercise”
as provided for in the Warrant Agreement.
The Warrant Agreement
provides that upon the occurrence of certain events the number of shares of Common Stock issuable upon exercise of the Warrants
set forth on the face hereof may, subject to certain conditions, be adjusted. If, upon exercise of a Warrant, the holder thereof
would be entitled to receive a fractional interest in a share of Common Stock, the Company shall, upon exercise, round down to
the nearest whole number of shares of Common Stock to be issued to the holder of the Warrant.
Warrant Certificates,
when surrendered at the principal corporate trust office of the Warrant Agent by the Registered Holder thereof in person or by
legal representative or attorney duly authorized in writing, may be exchanged, in the manner and subject to the limitations provided
in the Warrant Agreement, but without payment of any service charge, for another Warrant Certificate or Warrant Certificates of
like tenor evidencing in the aggregate a like number of Warrants.
Upon due presentation
for registration of transfer of this Warrant Certificate at the office of the Warrant Agent a new Warrant Certificate or Warrant
Certificates of like tenor and evidencing in the aggregate a like number of Warrants shall be issued to the transferee(s) in exchange
for this Warrant Certificate, subject to the limitations provided in the Warrant Agreement, without charge except for any tax or
other governmental charge imposed in connection therewith.
The Company and the
Warrant Agent may deem and treat the Registered Holder(s) hereof as the absolute owner(s) of this Warrant Certificate (notwithstanding
any notation of ownership or other writing hereon made by anyone), for the purpose of any exercise hereof, of any distribution
to the holder(s) hereof, and for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice
to the contrary. Neither the Warrants nor this Warrant Certificate entitles any holder hereof to any rights of a stockholder of
the Company.
Election to Purchase
(To Be Executed Upon Exercise
of Warrant)
The undersigned hereby
irrevocably elects to exercise the right, represented by this Warrant Certificate, to receive _____________ shares of Common Stock
and herewith tenders payment for such shares of Common Stock to the order of Anzu Special Acquisition Corp I (the “Company”)
in the amount of $____________ in accordance with the terms hereof. The undersigned requests that a certificate for such shares
of Common Stock be registered in the name of ___________________, whose address is _______________________ and that such shares
of Common Stock be delivered to ___________________ whose address is _______________________. If said number of shares of Common
Stock is less than all of the shares of Common Stock purchasable hereunder, the undersigned requests that a new Warrant Certificate
representing the remaining balance of such shares of Common Stock be registered in the name of , whose address is _______________________and
that such Warrant Certificate be delivered to ___________________, whose address is _______________________.
In the event that the
Warrant has been called for redemption by the Company pursuant to Section 6.2 of the Warrant Agreement and a holder thereof
elects to exercise its Warrant pursuant to a Make-Whole Exercise, the number of shares of Common Stock that this Warrant is exercisable
for shall be determined in accordance with subsection 3.3.1(c) or Section 6.2 of the Warrant Agreement, as applicable.
In the event that the
Warrant is a Private Placement Warrant that is to be exercised on a “cashless” basis pursuant to subsection 3.3.1(c)
of the Warrant Agreement, the number of shares of Common Stock that this Warrant is exercisable for shall be determined in accordance
with subsection 3.3.1(c) of the Warrant Agreement.
In the event that the
Warrant is to be exercised on a “cashless” basis pursuant to Section 7.4 of the Warrant Agreement, the
number of shares of Common Stock that this Warrant is exercisable for shall be determined in accordance with Section 7.4
of the Warrant Agreement.
In the event that the
Warrant may be exercised, to the extent allowed by the Warrant Agreement, through cashless exercise (i) the number of shares of
Common Stock that this Warrant is exercisable for would be determined in accordance with the relevant section of the Warrant Agreement
which allows for such cashless exercise and (ii) the holder hereof shall complete the following: The undersigned hereby irrevocably
elects to exercise the right, represented by this Warrant Certificate, through the cashless exercise provisions of the Warrant
Agreement, to receive shares of Common Stock. If said number of shares is less than all of the shares of Common Stock purchasable
hereunder (after giving effect to the cashless exercise), the undersigned requests that a new Warrant Certificate representing
the remaining balance of such shares of Common Stock be registered in the name of ___________________, whose address is _______________________and
that such Warrant Certificate be delivered to ___________________, whose address is _______________________.
[Signature Page Follows]
Date: ___________________, 20__
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Signature Guaranteed:
THE SIGNATURE(S) SHOULD BE GUARANTEED BY
AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED
SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15 (OR ANY SUCCESSOR RULE)).
EXHIBIT B
LEGEND
“THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE
OFFERED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ANY APPLICABLE
STATE SECURITIES LAWS OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE. IN ADDITION, SUBJECT TO ANY ADDITIONAL LIMITATIONS ON TRANSFER
DESCRIBED IN THE LETTER AGREEMENT BY AND AMONG ANZU SPECIAL ACQUISITION CORP I (THE “COMPANY”), ANZU SPAC GP I LLC
AND THE OTHER PARTIES THERETO, THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD OR TRANSFERRED PRIOR TO THE DATE
THAT IS THIRTY (30) DAYS AFTER THE DATE UPON WHICH THE COMPANY COMPLETES ITS INITIAL BUSINESS COMBINATION (AS DEFINED IN THE RECITALS
OF THE WARRANT AGREEMENT BETWEEN THE COMPANY AND AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC, AS WARRANT AGENT (THE “WARRANT
AGREEMENT”)) EXCEPT TO A PERMITTED TRANSFEREE (AS DEFINED IN SECTION 2 OF THE WARRANT AGREEMENT) WHO AGREES IN WRITING WITH
THE COMPANY TO BE SUBJECT TO SUCH TRANSFER PROVISIONS.
SECURITIES EVIDENCED BY THIS CERTIFICATE
AND SHARES OF CLASS A COMMON STOCK OF THE COMPANY ISSUED UPON EXERCISE OF SUCH SECURITIES SHALL BE ENTITLED TO REGISTRATION RIGHTS
UNDER A REGISTRATION RIGHTS AGREEMENT TO BE EXECUTED BY THE COMPANY.”
Exhibit 5.1
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morrison & foerster llp
beijing, berlin, boston,
brussels, denver, hong kong,
london, los angeles, new york,
northern virginia, palo alto,
san diego, san francisco, shanghai,
singapore, tokyo, washington, d.c.
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February 19, 2021
Board of Directors
Anzu Special Acquisition Corp I
12610 Race Track Road, Suite 250,
Tampa, FL 33626
Re: Registration Statement on Form S-1
Ladies and Gentlemen:
We are acting as counsel to Anzu
Special Acquisition Corp I, a Delaware corporation (the “Company”), in connection with its registration
statement on Form S-1, as amended (the “Registration Statement”), filed with the Securities and
Exchange Commission under the Securities Act of 1933, as amended (the “Securities Act”), relating to the
registration under the Securities Act of the issuance of (i) up to 40,250,000 units of the Company (the
“Units”), including Units that may be sold pursuant to the underwriter’s over-allotment option to
purchase additional Units, with each such Unit consisting of one share of Class A common stock of the Company, $0.0001 par
value per share (“Common Stock”), and one-third of one warrant of the Company to purchase a share of Common
Stock (each whole warrant, a “Warrant”) and (ii) all shares of Common Stock (the “Unit
Shares”) and all Warrants issuable as part of the Units, as specified in the Registration Statement (File No. 333-252861). All of such
Units are to be sold by the Company pursuant to the proposed form of Underwriting Agreement between the Company and the
underwriter named therein filed as Exhibit 1.1 to the Registration Statement (the “Underwriting
Agreement”). The Warrants shall be governed under the terms of a Warrant Agreement (the “Warrant
Agreement”) by and between the Company and American Stock Transfer & Trust Company, LLC.
As counsel for the Company, we have examined
originals or copies, certified or otherwise identified to our satisfaction, of such documents, corporate records, certificates
of public officials and other instruments as we have deemed necessary for the purposes of rendering this opinion and we are familiar
with the proceedings taken and proposed to be taken by the Company in connection with the authorization, issuance and sale of the
Units, the Unit Shares and the Warrants. In our examination, we have assumed the genuineness of all signatures, the authenticity
of all documents submitted to us as originals and the conformity with the originals of all documents submitted to us as copies.
As to all matters of fact, we have relied on the representations and statements of fact made in the documents so reviewed, and
we have not independently established or verified the facts so relied on. This opinion letter is given, and all statements herein
are made, in the context of the foregoing.
Board of Directors
Anzu Special Acquisition Corp I
February 19, 2021
Page Two
This opinion letter is based as to matters
of law solely on the General Corporation Law of the State of Delaware as currently in effect, and, with respect to the Units and
Warrants, the laws of the State of New York as currently in effect. We express no opinion as to the enforceability of the New York
choice-of-law provision contained in the Warrant Agreement. We express no opinion herein as to any other laws, statutes, ordinances,
rules, or regulations.
Based upon the foregoing, and subject to
the assumptions, limitations and qualifications stated herein, we are of the opinion that:
| 1. | The Units, when duly issued, delivered and paid for as contemplated in the Registration Statement and in accordance with the
terms of the Underwriting Agreement, and assuming the due authorization, execution and delivery thereof by American Stock Transfer
& Trust Company, LLC, as transfer agent, will constitute the valid and binding obligations of the Company. |
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| 2. | The Unit Shares, when the Units are duly issued, delivered and paid for by the underwriter
as contemplated in the Registration Statement and in accordance with the terms of
the Underwriting Agreement, will be validly issued, fully paid and nonassessable. |
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| 3. | The Warrants included in the Units, when the Units are duly issued, delivered and paid for as contemplated in the Registration
Statement and in accordance with the terms of the Underwriting Agreement and the Warrant Agreement, and assuming the due authorization,
execution and delivery of the Warrants by American Stock Transfer & Trust Company, LLC, as warrant agent, will constitute the
valid and binding obligations of the Company. |
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Our opinions expressed herein are subject
to the following qualifications and exceptions:
| a. | The effect of bankruptcy, insolvency, reorganization, arrangement, moratorium or other similar laws relating to or affecting
the rights of creditors generally, including, without limitation, laws relating to fraudulent transfers or conveyances, preferences
and equitable subordination. |
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| b. | Limitations imposed by general principles of equity upon the availability of equitable remedies, and the effect of judicial
decisions which have held that certain provisions are unenforceable where their enforcement would violate the implied covenant
of good faith and fair dealing, or would be commercially unreasonable, or where their breach is not material. |
Board of Directors
Anzu Special Acquisition Corp I
February 19, 2021
Page Three
| c. | We express no opinion as to the applicability of any regulatory statute, or rule or regulation of any regulatory agency, to
the Company or the effect of any such statute, rule or regulation on the opinions expressed herein. |
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| d. | We express no opinion as to compliance with applicable antifraud statutes, and rules or regulations of applicable foreign,
state and federal laws concerning the issuance or sale of the Units, the Unit Shares or the Warrants. |
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| e. | Our opinion is based upon current statutes, rules, regulations, cases and official interpretive opinions, and it covers certain
items that are not directly or definitively addressed by such authorities. |
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| f. | We express no opinion as to the validity or legally binding effect of Section 4.5 of the Warrant Agreement or any related provision
in the Warrants that requires or relates to adjustments to the conversion rate in an amount that a court would determine in the
circumstances under applicable law to be commercially unreasonable or a penalty or forfeiture. |
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This opinion letter has been prepared for
use in connection with the Registration Statement. We assume no obligation to advise you of any changes in the foregoing subsequent
to the effective date of the Registration Statement.
We hereby consent to the filing of this
opinion as Exhibit 5.1 to the Registration Statement and to the reference of our firm under the caption “Legal Matters”
in the prospectus forming a part of the Registration Statement. In giving such consent, we do not thereby admit that we are in
the category of persons whose consent is required under Section 7 of the Securities Act.
| Very truly yours, |
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/s/ Morrison & Foerster LLP
Morrison & Foerster LLP
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EXHIBIT 10.2
Anzu Special Acquisition Corp I
12610 Race Track Road, Suite 250
Tampa, FL 33626
Re: Initial Public Offering
Ladies and Gentlemen:
This letter (this “Letter Agreement”)
is being delivered to you in accordance with the Underwriting Agreement (the “Underwriting Agreement”) to be
entered into by and among Anzu Special Acquisition Corp I, a Delaware corporation (the “Company”), and BofA
Securities, Inc. and Barclays Capital Inc., as representatives (“the Representatives”) of the several underwriters
(the “Underwriters”) named therein, relating to an underwritten initial public offering (the “Public
Offering”) of [●] of the Company’s units (including up to [●] units that may be purchased to cover
over-allotments, if any) (the “Units”), each comprised of one share of the Company’s Class A common stock,
par value $0.0001 per share (the “Common Stock”), and one-[•] of one redeemable warrant. Each whole Warrant
(each, a “Warrant”) entitles the holder thereof to purchase one share of Common Stock at a price of $11.50 per
share, subject to adjustment. The Units will be sold in the Public Offering pursuant to a registration statement on Form S-1 and
prospectus (the “Prospectus”) filed by the Company with the U.S. Securities and Exchange Commission (the “Commission”),
and the Company has applied to have the Units listed on the Nasdaq Capital Market. Certain capitalized terms used herein are defined
in paragraph 11 hereof.
In order to induce the Company and the Underwriters
to enter into the Underwriting Agreement and to proceed with the Public Offering and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Anzu SPAC GP I LLC (the “Sponsor”) and each of
the undersigned individuals, each of whom is a member of the Company’s board of directors and/or management team (each, an
“Insider” and collectively, the “Insiders”), hereby severally (and not jointly and severally)
agrees with the Company as follows:
1.
The Sponsor and each Insider agrees that if the Company seeks stockholder approval of a proposed Business Combination, then
in connection with such proposed Business Combination, it, he or she shall (i) vote any shares of Capital Stock owned by it, him
or her in favor of any proposed Business Combination and (ii) not redeem any shares of Common Stock owned by it, him or her in
connection with such stockholder approval. If the Company seeks to consummate a proposed Business Combination by engaging in a
tender offer, the Sponsor and each Insider agrees that it, he or she will not sell or tender any shares of Capital Stock owned
by it, him or her in connection therewith.
2. The
Sponsor and each Insider hereby agrees that in the event that the Company fails to consummate a Business Combination within
24 months from the closing of the Public Offering, or such later period approved by the Company’s stockholders in
accordance with the Company’s amended and restated certificate of incorporation (the “Charter”), the
Sponsor and each Insider shall take all reasonable steps to cause the Company to (i) cease all operations except for the
purpose of winding up, (ii) as promptly as reasonably possible but not more than 10 business days thereafter, subject to
lawfully available funds therefor, redeem 100% of the Common Stock sold as part of the Units in the Public Offering (the
“Offering Shares”), at a per-share price, payable in cash, equal to the aggregate amount then on deposit
in the Trust Account, including interest (less up to $100,000 of interest to pay dissolution expenses and which interest
shall be net of taxes payable), divided by the number of then issued and outstanding Offering Shares, which redemption will
completely extinguish all Public Stockholders’ rights as stockholders (including the right to receive further
liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such
redemption, subject to the approval of the Company’s remaining stockholders and the Company’s board of directors,
dissolve and liquidate, subject in each case to the Company’s obligations under Delaware law to provide for claims of
creditors and other requirements of applicable law. The Sponsor and each Insider agree to not propose any amendment to the
Charter that would modify the substance or timing of the Company’s obligation to redeem 100% of the Offering Shares if
the Company does not complete a Business Combination within 24 months from the closing of the Public Offering, or with
respect to any other material provisions relating to stockholders’ rights or pre-initial business combination activity,
unless the Company provides its Public Stockholders with the opportunity to redeem their Offering Shares upon approval of any
such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account,
including interest (which interest shall be net of taxes payable), divided by the number of then issued and outstanding
Offering Shares.
The Sponsor and each Insider acknowledges
that it, he or she has no right, title, interest or claim of any kind in or to any monies held in the Trust Account as a result
of any liquidation of the Company with respect to the Founder Shares held by it, him or her. The Sponsor and each Insider hereby
further waives, with respect to any shares of Common Stock held by it, him or her, if any, any redemption rights it, he or she
may have in connection with (x) the consummation of a Business Combination, including, without limitation, any such rights available
in the context of a stockholder vote to approve such Business Combination or in the context of a tender offer made by the Company
to purchase shares of Common Stock and (y) a stockholder vote to approve an amendment to the Charter (i) to modify the substance
or timing of the Company’s obligation to redeem 100% of the Offering Shares if the Company does not complete a Business Combination
within 24 months of the closing of the Public Offering or (ii) with respect to any other provision relating to stockholders’
rights or pre-initial business combination activity (although the Sponsor, the Insiders and their respective affiliates shall be
entitled to redemption and liquidation rights with respect to any Offering Shares it or they hold if the Company fails to consummate
a Business Combination within 24 months from the closing of the Public Offering ).
3.
Notwithstanding the provisions set forth in paragraphs 7(a) and (b) below, during the period commencing on the effective date
of the Underwriting Agreement and ending 180 days after such date, the Sponsor and each Insider shall not, without the prior
written consent of the Representatives, offer, sell, contract to sell, pledge or otherwise dispose of (or enter into any
transaction that is designed to, or might reasonably be expected to, result in the disposition (whether by actual disposition
or effective economic disposition due to cash settlement or otherwise)), directly or indirectly, or establish or increase a
put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16
(“Section 16”) of the Securities Exchange Act of 1934, as amended, and the rules and regulations of the
Commission promulgated thereunder, with respect to, any Units, shares of Capital Stock, Warrants or any securities
convertible into, or exercisable, or exchangeable for, shares of Common Stock, or publicly announce an intention to effect
any such transaction; provided, however, that the foregoing does not apply to the forfeiture of any Founder
Shares pursuant to their terms or any transfer of Founder Shares to any current or future independent director of the Company
(as long as such current or future independent director transferee is subject to this Letter Agreement or executes an
agreement substantially identical to the terms of this Letter Agreement, as applicable to directors and officers at the time
of such transfer; and as long as, to the extent any Section 16 reporting obligation is triggered as a result of such
transfer, any related Section 16 filing includes a practical explanation as to the nature of the transfer). The provisions of
this paragraph will not apply if the release or waiver is effected solely to permit a transfer not for consideration and the
transferee has agreed in writing to be bound by the same terms described in this Letter Agreement to the extent and for the
duration that such terms remain in effect at the time of the transfer.
4. In
the event of the liquidation of the Trust Account, the Sponsor (which for purposes of clarification shall not extend to any
other shareholders, members or managers of the Sponsor) agrees to indemnify and hold harmless the Company against any and all
loss, liability, claim, damage and expense whatsoever (including, but not limited to, any and all legal or other expenses
reasonably incurred in investigating, preparing or defending against any litigation, whether pending or threatened, or any
claim whatsoever) to which the Company may become subject as a result of any claim by (i) any third party for services
rendered (other than the Company’s independent registered public accountants) or products sold to the Company or (ii) a
prospective target business with which the Company has discussed entering into a transaction agreement (a
“Target”); provided, however, that such indemnification of the Company by the
Sponsor shall apply only to the extent necessary to ensure that such claims by a third party for services rendered (other
than the Company’s independent registered public accountants) or products sold to the Company or a Target do not reduce
the amount of funds in the Trust Account to below (i) $10.00 per Offering Share or (ii) such lesser amount per Offering Share
held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust
assets, in each case, net of the amount of interest earned on the property in the Trust Account which may be withdrawn to pay
taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust
Account and except as to any claims under the Company’s indemnity of the Underwriters against certain liabilities,
including liabilities under the Securities Act of 1933, as amended. In the event that any such executed waiver is deemed to
be unenforceable against such third party, the Sponsor shall not be responsible to the extent of any liability for such third
party claims. The Sponsor shall have the right to defend against any such claim with counsel of its choice reasonably
satisfactory to the Company if, within 15 days following written receipt of notice of the claim to the Sponsor, the Sponsor
notifies the Company in writing that it shall undertake such defense. For the avoidance of doubt, none of the Company’s
officers or directors will indemnify the Company for claims by third parties, including, without limitation, claims by
vendors and prospective target businesses.
5.
To the extent that the Underwriters do not exercise their over-allotment option to purchase up to an additional [●]
Units within 45 days from the date of the Prospectus (and as further described in the Prospectus), the Sponsor agrees to forfeit,
at no cost, a number of Founder Shares in the aggregate equal to the product of [●] multiplied by a fraction, (i) the numerator
of which is [●] minus the number of Units purchased by the Underwriters upon the exercise of their over-allotment option,
and (ii) the denominator of which is [●]. The forfeiture will be adjusted to the extent that the over-allotment option is
not exercised in full by the Underwriters so that the Initial Stockholders will own an aggregate of 20.0% of the Company’s
issued and outstanding shares of Capital Stock after the Public Offering. To the extent that the size of the Public Offering is
increased or decreased, the Company will effect a capitalization or share repurchase, redemption or stock split or other appropriate
mechanism, as applicable, immediately prior to the consummation of the Public Offering in such amount as to maintain the ownership
of the Capital Stock of the Initial Stockholders prior to the Public Offering at 20.0% of the Company’s issued and outstanding
Capital Stock upon the consummation of the Public Offering. In connection with such increase or decrease in the size of the Public
Offering, (A) references to [●] in the numerator and denominator of the formula in the first sentence of this paragraph shall
be changed to a number equal to 15% of the number of shares included in the Units issued in the Public Offering and (B) the reference
to [●] in the formula set forth in the immediately preceding sentence shall be adjusted to such number of Founder Shares
that the Sponsor would have to return to the Company in order to hold (with all of the Initial Stockholders) an aggregate of 20.0%
of the Company’s issued and outstanding Capital Stock after the Public Offering.
6.
The Sponsor and each Insider hereby agrees and acknowledges that: (i) the Underwriters and the Company would be irreparably
injured in the event of a breach by such Sponsor or an Insider of its, his or her obligations under paragraphs 1, 2, 3, 4, 5, 7(a),
7(b), and 9, as applicable, of this Letter Agreement, (ii) monetary damages may not be an adequate remedy for such breach and (iii)
the non-breaching party shall be entitled to injunctive relief, in addition to any other remedy that such party may have in law
or in equity, in the event of such breach.
7. (a) The
Sponsor and each Insider agree that it, he or she shall not Transfer (as defined below) any Founder Shares (or shares of
Common Stock issuable upon conversion thereof) until the earlier of (A) one year after the completion of the Company’s
initial Business Combination and (B) subsequent to the Business Combination, (x) if the closing price of the Common Stock
equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the
like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Company’s initial
Business Combination or (y) the date on which the Company completes a liquidation, merger, capital stock exchange,
reorganization or other similar transaction that results in all of the Company’s stockholders having the right to
exchange their shares of Common Stock for cash, securities or other property (the “Founder Shares Lock-up
Period”).
(b)
The Sponsor and each Insider agree that it, he or she shall not Transfer any Private Placement Warrants (or shares of Common
Stock issued or issuable upon the exercise of the Private Placement Warrants) until 30 days after the completion of a Business
Combination (the “Private Placement Warrants Lock-up Period”, together with the Founder Shares Lock-up Period,
the “Lock-up Periods”).
(c)
Notwithstanding the provisions set forth in paragraphs 3 and 7(a) and (b), Transfers of the Founder Shares, Private Placement
Warrants and shares of Common Stock issued or issuable upon the exercise or conversion of the Private Placement Warrants or the
Founder Shares and that are held by the Sponsor, any Insider or any of their permitted transferees (that have complied with this
paragraph 7(c)), are permitted (a) to the Company’s officers or directors, any affiliates or family members of any of the
Company’s officers or directors, the Sponsor, any members of the Sponsor, or any affiliates of the Sponsor; (b) in the case
of an individual, transfers by gift to a member of the individual’s immediate family, to a trust, the beneficiary of which
is a member of the individual’s immediate family or an affiliate of such person, or to a charitable organization; (c) in
the case of an individual, transfers by virtue of laws of descent and distribution upon death of the individual; (d) in the case
of an individual, transfers pursuant to a qualified domestic relations order; (e) by private sales or transfers made in connection
with the consummation of a Business Combination at prices no greater than the price at which the securities were originally purchased;
(f) in the event of the Company’s liquidation prior to the completion of an initial Business Combination; (g) in the case
of an entity, by virtue of the laws of its jurisdiction or its organizational documents or operating agreement; or (h) in the event
of the Company’s completion of a liquidation, merger, stock exchange, reorganization or other similar transaction which results
in all of the Company’s public stockholders having the right to exchange their shares of Common Stock for cash, securities
or other property subsequent to the completion of the initial Business Combination; provided, however, that, in the
case of clauses (a) through (e), these permitted transferees must enter into a written agreement with the Company agreeing to be
bound by the transfer restrictions herein.
8. The
Sponsor and each Insider represent and warrant that it, he or she has never been suspended or expelled from membership in any
securities or commodities exchange or association or had a securities or commodities license or registration denied,
suspended or revoked. Each Insider’s biographical information furnished to the Company (including any such information
included in the Prospectus) is true and accurate in all respects and does not omit any material information with respect to
the Insider’s background. Each Insider’s questionnaire furnished to the Company is true and accurate in all
respects. Each Insider represents and warrants that: he or she is not subject to or a respondent in any legal action for, any
injunction, cease-and-desist order or order or stipulation to desist or refrain from any act or practice relating to the
offering of securities in any jurisdiction; he or she has never been convicted of, or pleaded guilty to, any crime (i)
involving fraud, (ii) relating to any financial transaction or handling of funds of another person, or (iii) pertaining to
any dealings in any securities and he or she is not currently a defendant in any such criminal proceeding.
9.
Except as disclosed in, or as expressly contemplated by, the Prospectus, neither the Sponsor nor any Insider nor any affiliate
of the Sponsor or any Insider, nor any director or officer of the Company, shall receive from the Company any finder’s fee,
reimbursement, consulting fee, monies in respect of any repayment of a loan or other compensation prior to, or in connection with
any services rendered in order to effectuate the consummation of the Company’s initial Business Combination (regardless of
the type of transaction that it is).
10.
The Sponsor and each Insider has full right and power, without violating any agreement to which it, he or she is bound (including,
without limitation, any non-competition or non-solicitation agreement with any employer or former employer), to enter into this
Letter Agreement and, as applicable, to serve as an officer and/or a director on the board of directors of the Company and hereby
consents to being named in the Prospectus as an officer and/or a director of the Company.
11.
As used herein, (i) “Business Combination” shall mean a merger, capital stock exchange, asset acquisition,
stock purchase, reorganization or similar business combination, involving the Company and one or more businesses; (ii) “Capital
Stock” shall mean, collectively, the Common Stock and the Founder Shares; (iii) “Founder Shares” shall
mean the [●] shares of the Company’s Class B common stock, par value $0.0001 per share, (or [●] shares if the
over-allotment option is not exercised by the Underwriters) initially held by the Sponsor; (iv) “Initial Stockholders”
shall mean the Sponsor and any other holder of Founder Shares immediately prior to the Public Offering; (v) “Private Placement
Warrants” shall mean the warrants to purchase up to [●] shares of Common Stock (or [●] shares of Common Stock
if the over-allotment option is exercised in full) that the Sponsor has agreed to purchase for an aggregate purchase price of $[●]
in the aggregate (or $[●] if the over-allotment option is exercised in full), or $1.00 per warrant, in a private placement
that shall occur simultaneously with the consummation of the Public Offering; (vi) “Public Stockholders” shall
mean the holders of securities issued in the Public Offering; (vii) “Trust Account” shall mean the trust fund
into which a portion of the net proceeds of the Public Offering and the sale of the Private Placement Warrants shall be deposited;
and (viii) “Transfer” shall mean the (a) sale or assignment of, offer to sell, contract or agreement to sell,
hypothecate, pledge, grant of any option to purchase or otherwise dispose of or agreement to dispose of, directly or indirectly,
or establishment or increase of a put equivalent position or liquidation with respect to or decrease of a call equivalent position
within the meaning of Section 16 with respect to any security, (b) entry into any swap or other arrangement that transfers to another,
in whole or in part, any of the economic consequences of ownership of any security, whether any such transaction is to be settled
by delivery of such securities, in cash or otherwise, or (c) public announcement of any intention to effect any transaction
specified in clause (a) or (b).
12.
This Letter Agreement constitutes the entire agreement and understanding of the parties hereto in respect of the subject
matter hereof and supersedes all prior understandings, agreements, or representations by or among the parties hereto, written or
oral, to the extent they relate in any way to the subject matter hereof or the transactions contemplated hereby. This Letter Agreement
may not be changed, amended, modified or waived (other than to correct a typographical error) as to any particular provision, except
by a written instrument executed by (1) each Insider that is the subject of any such change, amendment, modification or waiver
and (2) the Sponsor.
13.
Except as otherwise provided herein, no party hereto may assign either this Letter Agreement or any of its rights, interests,
or obligations hereunder without the prior written consent of the other parties. Any purported assignment in violation of this
paragraph shall be void and ineffectual and shall not operate to transfer or assign any interest or title to the purported assignee.
This Letter Agreement shall be binding on the Sponsor and each Insider and their respective successors, heirs and assigns and permitted
transferees.
14.
Nothing in this Letter Agreement shall be construed to confer upon, or give to, any person or entity other than the parties
hereto any right, remedy or claim under or by reason of this Letter Agreement or of any covenant, condition, stipulation, promise
or agreement hereof. All covenants, conditions, stipulations, promises and agreements contained in this Letter Agreement shall
be for the sole and exclusive benefit of the parties hereto and their successors, heirs, personal representatives and assigns and
permitted transferees.
15.
This Letter Agreement may be executed in any number of original or facsimile counterparts and each of such counterparts
shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.
16.
This Letter Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof
shall not affect the validity or enforceability of this Letter Agreement or of any other term or provision hereof. Furthermore,
in lieu of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of
this Letter Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible and be valid
and enforceable.
17.
This Letter Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York,
without giving effect to conflicts of law principles that would result in the application of the substantive laws of another jurisdiction.
The parties hereto (i) all agree that any action, proceeding, claim or dispute arising out of, or relating in any way to, this
Letter Agreement shall be brought and enforced in the courts of New York City, in the State of New York, and irrevocably submit
to such jurisdiction and venue, which jurisdiction and venue shall be exclusive and (ii) waive any objection to such exclusive
jurisdiction and venue or that such courts represent an inconvenient forum.
18.
Each party hereto shall not be liable for any breaches or misrepresentations contained in this Letter Agreement by any
other party to this Letter Agreement (including, for the avoidance of doubt, any Insider with respect to any other Insider), and
no party shall be liable or responsible for the obligations of another party, including, without limitation, indemnification obligations
and notice obligations.
19.
Any notice, consent or request to be given in connection with any of the terms or provisions of this Letter Agreement shall
be in writing and shall be sent by express mail or similar private courier service, by certified mail (return receipt requested),
by hand delivery or facsimile or other electronic transmission.
20.
This Letter Agreement shall terminate on the earlier of (i) the expiration of the Lock-up Periods or (ii) the liquidation
of the Company; provided, however, that this Letter Agreement shall earlier terminate in the event that the Public
Offering is not consummated and closed by December 31, 2021; provided further that paragraph 4 of this Letter Agreement
shall survive such liquidation for a period of six years.
[Signature Page Follows]
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Sincerely, |
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ANZU SPAC GP I LLC |
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By: |
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Name: Whitney Haring-Smith |
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Title: Managing Member |
[Signature Page
to Letter Agreement]
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| Name: William Wulfsohn |
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| Name: Whitney Haring-Smith
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| Name: John W. Joy |
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| Name: Peter J. Ganz |
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| Name: Teresa A. Harris |
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| Name: Priya Cherian Huskins
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| Name: Susan J. Kantor |
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[Signature Page
to Letter Agreement]
Acknowledged and Agreed:
| ANZU SPECIAL ACQUISITION CORP I |
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| By: |
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Name: John W. Joy |
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Title: Chief Financial Officer |
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[Signature Page
to Letter Agreement]
EXHIBIT 10.3
INVESTMENT MANAGEMENT TRUST AGREEMENT
This Investment Management Trust Agreement
(this “Agreement”) is made effective as of [●], 2021 by and between Anzu Special Acquisition Corp I,
a Delaware corporation (the “Company”), and American Stock Transfer & Trust Company, LLC a New York limited
liability company (the “Trustee”).
WHEREAS, the Company’s registration
statement on Form S-1 (File No. [●]) (the “Registration Statement”), including the prospectus therein
(the “Prospectus”), for the initial public offering of the Company’s units (the “Units”),
each of which consists of one share of the Company’s Class A common stock, par value $0.0001 per share (the “Common
Stock”), and one-[•] of one redeemable warrant, each whole warrant entitling the holder thereof to purchase one share
of Common Stock (such initial public offering hereinafter referred to as the “Offering”), has been declared
effective as of the date hereof by the U.S. Securities and Exchange Commission; and
WHEREAS, the Company has entered into an Underwriting
Agreement (the “Underwriting Agreement”) with BofA Securities, Inc. and Barclays Capital, Inc. as representatives
(the “Representatives”) of the several underwriters (the “Underwriters”) named therein; and
WHEREAS, as described in the Prospectus, $[●]
of the gross proceeds of the Offering and sale of the Private Placement Warrants (as defined in the Underwriting Agreement) (or
$[●] if the Underwriters’ over-allotment option is exercised in full) will be delivered to the Trustee to be deposited
and held in a segregated trust account located at all times in the United States (the “Trust Account”) for the
benefit of the Company and the holders of the Common Stock included in the Units issued in the Offering as hereinafter provided
(the amount to be delivered to the Trustee (and any interest subsequently earned thereon) is referred to herein as the “Property,”
the stockholders for whose benefit the Trustee shall hold the Property are referred to herein as the “Public Stockholders,”
and the Public Stockholders and the Company are referred to herein, collectively, as the “Beneficiaries”); and
WHEREAS, pursuant to the Underwriting Agreement,
a portion of the Property equal to $[●], or $[●] if the Underwriters’ over-allotment option is exercised in full,
is attributable to deferred underwriting discounts and commissions that will be payable by the Company to the Underwriters upon
and concurrently with the consummation of the Business Combination (as defined below) (the “Deferred Discount”);
and
WHEREAS, the Company and the Trustee desire
to enter into this Agreement to set forth the terms and conditions pursuant to which the Trustee shall hold the Property.
NOW THEREFORE, IT IS AGREED:
1. Agreements
and Covenants of Trustee. The Trustee hereby agrees and covenants to:
(a) Hold
the Property in trust for the Beneficiaries in accordance with the terms of this Agreement in the Trust Account established by
the Trustee located in the United States at [●] (or at another U.S.-chartered commercial bank with consolidated assets of
$100 billion or more) and at a brokerage institution selected by the Trustee that is reasonably satisfactory to the Company;
(b)
Manage, supervise and administer the Trust Account subject to the terms and conditions set forth herein;
(c)
In a timely manner, upon the written instruction of the Company, invest and reinvest the Property solely in United States government
securities within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended (or any successor rule), having
a maturity of 185 days or less, or in money market funds meeting the conditions of paragraphs (d)(1), (d)(2), (d)(3) and (d)(4)
of Rule 2a-7 promulgated under the Investment Company Act of 1940, as amended, which invest only in direct U.S. government treasury
obligations, as determined by the Company; the Trustee may not invest in any other securities or assets, it being understood that
the Trust Account will earn no interest while account funds are uninvested awaiting the Company’s instructions hereunder;
while on deposit, the Trustee may earn bank credits or other consideration;
(d)
Collect and receive, when due, all interest or other income arising from the Property, which shall become part of the “Property,”
as such term is used herein;
(e)
As soon as practicable, notify the Company and the Representatives of all communications received by the Trustee with respect to
any Property requiring action by the Company;
(f)
Supply any necessary information or documents as may be requested by the Company (or its authorized agents) in connection with
the Company’s preparation of tax returns relating to assets held in the Trust Account or in connection with the preparation
or completion of the audit of the Company’s financial statements by the Company’s auditors;
(g)
Participate in any plan or proceeding for protecting or enforcing any right or interest arising from the Property if, as and when
instructed by the Company to do so;
(h)
Render to the Company monthly written statements of the activities of, and amounts in, the Trust Account reflecting all receipts
and disbursements of the Trust Account;
(i)
Commence liquidation of the Trust Account only after and promptly after (x) receipt of, and only in accordance with, the
terms of a letter from the Company (“Termination Letter”) in a form substantially similar to that attached
hereto as either Exhibit A or Exhibit B signed on behalf of the Company by its Chief Executive Officer, President, Chief
Financial Officer, Chief Operating Officer, General Counsel, Secretary or Chairman of the board of directors of the Company
(the “Board”) or other authorized officer of the Company, and complete the liquidation of the Trust
Account and distribute the Property in the Trust Account, including interest (less up to $100,000 of interest that may be
released to the Company to pay dissolution expenses and which interest shall be net of any taxes payable, it being understood
that the Trustee has no obligation to monitor or question the Company’s position that an allocation has been made for
taxes payable), only as directed in the Termination Letter and the other documents referred to therein; provided,
that, in the case a Termination Letter in the form of Exhibit A is received, or (y) upon the date which is twenty-four (24)
months after the closing of the Offering, or such later date as may be approved by the Company’s stockholders in
accordance with the Company’s amended and restated Certificate of Incorporation, as it may be amended from time to
time, if a Termination Letter has not been received by the Trustee prior to such date, in which case the Trust Account shall
be liquidated in accordance with the procedures set forth in the Termination Letter attached as Exhibit B and the Property in
the Trust Account, including interest (less up to $100,000 of interest that may be released to the Company to pay dissolution
expenses and which interest shall be net of any taxes payable), shall be distributed to the Public Stockholders of record as
of such date;
(j)
Upon written request from the Company, which may be given from time to time in a form substantially similar to that attached hereto
as Exhibit C (a “Tax Payment Withdrawal Instruction”), withdraw from the Trust Account and distribute to the
Company the amount of interest earned on the Property requested by the Company to cover any tax obligation owed by the Company
as a result of assets of the Company or interest or other income earned on the Property, which amount shall be delivered directly
to the Company by electronic funds transfer or other method of prompt payment, and the Company shall forward such payment to the
relevant taxing authority; provided, however, that to the extent there is not sufficient cash in the Trust Account
to pay such tax obligation, the Trustee shall liquidate such assets held in the Trust Account as shall be designated by the Company
in writing to make such distribution so long as there is no reduction in the principal amount per share initially deposited in
the Trust Account; provided, further, however, that if the tax to be paid is a franchise tax, the written
request by the Company to make such distribution shall be accompanied by a copy of the franchise tax bill for the Company (it being
acknowledged and agreed that any such amount in excess of interest income earned on the Property shall not be payable from the
Trust Account). The written request of the Company referenced above shall constitute presumptive evidence that the Company is entitled
to said funds, and the Trustee shall have no responsibility to look beyond said request;
(k)
Upon written request from the Company, which may be given from time to time in a form substantially similar to that attached
hereto as Exhibit D (a “Stockholder Redemption Withdrawal Instruction”), the Trustee shall distribute on
behalf of the Company the amount requested by the Company to be used to redeem shares of Common Stock from Public
Stockholders properly submitted in connection with a stockholder vote to approve an amendment to the Company’s amended
and restated Certificate of Incorporation (A) to modify the substance or timing of the Company’s obligation to
allow redemption in connection with the Company’s initial merger, share exchange, asset acquisition, share purchase,
reorganization or similar business combination involving the Company and one or more businesses (a “Business
Combination”) or to redeem 100% of the Company’s public shares if the Company does not complete its initial
Business Combination within twenty-four (24) months from the closing of the Offering or (B) with respect to any other
provision relating to stockholders’ rights or pre-initial Business Combination activity. The written request of the
Company referenced above shall constitute presumptive evidence that the Company is entitled to distribute said funds, and the
Trustee shall have no responsibility to look beyond said request; and
(l)
Not make any withdrawals or distributions from the Trust Account other than pursuant to Sections 1(i), (j) or (k)
above.
2. Agreements
and Covenants of the Company. The Company hereby agrees and covenants to:
(a)
Give all instructions to the Trustee hereunder in writing, signed by the Company’s Chairman of the Board, President, Chief
Executive Officer, Chief Financial Officer, Chief Operating Officer, General Counsel, Secretary or other authorized officer of
the Company. In addition, except with respect to its duties under Sections 1(i), 1(j) and 1(k) hereof, the
Trustee shall be entitled to rely on, and shall be protected in relying on, any verbal or telephonic advice or instruction which
it, in good faith and with reasonable care, believes to be given by any one of the persons authorized above to give written instructions,
provided that the Company shall promptly confirm such instructions in writing;
(b)
Subject to Section 4 hereof, hold the Trustee harmless and indemnify the Trustee from and against any and all reasonable
and documented expenses, including reasonable outside counsel fees and disbursements, or losses suffered by the Trustee in connection
with any action taken by it hereunder and in connection with any action, suit or other proceeding brought against the Trustee involving
any claim, or in connection with any claim or demand, which in any way arises out of or relates to this Agreement, the services
of the Trustee hereunder, or the Property or any interest earned on the Property, except for expenses and losses resulting from
the Trustee’s or its representatives’ gross negligence, fraud or willful misconduct. Promptly after the receipt by
the Trustee of notice of demand or claim or the commencement of any action, suit or proceeding, pursuant to which the Trustee intends
to seek indemnification under this Section 2(b), it shall notify the Company in writing of such claim (hereinafter referred
to as the “Indemnified Claim”). The Trustee shall have the right to conduct and manage the defense against such
Indemnified Claim; provided that the Trustee shall obtain the consent of the Company with respect to the selection of counsel,
which consent shall not be unreasonably withheld. The Trustee may not agree to settle any Indemnified Claim without the prior written
consent of the Company, which such consent shall not be unreasonably withheld; provided, further, that the Company
may conduct and manage the defense against any Indemnified Claim if the Trustee does not promptly take action to mount such a defense.
The Company may participate in such action with its own counsel;
(c)
Pay the Trustee the fees set forth on Schedule A hereto, including an initial acceptance fee, annual administration
fee, and transaction processing fee which fees shall be subject to modification by the parties from time to time. It is
expressly understood that the Property shall not be used to pay such fees unless and until the Property is distributed to the
Company pursuant to Sections 1(i) and 1(j) hereof. The Company shall pay the Trustee the initial acceptance fee
and the first annual administration fee at the consummation of the Offering. The Company shall not be responsible for any
other fees or charges of the Trustee except as set forth in this Section 2(c), Schedule A hereto and as may be
provided in Section 2(b) hereof;
(d)
In connection with any vote of the Company’s stockholders regarding a Business Combination, provide to the Trustee an affidavit
or certificate of the inspector of elections for the stockholder meeting verifying the vote of such stockholders regarding such
Business Combination;
(e)
Provide the Representatives with a copy of any Termination Letter(s) and/or any other correspondence that is sent to the Trustee
with respect to any proposed withdrawal from the Trust Account promptly after it issues the same;
(f)
Expressly provide in any Instruction Letter (as defined in Exhibit A) delivered in connection with a Termination Letter in the
Form of Exhibit A that the Deferred Discount be paid directly to the account or accounts directed by the Representatives; and
(g)
Instruct the Trustee to make only those distributions that are permitted under this Agreement, and refrain from instructing the
Trustee to make any distributions that are not permitted under this Agreement.
3. Limitations of Liability. The Trustee shall have no responsibility or liability to:
(a)
Imply obligations, perform duties, inquire or otherwise be subject to the provisions of any agreement or document other than this
Agreement and that which is expressly set forth herein;
(b)
Take any action with respect to the Property, other than as directed in Section 1 hereof, and the Trustee shall have no
liability to any party except for liability arising out of the Trustee’s or its representatives’ gross negligence,
fraud or willful misconduct;
(c)
Institute any proceeding for the collection of any principal and income arising from, or institute, appear in or defend any proceeding
of any kind with respect to, any of the Property unless and until it shall have received instructions from the Company given as
provided herein to do so and the Company shall have advanced or guaranteed to it funds sufficient to pay any reasonably incurred
and documented expenses incident thereto;
(d)
Refund any depreciation in principal of any Property;
(e)
Assume that the authority of any person designated by the Company to give instructions hereunder shall not be continuing unless
provided otherwise in such designation, or unless the Company shall have delivered a written revocation of such authority to the
Trustee;
(f)
The other parties hereto or to anyone else for any action taken or omitted by it, or any action suffered by it to be taken or omitted,
in good faith and in the Trustee’s best judgment, except for the Trustee’s or its representatives’ gross negligence,
fraud or willful misconduct. The Trustee may rely conclusively and shall be protected in acting upon any order, notice, demand,
certificate, opinion or advice of counsel (including counsel chosen by the Trustee with written notification to the Company, which
counsel may be the Company’s counsel), statement, instrument, report or other paper or document (not only as to its due execution
and the validity and effectiveness of its provisions, but also as to the truth and acceptability of any information therein contained)
which the Trustee believes, in good faith and with reasonable care, to be genuine and to be signed or presented by the proper person
or persons. The Trustee shall not be bound by any notice or demand, or any waiver, modification, termination or rescission of this
Agreement or any of the terms hereof, unless evidenced by a written instrument delivered to the Trustee, signed by the proper party
or parties and, if the duties or rights of the Trustee are affected, unless it shall give its prior written consent thereto;
(g)
Verify the accuracy of the information contained in the Registration Statement;
(h)
Provide any assurance that any Business Combination entered into by the Company or any other action taken by the Company is as
contemplated by the Registration Statement;
(i)
File information returns with respect to the Trust Account with any local, state or federal taxing authority or provide periodic
written statements to the Company documenting the taxes payable by the Company, if any, relating to any interest income earned
on the Property;
(j)
Prepare, execute and file tax reports, income or other tax returns and pay any taxes with respect to any income generated by, and
activities relating to, the Trust Account, regardless of whether such tax is payable by the Trust Account or the Company, including,
but not limited to, franchise and income tax obligations, except pursuant to Section 1(j) hereof; or
(k)
Verify calculations, qualify or otherwise approve the Company’s written requests for distributions pursuant to Sections
1(i), 1(j) or 1(k) hereof.
4. Trust Account Waiver. The Trustee has no right of set-off or any right, title, interest or claim of any kind (“Claim”)
to, or to any monies in, the Trust Account, and hereby irrevocably waives any Claim to, or to any monies in, the Trust Account
that it may have now or in the future. In the event the Trustee has any Claim against the Company under this Agreement, including,
without limitation, under Section 2(b) or Section 2(c) hereof, the Trustee shall pursue such Claim solely against
the Company and its assets outside the Trust Account and not against the Property or any monies in the Trust Account.
5. Termination; Replacement of Trustee. This Agreement shall terminate as follows:
(a)
If the Trustee gives written notice to the Company that it desires to resign under this Agreement, the Company shall use its reasonable
efforts to locate a successor trustee, pending which the Trustee shall continue to act in accordance with this Agreement. At such
time that the Company notifies the Trustee that a successor trustee has been appointed and has agreed to become subject to the
terms of this Agreement (whether following the Trustee giving notice that it desires to resign under this Agreement or the Company
otherwise electing to replace the Trustee under this Agreement), the Trustee shall transfer the management of the Trust Account
to the successor trustee, including but not limited to the transfer of copies of the reports and statements relating to the Trust
Account and any other reasonable transfer requests the Company may make, whereupon this Agreement shall terminate; provided,
however, that in the event that the Company does not locate a successor trustee within ninety (90) days of receipt of the
resignation notice from the Trustee, the Trustee may submit an application to have the Property deposited with any court in the
State of New York or with the United States District Court for the Southern District of New York and upon such deposit, the Trustee
shall be immune from any liability whatsoever;
(b)
At such time that the Trustee has completed the liquidation of the Trust Account and its obligations in accordance with the provisions
of Section 1(i) hereof and distributed the Property in accordance with the provisions of the Termination Letter, this Agreement
shall terminate except with respect to Section 2(b); or
(c)
If the Offering is not consummated within ten (10) business days of the date of this Agreement, in which case any funds received
by the Trustee from the Company or SSAC Alpha Sponsor, LLC, as applicable, for purposes of funding the Trust Account shall be promptly
returned to the Company or SSAC Alpha Sponsor, LLC, as applicable.
6. Miscellaneous.
(a)
The Company and the Trustee each acknowledge that the Trustee will follow the security procedures set forth below with respect
to funds transferred from the Trust Account. The Company and the Trustee will each restrict access to confidential information
relating to such security procedures to authorized persons. Each party must notify the other party immediately if it has reason
to believe unauthorized persons may have obtained access to such confidential information, or of any change in its authorized personnel.
In executing funds transfers, the Trustee shall rely upon all information supplied to it by the Company, including, account names,
account numbers, and all other identifying information relating to a Beneficiary, Beneficiary’s bank or intermediary bank.
Except for any liability arising out of the Trustee’s or its representatives’ gross negligence, fraud or willful misconduct,
the Trustee shall not be liable for any loss, liability or out-of-pocket expense resulting from any error in the information or
transmission of the funds.
(b)
This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York, without giving
effect to conflicts of law principles that would result in the application of the substantive laws of another jurisdiction.
(c)
This Agreement contains the entire agreement and understanding of the parties hereto with respect to the subject matter hereof.
Except for Sections 1(i), 1(j) and 1(k) hereof (which may not be modified, amended or deleted without the
affirmative vote of sixty five percent (65%) of the then outstanding shares of Common Stock and Class B common stock, par value
$0.0001 per share, of the Company voting together as a single class; provided that no such amendment will affect any Public Stockholder
who has otherwise indicated its election to redeem its shares of Common Stock in connection with a stockholder vote sought to amend
this Agreement), this Agreement or any provision hereof may only be changed, amended or modified (other than to correct a typographical
error) by a writing signed by each of the parties hereto.
(d)
The parties hereto consent to the jurisdiction and venue of any state or federal court located in the City of New York, State of
New York, for purposes of resolving any disputes hereunder. AS TO ANY CLAIM, CROSS-CLAIM OR COUNTERCLAIM IN ANY WAY RELATING
TO THIS AGREEMENT, EACH PARTY WAIVES THE RIGHT TO TRIAL BY JURY.
(e)
Any notice, consent or request to be given in connection with any of the terms or provisions of this Agreement shall be in writing
and shall be sent by express mail or similar private courier service, by certified mail (return receipt requested), by hand delivery,
by electronic mail or by facsimile transmission:
if to the Trustee, to:
American Stock Transfer & Trust Company, LLC
[Address]
Attn: Felix Orihuela
Email: FOrihuela@astfinancial.com
if to the Company, to:
Anzu Special Acquisition Corp I
12610 Race Track Road, Suite 250
Tampa, FL 33626
in each case, with copies to:
Morrison & Foerster LLP
2100 L Street, NW, Suite 900
Washington, DC 20037
Attn: Justin R. Salon; Andrew P. Campbell
and
BofA Securities, Inc.
One Bryant Park
New York, New York 10036
Attn.: Philip Turbin
Barclays Capital, Inc.
745 Seventh Avenue
New York, New York 10019
Attn: Syndicate Registration
and
Davis Polk & Wardell LLP
450 Lexington Avenue
New York, NY 10017
Attn: Derek Dostal
(f)
This Agreement may not be assigned by the Trustee without the prior consent of the Company.
(g)
Each of the Company and the Trustee hereby represents that it has the full right and power and has been duly authorized to enter
into this Agreement and to perform its respective obligations as contemplated hereunder. The Trustee acknowledges and agrees that
it shall not make any claims or proceed against the Trust Account, including by way of set-off, and shall not be entitled to any
funds in the Trust Account under any circumstance.
(h)
This Agreement is the joint product of the Trustee and the Company and each provision hereof has been subject to the mutual consultation,
negotiation and agreement of such parties and shall not be construed for or against any party hereto.
(i)
This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts
shall together constitute one and the same instrument. Delivery of a signed counterpart of this Agreement by facsimile or electronic
transmission shall constitute valid and sufficient delivery thereof.
(j)
Each of the Company and the Trustee hereby acknowledges and agrees that the Representatives, on behalf of the Underwriters, are
third party beneficiaries of this Agreement.
(k)
Except as specified herein, no party to this Agreement may assign its rights or delegate its obligations hereunder to any other
person or entity.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties have
duly executed this Investment Management Trust Agreement as of the date first written above.
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American Stock Transfer & Trust
Company, LLC, as Trustee
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By: |
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Name: |
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Title: |
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ANZU SPECIAL ACQUISITION CORP I |
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By: |
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Name: John W. Joy |
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Title: Chief Financial Officer |
[Signature Page to Investment Management
Trust Agreement]
SCHEDULE A
| Fee Item | |
Time and method of payment | |
Amount | |
| Initial acceptance fee | |
Initial closing of the Offering by wire transfer. | |
$ | [3,500.00] | |
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| Annual fee | |
First year fee payable at initial closing of the Offering by wire transfer, thereafter on the anniversary of the effective date of the Offering by wire transfer or check. | |
$ | [10,000.00] | |
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| Transaction processing fee for disbursements to Company under Sections 1(i) and 1(j) | |
Billed to Company following disbursement made to Company under Sections 1(i) and 1(j) | |
$ | [250.00] | |
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| Paying Agent services as required pursuant to Sections 1(i) and 1(k) | |
Billed to Company upon delivery of service pursuant to Sections 1(i) and 1(k) | |
| Prevailing rates | |
EXHIBIT A
[Letterhead of Company]
[Insert date]
American Stock Transfer & Trust Company, LLC
[Address]
Attn: Felix Orihuela
Re: Trust Account Termination Letter
Dear Mr. Orihuela:
Pursuant to Section 1(i) of the Investment Management
Trust Agreement between Anzu Special Acquisition Corp I (the “Company”) and American Stock Transfer & Trust
Company, LLC (the “Trustee”), dated as of [●], 2021 (the “Trust Agreement”), this is
to advise you that the Company has entered into an agreement with [insert name] (the “Target Business”) to consummate
a business combination with Target Business (the “Business Combination”) on or about [insert date]. The Company
shall notify you at least seventy-two (72) hours in advance of the actual date of the consummation of the Business Combination
(the “Consummation Date”). Capitalized terms used but not defined herein shall have the meanings set forth in
the Trust Agreement.
In accordance with the terms of the Trust
Agreement, we hereby authorize you to commence to liquidate all of the assets of the Trust Account and to transfer the proceeds
into the above-referenced trust operating account at [●] to the effect that, on the Consummation Date, all of the funds held
in the Trust Account will be immediately available for transfer to the account or accounts that BofA Securities, Inc. and Barclays
Capital, Inc. (the “Representatives”) (with respect to the Deferred Discount) and the Company shall direct on
the Consummation Date. It is acknowledged and agreed that while the funds are on deposit in the trust operating account at J.P.
Morgan Chase Bank, N.A. awaiting distribution, neither the Company nor the Representatives will earn any interest.
On the
Consummation Date (i) counsel for the Company shall deliver to you written notification that the Business Combination has
been consummated, or will be consummated substantially, concurrently with your transfer of funds to the accounts as directed
by the Company (the “Notification”) and (ii) the Company shall deliver to you (a) a certificate of the
Chief Executive Officer, which verifies that the Business Combination has been approved by a vote of the Company’s
stockholders, if a vote is held and (b) joint written instruction signed by the Company and the Representatives with respect
to the transfer of the funds held in the Trust Account, including payment of the Deferred Discount from the Trust Account
(the “Instruction Letter”). You are hereby directed and authorized to transfer the funds held in the Trust
Account immediately upon your receipt of the Notification and the Instruction Letter, in accordance with the terms of the
Instruction Letter. In the event that certain deposits held in the Trust Account may not be liquidated by the Consummation
Date without penalty, you will notify the Company in writing of the same and the Company shall direct you as to whether such
funds should remain in the Trust Account and be distributed after the Consummation Date to the Company. Upon the distribution
of all the funds, net of any payments necessary for reasonable unreimbursed expenses related to liquidating the Trust
Account, your obligations under the Trust Agreement shall be terminated.
In the event that the Business Combination
is not consummated on the Consummation Date described in the notice thereof and we have not notified you on or before the original
Consummation Date of a new Consummation Date, then upon receipt by the Trustee of written instructions from the Company, the funds
held in the Trust Account shall be reinvested as provided in Section 1(c) of the Trust Agreement on the business day immediately
following the Consummation Date as set forth in the notice as soon thereafter as possible.
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ANZU SPECIAL ACQUISITION CORP I |
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By: |
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Name: |
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Title: |
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BofA Securities, Inc.
Barclays Capital, Inc. as Representatives
of the several Underwriters |
EXHIBIT B
[Letterhead of Company]
[Insert date]
American Stock Transfer & Trust Company, LLC
[Address]
Attn: Felix Orihuela
Re: Trust Account Termination Letter
Dear Mr. Orihuela:
Pursuant to Section 1(i) of the Investment
Management Trust Agreement between Anzu Special Acquisition Corp I (the “Company”) and American Stock Transfer
& Trust Company, LLC (the “Trustee”), dated as of [●], 2021 (the “Trust Agreement”),
this is to advise you that the Company has been unable to effect a Business Combination with a Target Business within the time
frame specified in the Company’s amended and restated Certificate of Incorporation, as described in the Company’s Prospectus
relating to the Offering. Capitalized terms used but not defined herein shall have the meanings set forth in the Trust Agreement.
In accordance with the terms of the
Trust Agreement, we hereby authorize you to liquidate all of the assets in the Trust Account and to transfer the total proceeds
into the trust operating account at [●] to await distribution to the Public Stockholders. The Company has selected [●]
as the effective date for the purpose of determining when the Public Stockholders will be entitled to receive their share of the
liquidation proceeds. You agree to be the Paying Agent of record and, in your separate capacity as Paying Agent, agree to distribute
said funds directly to the Company’s Public Stockholders in accordance with the terms of the Trust Agreement and the amended
and restated memorandum and articles of association of the Company. Upon the distribution of all the funds, your obligations under
the Trust Agreement shall be terminated, except to the extent otherwise provided in Section 1(j) of the Trust Agreement.
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Very truly yours, |
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ANZU
SPECIAL ACQUISITION CORP I |
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By: |
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Name: |
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Title: |
| cc: | BofA Securities, Inc.
Barclays Capital, Inc. as
Representatives of the several Underwriters |
EXHIBIT C
[Letterhead of Company]
[Insert date]
American Stock Transfer & Trust Company, LLC
[Address]
Attn: Felix Orihuela
Re: Trust Account Tax Payment Withdrawal Instruction
Dear Mr. Orihuela:
Pursuant to Section 1(j) of the Investment
Management Trust Agreement between Anzu Special Acquisition Corp I (the “Company”) and American Stock Transfer
& Trust Company, LLC (the “Trustee”), dated as of [●], 2021 (the “Trust Agreement”),
the Company hereby requests that you deliver to the Company $[●] of the interest income earned on the Property as of the
date hereof. Capitalized terms used but not defined herein shall have the meanings set forth in the Trust Agreement.
The Company needs such funds to pay
for the tax obligations as set forth on the attached tax return or tax statement. In accordance with the terms of the Trust Agreement,
you are hereby directed and authorized to transfer (via wire transfer) such funds promptly upon your receipt of this letter to
the Company’s operating account at:
[WIRE INSTRUCTION INFORMATION]
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Very truly yours, |
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ANZU SPECIAL ACQUISITION CORP I |
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By: |
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Name: |
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Title: |
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BofA Securities, Inc.
Barclays Capital, Inc. as Representatives
of the several Underwriters |
EXHIBIT D
[Letterhead of Company]
[Insert date]
American Stock Transfer & Trust Company, LLC
[Address]
Attn: Felix Orihuela
Dear Mr. Orihuela:
Re: Trust Account Stockholder Redemption Withdrawal
Instruction
Pursuant to Section 1(l) of the Investment
Management Trust Agreement between Anzu Special Acquisition Corp I (the “Company”) and American Stock Transfer
& Trust Company, LLC (the “Trustee”), dated as of [●], 2021 (the “Trust Agreement”),
the Company hereby requests that you deliver to the redeeming Public Stockholders of the Company $[●] of the principal and
interest income earned on the Property as of the date hereof into a segregated account held by you on behalf of the Beneficiaries
for distribution to the Stockholders who have requested redemption of their shares. Capitalized terms used but not defined herein
shall have the meanings set forth in the Trust Agreement.
The Company needs such funds to pay its
Public Stockholders who have properly elected to have their shares of Common Stock redeemed by the Company in connection with a
stockholder vote to approve an amendment to the Company’s amended and restated memorandum and articles of association (A) to
modify the substance or timing of the Company’s obligation to allow redemption in connection with the Company’s initial
Business Combination or to redeem 100% of the Company’s public shares if it does not complete its initial Business Combination
within such time as is described in the Company’s amended and restated Certificate of Incorporation or (B) with respect to
any other provision relating to stockholders’ rights or pre-initial Business Combination activity. As such, you are hereby
directed and authorized to transfer (via wire transfer) such funds promptly upon your receipt of this letter to the redeeming Public
Stockholders in accordance with your customary procedures.
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ANZU SPECIAL ACQUISITION CORP I |
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By: |
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Name: |
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Title: |
| cc: | BofA Securities, Inc.
Barclays Capital, Inc. as Representatives
of the several Underwriters |
EXHIBIT 10.6
SPONSOR WARRANTS PURCHASE AGREEMENT
THIS SPONSOR WARRANTS PURCHASE AGREEMENT,
dated as of [●], 2021 (this “Agreement”), is entered into by and between Anzu Special Acquisition Corp
I, a Delaware corporation (the “Company”), and Anzu SPAC GP I LLC, a Delaware limited liability company (the
“Purchaser”).
WHEREAS, the Company intends to consummate
an initial public offering of the Company’s units (the “Public Offering”), each unit consisting of one
share of the Company’s Class A common stock, par value $0.0001 per share (a “Share”), and one-[•] of
one redeemable warrant, each whole warrant exercisable for one Share at an exercise price of $11.50 per Share, as set forth in
the Company’s registration statement on Form S-1 related to the Public Offering (the “Registration Statement”);
and
WHEREAS, the Purchaser now wishes to purchase
an aggregate of [●] warrants (or [●] warrants if the underwriters’ over-allotment option is exercised in full)
(the “Warrants”), each Warrant entitling the holder thereof to purchase one Share at an exercise price of $11.50
per Share.
NOW THEREFORE, in consideration of the mutual
promises contained in this Agreement and other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties to this Agreement hereby, intending legally to be bound, agree as follows:
AGREEMENT
Section 1. Authorization,
Purchase and Sale; Terms of the Warrants.
A. Authorization
of the Warrants. The Company has duly authorized the issuance and sale of the Warrants to the Purchaser.
B. Purchase
and Sale of the Warrants.
(i) On
the date of the consummation of the Public Offering or on such earlier date as may be mutually agreed upon by the Purchaser
and the Company (the “Initial Closing Date”), the Company shall issue and sell to the Purchaser, and the
Purchaser shall purchase from the Company, [●] Warrants at a price of $1.00 per Warrant for an aggregate purchase price
of $[●] (the “Purchase Price”), which shall be paid by wire transfer of immediately available funds
to the Company at least one business day prior to the Initial Closing Date in accordance with the Company’s wiring
instructions. On the Initial Closing Date, following the payment by the Purchaser of the Purchase Price by wire transfer of
immediately available funds to the Company, the Company, at its option, shall deliver a certificate evidencing the Warrants
purchased on such date duly registered in the Purchaser’s name to the Purchaser, or effect such delivery in book-entry
form.
(ii)
On the date of the consummation of the closing of the over-allotment option in connection with the Public Offering or on
such earlier time and date as may be mutually agreed by the Purchaser and the Company (each such date, an “Over-allotment
Closing Date,” and, each Over-allotment Closing Date (if any) together with the Initial Closing Date, being sometimes
referred to herein as a “Closing Date,” or the “Closing Dates”), the Company shall issue
and sell to the Purchaser, and the Purchaser shall purchase from the Company, up to [●] Warrants at a price of $1.00 per
warrant for an aggregate purchase price of up to $[●] (if the over-allotment option in connection with the Public Offering
is exercised in full) (the “Over-allotment Purchase Price”), which shall be paid by wire transfer of immediately
available funds to the Company in accordance with the Company’s wiring instructions. On the Over-allotment Closing Date,
upon the payment by the Purchaser of the Over-allotment Purchase Price by wire transfer of immediately available funds to the Company,
the Company shall, at its option, deliver a certificate evidencing the Warrants purchased on such date duly registered in the Purchaser’s
name to the Purchaser, or effect such delivery in book-entry form.
C. Terms of the Warrants.
(i)
Each Warrant shall have its terms set forth in a Warrant Agreement to be entered into by the Company and a warrant agent,
in connection with the Public Offering (a “Warrant Agreement”).
(ii)
At the time of the closing of the Public Offering, the Company and the Purchaser shall enter into a registration rights
agreement (the “Registration Rights Agreement”) pursuant to which the Company will grant certain registration
rights to the Purchaser relating to the Warrants and the Shares underlying the Warrants.
Section 2. Representations
and Warranties of the Company. As a material inducement to the Purchaser to enter into this Agreement and purchase the Warrants,
the Company hereby represents and warrants to the Purchaser (which representations and warranties shall survive the Closing Dates)
that:
A. Organization and Corporate Power. The Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and is qualified to do business in every jurisdiction in which the failure to so qualify
would reasonably be expected to have a material adverse effect on the financial condition, operating results or assets of the Company.
The Company possesses all requisite corporate power and authority necessary to carry out the transactions contemplated by this
Agreement and the Warrant Agreement.
B. Authorization;
No Breach.
(i)
The execution, delivery and performance of this Agreement and the Warrants have been duly authorized by the Company as
of the Initial Closing Date. This Agreement constitutes a valid and binding obligation of the Company, enforceable in accordance
with its terms. Upon issuance in accordance with, and payment pursuant to, the terms of the Warrant Agreement and this Agreement,
the Warrants will constitute valid and binding obligations of the Company, enforceable in accordance with their terms as of the
Closing Dates.
(ii)
The execution and delivery by the Company of this Agreement and the Warrants, the issuance and sale of the Warrants, the
issuance of the Shares upon exercise of the Warrants and the fulfillment of, and compliance with, the respective terms hereof and
thereof by the Company, do not and will not as of the Closing Dates (a) conflict with or result in a breach of the terms, conditions
or provisions of, (b) constitute a default under, (c) result in the creation of any lien, security interest, charge or encumbrance
upon the Company’s capital stock or assets under, (d) result in a violation of, or (e) require any authorization, consent,
approval, exemption or other action by or notice or declaration to, or filing with, any court or administrative or governmental
body or agency pursuant to the certificate of incorporation of the Company or the bylaws of the Company (in effect on the date
hereof or as may be amended prior to completion of the contemplated Public Offering), or any material law, statute, rule or regulation
to which the Company is subject, or any agreement, order, judgment or decree to which the Company is subject, except for any filings
required after the date hereof under federal or state securities laws.
C. Title to Securities. Upon issuance in accordance with, and payment pursuant to, the terms hereof and the Warrant
Agreement, the Shares issuable upon exercise of the Warrants will be duly and validly issued, fully paid and nonassessable. Upon
issuance in accordance with, and payment pursuant to, the terms hereof and the Warrant Agreement, the Purchaser will have good
title to the Warrants and the Shares issuable upon exercise of such Warrants, free and clear of all liens, claims and encumbrances
of any kind, other than (i) transfer restrictions hereunder and under the other agreements contemplated hereby, (ii) transfer restrictions
under federal and state securities laws, and (iii) liens, claims or encumbrances imposed due to the actions of the Purchaser.
D. Governmental Consents. No permit, consent, approval or authorization of, or declaration to or filing with, any governmental
authority is required in connection with the execution, delivery and performance by the Company of this Agreement or the consummation
by the Company of any other transactions contemplated hereby.
E. Regulation D Qualification. Neither the Company nor, to its knowledge, any of its affiliates, officers, directors
or beneficial stockholders of 20% or more of its outstanding securities, has experienced a disqualifying event as enumerated pursuant
to Rule 506(d) of Regulation D under the Securities Act of 1933, as amended (the “Securities Act”).
Section 3. Representations
and Warranties of the Purchaser. As a material inducement to the Company to enter into this Agreement and issue and sell the
Warrants to the Purchaser, the Purchaser hereby represents and warrants to the Company (which representations and warranties shall
survive the Closing Dates) that:
A. Organization
and Requisite Authority. The Purchaser possesses all requisite power and authority necessary to carry out the transactions
contemplated by this Agreement.
B. Authorization; No Breach.
(i)
This Agreement constitutes a valid and binding obligation of the Purchaser, enforceable in accordance with its terms, subject
to bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other laws of general applicability relating to
or affecting creditors’ rights and to general equitable principles (whether considered in a proceeding in equity or law).
(ii)
The execution and delivery by the Purchaser of this Agreement and the fulfillment of and compliance with the terms hereof
by the Purchaser does not and shall not as of the Closing Dates conflict with or result in a breach by the Purchaser of the terms,
conditions or provisions of any agreement, instrument, order, judgment or decree to which the Purchaser is subject.
C. Investment
Representations.
(i)
The Purchaser is acquiring the Warrants and, upon exercise of the Warrants, the Shares issuable upon such exercise (collectively,
the “Securities”), for the Purchaser’s own account, for investment purposes only and not with a view towards,
or for resale in connection with, any public sale or distribution thereof.
(ii)
The Purchaser is an “accredited investor” as such term is defined in Rule 501(a)(3) of Regulation D under the
Securities Act and the Purchaser has not experienced a disqualifying event as enumerated pursuant to Rule 506(d) of Regulation
D under the Securities Act.
(iii)
The Purchaser understands that the Securities are being offered and will be sold to it in reliance on specific exemptions
from the registration requirements of the United States federal and state securities laws and that the Company is relying upon
the truth and accuracy of, and the Purchaser’s compliance with, the representations and warranties of the Purchaser set forth
herein in order to determine the availability of such exemptions and the eligibility of the Purchaser to acquire such Securities.
(iv)
The Purchaser’s decision to enter into this Agreement was not the a result of any general solicitation or general
advertising within the meaning of Rule 502(c) under the Securities Act.
(v)
The Purchaser has been furnished with all materials relating to the business, finances and operations of the Company and
materials relating to the offer and sale of the Securities which have been requested by the Purchaser. The Purchaser has been afforded
the opportunity to ask questions of the executive officers and directors of the Company. The Purchaser understands that its investment
in the Securities involves a high degree of risk and it has sought such accounting, legal and tax advice as it has considered necessary
to make an informed investment decision with respect to the acquisition of the Securities.
(vi) The
Purchaser understands that no United States federal or state agency or any other government or governmental agency has passed
on or made any recommendation or endorsement of the Securities or the fairness or suitability of the investment in the Securities
by the Purchaser nor have such authorities passed upon or endorsed the merits of the offering of the Securities.
(vii)
The Purchaser understands that: (a) the Securities have not been and are not being registered under the Securities Act or
any state securities laws, and may not be offered for sale, sold, assigned or transferred unless (1) subsequently registered thereunder
or (2) sold in reliance on an exemption therefrom; and (b) except as specifically set forth in the Registration Rights Agreement,
neither the Company nor any other person is under any obligation to register the Securities under the Securities Act or any state
securities laws or to comply with the terms and conditions of any exemption thereunder. In this regard, the Purchaser understands
that the Securities and Exchange Commission has taken the position that promoters or affiliates of a blank check company and their
transferees, both before and after an initial business combination, are deemed to be “underwriters” under the Securities
Act when reselling the securities of a blank check company. Based on that position, Rule 144 adopted pursuant to the Securities
Act would not be available for resale transactions of the Securities despite technical compliance with the requirements of such
Rule, and the Securities can be resold only through a registered offering or in reliance upon another exemption from the registration
requirements of the Securities Act.
(viii)
The Purchaser has such knowledge and experience in financial and business matters, knowledge of the high degree of risk
associated with investments in the securities of companies in the development stage such as the Company, is capable of evaluating
the merits and risks of an investment in the Securities and is able to bear the economic risk of an investment in the Securities
in the amount contemplated hereunder for an indefinite period of time. The Purchaser has adequate means of providing for its current
financial needs and contingencies and will have no current or anticipated future needs for liquidity which would be jeopardized
by the investment in the Securities. The Purchaser can afford a complete loss of its investment in the Securities.
Section 4. Conditions of the Purchaser’s Obligations. The obligations of the Purchaser to purchase and pay for the Warrants
are subject to the fulfillment, on or before the Closing Dates, of each of the following conditions:
A. Representations and Warranties. The representations and warranties of the Company contained in Section 2
shall be true and correct at and as of the Closing Dates as though then made.
B. Performance.
The Company shall have performed and complied with all agreements, obligations and conditions contained in this Agreement that
are required to be performed or complied with by it on or before the Closing Dates.
C. No
Injunction. No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted,
entered, promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory
organization having authority over the matters contemplated hereby, which prohibits the consummation of any of the transactions
contemplated by this Agreement or the Warrant Agreement.
D. Warrant
Agreement. The Company shall have entered into a Warrant Agreement with a warrant agent on terms satisfactory to the Purchaser.
Section 5. Conditions
of the Company’s Obligations. The obligations of the Company to the Purchaser under this Agreement are subject to the
fulfillment, on or before the Closing Dates, of each of the following conditions:
A. Representations and Warranties. The representations and warranties of the Purchaser contained in Section 3
shall be true and correct at and as of the Closing Dates as though then made.
B. Performance.
The Purchaser shall have performed and complied with all agreements, obligations and conditions contained in this Agreement that
are required to be performed or complied with by the Purchaser on or before the Closing Dates.
C. No Injunction. No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have
been enacted, entered, promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory
organization having authority over the matters contemplated hereby, which prohibits the consummation of any of the transactions
contemplated by this Agreement or the Warrant Agreement.
D. Warrant
Agreement. The Company shall have entered into a Warrant Agreement with a warrant agent on terms satisfactory to the Company.
Section 6. Termination.
This Agreement may be terminated at any time after December 31, 2021 upon the election by either the Company or the Purchaser
upon written notice to the other party if the closing of the Public Offering does not occur prior to such date.
Section 7. Survival
of Representations and Warranties. All of the representations and warranties contained herein shall survive the Closing Dates.
Section 8. Definitions.
Terms used but not otherwise defined in this Agreement shall have the meaning assigned to such terms in the Registration Statement.
Section 9. Miscellaneous.
A. Successors
and Assigns. Except as otherwise expressly provided herein, all covenants and agreements contained in this Agreement by or
on behalf of any of the parties hereto shall bind and inure to the benefit of the respective successors of the parties hereto
whether so expressed or not. Notwithstanding the foregoing or anything to the contrary herein, the parties may not assign this
Agreement, other than assignments by the Purchaser to affiliates thereof.
B. Severability.
Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision shall
be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement.
C. Counterparts.
This Agreement may be executed simultaneously in two or more counterparts, none of which need contain the signatures of more than
one party, but all such counterparts taken together shall constitute one and the same agreement.
D. Descriptive
Headings; Interpretation. The descriptive headings of this Agreement are inserted for convenience only and do not constitute
a substantive part of this Agreement. The use of the word “including” in this Agreement shall be by way of example
rather than by limitation.
E. Governing
Law. This Agreement and the rights and obligations of the parties hereunder shall be construed in accordance with and governed
by the laws of New York applicable to contracts wholly performed within the borders of such state, without giving effect to the
conflict of law principles thereof. The parties hereto irrevocably submit to the exclusive jurisdiction of any federal court sitting
in the Southern District of New York or any state court located in New York County, State of New York, over any suit, action or
proceeding arising out of or relating to this Agreement. To the fullest extent they may effectively do so under applicable law,
the parties hereto irrevocably waive and agree not to assert, by way of motion, as a defense or otherwise, any claim that they
are not subject to the jurisdiction of any such court, any objection that they may now or hereafter have to the laying of the
venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient forum.
F. Amendments.
This Agreement may not be amended, modified or waived as to any particular provision, except by a written instrument executed
by all parties hereto.
[Signature page follows]
IN WITNESS WHEREOF, the parties hereto
have executed this Agreement to be effective as of the date first set forth above.
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ANZU SPECIAL ACQUISITION CORP I |
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ANZU SPAC GP I LLC |
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[Signature Page
to Sponsor Warrants Purchase Agreement]
Exhibit 23.1
Consent of Independent Registered Public
Accounting Firm
We hereby consent to the use in the
Prospectus constituting a part of this Registration Statement on Amendment No. 1 to Form S-1 of our report dated
February 19, 2021, relating to the financial statements of Anzu Special Acquisition Corp I, which is contained in that
Prospectus. We also consent to the reference to us under the caption “Experts” in the Prospectus.
/s/ WithumSmith+Brown, PC
New York, New York
February 19, 2021
